Eyes on US consumer credit growth; Canada sentiment rises; China eases FX restrictions; EU confidence up; ACCC bares its fangs; UST 10yr yield 2.48%; oil up and gold down; NZ$1 = 71.8 USc; TWI-5 = 74.1

Here's our summary of key events overnight that affect New Zealand, with news that both business and consumer sentiment is on the rise in more major economies.

But first in the US, consumer credit data will be released at about 9am today and we will update this item then. The data will be for November and will follow a +6.5% pa growth level in October. Analysts are expecting a +4.8% pa rise this time.

Updated: US consumer credit data has come in much stronger than analysts were expecting, rising +8.8% pa in November compared with the same month a year ago. The rise was an impressive +US$31.3 bln in the month compared with the +US$17.8 bln expected and the +US$20.5 bln in October. It has been banks, rather than second-tier lenders who have garnered most of this rise.

In Canada, a central bank survey there has found a broad rise in optimism in their business community.

In China, their central bank has removed more limits on cross-border flows of the yuan. Overseas salaries can now be paid in China’s national currency and foreign companies can use the yuan to participate in the domestic carbon-trading market. The measures are effective immediately. The central bank also clarified that onshore companies that issue bonds or stock in yuan overseas can transfer those funds back to China “to facilitate the day-to-day operation of the enterprise.”

If you have been following the travails of HNA, here is a very useful review of all their current woes.

In December, the EU Economic Sentiment Indicator rose again, more strongly than expected and continuing the upward trend that began in the autumn of 2016. It was a broad based improvement, primarily boosted by the services, retail trade and construction sectors. Among the largest euro-area economies, it rose strongly in France (+2.3) and Germany (+1.6) and, to a lesser extent, in the Netherlands (+0.7), while it remained unchanged in Italy (0.0) and decreased slightly in Spain (-0.8).

In Germany, factory orders in November have come in +8.7% higher than the same month a year ago and stronger than analysts were expecting, (although there was a slight dip from October). This continues a strong rising trend.

In Australia, their competition watchdog is baring its fangs. It is set to launch its first criminal cartel cases against a series of high-profile Australian companies seeking multimillion-dollar fines and up to 10 years' jail for senior executives. "2018 will be a very big turning point for cartel enforcement and cartel deterrence," ACC supremo Rod Sims told The Australian Financial Review. "We will very likely have three to four domestic-based criminal cartel actions in 2018. It is very unfortunate we need to take action against individuals but I think that is what is needed." Under Australian criminal cartel laws, executives can face jail terms of up to 10 years if found guilty and company fines of up to 10% of their turnover or three times the profit gained.

The UST 10yr yield is unchanged at 2.48% today. In China, the equivalent 10yr sovereign bond is yielding 3.92% (-2 bp) while the equivalent NZ 10yr sovereign bond is yielding 2.78% (+2 bps).

Oil prices are a little higher in the US today with the WTI benchmark now just over US$61.50 a barrel, while the Brent benchmark is just over US$67.50.

Gold is lower by -US$5 to US$1,316/oz.

This morning the Kiwi dollar is marginally firmer this morning at just on 71.8 USc, and on the cross rates it is at 91.6 AUc, and against the euro it's also higher at 59.9 euro cents. That puts the TWI-5 at 74.1.

Bitcoin has sunk faster today than yesterday, losing US$1,150 in 24 hours and is now at US$14,810, a 7.2% drop.

The easiest place to stay up with event risk today is by following our Economic Calendar here ».

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Source: CoinDesk

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90 Comments

Banks really trying to spook the crypto space..punch and counter punch
"Amid headlines that South Korean regulators are inspecting 6 banks, including Industrial Bank of Korea, that provide virtual accounts to companies related to cryptocurrency, has sparked selling pressure across the entire space with Ripple down almost 20% today."
https://www.zerohedge.com/news/2018-01-08/south-korean-probe-sparks-cryp...

Another great example of why we shouldn't pay too much attention to Zerohedge as their standard of analysis is not much better than that of CNN or FOX.
Effectively, XRP and BTC are not down at all. Although anyone who buys BTC at this point is a fool.

The issue stemmed from a average price calculation omitting prices in the Korean market which actually pushed XRP up by around 10-20%.

"Although anyone who buys BTC at this point is a fool."...
Well plenty are around the world and with many new millionaires created.

True. There are many fools.
Are they going to be buying BTC. I dunno about that one.
BTC is fast approaching its physical limits.The technology isn't going to be able to support anywhere near the number of transactions required to maintain substantial price growth from this point on. Plus the alternatives are just so much better.

But invest how you will.
I don't have any positions in BTC anymore. It gave me a nice return, but it's over now.
My position is now with all the other smart money.

Hmm that is not the banks then trying to spook, that is the regulators. Ah why should they care about consumer protections and money laundering right? They should encourage more Mt Gox level business. Exchanges are really the wild west where it is a race to the bottom in quality and standards. Even a basic comparison can easily see the issues and dangers in many parts. How that low, low level of service and financial governance is accepted for investment is quite easy to see when they are pulling mostly newb investors. However as this is a wild west you would expect the good exchanges to shine through which unfortunately none do. After all the cryptocurrencies can have separate issues that also limit service response. Owning and trading cryptocurrencies has been technically embarrassing from the get go.

Bitcoin is old news - ripple, ethereum and stellar are the place to be invested in Crypto http://www.afr.com/technology/bitcoin-competitor-ripple-value-climbs-alm...

Tuck your money in a selection of those and you will be looking pretty happy in 6 months. The banks are nervous as this could make them redundant on many fronts

Are you doing this bigblue? How much are you investing?

Pulled it all out pre Christmas and put the profit into www.crypterium.io

Also pulled out of Bitcoin in December. But have reinvested $20K USD across a spread of other cryptos. We already had some Bitcoin gold & Bitcoin cash so have kept them, but added Litecoin, Etherium, Ripple, Monero, Zcash, Dash, Mint, Doge and Peer to the wallet.

Bigblue, just wondering, is there not a risk that crypterium is just a pump and dump scam (like so many ICOS before)?

Again, don't read this crap if you are investing in crypto.
You need to actually read and understand the technologies, alternatives, and applications. By the time the media reports on it, it's too late for the real gains.

I have $100k split mainly over XRP, XLM, ADA, and XVG. That $100k grew from $2k 2 years ago, and none of those investment decisions were based on mainstream media news.

Agree.you need to do your research not read the headlines. Can you recommend a good exchange Nymad?

Cryptopia.co.nz is based in NZ, easy to get verified and accepts NZ bank deposits with no fees (ie no FXT fee) there are plenty of coins there but the main thing is you can get an account open, buy what ever you want in NZDT and then transfer that coin to another exchange and buy the shitcoin of your choice. They have experienced exponential growth over the last month - 6 weeks so registration can take a little bit longer than normal.

New registrations are closed for Cryptopia? They state they are making a million dolllars a day but cant afford an upgrade to take on new customers?

When your user base grows from like 400k to 1.4mil in 6 months, upgrading infrastructure isn't that simple.

Or perhaps lack of good techys to expand this growth??

Surely not, Frazz.
Remember - that's why immigration has been so high, so we don't stymie the grow of productive enterprise.

Actually it is that simple. Unless they started with morons setting up scalable infrastructure is easy off the bat. Even NZ games companies requiring larger data transfers and near instantaneous response times for millions of users can do better than this and given they do not scrape millions in fees and over 50 staff it just emphasises how poorly the exchange is set up.

Try not Cryptopia, any company that shuts down trading for their benefit and fails to test updates is not an exchange you want to trust to run a basic ecommerce website. Unfortunately the exchanges have been using reddit to collect information, guides and customer support. So you will find more recommendations on the different NZ ones there e.g. tag NZBitcoin. I will not shill for any particular NZ exchange, they are all pretty bad compared to international ones. But do due diligence on them, check out the issues. If the issues include: unscheduled downtime, unclear fees, holds on user registrations, holds on accounts transactions, transfers in tether, low liquidity, unclear backend security, scalability issues, does not reply to email communications in a timely manner etc move on. Yergh. Once you have brought best advise is to switch to a better trading exchange, likewise a different one for withdrawls.

Why use an NZ exchange at all?

Indeed your use of Kraken was a better start. Mostly the benefits with NZ exchange on purchases is faster account approvals, e.g. with RealMe and lower currency exchange fees NZ -> crypto rather than NZ -> USD -> crypto but many overseas ones like Independent Reserve in Australia offer that competitively as well. If the account approvals on overseas exchanges are faster & they are more trustworthy they should definitely be used ahead of the NZ ones. Our family used a few over the years, including switching to a couple of better ones for alts. Some exchanges have had some epic issues. But at least some are building up better compliance to regulations and better security.

EPIC ISSUES!!!! yes, so much so.
We've just been using international exchanges and then using foreign currency accounts to hold fiat. We use a speedy FX company to exchange currencies back into NZD (also very low fees). Just don't have enough faith in the NZ exchanges yet.

Good luck getting into one, mate.
They closed their doors to new accounts due to demand.
When they all open up again, it is go be one hell of a bull run. There is just so much money waiting to be poured into this market. So much FOMO.

I'm on Cryptopia and Binance.
Cryptopia is still accepting new registrations, I think, but suspending NZD transactions.
BTC transactions are taking hours - hence my earlier comment.

Thanks..yes most have closed the doors I have noticed..

Try this guy.
He might be able to help ya out.

https://www.easycrypto.nz/

For my two crypto's worth ... bitstamp is also a good exchange. Only has 4 coins, but the upside is the liquidity with the huge amount trading and stable platform. You can purchase crypto with your debit card directly. Took a week to get verified however. Avoid HitBTC - words can not express how sh!t this exchange is! Cryptopia is good, but not as user friendly, especially as a first timer. Certainly looking in to crypto, even if it starts out as 'entertainment purposes only'.
Watch your bank - reports of banks closing accounts if even a hint of Crypto trading is detected, but i see that Westpac has just softened its hardline position over the last few days. Good luck and have fun with it.

We have mostly used Kraken. It's one of the most respected, safer exchanges with a good range of cryptos.

I'm sitting on a bit (not much) XVG, once the FUD dissipates I see this coin going off. Funny enough the most growth I've had was on a couple of very small bets I placed at the start of December DOGE and MINT. I call them bets as I did no real research but stuck in $50 for shits and giggles.

Yep, my thoughts exactly.
Once they get the product ready, like ADA, it is going to explode.
Between them and Ripple/Stellar, they will kill BTC.

What if you's simply betting on the the next Netscape? No disrespect to you or your understanding of the future and how it will unravel, but most people have very little idea about what cryptocurrency will emerge. It may not even exist yet. There is an element of speculation, and without the critical mass of people who don't really understand what the future will be, these massive gains will not exist.

Fair enough.
There is a huge amount of risk, I agree.

Obviously I have a much higher tolerance than you.
I'm not saying you should or shouldn't be investing in crypto. What I can say is that the technology is here to stay.

nymad, you are so saying people should invest in crypto-currencies. It's going up and up and up and then it's going to burst. Get in now and pull out before the pop is what you are implying in your comments.

I'm not giving any financial advice.

What I am saying is that if you are smart, you will make more money than you could ever imagine.
If you are not smart/late comer, you will lose it all.
This has been the story of similar markets since the day dot, ZS.

Normally investors disagree on the intrinsic value of something and bring up arguments such future potential of a technology to justify various valuation. However, remember, Bitcoin is NOT a technology, it is an electronic piece of paper with transactions listed on it. Just a bunch of 1’s and 0’s in a bunch of computers backed by absolutely nothing. Block-chain itself is a very valuable technology freely available to anyone, however, you are NOT buying blockchain when you buy Bitcoin, you own none of the tech behind it.

To illustrate imagine that someone had found a cure for cancer and posted the step-by-step instructions on how to make it on-line, freely available for anyone to use. Now imagine that the same person also created a product called Cancer-Pill using their own instructions, trade marked it, and started selling it to the highest bidders. I think we can all agree a cure for cancer is immensely valuable to society (blockchain may or may not be, we still have to see), however, how much is a Cancer-Pill worth?

Initially, with no one else making cancer curing pills, and people hearing about the trade-marked name, it’s very likely the profits would be quite large and the price of the pill ridiculously high. However, as the money flows in, another person would without a doubt create a pill using the same freely available instructions and call it Cancer-Away. Cancer-away may not initially be as recognizable as Cancer-pill, so it might fetch a smaller price, but eventually both prices would converge as they are essentially the same thing. Over time, with more and more cancer curing pills with different names arriving on the market, the price of all of them would converge to something very close to the cost of production (ie. materials + time to make it). I think we can all agree this is a good thing, as it means the maximum number of people will be able to cure their cancer at the lowest possible price.

How does this apply to Bitcoin? Well, Bitcoin is simply the initial Cancer-Pill, but as mentioned above there are now 1,365 different “pills” in production and counting. While creating a cancer pill, even with step-by-step instructions, would require some materials, equipment and incur some costs, the production of a random generic e-coin costs pretty damn close to $0. All you need is a website and some hype.

The bottom line is that while a cancer pill is very valuable, it would not be a good investment to buy up the pills for far above the cost of making them, if the formula for making them is freely available to anyone. Similarly buying Bitcoin, or any other e-coin, is a bad investment even if you truly believe block-chain technology will change the world.

http://www.unassumingbanker.com/2017/12/28/bitcoin-actually-worth/

Each to their own.
And I don't disagree in many ways.

You do make one very poor assumption though that each coin is completely undifferentiated from the next. To use your same analogy, it's like not buying the pill to cure Diabetes because the pill to cure Cancer has been overpriced.

The point remains - what intrinsic value does each coin have given that the underlying technology is freeware? If the Diabetes pill recipe is also available, then it too is also has little value.

Again, too simplistic of a view.
I agree, prices are purely speculative currently.
To say that the technologies are easily replicated and undifferentiated is fundamentally not true, though.
Fundamentally they are a mechanism of exchange. This is where their value comes from.

The point you make equally applies to seigniorage value of Government issued fiat currency.
That costs nothing to make, but is underpinned by the relative exchange value it represents.

....but it is still working on the bigger fool theory.

Well in some ways that analogy applies and in others it does not. At this point at least, (earlier cryptocurrencies were closer to becoming more viable as a currency before the mass FOMO and speculator ramping). Investing in cryptocurrencies is not backing the technology, they are simply an implementation using it. They are not limited product from a company which must abide by fair trading etc, they are not investing in the company shares, nor are they a share in IP and can be copied infinitely so the reduction on supply does not really exist. So if it was not say a physical cancer pill but more like an online World of Warcraft, (WoW game), suit of armour whose values shifts rapidly over time. As more users work in the space more of that armour is created in the world but it is sufficiently hard enough that it holds enough value to sell. However that value varies due to both the quantity and interest in the user base and the release of more high spec items. You can trade it but if the development in that game stops and the user base is fickle then it will lose value faster. Some people will pay tens of thousands for trade items online, they have done for years, but these items rarely have been so widely traded and normally they require a bit of time to manage. Now the market has become global and has easier trade tools, plus over a thousand different suits to pick between.

That being said I did mention this is far from the original intent and goal for cryptocurrencies which were intended to act & become a more widely and easily transferable currency that would be less susceptible to local country issues. Some were intended to have more security, some more anonymity, some to have some utility in use for other processes, some like IOTA were not billed as a main currency at all and some like Dogecoin were setup as a joke after a few beers. The environment & development is shifting, unfortunately with Bitcoin the updates for scalability are now more hamstrung by the exchanges trading it and the lack of ability to rollout & test updates cleanly. There is also the issue in forking existing chains and some results have lead to mass generation & more drive in speculation like in Bitcoin Cash. There will need to be a mass of development and cleaning up in the industry but the likely winners will be those who manage to catch the right waves and spread out over more cryptocurrencies selling off when it is safe and then able to switch to those more successful in the long run when they become viable again. I too doubt in Bitcoin now, because while it holds the title of First, that is rarely enough to be the leading comment. We still even keep our first investment in Bitcoin, more as a bet & trophy than for investment, after all it does not hurt to hold that original amount at this point and have a separate investment spread for intentional purposes.

However even aside from the value of cryptocurrency investment, exchange practices and risk is another story. They are often risky, badly managed and fraudulent financial investment providers with a few ok ones mixed in. Some of the larger ones will want to keep their fees rolling in & market going so will do a little trading themselves in competition with their customers, they will also buy when a large enough investor withdraws so the value does not drop as readily. Others will seek to regulate to adopt different classes of more bearish investors & to keep operating in the countries updating their regulations to consider online investment items. It is still a wild west so finding the right exchange for investment is hard enough without the hype.

While I think blockchain/crypto technologies will eventually become a real thing, the problem at the moment is figuring out which of the 200 odd cryptos is the cream that will float to the top, and which are going to sink and rot. And as history has repeatedly shown, the technically best solution doesn't always win. (VHS vs Beta being a prime example). Crypto is a high risk gamble at the moment. Glad you've done well out of it.

Thats a good spilt - your $100k should be $500k by December

Thats a good spilt - your $100k should be $500k by December

So you heard from the guy at the next machine at SkyCity or the guy at the BBQ who does "IT and stuff"/

Don't be a sore loser.

BigBlue obviously knows a thing or two about the market (given earlier comments), unlike the majority of you archaic naysayers.

Don't be a sore loser.

BigBlue obviously knows a thing or two about the market (given earlier comments), unlike the majority of you archaic naysayers.

Sore loser? I'm simply pointing out that it's ludicrous to suggest that Tom, Dick, and Harry know the future of currencies and can make a motza from that knowledge. Furthermore, you're saying someone "knows a thing or two", which means that you are at the "fountain of knowledge". Nothing wrong with speculation, but if you need to justify yourself in public and suggest that you have semblance on the laws or probability, then you're kidding yourself. This is behavioral and sociological and we've seen it all before; for example, the tech bubble.

I refer you to your patronizing comment.
"So you heard from the guy at the next machine at SkyCity or the guy at the BBQ who does "IT and stuff"/"

I don't need to justify myself, at all.
All I'm saying is make a mint while you can. It is the Tom, Dick, and Harry's that BigBlue and I are banking on entering to boost our portfolios.

All I'm saying is make a mint while you can. It is the Tom, Dick, and Harry's that BigBlue and I are banking on entering to boost our portfolios.

OK, in the case, you're saying that you think you know more that the Tom. Dick, and Harrys and are speculating on their behavior. Fair enough, if for some reason, you think you can trade cryptocurrencies based on market movements. Do you really think you can? I would think that you[re either trolling or overestimate your own abilities if you think you can.

We'll see :)
I'm betting on coming out on top.

I'll let you know this time next year and we can compare investment performances, if you like.

Yeah that is what the investors are talking about the development chain and release schedules... easy to check on the main cryptocurrency community boards and cryptocurrency news sites... nope they are all nattering on about the speculation. If you want to invest in blockchain technology go invest in a company providing blockchain solutions for customers. Buying cryptocurrency is now just speculation, they have already failed as reliable currency, and the market requires significant updates and changes before they even become viable again. So invest in a speculation in online items, but don't give it airs the technology has not achieved and cannot without more development.

Banks are not nervous they are all over blockchain technology, (anything which cuts back on costs and issues), however they are not supporting your favourite high risk speculation. Mostly because they have regulations in place to protect customers. You can even do a search to find out the news releases on banks moving in the blockchain tech space, you will be surprised at the results (after all they have been in that space for years).

It is a pity that our CC is so pathetic when compared to the ACCC. By comparison our lot are practically complicit. You can bet your bottom dollar that if companies are into criminal anticompetitive behaviour in Australia in the face of an energetic ACCC, then NZ companies or the NZ operations of Australian companies will be up to their gills in it in NZ, given that our CC is so weak.

But first in the US, consumer credit data will be released at about 9am today and we will update this item then. The data will be for November and will follow a +6.5% pa growth level in October. Analysts are expecting a +4.8% pa rise this time.

Bank lending seeks extreme growth rates to boost earnings.

The torrent of leveraged lending last year generated a record $12.4 billion in bank fees, a 41 percent surge over 2016, said Freeman Consulting Services. About 70 percent of the almost $1 trillion of such loans in 2017 came in the form of follow-up repricings and refinancings, according to data compiled by Bloomberg. Read more

The last time Goldman Sachs Group Inc.’s financial conditions index was pointing to a market environment this good, its then-chief economist was using the gauge to analyze the effects of Federal Reserve decisions that he now helps make.

New York Fed President William Dudley developed the index in the 1990s while at Goldman to create an alternative way to measure the impact of monetary policy on the economy. Now, with the index signaling the easiest conditions since 2000 after a big run-up in U.S. stocks, Fed officials are starting to wonder if they will need to address inflated asset prices in order to avoid over-inflated consumer prices. Read more

And yet:

At the Jan. 5-7 annual meeting of the American Economic Association in Philadelphia, economists questioned the usefulness of a cornerstone concept in mainstream economics that links changes in inflation to fluctuations in joblessness.

“The Phillips Curve is a terrible idea,’’ said Robert Hall, a professor at Stanford University in California who also heads the recession-dating committee of the National Bureau of Economic Research.

Skepticism about the Phillips Curve is significant because the Fed and other major central banks are counting on declines in unemployment to foster faster wage increases and lift inflation that they deem to be too low. Indeed, it’s the major rationale behind the U.S. central bank’s plan to keep raising interest rates. If the curve is broken, it’s unclear what lodestar monetary policy makers would adopt to help guide inflation back up to target. Read more

US Federal Reserve floundering around, not knowing what to do.

Confidence looking great post Labour victory - exchange rate now back at highest point seen in last 90 days against AUD, USD and EUR

Investors Should Heed the Warning From Treasuries
Bonds, not stocks, have been the better predictor of the two recessions in the 21st century. Read more

Some predictions for 2018
Crypto at worst will triple by year end
NZ median house price up by 10%
Auckland median house price up by 5% to 7%
NZX50 up by 18%
Crypto is where the big gains will be made and many will cash out and buy an investment property

Or a first home bigblue. Good thinking. Good times ahead for the bold.

I don't agree with the housing or NZX sentiments.

We are on the verge of seeing the largest transfer of wealth the world has ever seen. There are going to be 100x more losers than winners.

It is going to kill the stock markets along with the housing markets. Liquidity is going to flow out of these and into crypto markets at a phenomenal rate.
In NZ we might be shielded from it initially, but the fever will spread. When it does, money will flow out of the property market as quick as it came in.

So what happened to the wealth of the 99 losers? It got transferred into real money and probably real estate before the crypto currencies imploded? Your comment implies that the crypto currencies will fail for most investors but the lucky few who managed to get out in time.
If crypto currency is going to become useful it would have to become stable. Become a global currency that you could use anywhere. In this scenario there would be no losers.

Can you describe how the 99% lose? Not getting on board is hardly losing. I can't see people accepting bitcoin for the purchase of a property without it being trusted as being stable. Do crypto currencies cause massive inflation? Won't crypto currencies just become another currency? What happens in your imaginary scenario?

"So what happened to the wealth of the 99 losers?"
It is erased.
You know, final value of investment < initial value of investment.
Exactly what happens during all corrections..

At the moment crypto does not generate any wealth at all, it merely absorbs it from competing investment classes.
The market can only sustain the prices it does with huge amounts of capital injection - while doing this other investments are going to be starved of money. Surely I don't need to outline why this is bad.
For an example, think of your beloved Grammer Zone. The reason for price inflation in that area is solely due to a glut of money available and supernormal returns. When that money instead prefers the perceived 100% returns in the Crypto market, do you think it is going to hang around in Remuera? Nope.
Likewise, Bob's maturing tech start-up giving 20% returns to desperately needed investors is going to struggle to find money.
People will (and already have) started in a big way to leverage existing wealth and reinvest in in the crypto market. And, they are investing it in bad ways such as 100% in BTC. This is typical bubble behavior of late comers.

Cryptos will be the way of the future. There are no two ways about it. This isn't an imaginary situation.
What I am saying is that, as in most markets, irrationality will prevail for the majority of investors and this will result in many more losers than winners.

"Cryptos will be the way of the future. There are no two ways about it. This isn't an imaginary situation."

I am still not sure on that one. ignoring the scalability and suitability for minor transactions. Trust is the major factor in a currency.

I don't know the answer to the question below, but I think it is the one people need to ask themselves.

What makes a random private entity (individual or corporate) that created a crypto more trustworthy than a random private entity that uses fiat currency?

Okay, I'm sorry, but it's obvious you have absolutely no idea what you are talking about.

"I am still not sure on that one. ignoring the scalability and suitability for minor transactions..."
For one, both XRP and XLM are specifically designed for minor transactions.
Scalability is only an issue with BTC. Hence why it will be killed off by alternatives which have been developed with this in mind.

You are correct about the volatility, but this will smooth over time.
The main reason for volatility right now is the one article experts.

"What makes a random private entity (individual or corporate) that created a crypto more trustworthy than a random private entity that uses fiat currency?"
???
I don't know what you are actually trying to ask...

Only a very small minority of people are going to mortgage the house to bet on crypto currencies. If you can see that this is a tulip-like bubble how come most other people can't see that also?

People are not going to forgo all other investments and throw it all into crypto-currencies.You do write nonsense nymad!

My advice to anyone wanting to take a punt is throw in no more than 5% of your net worth. Hmmm, even that seems way to high for someone like me.

"People are not going to forgo all other investments and throw it all into crypto-currencies."

Just like they don't do it with property, ZS?
Oh, wait...
So they can be irrational when 'investing' in property, but not when investing in other asset classes?

It comes down to assessing risk, and the majority of people cannot do that adequately.

Even if people are only investing 25% of their portfolio in crypto, then to lose that is a substantial hit.
The point is that erasing wealth from anywhere is going to have substantial impacts on other competing areas. It doesn't take an economist to see that.

You have no idea nymad. Property is a spiritual thing and a measure of power through the ages. Crypto-currencies not so much.
People are not going to have 25% in crypto.
Losing 25% s not really that serious anyway.

I have 50% in crypto.
Many I know have upwards of 75%.

Losing a quarter of you financial wealth is "not really that serious anyway".
Textbook ZS comment.

Wow 50% of your entire wealth in crypto? I'm impressed. To me this is like having 50% of your entire wealth on black to win at the roulette table.

I am not trolling - just adding an opinion. You don't need to start every reply with an insult just because you disagree.

I have looked at blockchain, and scalability applies to the entire technology not just one crypto. The more transactions, the longer the chain. The longer the chain, the more complex. The more complex, the more time it takes and ultimately the more it costs.

Nothing I have seen in blockchain would show it can handle that level of fluidity, complexity, and timeliness that we currently have.

For example:

NZ is a minuscule market in global terms, yet we still put through almost 200 transactions per second during peak Christmas shopping (that is 12,000 per minute / 720,000 per hour) - and that is only EFTPOS at physical shops.

Using https://cryptovoices.com/transaction-volume/ we can see that at best the major cryptos are processing about 25 transactions per second between them. So globally they are doing 1/8 of what NZ does shopping at the mall.

Now factor in all the other transactions going on at the same time such as Direct Debits/Credits, APs, ATM, Transfers, Online purchases, taxes, fees, cheques, cash, etc...

I just don't see it happening.

As for the trust question. It wasn't directed at you per se, rather just an open question.

Perhaps a different tack could be...

I/you/anyone could start a crypto tomorrow. How is this Crytpo different to the others? Would you buy into it? If not? why not?

or another way - Would you buy a Noncents Coin? a Zsmith coin? a Nymad coin? a DGZ coin?

At the end a crypto is entirely private. The whole world could create one each. But no one else would be obliged to accept it. One would eventually have to win out just so that trade is possible. So what one do you trust?

My guess is the winner would most likely be govt endorsed, heavily regulated, and only available through registered agencies.

So how does this differ from FIAT other than the technological system used to create it?

Blockchain has a myriad of potential uses. But I personally do not see mainstream currency as one.

Again, you don't understand the technology and you are using poor data to make your point.

The Stellar platform can, for instance, can ramp up to 2k transactions a second at current levels of technology. That is more transactions than VISA worldwide.

I agree with you regarding the Govt. endorsed thing.
Hence why I have a holding in one Chinese Govt. endorsed coin.
Also hence why I have a substantial position in a privacy coin.

"Blockchain has a myriad of potential uses. But I personally do not see mainstream currency as one."
You sound like Henry Ford's bank manager with that one.

It is erased

So you do believe it is a bubble that will busrt and you are the only one that can see this? LOL.

Why won't it just become an acceptable currency? Why does it have to be erased?
You have a crystal ball too?

When did I say any of that?

It is a bubble.
That doesn't mean that it is doomed forever, though.

"Why won't it just become an acceptable currency? Why does it have to be erased?"
As I said earlier, and I thought wouldn't need explaining.
When initial investment < final investment, that equals a loss.

When did I say any of that?

You said the 99 people (out of a hundred) will have their wealth erased

You don't seem to be on top of your game today nymad I must say. I think you have crypto-fever!

I was referring to this.

"So you do believe it is a bubble that will busrt and you are the only one that can see this? LOL"

Argue as you will, ZS.
You might get a ban or award for ineptitude this year.

Honestly though this is fascinating. I never believed Auckland property was a bubble and argued that the fundamentals were sound, hence my level of investment. You, however, believe crypto is a bubble but nevertheless invest heavily. It's a pretty interesting development.
I have 20k kicking around I can afford to lose. Which one should I invest in? Serious question.

Go to binance.com and take your pick.
You're smart enough, I'm sure you'll pick a winner.

Closed for new registrations.. have yet to find a trustworthy one open today. Seems like a gold rush..

Yep, it will be an absolute gold rush this year.
Do whatever you can to get on an exchange. Once there, invest wisely.

Thanks nymad. That's a very intriguing site being able to watch the figures change so rapidly in real time.

"Crypto is where the big gains will be made and many will cash out and buy an investment property"

First part of your statement is absolutely true, second part may occur when the next boom in property happens, not in the near future

Updated: US consumer credit data has come in much stronger than analsysts were expecting, rising +8.8% pa in November compared with the same month a year ago.

Hmmmm...

Broken down, consumer credit rose by $11.2 billion in revolving credit, or credit card debt, which pushed it a record $1.023 trillion, the highest credit card amount outstanding on record. This was also the second highest monthly increase in credit card debt on record. Read more

As always, it starts with income growth, or really the continued lack of it....

The view from both hours worked as well as the apparent relation to consumer credit (and the savings rate) supports that analysis. Like the steady increase in adult cohabitation, it just doesn’t fit the sweet spot. Read more and more

Crypto currencies are nothing but a total gamble and are supported by nothing tangible.
Good on you if you have made plenty on Bitcoin etc. you have got guts!
Personally think that it will drop if not crash as I believe that there will not be enough new people stupid enough to continue to buy into it, and I also beleive that currently there is a helluva lot of manipulation of the price by current investors!

Bitcoin has crashed 3 or 4 times as I recall and keeps recovering, not the normal behavior of a bubble? Better we buy a old rental in CHCH for the real returns no doubt..

Is it back at $19k USD already? Or are we still waiting for the recovery?

Boo hoo is $16k..miss out did we?

"not the normal behavior of a bubble" actually normal behaviour is to have repeated ups and downs along the way, ever seen a 'dead cat bounce' (and no I am not that sadistic).

" Personally I hope it crashes and soon as it is probably too late for me to get in as I was not quick enough to get in early. I wish I had the ability to understand what it is all about and the ability to get on a couple of computers however I don't and I have to accept that fact."

I think Bitcoin is akin to a piece of string. The other end is anchored in by nothing more than prophecy. The longer it goes on for, the more people will hop on believing it has further to run until one day, the one pin pricks the bubble. I suspect most people are just gambling with money they cannot afford to loose.

Personally, I wouldn't be surprised if Bitcoin has way more life span and takes off to say $30K - $40K. Often these things go on way longer than the conservative amongst us believe is possible. These manias are the tail end of a period of unprecedented credit creation. It's just QE froth. The longer it goes on, the more damage will be done on a global scale on the unwind.

Unfortunately with the volatility and exchanges delays you cannot time the market as well as with other investments. It can rise or drop over 5% in a day and a transaction could take hours or a week to go through. The key thing is that it is easy to pick up trading in it if you do not treat it like you need to learn the technology behind but like other currency markets (abet with much more volatile and slightly more bullish investment). There is no miners you need to setup, no GPUs you need to buy, no cryptography principles to learn. You sign up for an account, transfer funds and start trading. You usually spend more time reading about the different exchanges and different account storage e.g. hardcopy offline, device wallets and exchange wallets much like other investment platforms, banks, ETFs etc. Much of the rise is driven by news and the user base. So a lot of effort in picking good waves is keeping on top of the comms channels as well as the analytics. If investment this volatile is not for you that is incredibly understandable.

Question. The US has spent trillions protecting the petro dollar. Cypto (if I understand correctly) is a threat to all currencies. If this is correct, then one would expect an absolutely massive (possibly joint) effort to destroy it? Corrupting/messing with the crypto markets to undermine it would be chump change compared to warfare?

They don't need help, the design, lack of scalability, developer infights and exchanges are doing pretty well at sabotaging themselves. They don't need any help and certainly do not need the banks or other less risky investment instruments to hamstring themselves. If anything regulators might be trying to act like a knight in shining armour ready to help rescue customers when things go pear shaped, again... I mean those first few times, (like MT Gox etc etc), had exactly the predictable response when the ideas of good governance and customer services are avoided like the plague from the community. Now the large customer base exchanges are trying to court the more discerning large scale investors so no wonder they are trying to look more respectable than the highwayman. Whether they would attract more than the white knights would depend on how dashing they seem. Tell me what attracts this investment to you, e.g. the thrill, the claims to safety on the roads at night, the rewards, the mystery of the devil you don't know etc? Because unfortunately tech wise I have got to say the currency speculation has been so very disappointing. Thankfully the actually technology used is able to be developed further outside of it to more lasting solutions for different industries. https://www.youtube.com/watch?v=3OFOZQ6pMGo

meanwhile..... wait until the new govt policy comes out. The $25 ceiling has to come off for targets to be met.
https://www.commtrade.co.nz/