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WalletInvestor
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Re: Bitcoin will crash soon

Tue Apr 13, 2021 12:05 am

It might be a possibility, but why do you think so?
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WilliamBrown
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Re: Bitcoin will crash soon

Fri Jun 18, 2021 5:46 pm

Oh, no. i'm die

CryptoStar19
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Re: Bitcoin will crash soon

Sat Jun 26, 2021 8:14 pm

Bitcoin can crash anytime for various reasons: an easy one is a large holder selling a large amount that will then cause prices to fall slightly and this will cause liquidation of many leveraged position that will have a cascading effect causing further price falls... doesn't change anything about the bright outlook for bitcoin in the long run.

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CryptoManiaks
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Re: Bitcoin will crash soon

Sat Jul 31, 2021 9:24 pm

Well, BItcoin will not crash soon :)
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WalletInvestor
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Re: Bitcoin will crash soon

Thu Aug 26, 2021 11:10 am

For the record, I look like I'm the original poster of this thread, but it wasn't actually I who posted it. I was just responding to someone else who apparently thought Bitcoin would crash - the OP must have gotten deleted or something.
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goddey
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Re: Bitcoin will crash soon

Fri Aug 12, 2022 4:48 am

The necessity for a decentralized monetary system has been gaining a lot of traction as part of the aftermath of the financial crises of 2007 to 2009 that crippled the global financial system and cryptocurrencies are gradually meeting that need. The traditional centralized monetary system is losing its popularity as the digital currency market is taking over as a decentralized monetary system (Wu et al., 2018; Apopo & Phiri, 2021). More so, As a digital coin, cryptocurrency employs blockchain technology in generating, transferring, storing, and verifying currency. The process is independent and does not follow any government or central authority regulations. The cryptocurrency idea started with Digicash developed by David Chaum in 1983 and Bit Gold developed by Nick Szabo in 1998. Both ideas are pursuing the achievement of having a currency that can use untraceable and not involve central authority (Wayner, 1997; Szabo, 1998; Popper, 2015). These digital currency proponents maintained that the introduction of virtual currency markets will increase the inclusion of the financial market.

Decades after these two attempts, a white paper on electronic cash systems was published in 2008 which set the pace for cryptocurrencies. Satoshi Nakamoto explains the principles, technicality, and functionality of the decentralized electronic cash payment system named Bitcoin. Since then, other cryptocurrencies have emerged and they have been experiencing tremendous popularity and growth because of their special features such as user anonymity, flexibility, irreversible transaction, and less attention from authorities when compared to other payment channels (Bohme et al., 2015; Eva Lengyel-Almos, & Demmler, 2021). The early adoption of this form of payment is rooted in its ability to leave behind no trace as it operates outside the central bank’s reach and state’s supervision because the peer-to-peer network brings cryptocurrency users in direct contact and the money supply is a function of mining activity. The global coverage of the currency is another important characteristic that distinguishes it from others that are limited by geographic reach (Gómez and Demmler, 2018).

The growth of the cryptocurrency market has been applauded but it is not free from challenges and setbacks that raised serious concerns of the public and financial authorities. The ascension of cryptocurrencies to being a worldwide phenomenon started in 2017 as it witnessed over 100 percent increase between January 2016 to January 2017. By the end of the year 2017, the increase has been over 500% with Bitcoin and Ethereum being the lead cryptocurrency on blockchain by market capitalization. All these skyrocketing peaks in price witnessed in the cryptocurrency market are accompanied by a subsequent crash into depressive troughs. The volatility of the cryptocurrency has raised serious questions about its capability to serve as a unit of account as well as a store of value. The matter of the efficiency of cryptocurrency is now attracting attention in discourse due to its susceptibility to financial bubbles (Bouri, Shahzad, & Roubaud, 2019).

Bubbles indicate a rise in price that is well above the intrinsic value of the cryptocurrency however, the Efficient Market Hypothesis (EMH) holds that these speculative bubbles are impossible or do not exist. In his paper published in 1965, Eugene Fama investigated 30 stock prices for the presence of serial correlations and he concluded the findings that there is a small positive correlation between the daily changes of the stock. The market seems to incorporate and reflect all past price information in the current prices. An efficient market is classified as a market traded by a large number of rational parties to maximize profit. All these parties in the market can get access to information freely as they try to predict the securities prices. The EMH characteristics followed that of the perfectly competitive market in which the sellers in the market do not influence the price of goods and services which leaves traders to earn a normal profit (Apopo & Phiri, 2021).

In recent times, researchers have examined the predictability of cryptocurrency prices and it is expected that if the prices can be predicted, it will be possible to take advantage of arbitrage opportunities (Makarov & Schoar, 2020). However, if prices are not predictable, it means the price will be guided by a random walk leading to an efficient market and no basis for setting up strategies to beat the market. the efficiency of the cryptocurrency market is verified by examining if the returns from the market are independent and random variables that are distributed similarly. Urquhart and McGroarty (2016) were the first to examine this phenomenon using Bitcoin and they submitted that the coin followed an efficient market over some time and later in the last subsample begin to exhibit a weak form of market efficiency. Following this finding, several studies have investigated this EMH on cryptocurrency with each study identifying different uses of cryptocurrencies as they give their conclusion on the topic. The global acceptability of the cryptocurrency has led to its exposure to many hits and is driven by global issues such as COVID-19. It is, however, imperative to examine the extent that this change has led to cryptocurrency aligning with the EMH. Based on the aforementioned, this current research will test the EMH in the cryptocurrency market.

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