Cryptocurrencies – Bitcoin – Central Banks



hi everybody I'm Lynette Zhang chief market analyst here at ITM trading well we've talked a lot about the central bankers and the the key tool that they use to regulate the rate and speed of inflation which is our interest rates and some of you also might recall that back in 2015 they came out with a piece on how to break below the lower zero bound because most of the world is anchored at zero percent interest rates and they say the most important consequence of breaking through the zero lower bound is that there is no longer any constraint on how low interest rates can go okay well we know that crypto currencies Bitcoin came out in 2009 and they looked at it and I've been following it since then too and I thought it was a fad and so did they well we all decided to no it's not really a fad it is definitely here to stay and so there is a tremendous amount of money that is going into developing this area by central banks by governments by corporations okay so in fact here okay this is a piece from the rice bank which is Sweden's central bank talking about issuing an e Corona and that would be a digital currency now we do know that sweden is instrumental in going there almost cashless right now so they are really way ahead of the curve and a great place to test that so central bankers see the advantage of that because crypto currencies are infinitely divisible so they could easily eliminate that issue of going below zero because they can do that easily of course they need everybody's buy-in so they've taken a pretty good hands-off approach as far as regulation goes because they want people to get used to the crypto currencies so we can see the rise just since the first of the year in the market cap of crypto currencies these are the IC O's which is the initial coin offering so you can see how rapidly that 2 is rising as money flows into here now there are some that think that this is the beginning of the run on the dollar and actually all fiat money that could very well be true but they also need to control it so this going to that chart that I graph that I just showed you this is the important column in there you can see how much they've risen just since January this is a bubble that's ready to explode and I'm going to come back to that in a second but when there is a flight to safety as that confidence is lost in the currencies what I'm not sure what that is focus on this camera okay if there's a rise in the flight to safety well this is the current market cap of gold physical gold this is the current market cap of physical silver and this is the current market Katz actually a little bit bigger than larger than this of crypto currencies including Bitcoin so they're now crypto currencies now have a larger Mac market cap than silver does physical physical cyber okay so I want you to be aware that there is definitely a growing awareness of crypto currencies which actually serves the central bank's purpose of getting everybody used to it now the other thing I want to bring up is the fact that we do also know that the global power has been shifting from the u.s. to China and last month the shanghai gold exchange created a partnership or relationship with Dubai's gold exchange well that does a few things number one remember this is the first ever ran in be denominated gold contract but with what's been happening in the oil markets we also know that that the Middle East wants to create other of Revenue so by creating this partnership China gains access to 1.6 billion Muslims but Dubai gains access to both China and India the two largest Asian countries so this is pretty good now Sharia law okay well they're starting to come out with its they're not out yet but they are in the process of coming out with gold backed crypto currencies this is the only one it's one gram gold is the only one that I could find that actually states that they are backed by that you could convert them back into physical gold the CME Group is coming out with one and then there's another company that's coming out with one however remember they don't have firm regulations in here yet so I could not find any kind of legal document or filing or anything that's that guaranteed any of this nor that stated that they could be converted into physical gold however in the bubble and the other crypto currencies explodes most likely you will see a flight into that so I definitely want you to be aware of that but truthfully if you don't hold it you don't own it anyway I might personally feel a little more comfortable going in in that arena but my level of comfort is with my wealth that I can hold because if for any reason you cannot access that then it's lost to you until you gain access again if you hold physical gold and silver in your possession that's not true you can access it when you need it and you can always convert physical gold and silver into any currency Andy good or any service that same thing cannot be said for currencies and crypto currencies have only been around since 2009 I don't think they're quite fully tested yet not only that but we have seen what's happened to crypto currencies when governments have central banks have felt threatened by them remember they have the laws on their side there are some that think that these cryptocurrencies will completely bypass the central banks and that is certainly a possibility but I don't think central banks are going to give up their monopoly quite that easily so we'll see the progress of this and I'll let you know about it but what are they doing for themselves and what's really happening this is physical gold bar and coin demand through the first quarter of 2017 it's up nine percent year-over-year in China it's up thirty percent year-over-year it's pretty obvious what the central bankers and the wealthy are actually doing and that's physical I'm not saying that they aren't doing cryptocurrencies clearly you saw that big huge spike in there however this in my opinion this physical in your possession is the single safest place to be but we definitely want to keep our eye on what's happening there because they're infinitely divisible so that eliminates the lower zero bound challenge having said that they will still need to deal with this debt so we still need to go through that reset some things that's the run into the crypto currencies is about me this is where I'm most comfortable and we'll take it from there so that's it for today I hope you found value in it make sure you share this information and follow us on Facebook like us on Twitter subscribe to us on YouTube give us a thumbs up if you like this and share share share and be careful out there 888 six nine six four six five three take care bye you

20 thoughts on “Cryptocurrencies – Bitcoin – Central Banks”

  1. Be careful talking about a technology you are not fully informed about and have a clear bias about. Listen to videos by Andreas Antonopoulos to become better informed.

  2. NO CHANCE CRYPTO ARE BYPASSING CENTRAL BANKS , BANKS HAVE CONTROL OVER MONETARY POLICY , WHICH THEY CAN BAN ANY COMPETION THEY WANT LEGALLY , WITHOUT FIAT CRYPTOS WOULD BE AT BLACKMARKET VALUE ONLY WHICH IS $100 A COIN , INVESTORS ARE CHANGING CRYPTOS BANK INTO FIAT THE REAL WORLD WEAR YOU CAN BUY A HOUSE AND CAR , AND THE INSURANCE OF BANKS TO YOUR MONEY , CRYPTOS THERES NO INSURANCE , THE MAJOR PROBLEMS WITH CRYPTOS IS NO STABILITY WHO WOULD ACCEPT THEM IF THEY CAN LOSE 50% OVER NIGHT , THATS WHY FIAT WAS CREATED SO THAT A LOAF OF BREAD ISNT $20 MORE EXPENSIVE THE NEXT DAY , SO NO SANE BUSINESS WOULD ACCEPT CRYPTO AT THE MOMENT UNLESS THERES A FIXED UNIT OF CURRENCY , SO WHATS STOPPING THE CENTRAL BANKS CREATING THERE OWN CRYPTO 1S WITHOUT LIMITING SUPPLY AT A FIXED UNIT OF PRICE , GIVING THEM POWER TO STILL MONEY PRINT DIGITALLY , I DONT GET WHY PEOPLE DONT SEE THIS !!!!!!

  3. Bitcoin is NOT infinitely divisible. There is a fixed limited supply of 21 mn Bitcoins and 1 bitcoin is divisible to 8 decimal places. Fixed supply. Bitcoin is the opposite of any gov. Crypto currencies that will come out. You will hurt a lot of people with your deception as you sell more gold for your own self gain. Despicable.

  4. "Crypto currencies are infinitely divisible" Where did you get that idea from?
    If you are going to make broad sweeping generalizations (indirectly suggesting) that all crypto currencies are the same at least back it up with the data to prove it.

    Furthermore holding up pieces of paper to the camera does not build credibility it makes you look a few generations out of date.

    To the future generations you will be seen as an industrial age dinosaur using your industrial age education, beliefs and perception of what you think the world is to understand a digital age that you have not grown up in.

    Put simply, your way of perceiving reality is based on a world that no longer exists. Try to take that into account when making inaccurate assumptions based on a limited amount of information.

  5. This could be a repeat question…but could the crypto's like LiteCoin be based or measured off on Silver or Gold?

  6. Businesses like Gold Money have remonetized gold, by allowing customer to make purchases though a VISA card, or as mentioned, a crypto currency backed by gold would do the same thing, yes?

  7. In reviewing your listener comments about what can hack block chain, nobody even mentions the ONE mathematical expression that can CRASH any block chain: 51%. Please lynette zang, input this for your followers if you think my point has merit. Everybody extolles the invincibility of block chain without knowing that it's invincibility is not true. It's invincibility is theoretically impossible mathematically even without centralized control.

  8. New follower here and a baby boomer, too. Thank you for your level headed opinion based on your objective analysis of bitcoin. I have been observing the crypto developments and am convinced many crypto speculators have not even read the original block chain white paper by Satoshi Nakamoto or his persona. They do not even understand the 51% threat to block chain that satoshi cautioned. Every time I mention this in conjunction with quantum computers and the hacking potential, I get blown off. Could you please review the white paper or relevant parts thereof? Lynette Zang, you would be the perfect expose' for this prescient document. Thank you for your excellent commentary. And keep stacking!!

  9. Decentralized ledgers are of NO use to central banks and governments. Gold and Silver are obsolete. Are you planning to revert to the horse and buggy as well. Maybe you can keep an ingot in your pocket and chunk off pieces to pay your groceries?? You gonna keep it in you house? You're very uninformed on the Block Chain technology. Lastly, why do you call yourselves a "trading" firm when you are nothing more than a "brokerage house". You're NOT a trading firm or entity. Stop co-opting the name to try and gain credibility.

  10. I think you're absolutely right. I think though there are multiple levels of comfortability with risk. I think though if you took a percentage of money that you're comfortable with losing, placing it in more established cryptos like bitcoin chances are pretty good that you'll see a nice return, if you wanna get super risky then ICOs are the way. I've been trying to find a good balance between the 3 and doing pretty good!

  11. ENGLISH: The central banks can not have a opinion on Bitcoin (CC) because it's their competitor… Their powers and places of work are in danger because of the innovative Bitcoin or other CC…
    GERMAN: Die Zentralbank kann zum Bitcoin keine Meinung haben, den der Bitcoin ist ihr Konkurrent… Die Macht sowie alle Arbeitstellen der Zentralbank sind gefährdet durch den Bitcoin…

  12. there are no sure bets. everything is a gamble..what did people use to buy their crytos? paper money? the same thing that people say is worthless. so crytos are backed by paper money than.

  13. The new LME gold /silver and China gold /silver index will kill the comex manipulation !!

    it is already starting , big upside potential for silver , it will never be this cheap again in our lifetime !

  14. The management of and after the crisis in 2008 was a masterful stroke preformed by the Fed and allowed the world to kick the can up to the construction zone (destruction if you don't know much about the can?) Said can is full of the hopes and dreams of a world were short rates never go north and business deals never go south? Where dollars aren't made anymore they are "mined"?

  15. The fed will do whatever it takes to get The Ten year up to 3%, and than peg it to the rate and use the peg to twist again like they did last 2012 summer? And push the balance sheet duration out to infinity at 3% or until the next big liquidity crisis (of opportunity). Your dot graph becoming huge lines of price discovery on interest rates better have got noticed? That chart was real pro work, the sky has been falling for long bonds for over 35 years. And you proved its now over, great job.

  16. I am not getting in this crypto trap….Yes, make money by speculating with crypto, but to hold your money in crypto, no way! Crypto bugs call me dinosaur while in reality they are delusional that their Bitcoin is a safe haven. If Bitcoin was going to hurt central banks , they would probably have created a law branding crypto illegal by now…. I stick with thousands of years of proven value….

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