Five psychological reasons why people fall for scams – and how to avoid them
Con artists, fraudsters and their hapless victims are a staple of the news cycle and hardly a week seems to pass without a story about an e-mail lottery scam or a telephone fraud. Many reading these stories perhaps just raise their eyebrows and shake their heads, wondering how people can be so gullible.
Using some of the ideas outlined by psychology professor, Robert Cialdini, here are five psychological reasons why people fall for scams.
You scratch my back…
Beware the principle of reciprocity. If someone does something for us, we feel more obliged to do something for them. Scammers use this type of “enforced indebtedness” to elicit an unwise action from their target. For example, someone offering you an exclusive opportunity to invest your money can be seen to be doing you a favour. That in turn makes people want to return the favour – which could be as simple as continuing to listen to their sales pitch, or as destructive as signing up for a bogus scheme.
Like lemmings off a cliff
Research shows that if a person believes other people are doing something, then they feel it must be okay for them to do it too. This is especially true when individuals find themselves in a pressured and ambiguous situation – such as a sales pitch. If a person on the other end of the phone tells us that 75% of people like us have signed up to this financial scheme, then we are much more likely to do so – even though we might secretly doubt the veracity of such claims.
People like to think of themselves as being consistent and committed individuals. If we say we are going to do something, then generally we will, as failure to do so may dent our sometimes fragile self-esteem.
Fraudsters take advantage of this by getting us to commit to little steps that then escalate in nature. For example, by simply getting people to answer their “trivial” questions (how are you today?), the fraudster is getting their prey to fool themselves into believing that they are happy to talk to this unknown person. And, of course, trivial questions lead to more personal ones, like who do you bank with? Having answered one question, it would be inconsistent not to answer another one. And, after all, we like to perceive of ourselves as helpful and polite individuals.
FOMO (the fear of missing out)
People are generally worried about missing out on an opportunity, perhaps for “the next big thing”. And if such an “offer” is for a limited time only, then the principle of scarcity suggests that people are more likely to be drawn to it.
When our freedom to be able to do something is threatened, we tend to react quickly to ensure that we don’t miss out. When pitching financial offers, scammers will claim that this offer is only valid now and as soon as they put the phone down, the offer will be gone. Many people will feel that they simply can’t miss out on such an opportunity.
They seemed so nice
The principle of similarity suggests that we tend to like people who seem to be the same as us, and, in turn, we are much more likely to agree to a request from someone we like. Similarity can be as broad as an interest in financial investments or as fleeting as sharing some personal characteristics.
Scammers take advantage of this and try to find out things about us in order to appear to be like us. For example, asking your date of birth, and then mentioning that it is their date of birth also, can have the unconscious effect of making you like them more – and hence more likely to agree to their requests.
While it is unlikely that any one of these psychological ploys on their own would be sufficient to persuade someone to do something that is against their best interests, in combination they can be powerful tools for a con artist. But by being aware of, and understanding, these five simple psychological principles, people are far more likely to be able to resist them and avoid being scammed.
BEWARE OF BELLS and WHISTLES and UNFOUNDED CLAIMS
SOME HOME TRUTHS ABOUT ONPASSIVE AND “PASSIVE INCOME”
At one time or another in our online journey, we’ve been led to believe we can get-rich-quick or live a luxurious lifestyle on passive income for very little to no work involved. Even more now than ever, there are millions of people looking to make an income online and are spellbound by the so-called limitless potential of the internet especially when someone tells you you don’t have to do a thing, it’s all done for you, so just pay the money and let the money roll in passively.
Although some of us learn that this is just fantasy, others, particularly the tens of thousands of newcomers to the online world are sitting ducks for any so-called company promising great riches with no real evidence of the amazing proprietary technology they endlessly spruik about and the passive income promises they make.
Passive Income Is A Risky Fantasy
Online technology has greatly evolved since the dot.com era with automated marketing and AI and although it has its place, there’s a lot more to building a business than relying on automation or other people to work it or bring in new recruits for you. What makes a business work is by creating value on a personal level. If you're going into the business with the intention of having it magically provide money for you while you sip margaritas on the beach, then you often get roped into dubious companies making unfounded claims.
The majority of people I see who are only interested in passive income haven't learned how to create value in the first place. They're just going along with the gimmicks, tricks, and formulas, basically wanting and believing they will get the lifestyle promised to them without doing anything to the point where it becomes a cult.
Too Many To Count
There have been so many companies that have failed due to pyramid structure or matrix compensation plans which is the primary structure that pays the thousands of people their promised millions of dollars. Either intentionally or unintentionally they failed.
Then there are the ones that intentionally create a business with no products on the back end, in fact, the websites never existed. Just one example is PRSI. William Caudell offered people a wholesome internet business that turned out to be a bogus marketing scheme, which cheated them out of $13 million was sentenced to 11 years in jail, originally 14 years, however, it was reduced after Caudell cooperated with the authorities by giving up his co-conspirators.
PRSI made its money by charging a $295 "application fee" that qualified users for the "Small Office/Home Office (SOHO) System" that would provide them access to their own site in an Internet shopping mall.
But there were no Web sites, nor any intention to provide them. PRSI was "selling air". Instead of providing Internet shopping sites, PRSI recruited "CyberManagers" who would recruit others to buy into the plan, and the new recruits would find more participants to pay the fee – a classic, illegal pyramid scheme that hooked 48,000 people globally. The company's Web site advertised that the company was dedicated to protecting children and creating a pornography-free e-commerce site that would spark the interest of any humane individual. Great hook!
Tugging On The Heartstrings
The latest current program, as it stands at the moment, and similar in nature to PRSI is GoFounders/Onpassive which hone in on the heart of people. Everyone wants to belong to something. They play on peoples’ sense of community and tug at their heartstrings, literally brainwashing their victims. GoFounders.net seems to be the matrix program and the funnel to access Onpassive.com, (awaiting launch), which is purported to be the marketing suite with proprietary products. (Although it states on their website that GoFounders is the product. See image below)
One of the catchphrases is “Artificial Intelligence with heart”. AI is defined by its very name, it has no heart, it’s artificial. The heart comes with the human aspect of a business that provides value and personal experience the customer receives from a living person. So if the main feature that sells this concept is to automate everything so the business owner doesn’t have to do anything but rake in the money, they are doomed from the very start. Any professional, experienced marketer will tell you there is no such thing as “completely done-for-you systems”.
Ash Mufareh is going to great lengths to make ONPASSIVE seem like it’s growing into an IT tech giant, yet it suffers from a lack of quality control. For example, the video says “In the heart of Disney Land.” First, Disneyland is one word, and in California, not Florida where Walt Disney World is.
NOTE: Ash Mufareh has also registered another Orlando, FL address for ONPASSIVE that is not the same as this office building. This other address is, 9924 Universal Blvd., 224-320, Orlando, FL 32819. When you Google that address, it comes up as The UPS Store.
On one hand, they proclaim you will earn $2 million a month passively for a one time fee, so unsuspecting people sign up, pay the fee, only to find they are now saying you must “work hard and smart” to achieve that, along with financial disclaimers according to Ashraf (Ash) Mufareh, the founder and CEO of GoFounders/OnPassive, in a zoom meeting held last week by a group of leaders that invited him to speak. In that same webinar, he stunned the attendees with his new and latest announcement of implementing an Onpassive Academy for school kids, due to the COVID19 situation. I wonder if this will delay the launch yet again!
The Perpetual Prelaunch
This program has been taking money from people while in prelaunch now for over 2 years with nothing, no sign of any marketing software, except for the promise of “never been done before” automation and AI technology, but to keep these members placated, it had provided a URL shortening tool which you can access for free anywhere. Personally, I refuse to call it a company until I see proof of their claims and products.
The normal procedure for a real startup company has 3 stages. Telling members they are holding off the launch till everything is perfect while stipulating a joining fee is a RED FLAG.
In the Prelaunch stage, a company starts to build an audience so it can actually have a product for people to try.
Private Beta is where a company has products that members can use and do use. It can still be buggy at this stage and this is where the company continues to develop and fine-tune its systems while still continuing with member development.
Public Beta is when a company can take on more members because it knows it has delivered and continues to deliver value as well as introduce and roll out further upgrades and services that are stated on the white paper and road map.
Marketing should start at pre-launch and carry through to all stages. All genuine companies that integrate and use the latest technology have an official whitepaper and road map. In all my research I have yet to find an Onpassive White Paper or Road Map.
Notably, I found only four videos. Three of them were hyped up videos of roughly around 90-seconds in length each, that belonged to Ash Mufareh himself, but not of himself on his YouTube channel that had a total of only 420 subscribers. The one other video was a presentation by one of his recruits. You’ll only ever actually see him on a few webinars of his top leaders in Onpassive at which he has been an invited guest.
All meetings seem to be very Kumbaya with very little substance and all very vague of what is actually promised to the members in terms of its “seismic revolutionary technology” and marketing tools. The rest is excited hype. Transparency doesn’t seem to be one of Ashraf Mufareh’s fortes. All of the webinars are still there on YouTube with the repetition of the exact same things said a year ago, always being equally “excited” and “blown away” by all the wonders Mufareh keeps talking about, during these webinars – but of course, that’s all “proprietary”, so he can only hint at it. (the guy seems to think “proprietary” means “confidential”).
Video Compliments of Julian Leahy
The Matrix Of Infinity
Onpassive’s compensation plan was until recently, a 3 x 10 matrix, and since been changed to a 3 x infinity corporate matrix. Every individual has their own matrix they need to fill within the corporate matrix. Below I do the math on a 3 x 12 level matrix then go on to 20 levels for those that haven’t taken that into consideration up to this point.
The initial joining fee of $97 upfront, locks you into the infinity corporate matrix. Then at launch, you need to become a customer initially, pay one of four levels $25, $125, $250, $500. This is a monthly fee, which the leaders claim will become self-funding, therefore not out of pocket once you fill your matrix. Each level has a finite amount of tools available for use. If you want them all to complete your marketing suite, you need to pay for all 4 levels upfront totaling $950 monthly. Once you have your back office, with a click of a button you become an independent reseller even though it’s touted that you just pay a one-time joining fee of $97 now before it goes up to $997, then sit back and earn $2 million a month.
What is noteworthy is that for any MLM company to be a legal entity, it needs to have retail customers yielding retail sales separate from the distributors or resellers.
There are no qualifications needed, just join up and get paid by every new member that comes into your team. According to one of the leaders, Mike Ellis, This comp plan is “revolutionary” and “really really cool, really really ingenious” as you as a member get your level 4 monthly membership (once you’ve reached level 4) paid by the “profits of the company.” (in other words, the money from the people that have come in after you that are in your personal matrix within the corporate matrix.)
Revolutionary? No, it’s been done and failed too many times before. This matrix program is just hiding under the guise of the latest technology of the products (that no one has actually seen yet) that most people know very little about. Any real AI company will tell you it is very expensive to implement and maintain to keep it running at top-notch.
Let’s Do The Math
In a 3 x 12 matrix pyramid scheme in which the top 3 people recruit 3 new people. Those 9 recruits 3, the 27 beneath them bring in 3, 81 beneath them, 243 beneath them, 729 and beneath them, 2,187 beneath them 6,561 and so forth down to just the 12th level is 4,782,969 recruits.
On the 20th level, it equates to 10,460,353,203 people which is more than the current population on earth. Unfortunately, everyone that comes in, even the last person to be signed up thinks they are at the top of the matrix. (Psst… you are! – The top of YOUR matrix with nobody under you until you make the effort to recruit, and until then you pay the monthly fee for the tools.) but wait, there are no more people left in the world to recruit.
What about spillover? Unless you come under a hotshot recruiter and particularly if you come in at a lower level there is no spillover, it dries up as the people who have been told they don’t need to recruit come in before you have their infinity matrices to fill before they even get close to you. Let’s face it, most people that are drawn into a program that promises to make them a millionaire don’t know how or even want to work for their dreamy lifestyle.
Genuine Customers Who Want The Purported Services Of Onpassive Are Waking Up
One of many members that joined over a year ago, had this to say,
“I, unfortunately, joined this company over a year ago "yea I know stupid me" but I didn't believe the bullsh*t about making all that money with the matrix plan doing little work but instead was trying to find a marketing system that would help me with advertising my affiliate programs and other business ideas. For the last year, I have been hearing the company's mouthpieces talk about we are "just about to launch so get in now".
Since that time the "Founders'' have gone from around 25,000 to now well over 110,000 and still, we are "just about to launch". I just wanted the services which were promoted in the beginning but now it's all about creating an online meeting platform like Startmeeting which is going to be "bigger than Zoom or Google". Well, I DON'T CARE about that. I just want to have a marketing system that works and doesn't cost an arm and a leg which I am beginning to see now is next to impossible.
I have given up on the $97 sign-up fee but it just pisses me off the way people can so blatantly promise a service(s) and then just put off providing it because they are some sort of MLM marketing company in prelaunch. I wish I had done more research and looked for other videos like yours back then, but I was just so eager to find something that might work for me that I just went in blindly. Maybe eventually this company might prove me wrong and actually launch but then again maybe golden raindrops will fall from the sky the same day I win the lottery too.”
Or there’s this one…
This guy seems to know what he’s talking about…
About Ashraf Mufareh – The Last 10 Years
Ash Mufareh has been involved with different work at home endeavors that have been shut down almost as soon as they start. In 2010 Mufareh founded a recruitment-based matrix scheme called AshMax.
Mufareh stipulated AshMax was NOT MLM but on the contrary, has a 5×5 sales matrix, with each new member required to recruit 5 additional members within 20 days. If someone does not meet this requirement, the person is forced out of the matrix. The full 5 x 5 matrix comes into effect after 100 days (5 x 20 day periods), at which point the first level member can reportedly expect to earn in excess of $22,000 per month, recurring, for life.
According to one ex-member of AshMax,
“things were well organized over there (AshMax), for a while – weekly webinar meetings, training sites, upline/sponsor communications on point. The crux for me, the goal post kept moving, things got shaky and no one was giving disclosure. Long story short, things went pear-shaped, never got sorted, refunds never happened, etc.”
In 2012 he became involved with a Ponzi scheme called TelexFree using his TelexMax. TelexFree had legal troubles in Brazil. In 2014 the SEC shut it down revealing TelexFree U.S. investors lost in excess of $3 Billion.
A couple of years later Ash Mufareh became involved with another Ponzi scheme based out of Brazil called PayDiamonds. That endeavor didn’t last long either and in mid-2018 it was closed down. It was at that time when Ashraf Mufareh started GOFOUNDERS/ONPASSIVE.
Here is one of the three videos on Mufareh’s official YouTube channel. The title of the video is, “Ash Mufareh – The Visionary Behind the World’s Best Online Business Solution”. With a title like that, wouldn’t you expect to see or hear Ash saying something about his AI-Tech baby? How about footage of him working with his team? I certainly did and was left disillusioned when I viewed them. There was nothing but self-aggrandizing and hype. Ash is not the person in the video.
Absolutely none of the ONPASSIVE videos show footage of Ash Mufareh. You would think that if someone was creating the next best thing, that person would want to get out there and promote his new creation. Wouldn’t you expect that after 2 years of promoting and collecting an accumulative total of $11,640,000 from 120,000 GoFounder members at $97 a pop, he would be able to and want to reveal the progress to date? You will always find a genuine owner of a startup out there in full view with updates and progress reports every step of the way.
Trustpilot,as its name suggests, should be trustworthy about its reviews (you would think) however, a multitude of reviews look very suspicious to me… here are just two,
How can this be if they haven’t launched the marketing suite yet?
If a plan purports to sell a product or service, check to see whether its price is inflated, whether new members must buy costly inventory, or whether members make most "sales" to other members rather than the general public.
Beware of any plan that makes exaggerated earnings claims, especially when there seem to be no real underlying product sales or investment profits.
Beware of any plan that offers commissions for recruiting new distributors, particularly when there is no product involved or when there is a separate, up-front membership fee. At the same time, do not assume that the presence of a purported product or service removes all danger.
Beware of any program that claims to have a secret plan, overseas connection, or special relationship that is difficult to verify.
Beware of any plan that delays meeting its commitments while asking members to "keep the faith" and keep taking on new signups that must pay a joining fee. Many pyramid schemes advertise that they are in the "pre-launch" stage, yet they never can and never do launch. By definition pyramid schemes can never fulfill their obligations to a majority of their participants. To survive, pyramids need to keep and attract as many members as possible. Thus, promoters try to appeal to a sense of community or solidarity, while chastising outsiders or skeptics.
Finally, beware of programs that attempt to capitalize on the public's interest or naivety in hi-tech. Every investor fantasizes about becoming wealthy overnight, but in fact, most hi-tech companies only yield substantial profits after years of hard work.
Summary and Reality Of So Many Team Building Pyramids
The victim, like the first investor, thinks of himself at the top of the pyramid but suddenly realizes that he is actually at the bottom, unable to find people interested in the program to build out his downline. He is not alone because mathematics shows that MOST investors will find themselves at the bottom of the pyramid when it collapses. The very structure of a matrix dictates that whenever the collapse occurs, at least 70 percent will be at the bottom level with no means to make a profit.
The GoFounder members will be quick to say that ONPASSIVE is an AI & IT company and not an MLM. If that is true, why is a matrix-based multi-level compensation plan used to build a team? Those are MLM hallmarks!
In my opinion, it shouldn’t be frozen in a prelaunch for over 2 yearswhile taking people’s money. It should have reached the BETA stage by now so those 120,000 members that have paid their money can start tinkering with it at least, with ongoing updates and reports from the engineering department and corporate body, not just avid over-excited members who have only been in it for 15 months, taking the lead and have obviously drunk the kool-aid.
Right now the only thing that may attract a naive marketer is its claim of being “100% Hands-Free Completely Done-For-You Automated Online Success” and for the people who want to believe that there’s money-for-nothing ogle over the proposed passive earnings in the compensation plan.
If you apply some simple logic to their claim against the actions of a member aggressively promoting and recruiting, it contradicts itself. It’s clear to me that anyone who joins has been swept up by the thought and promise of making millions passively.
A successful business that brings real value does not put making money a personal priority and just wait for the money to roll in while you sleep. An excellent article explaining why “passive income” is a dangerous fantasy and points out 4 reasons why,
1. You Can't Stay Ahead of Competition Passively 2. You Can't Maintain a Loyal Tribe of Customers Passively 3. You Can't Lead Great Teams Passively 4. You Can't Create Meaning, Passion, or Purpose in Your Life Passively
My Final Thoughts
The evidence and timelines in this article are correct at the time of researching and writing. It certainly makes sense to me to BEWARE & to look out for RED FLAGS and apart from doing your own due diligence, logically think about what is really happening here.
What Onpassive is promoting is nothing new or special in the technical aspect, in fact, at the moment it’s fresh air until it launches (if it ever does). Automated marketing and AI technology are already being used along with blockchain and cryptocurrency in the marketing arena for far less money and there’s been no need for a pyramidical recruitment matrix.
Elon Musk, CEO of Tesla and SpaceX,a very successful entrepreneur revealed that Tesla has had a spectacular run this year despite the COVID 19 impacts. In a recent interview, he offered some advice to other entrepreneurs, suggesting that any company of any caliber put their investments first into engineering and developing a product that is superior before investing in Marketing,
“My advice, you know, to corporate America or companies worldwide is spend less time on marketing presentations and more time on your product. Honestly that should be the number one thing taught in business schools. Put down that spreadsheet and that PowerPoint presentation and go and make your product better.”
What Musk says speaks volumes to me. To be a legitimate company, there needs to be “a product” long before it starts taking money from interested parties. Even in the initial stages, you won’t see any investor just hand over the money on promises or without seeing at least the blueprint (or white paper) of the startup company’s products which should be available to the public. They need to see that it’s a viable company and marketing hype incessantly and publicly just doesn't cut it for savvy investors.
Before the claims of how “mind-blowingly, nothing out there like it” system is broadcast to the world, the company needs to be transparent with its products and after 2+ years, it should be well into a BETA phase and not continuously delaying the launch, repeatedly saying you still have time to get in at the cheaper price. Food for thought.
A Crypto/Blockchain enthusiast and a strong advocate for technology, progress, and freedom of speech. I embrace "change" with a passion and my purpose in life is to help people understand, accept, and move forward with enthusiasm to achieve their goals.
On July 15th, a spectacular hack succeeded, affecting the Twitter accounts of over 100 celebrities.
The attackers used the control over the accounts to commit advance fraud with Bitcoin.
Now three young men have been arrested. One of them is still a minor.
The accounts of Joe Biden, Barack Obama and Elon Musk were just some of the accounts that were taken over by the attackers in mid-July. They used control of the accounts to ask other users on the social media platform to transfer Bitcoin to them. In doing so, they promised to send back double the amount to the victims.
Many experienced users quickly noticed this widely known variation of the advance fraud. What was new, however, was that the celebrities were not fake accounts, but were actually affected.
Thus, the perpetrators managed to convince a whole range of people to transfer large amounts of Bitcoin to them anyway. Now there were three arrests yesterday in the USA and Great Britain. A group of three young men are believed to be behind them.
Perpetrators named themselves: Rolex and Chaewon
In the official announcement of the US Department of Justice, three young men are accused of having committed several crimes in connection with the hack. One of the suspects is a 19-year-old British man who nicknamed himself Chaewon. He is accused of computer fraud and money laundering.
A 22-year-old man from Florida is accused of gaining access to protected computer systems or at least being an accessory to them. He was operating under the pseudonym "Rolex".
The third suspect is a minor, for whom no details have been published officially due to his age.
According to several media reports, however, the suspect is a 17-year-old youth, who is also from Florida. The three of them are said to have jointly stolen Bitcoin to a total value of 100,000 US dollars.
Big load: Block chain analysis in action
The three suspected perpetrators actually became public enemy number one, and in addition to the FBI, the IRS Cybercrime Unit also participated in the investigation. In addition, several public prosecutor's offices are involved in the case.
In addition, British law enforcement agencies also took part in the investigation. Chainalysis was also commended in the case. This leads to the conclusion that the perpetrators could also be identified on the basis of the transaction in the Bitcoin network.
However, they are said to have gained actual access to the accounts by pretending to be on the staff of the social media giant. This procedure, known as "social engineering", cannot always be exposed in time. This is often the case when the perpetrators have profound knowledge of IT and the respective business processes.
Here’s Where the Earliest ETH Ever Mined Ended Up 5 Years Later
Coinfirm details what happened to the first mined Ethereum after the asset's launch in 2015.
Ethereum, a household name in the crypto industry, fired up its network on July 30, 2015,
ut what happened to the first ETH coin ever mined all those years ago? Blockchain analytics and Anti-Money Laundering company Coinfirm found out. “Another great example of the many benefits of blockchains such as Ethereum compared to the traditional space, we can see and understand the literal creation of value and how it moves," Coinfirm co-founder and CMO Grant Blaisdell told Cointelegraph, adding, "In a time where fiat printing by central banks and other major elements are absolutely unknown to the people and businesses effected by it.” *Image courtesy of Coinfirm.
The fist mined ETH coin came into existence five years back
Ethereum's inaugural mined block attributed to the following address: 0x05a56e2d52c817161883f50c441c3228cfe54d9f, Coinfirm data showed. The address received a 5 ETH payout. The noted address racked up 265.63 ETH in mining rewards over time, responsible for a total mining career of 53 blocks. A Kraken crypto exchange address received the first 5 ETH rewarded as payout for mining the inaugural block, Coinfirm data showed. One Wei of ETH, however, went to the address — 0xc130afe98f8c42e19bdacf8c6e63e48a44a26ca8. Wei hold as Ethereum's version of Satoshis, denominating the smallest divisible fraction of a 1 ETH. In total, the address sent ETH to three different locations on four separate occasions.
Ethereum has come a long way
Ethereum has changed significantly since its first mined block, not only regarding its network, but also in its asset's price. Long-term hodlers likely reaped the benefits of the project, seeing the asset take its place among the largest assets in the industry.Data from ICODrops shows ETH priced at $0.31 per coin during its initial coin offering, or ICO — a hefty profit potential if owners held the asset until its 2018 peak near $1,400 per coin. Ethereum's network has also shown no shortage of changes over the years as it still wages toward a transition to proof-of-stake, or PoS, as part of Ethereum 2.0.
Article Produced By Benjamin Pirus
Benjamin (BJ) is a full-time writer and trader in the crypto space. A former college hockey player, BJ loves a good burger, volatile Bitcoin charts and chatting about crypto.
The restricted performance of the crypto market in the second quarter of 2020, did not come as a surprise to its users. The consolidation phase in June was the main reason for this blow followed by the user sentiment. However, prominent exchanges believed that the upcoming quarter and the second half of 2020 could provide rapid growth for the crypto market.
As the price of the largest cryptocurrency, Bitcoin breaks away from the kangaroo market, the consolidation phase might note an end. At press time Bitcoin has a trading value of $11,158 and a 24-hour trading volume of $7.1 billion.
As volatility snuck back in, Alternative.me highlighted a ‘Greedy’ market, at press time, which was better than ‘Extreme Greed’ that was indicated yesterday. As the sentiment in the market stabilizes, it was important to identify prominent exchanges and key sources of users based on countries.
According to the data collected by TokenInsight, webpage popularity represented professional users’ attitudes towards the exchange. Thus, if an exchange had a higher number of independent visitors [UV] it meant that professional users were relatively recognized by the exchange.
As per the chart above, Binance, Coinbase Pro, OKEx, ZB, and Kraken have obtained 77% of independent visitors from key exchanges. This may be indicative of a high user base and a higher proportion of professional users.
As the prominent exchanges were known, they could be linked with the user source analysis, which suggested the value of orders of quarterly visitors to an exchange. TokenInsight’s data suggested that the United States, Ukraine, Russia, the United Kingdom, and China were the key markets for most prominent exchanges.
As per the data highlighted by the above chart, Coinbase Pro and OKEx had a market share of 12.493 million and 8.186 million orders, respectively. Coinbase Pro’s primary user source was in the United States, followed by the United Kingdom. Whereas, OKEx saw its major traffic from Ukraine, followed by China.
As per the analysis, no other single country or region could acquire 2 million orders of quarterly visitors to the exchange. Apart from the above mentioned five countries, the remaining single geographic market shares were below 5%. Thus, the main driver for the rapid growth in the second half of 2020 could be expected by users from these five countries on the key exchanges.
Even though the market sentiment may bring about small-scale positive changes, other problems like false transactions, capital security, and limited incremental users remain unsolved and would have to be resolved for crypto to usher in real market dynamics.
Another Chinese province reported that it is about to launch a blockchain-powered cross-border financial service platform.
Per Haiwainet, Guizhou Province, in China’s mountainous southwest, will launch the initiative this month.
The province’s foreign exchange administrator is the platform’s mastermind. The administrator stated that it has been working on the project with the Guizhou branches of state-owned banking giants, including policy bank the Export-Import Bank of China.
The province said the platform will allow “private, small, medium and micro businesses” support when making cross-border transactions by providing faster, more effective, paper-free financing for foreign trade deals.
Smaller companies typically need to rely on banks to help with the financing their international trade deals. They also need to apply for customs clearance. This typically involves a long, drawn-out process – much of which is paper-based and involves face-to-face contact.
The operators of similar initiatives in other Chinese provinces said that in many cases, they have managed to cut down month-long processes to seven days or under.
Guizhou said that the move will also help cut down on fraudulent and error-ridden financing practices, with greater transparency and traceability.
The province’s population is around 35 million, and it has become the focus of a massive investment boost in recent years. In 2017, its provincial governor unveiled plans to construct 10,000km of motorways, 600km of canals, and 4,000km of high-speed railways – as well as 17 airports.
Guizhou also has thriving mining and agricultural sectors, and exports coal, timber, and tobacco.
It has been a year of trends for Bitcoin and one of the most well-documented ones is the trend of more Bitcoin leaving exchanges than entering it. Since the start of the year, more specifically since March, over 92,000 BTC has moved out of exchanges.
A recent report had suggested that some amount of Bitcoin were starting to come back into the exchanges but recent data from Glassnode suggested that the Bitcoin balance on platforms was still stable.
According to the Glassnode’s tweet, Bitcoin’s current price explosion did not have a significant effect in terms of large-scale deposits of funds into exchanges. It said,
“So far, the Bitcoin balance on exchanges remains stable – at around 14.5% of the circulating BTC supply.”
Recent reports also cited that Bitcoin reached an 18-monthly low in terms of BTC balances on exchanges and recently, Shapeshift exchange released its self-custody app, where the users do not have to share their private keys with any third party domain.
However, the situation is most likely to undergo a trend reversal over the next few months.
Why did Bitcoin exit exchanges in the first place?
Although there wasn’t any clear cut reason, many suggested that a sentiment of distrust attached to exchanges ran like wildfire after the March Crash. Binance and Coinbase incurred less exiting Bitcoins but other exchanges faced major wrath, especially BitMEX.
However, it is important to remember that Bitcoin alongside the larger financial market was facing an economic collapse amidst the pandemic. With global lockdown a reality, many speculated that it was safer to keep Bitcoin under self-custody rather than with exchanges.
With the financial ecosystem improving, it is possible that users saw the benefit of storing Bitcoins in exchanges again.
With BitMEX’s Open-Interest improving over the past week, the largest derivatives platform image was recovering as well, which meant that users were ready to let go of the past.
Therefore, it seems like a matter of time before Bitcoins are swarming back into the exchanges, with the general sentiment becoming strongly positive over the past month.
Will Bitcoin Offer Currency Freedom Even After Mass Adaptation?
Bitcoin is a cryptocurrency which enables the transaction of money without involving the middlemen It can be used to do
various transactions like booking flight tickets, shopping for multiple goods, and purchasing stocks. Numerous people understand Bitcoin as the speculative type of investment to transact online. It is a superior form of currency as it cannot be censored, confiscated, or inflated. However, there are numerous apprehensions in the minds of the people whether Bitcoin will be able to be the king of cryptocurrency even after mass adaptation. The price of Bitcoin was $ 3500 during the starting of the year and increased to around $10,000 this summer. It drastically crashed back to $7,000 due to the tension over whether Facebook’s planned cryptocurrency would cause the regulators and central bank to legal action against the cryptocurrency.
Do you think Bitcoin will rule even after the mass adoption?
In the recent tweet, Layah Heilpern asked, “Will Bitcoin dominate the crypto market even after the mass adoption?” Well, there are many who believe that Bitcoin could hit $100,000 per Bitcoin during the next two years, and it may reach $500,000 per Bitcoin by the year 2030. The possible reasons to believe that Bitcoin would remain the king of cryptocurrency due to its simple network and advanced technical innovations. The lightning network of Bitcoin appears to reduce its popularity in the market. But to counter this, they have developed the second-layer protocol, which offers cheaper and faster payments and retains the level of decentralization in the market. The other cryptocurrency wallets have different augmentation on the top of the wallet to make it more attractive. Whereas, in the real market, people prefer to purchase and hold Bitcoin than any other cryptocurrency because there is a digital store of value. And also, to give tough competition to the other cryptocurrency wallets, Bitcoin appears to enhance the liquid sidechain and marginal improvements and enhanced privacy.
Bitcoin vs. traditional assets: Who will win?
While comparing the value of gold with Bitcoin over an extended period, it has been found that even though Bitcoin’s value will surpass the market cap for gold in the near future. However, gold has always been a superior store of value for different investment portfolios.Furthermore, the price of Bitcoin is not only volatile but also unpredictable. The price of Bitcoin seems to be altered by numerous real-world cases and scenarios like a mass adaptation. Still, the price of gold is affected by a change in the value of dollars in the international market, and for this reason, the gold prices are not volatile.
When Bitcoin is compared to other assets like stocks and bonds, it has been found that Bitcoin can give a higher return. It can significantly save the tax loss a person would suffer when they invest their money in stocks or bonds. However, the price volatility of Bitcoin makes it less popular when compared to the other assets. The price of Bitcoin would drastically fall due to external factors like mass adaptation, supply, and demand. Whereas the prices for the stocks and bonds would not fall drastically due to any changes in the market, its prices usually decrease by 0.5–3 %. However, if you are willing to invest in cryptocurrencies to gain more profit, then, libra-maximizers.com is the one-stop destination for your investment needs. For further information, please visit the website.
With Bitcoin surging past $10,000 for the first time in two months and marking its first real big-money move since the halving, is the 2020 bull run here? Well, it’s still too early to say, and global markets are dealing with a host of challenges, but for Bitcoin to sustain this breakout and continue on, everyone has a part to play.
The steps to a bull run aren’t quite as simple as they were in 2017. Three years ago, when Bitcoin rose from $1,000 to just short of $20,000, what fueled the run came from both big-pocketed hedge funds and everyday investors. In short, institutional investors saw a green light with Bitcoin Futures approved by the Commodity and Futures Trading Commission [CFTC] and retail investors jumped on the price parade. This time, the market is quite different.
Bitcoin in 2020 is not just an outlier market, but one comparable, if not in value, in correlation, or lack thereof, to commodities and equities. Institutional interest and a plethora of retail exchanges have allowed all sorts of investors to either jump in on the price rally, like we saw last week, or liquidate in a cash-crunch as we saw in March. Either way, both facets of the market have joined in, and going forward, both facets are crucial if the next ATH is to be seen.
Speaking to AMBCrypto, Nick from Ecoinmetrics said that a bull run will occur broadly in two steps, adding that each of these steps will have a primary customer group driving the rally, and a secondary one hanging back, providing momentum. Their roles will switch with a succession of steps, thereby allowing both retail and institutionalplayers to be in the driving seat. It should also be noted that these remarks were made on 23 July, on the eve of Bitcoin’s move over $9,500.
First comes the run from $10,000 to $20,000, with the former target already met courtesy of yesterday’s pump. This phase will be driven by hedge funds and family offices, said the Ecoinmetrics analyst. He calls this the “Paul Tudor Jones thesis” after the hedge fund manager who revealed he is long on Bitcoin in May 2020 when Bitcoin recovered all of its lost value in two months.
Nick went on to say that this thesis will be a mix of past-FOMO, present momentum, and a hunger for future profits,
“While we stay below the all-time-high BTC price it would mostly be a momentum play by professional investors. These people missed previous opportunities and want in on the action. That’s why they are accumulating now.”
Once the 2017-ATH is surpassed, retail investors will get in on the move, witnessing the early-profits eaten up by professional investors. As mainstream media gives Bitcoin the airtime following the move past $20,000, a bout of retail FOMO will hit the market, pushing the price higher and higher.
While on the face of it this would mimic the 2017-rally, the difference lies in narrative and appeal, said Nick. Bitcoin’s claim to retail investors of being digital gold “is much stronger,” and while the Federal Reserve continues to print more and more money, which is likely given the current economic situation, the case of Bitcoin as a hedge against rising inflation will be looked at favorably, even by the average Joe. He concluded,
“People can point out at the Fed printing record amounts of money. They can point out to how the stock market is just propped up by Central Banks interventions. They can see that the global economy is not doing well and that using Bitcoin as a hedge against inflation has merits.”
This may just be a theory, but its core elements are present. Narrative and environment-wise, Bitcoin is being seen as an investment and economic crisis hedge. Now, all that’s left for a bull run is for investors to play their part.