Several Investors Do Not Understand Bitcoin – The Gary Shilling Black BoxJanuary 6, 2019
At the time of reporting the news, Bitcoin was trending 23% short at 3.2605, providing for a bearish look today.
Yesterday, Bitcoin was moving sideways and was building a triangle pattern. The triangle will be decided considering its interaction with the significant resistance level. A breakout was predicted to lead to a bullish move thereby sending the situation for the Bitcoin to test for the next resistance level at 4050 and 4200. The bearish trend has support from the 50 days moving average.
The ecosystem of Bitcoin is growing in a complex manner; it is refusing to die according to Jameson Lopp. However, Gary Shilling has a different opinion. He calls it the “monolithic International inventory-building fling.”
Gary Shilling previously called Bitcoin a Black box. He further compared the price performance of Bitcoin to that of the South Sea Bubble.
The South Sea Bubble is a well-known stock scam that took place in 1700. The stocks of the South Sea Company appreciated wildly in response to false claims and rumors. There were a lot of speculations that triggered a hype, and the stock became completely worthless only to finally crash. Shilling has to say that Bitcoin is following a similar path. And he predicts that the value will trend all the way down to zero.
Shilling further added to his anti-Bitcoin position by making use of an excerpt from a non-fictional book with the title “Extraordinary Popular Delusions, the Money Mania.” In the book, an anonymous person advertises in a London based newspaper that read, “Great Discovery, Wonderful Investment, But I Won’t Tell You the Details.” Ultimately, the guy left the continent and was never heard back again.
According to Shilling Satoshi Nakamoto, holds nearly 980,000 bitcoins and he opines that one day he might sell off his holdings only to run away like the Londoner.
If a crash should happen, it could occur only when the Big Whales in the Bitcoin Market would co-ordinate the crash. Big Whales refers to those who hold $100,000 worth in cash. Small investors would follow the trend and would likely go short on their holdings. This will add to the negative trend. If Bitcoin should go down to zero, all the activities in the industry should come to an end. All the activity refers to stopping the activities like mining and trading for the payments.
When something like that should occur what would matter the most is the liquidity of the cryptocurrency to the fiat currency. However, during such a situation crypto exchanges will call off their operations due to being insolvent, and the investors will be left holding to their coins. Several investors do not understand the Bitcoin truly clearly.