What Causes BTC To Pump And Dump? You Won’t Believe THIS!!

What causes BTC to pump and dump this is A question that's been on everyone's Mind lately and the European Central Bank recently published a report that Provides a very compelling answer it Found that btc's price is determined by The people who are buying and selling it Specifically if they see it as a safe Haven or a risk asset if you can Understand this then you can predict Btc's pumps and dumps that that's why Today we're going to summarize ECB Report and tell you what it could mean For the crypto Market this is a video That you do not want to Miss the report will be summarizing Today is titled Global and local drivers Of Bitcoin trading vi v Fiat currencies It was published by the European Central Bank or the ECB earlier this month and We'll leave a link to the full report in The description if you're interested now The report begins with a brief Introduction wherein the authors ask the Same question we've asked at the Beginning of this video but in a much More long-winded way and I quote to what Extent is Bitcoin usage a global Phenomenon driven by speculative demand To what extent can country specific Factors explain the use of Bitcoin what Drives the adoption of an unbacked Digital currency like Bitcoin well to Answer these questions the authors

Looked at BTC traded volume against fat Currencies in different countries now What's really interesting here is that They analyze these trading volumes on a Peer-to-peer AKA of PTP crypto exchanges Many of which ironically have gone Bankrupt because of eu's crypto Regulations the authors explained that They chose to analyze traded volume on P2P exchanges because they're used Primarily by retail investors and Therefore are not prone to Market Manipulation as seen on regular Exchanges if you want to know how bad This Market manipulation is you can Check the link in the description anyway The authors then go on to explain that They analyze traded volumes against 44 FIA currencies on local Bitcoins and Paxful between January 2018 and April 2022 notably the authors excluded the US Dollar from their analysis due to and I Quote special Status they didn't explain what that Meant in any case with this data in hand The authors assessed three things the Effect of crypto specific factors on Btc's price the effect of macro factors On btc's price and the effect of country Specific factors on btc's price notably The authors acknowledged that crypto has Its own bonafied fouryear cycle the Authors pay particularly close attention To btc's Trading in so-called emerging

And developing economies presumably Because this is where Bitcoin adoption Is the highest they know several factors Contributing to this adoption including Exchange rate volatility they also Speculate that the absence of developed Financial infrastructure could also be a Driver of BTC adoption in emerging and Developing economies if you watch our Video about what's happening in Nigeria However you'll know this doesn't seem to Be the case there are deeper drivers at Play namely trust in Institutions regardless the authors Reveal their results and I quote point To financial stability risks associated With BTC they argue these risks should Not be ignored because crypto links with Traditional Finance systems have been Increasing not surprisingly the authors Put stable coins in the crosshairs here This is not surprising given that the ECB is scared that a stable coin could Challenge or even replace the Euro lo And behold the authors allude to this a Little later and I quote these Developments raise the risk of cryptoz The substitution of domestic currency With a Cryptocurrency be very afraid in all Seriousness the authors admit that They're surprised at just how much BTC Has grown despite being and I quote an Unbacked crypto asset the authors then

Describe btc's Global popularity in a Way that makes it sound like the next Pandemic and note that it's been really Difficult to measure its effect at the Country level they Proclaim that this Report fills the Gap in existing Central Bank literature about btc's country Level Effects by using actual data from PTP exchanges not surveys the result is That they're able to get a much better Sense of when local fact s are driving Btc's price in various countries if You're enjoying the video so far be sure To smash the like button and give it a Boost now the second part of this report Is all about those P2P exchanges your Record the authors analyze two local Bitcoins and paxful both of which were Shut down earlier this year now what's Fascinating is that the authors classify These exchanges as and I quote offchain Decentralized Exchanges this is fascinating because The authors admit that and I quote PTP Exchanges only match buyers and sellers But do not act as Intermediaries logically this implies That it was inappropriate to subject Pt-p exchanges to the same regulations As saxes something which caused local Bitcoins to go broke any who the authors Explained that P2P exchanges have been Really popular in emerging Economies they believe this is mainly

Due to the absence of liquidity on Sexes For smaller fear currency pairs which Makes sense even so they know that the US dollar is still the most use f Currency on PTP exchanges when you Exclude the US dollar the most popular Currencies on P2P exchanges are Apparently the Nigerian naira the Russian Ruble and the Chinese Yuan and The Indian rupy so if we understand Correctly one of the reasons why the Authors Adit the USD is because it makes It hard to know where the users are Based to put things into perspective About a dozen non- us countries use the US dollar as their National currency and Many others Peg their currencies to the US dollar with limited data about the Location of P2P exchange users it's hard To know for sure whether those trading USD are based in the US or elsewhere That said the authors were able to get Some location data from paxville and What they found was pretty pretty crazy Basically those trading BTC for the Chinese Yan were not based in China they Were based in the US there also appears To have been some geographically Inconsistent activity involving the Polish slotty make of that what you will Now this all ties into the third part of This report which is all about the data To refresh your memory the authors Analyzed btc's Trader volume against 44

F currencies and excluded the US dollar In their analysis 14 of these currencies Were from advanced economies and the Rest were from emerging economies once Again the authors explain that the US Dollar was excluded because of its Unspecified special Status this makes us wonder whether the Authors found something in the US dollar Data that they'd rather not tell us About otherwise they would give us an Actual explanation for why why this US Dollar data was emitted speculation Aside the author found that btc's Trading against the British pound was The most active pair for P2P exchange Users from advanced economies what's Wild is that 60% of BTC to Great British Pound trading on PTP exchanges was Nonetheless being done by users in Emerging economies where the Kenyon Shilling reigned Supreme using a bunch Of complex calculations that are outside The scope of this video the authors Assess the impact of macro factors such As tech stocks crypto specific factors Such as the four-year cycle and local Factors such as inflation on btc's price They also assess each country's Institutional features including things Like remittance cost political risks Demographics and so On WE interrupt this program for an Emergency crypto weather forecast get

Ready for a whirlwind savings we're Seeing some high pressure sign up bonus Systems forming in the Northeast with Some exchanges offering up to $40,000 in the South we'll be seeing Some heavy discounts on Hardware wallets So watch out for those if you're going To be out and about and then in central Areas there's a high chance of tradeing Fee discounts which should be settled in Later on so be on the lookout for up to 60% off there Lush for the more Comprehensive forecast just visit Coin.com deals or use the link down in The description these deals are red hot So make sure to take all the necessary Precautions well that's all for today's Forecast now back to the scheduled Program this relates to the fourth part Of this report which is analysis on said Data as expected momentum in the crypto Market a crypto specific Factor as well As levels of global liquidity AKA money Supply a macro factor and USD exchanges Rates a local Factor all play a role in Btc's price action However it appears the largest factor is Speculation which the author's estimate Accounts for as much as 40% of bgc's Volatility as such the authors state That BDC is still primary a risk asset Even though it's being used in many Emerging economies as a store of value And even as a means of payment the

Authors then pivot to analyzing factors That determine btc's traded volume Again they found speculation brought on By crypto Market momentum is the primary Driver with exchange rate volatility Playing a secondary role now oddly Enough macro factors have little effect On BTC traded volume what's even more Odd is that the relationship between BTC Traded volume and Market liquidity seems To be upside down the authors found that Btc's traded volume actually tends to Increase when liquidity is falling fall In at least in the foreign exchange Markets another particular finding is That geopolitical risks have zero effect On btc's traded volume and that there's Zero correlation between btc's traded Volume and gold price this seems to be a Slight of hand on the part of the Authors as I noted traded volume doesn't Tell you anything about btc's price very Sneaky now to be fair the authors go on To site another study which specifies That btc's price has zero correlation to Gold price the problem is that this Study is from 2021 believe it or not but btc's Correlation to Gold has actually been Increasing over the last few months Presumably due to the digital gold Narrative you can thank Black Rock for That one more about the spot Bitcoin ETF Applications in the description anyhow

Another bizarre Discovery is that the Authors found no correlation between BT Traded volumes and Inflation this might have something to Do with the fact that the authors Compared btc's traded volume to Google Search Trends alternatively it could Have to do with the author's Definitions that's because the author Reiterate that there is a strong Correlation between btc's trading volume And exchange rate volatility what they Fail to mention is that this exchange Rate volatility that is the decline in Price of a currency the US dollar is Often driven by the inflation of said Currency naturally the impacts of these Factors on BTC change depending on if We're talking about advanced economies Or emerging economies for example Liquidity in Forex markets mainly Affects btc's Trader volume among users In advanced economies whereas exchange Rate volatility mainly affects btc's Trading volume in emerging economies More importantly the pandemic seems to Have permanently Amplified the effects Of these factors the authors take this As a sign that Bitcoin is being adopted Not just invested in in other words BTC Is increasingly being used as an actual Currency not something that people are Just buying to get rich the authors Knowe that the reason for Bitcoin

Adoption is outside the scope of their Report this is expected given the Reasons for Bitcoin adoption is probably Something that the authors aren't even Allowed to talk about the decline in Trust in institutions like central banks During the pandemic more about that in The description now after more complex Calculations that are outside the scope Of this video the authors unpack the Effects of those institutional features On BTC in emerging economies they start By explaining that many of these factors Like political instability are difficult To quantify so they must make a few Assumptions based on these assumptions The authors found that BDC volumes are Higher in countries with less developed Payment Systems suggesting that BDC is Being used as a Substitute as we mentioned earlier However this may not always be the case There could be other institutional Features at play case in point the Authors reveal that they use the number Of ATMs available as a proxy for how Advanced the payment system is in Emerging economies this is a Questionable metric to use given the ATM Availability isn't always indicative of How advanced a country's payment system Is look no further than cash to Societies for evidence of that one more About those in the description now

Moving on there is one significant Institutional feature that the authors Found and that's age the younger a Country's population is the more likely It is to dabble in BTC this makes sense Given that younger people are typically More in tune with technology no offense To the Boomers out there now regarding The robustness of these findings the Authors reveal that some of the Currencies they analyze were in fact Pegged to the US dollar however they Reanalyzed the data and found that Admitting these currencies had no impact On the results which again begs the Question of why the US dollar was Omitted when it comes to the Chinese Unan or the Polish slotty the authors Found that omitting these currencies Likewise had no effect on the results You'll remember that both were heavily Traded outside of their countries of Origin which certainly begs the question Of what was going on there the bigger Question however is how the authors Managed to find that things like Dollarization inflation and capital Controls had no effect on BT BC trading This runs contrary to the reality the Countries that are adopting BTC the most Are the ones where there's dollarization Inflation and capital controls Inconsistencies aside the authors Conclude by repeating that btc's primary

Driver is speculation and that this Speculation is and I quote a truly Global phenomenon they again Conde that Crypto Cycles exist that BT Is affected by global and local factors And the actual Bitcoin adoption is Increasing incredibly the authors admit That and I quote this indeed suggests That Bitcoin despite its wide price Fluctuations might have been appreciated Also as a store of value or a medium of Exchange in countries which experience a Loss in the purchasing power of their Domestic currency in turn this implies That macroeconomic instability May potentially spur greater crypto Asset usage in some BTC is a safe haven Of course the authors can't help but Throw shade at stable coins in the last Few sentences underscoring the fact that They could see widespread adoption and Result in the aformentioned Cryptoz what's funny is that the authors Don't realize that this is already Happening right before their very eyes This brings us to the big question and That's What all of this means for the crypto Market from our perspective it means Three things the first is that BTC Trading is likely to increase that's Because the main factor driving BTC Trading volume are likely to increase in The future these include the levels of

Speculation which will increase as Institutions get involved the lack of Liquidity in the Forex markets which Will decrease due to the issues related To debt and interest rates and the vol Volatility of exchange rates which will Increase due to interventions by central Banks again an increase in BTC traded Volume doesn't tell you which way prices Will go but is safe to assume the issues In the traditional Financial system will Incentivize the average person to look For Alternatives don't forget the quote A few months ago about macro economic Instability and BTC adoption this Pertains to a second thing this report Means for the crypto market and that's Genuine Bitcoin adoption is increasing Due to its emerging role as a safe haven This is evidenced in the fact that the Amount of BTC on exchanges has been on a Decline since the beginning of the last Bull market for those who don't know Lower amounts of BTC on exchanges Suggest that BTC holders are hodling not Selling this is a trend that's likely to Continue Indefinitely this will make BTC price More volatile which will increase Speculation further attracting investors And users to bitcoin the third thing This report means for the crypto Market Follows from the second and that is that BTC is slowly but surely transitioning

From being recognized as a risk asset to A store of value to be clear BTC is Still a risk asset and that means it Will continue to experience incredible Price volatility as time goes on however Btc's price volatility will continue to Decline as it has been since its Inception for reference research from Coin Telegraph suggests that btc's Volatility will be on par with the Volatility of the US dollar by the end Of the decade but differently BTC will Be just as stable as the US dollar if These projections are correct then it Could paradoxically create a problem for Bitcoin that's because central banks Like the ECB would likely start to take BTC more seriously they could start to See it just as a threat like stable Coins and push politicians and Regulators to try and restrict its Adoption conversely we could see central Banks start adding BTC to their balance Sheets with some even trying to back Their currencies with this digital gold In case you missed the news central Banks will be allowed to hold BTC on Their balance sheet starting from 2025 Chances are that some of them will do Just that and you can find out what this Means to btc's price using the link in The Description well that's all for today's Video if you learn something new let us

Know by Smashing that like button if you Want to keep learning then subscribe to The channel and ping that notification Bell so you don't miss the next one if You want to help others learn take a Second to share this video with them if You are accumulating crypto in Preparation for the inevitable cryptoz Then check out the coin Bureau deals Page it's got trading fee discounts of Up to 60% and bonuses of up to $40,000 on some of the best crypto Exchanges and the biggest discounts on The best hardware wallets the link will Be down in the description well thank You all so much for watching and I'll See you in the next one this is Jessica Signing Off Oh