Ampleforth and Cryptocurrencies trading concepts

Ampleforth and Cryptocurrencies trading concepts

By Itech | Crypto trading tips | 19 Feb 2021

It seems that many are still confused about what kind of value "supply elasticity" really brings to the cryptocurrency markets. The experiments taking place in this niche of markets are critical to the long term health of the entire space

Frenzies that send BTC to the moon are always followed by insane dumps that can result in up to 80% retracement and can last years on end. Let us consider the state of the markets for the 2.5yrs leading into the summer of 2020, where BTC broke out of a multiple yrs bear market.

This “bear market” is otherwise known as a depression. Bitcoin's inelastic supply makes it vulnerable to years-long drops in economic activity, which will paralyze the development of the cryptocurrency markets long term as Bitcoin struggles through these long depressions.

While Bitcoin's performance as an asset since its creation has been nothing short of incredible, the issues considered above are the reason why it will never act as the foundation of any major economy. This is why a correlation breaking new elastic standard is necessary.

The elasticity of $AMPLallows it to adjust to market conditions much faster than what Bitcoin is capable of. When negative shocks to the markets do take place, the $AMPL deflationary rebases will very quickly drive the price of it over 1$, which is where the tables will turn.

At this point, AMPL will be recognized as a safe haven against other assets in a bear market. AMPL is not supposed to be immune to panic selling, its elastic mechanisms are designed partly to speed up its recovery in the event of a major panic sell.

For these reasons, AMPL is not vulnerable to the same long lasting depressions that Bitcoin is vulnerable to. If the markets were to be pegged to AMPL instead of Bitcoin, then these quick recoveries would theoretically speed up the recoveries of the rest of the market.

This would be amazing for the development of the markets, as it would bring more stability to the market, which would result in faster and greater innovation within the free market.


Cryptocurrency Investor.

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