Word On The Street

Battle of the Bulls

Six days ago, there was $60 billion less capital invested in the cryptocurrency market. The recent uptick has brought new air into the bulls’ sails and dampened bearish appetites in tandem.

But, as we know, asset prices and market capitalizations are subject to short-term swings in sentiment. To understand the bigger picture, it’s important to dig into the weeds. So, let’s venture in.

Seven Signs of Bulls

1: Short squeezes. When trade positions are disproportionately tilted to the short end, a sudden increase in demand can lead to what’s known as a short squeeze, which can lead to a significant uptick in price. With Bitcoin shorts atall-time highs last week, some of the latest rally was caused by short sellers closing out their positions.

2: Tax season. Tom Lee of Fundstrat Global Advisors predicted that U.S. investors owed nearly $25 billion in capital gains taxes for cryptocurrency holdings. As retailers accepted that they must, in fact, pay taxes on their fantastic 2017 cryptocurrency gains, many investors were forced to exit their positions to cover their bills — or at least attempt to.

3: Historical performance. The 2014 bear market broke above the long-termresistance in mid-April. However, that ultimately led to a dead cat bounce(temporary recovery) and a more prolonged downtrend that stretched through January 2015.

4: Tim Draper. While the VC’s predictions are by no means prophecy, Draper’s 2022 target for Bitcoin is set at $250k. Draper’s conviction comes from Bitcoin’s ability to revolutionize multiple industry sectors and potentially serve as a global currency. According to Draper, there is more than $100 trillion of circulating fiat currency — Bitcoin’s market cap likewise sits below $140 billion.

5: Pantera Capital. The blockchain investment fund announced that they believe $6,500 marks the low for this bear market and that “a wall of institutional money will drive the markets much higher”. Pantera deems a Bitcoin price above $20k within 12 months as “highly likely”, and the fund has made 4 cryptocurrency trade recommendations in 7 years.

6: ICO Demand. Regulatory hurdles will make it harder for companies to obtain ICO funding, though that’s not bad for the market’s health. Family offices and institutional funds are scooping up pre-sale allocations for approved projects such as Telegram’s ICO with little left uncertain regarding compliance. That’s led to funding volumes in excess of $1 billion during each month of 2018.

7: ICO Correlations. As more ICOs were issued on Ethereum, the price of ETH continued to rise. As the market pulled back in mid-January, projects that previously raised capital in ETH were prompted to liquidate their positions and lock in funding in USD. While recent selling pressure contributed to ETH’s downward spiral, an increase in ICO funding could bring about positive correlations in price as the year progresses.

Our take: This isn’t the same bear market as 2014. While the cryptocurrency market was able to fade into the shadows during historical nosedives, it doesn’t have that luxury this time around. We personally think there’s too much attention on the market to curb buying pressure for as long as past corrections.

The bottom line: If you want to see green, you’ll see green. The same goes for bears. It’s important to approach the market with an open mind and be aware of the outcomes that could result in either a market expansion or contraction. Economic, geo political, and regulatory developments will all impact the industry in multiple ways.

Booking with Blockchain

Despite the ties to vacationing, booking hotels can be far from luxurious. Standing between travelers and hotels are several third parties competing for commission fees. And the siloed data hubs lead to slower payments, more complex data reconciliation, and a hellish user experience.

By transporting much of the travel experience to the blockchain, inefficiencies in the current ecosystem can be cast aside. Streamlining booking to integrate identification and payment can allow individuals to find rentals, authenticate identity, and authorize payment for rooms in a single process.

Enter: BookLocal. With proper implementation, the blockchain-based hotel management app could tear down barriers caused by online travel agencies and hotel operators. Smaller, independent hotel chains manually reconcile transactions with guest arrivals and departures, which can lead to massive headaches when considering the mass of rate adjustments and cancellations that can build up each month.