A century ago, Henry Ford, the great entrepreneur, envisioned the development of an “Energy Currency” to substitute for gold. Ford’s goal was to end wars which he reasoned were centered around the control of money.
Ford’s vision for an energy currency was that, unlike gold, it could not be controlled. Every country could issue currency backed by the natural wealth of its energy resources. The standard of value for this system breaks down in the following manner. A value of $1 would be created with a certain amount of energy exerted for one hour.
This currency idea, backed by kilowatt hours (kWh), has great similarities with Bitcoin, which can also be considered as “backed” by energy input.
Bitcoin meets Ford’s definition for an energy currency
For the last decade, the majority of Bitcoin’s price history is explained by a constant value against energy input. Price fluctuates around value. But price and value are intrinsically linked and mean-reverted. Bitcoin has a fixed value through time, which is based on its supply growth rate and the energy expended on mining.
“Mr. Ford proposes that this currency be issued only to a certain definite amount and for a specific purpose.”
Speaking clearly, one could only issue more of this energy currency if they were putting more energy into the process. This system is analogous to what Bitcoin does. A single Bitcoin miner will receive more freshly created BTC by putting in more energy into the mining operation. However, such mining becomes more difficult and costly for the individual when all the other BTC miners are pouring in energy as well. This is what drives the price predictions of Bitcoin.
BTC/ETH/XRP/LTC Price Predictions
BTC price has finally smashed the $12,000 resistance and made a further $1,000 move up towards $13,000 yesterday, which opens up the possibility of reaching $14,000, which is one the most important pivotal points to establish a strong support for BTC to aim for the all-time high price of $20,000.
If $14,000 gets rejected, we might again see a move in BTC price down towards $12,000 and potentially $10,000, which are the two main support zones.
This big jump from $11,000 to $13,000 USD was catalyzed by the announcement by PayPal, who released a statement that its customers will be able to buy and sell Bitcoin and other virtual currencies using their PayPal accounts.
We have seen an expected move on ETH price from the support at $370. It is more likely for ETH to head towards $435 first since the resistance at $406 has been cleared. A long from $406 with a stop loss below $400 and target of $435 and $465 could be a good trade.
If we break $400, bears will target $370 again, and in that case, we can open a short from $400 with a stop loss above $406 and target of $370.
The XRP chart has completed an inverse head and shoulder pattern and broken out of it on the daily time frame. Inverse head and shoulder breakout is generally a very strong indicator. It should head up towards $0.28/0.3 and $0.32. Breaking below $0.24 would bring the bears back in control, and we can see an XRP price pull back towards $0.22.
It would be a good idea to start accumulating XRP for holding for a long term if we see a dip towards $0.24.
LTC price has reached a major resistance zone of $55.5. If it can break this and turn this to support, it will likely consolidate in this zone and head up towards $61. If LTC can break this resistance, we can long from $55.5 with a stop-loss at $53 and target price of $61.
There is a higher chance of rejection of this zone, and a good short opportunity would be to short from $55.5 on rejection (close of daily candle below 55.5) with a stop-loss at $57 and target of $50.