Trader Note

Spike indicates direction (confirmation) of move. If it has legs, it will follow the spike. If the spike retraces, it is (probably) a short cover rally in opposite direction.


Bitcoin. Vanuatu and Crypto  See: EVENTS


This Week

Central bankers will be lecturing this week. Perhaps they are hyping their exit from the market.

China data this week will likely be a bigger market mover.

Stock Markets like to pullback this time of year. So market action may be mild leading to a horrific market collapse. Most likely, however, it will probably just be status quo this week. Avoid over extending your risk.



Bitcoin has been popping on the market. This does not mean that it is time to sell. However, if you are trading, be aware than in November there will be another code split of Bitcoin.

This split may prompt a sell-off in the lead up to the split. Many investors will still be in this market, profiting from selling the split side that they do not want. This happened previously for the spilt that created Bitcoin Cash. So look to a dip in November to add to a core position.

Expect that Bitcoin will continue to be the main crypto currency that other crypto prices are based around. As the primary, utilizing well written code, Bitcoin will continue to exist into the future. As there is a cap on the number of Bitcoins at 21 million, demand will outstrip supply causing higher prices. Bitcoin will continue to be used into the future as a comparable crypto currency has not yet been created.

Bitcoin can be fractioned down to 8 decimal places. That means 0.00000001 BTC is the smallest amount that can be handled in a transaction, similar to the smallest increment of USD is $0.01. Assuming that the cost of processing drops with the increase in Bitcoin value, that means that it is conceivable that 0.00000001 BTC may one day be the equivalent to $0.01. That puts the value per Bitcoin at US$100,000, assuming that USD doesn’t collapse in value as oil crypto-currency takes over the market.

Bitcoin is not minted as quickly as central banks mint currency, but instead requires an input of electricity and computing power. As the cost of mining increases and the ease of use spread to a wider audience, it is conceivable that the price of Bitcoin could be higher than $100k, if it survives these market shakeups.

For now, however, if you want to take some profits to lower your risk, that may be wise.

Be aware that China rumors are hitting market about continued trading of crypto-currency. Until the government confirms or denies this, be prepared for a snapback if the rumors pan out untrue.



Vanuatu and Bitcoin

The island chain of Vanuatu is taking Bitcoin for citizenship (USD$200k). As explained in an earlier post, when governments of the world ban crypto-currency exchanges, other smaller nations will open their markets to this highly profitable market possibilities. Vanuatu is one such nation.

If you have always wanted to live on a beach but cannot afford Hawaii, then Vanuatu might be an option. If Vanuatu becomes a crypto hub for exchange and trading, then there will be a boom in the local economy, so get in now while real estate prices are reasonable.

Islands like Vanuatu offer unique opportunities to foreign investors. Vanuatu has no income tax, withholding tax, capital gains tax, inheritance tax, or exchange tax. This seems like the perfect environment for an electronic market. It is also an excellent environment for those profiting from such trades and looking for a way to cash out without a major tax liability. As many early adopters of crypto-currencies exit the market, such tax havens will be awash with capital.

The drawbacks to island living are based in the remote nature of the location. Electricity is expensive so mining crypto is not cost effective. The island does not have oil deposits, so all fuel is imported which raises the input costs for industry. The islands are geologically active, so volcanoes and earthquakes are a risk factor. The remote nature of the island means that trading foreign markets has a larger lag-factor (so placing At-Market orders can be fatal to your bottom line).

The future of solar, wind and nuclear power mean that remote locations like Vanuatu will soon be energy independent. When electrical generation input costs drop (quality storage options, thorium reactors, and cheap solar panels) then such locations will be highly competitive technology centers. When the price of crypto-currencies soars, such locations will be awash with funds to invest in such technologies. This will create the next boom markets to governments that are open to these new technologies.

With decentralized markets, the question is simple:

What programmer would prefer to live in a New York basement over a beach front condo in island paradise?

For example, what can AUD $250k gets you?





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