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  • Market Makers and Market Takers Explained

    Market Makers and Market Takers Explained

    Markets are made up of makers and takers. The makers create buying or selling orders that aren’t carried out immediately (e.g., “sell BTC when the price hits $15k”). This creates liquidity, meaning it’s easier for others to instantly buy or sell BTC when the condition is met. The people that buy or sell instantly are called takers. In other words, the takers fill the orders created by the makers.



    Introduction

    On any kind of exchange (whether Forex, stocks,...
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  • What Is Inflation?

    What Is Inflation?

    Inflation can be defined as the reduction of the purchasing power of a given currency. It’s the sustained increase in the price of goods and services in an economy.

    While “relative-price change” usually means just one or two goods have increased in price, inflation refers to an increase in costs of nearly all items in the economy. Also, inflation is a long-term phenomenon – the increase in prices has to be sustained, and not just a sporadic event.

    Most countries perform...
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  • Pyramid and Ponzi Schemes

    Pyramid and Ponzi Schemes

    Most individuals that invest in Bitcoin – or that participate in Initial Coin Offering (ICO) events – are usually concerned about two things. First, the Return of Investment (ROI), which represents the profits they will eventually make from the initial investment. Then, there is a second concern, which is related to the amount of risk involved with the investment. When the risks are too high, investors are more likely to lose their initial investment (in parts or completely), which would result...
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  • Moving Averages Explained

    Moving Averages Explained

    Technical analysis (TA) is nothing new in the world of trading and investing. From traditional portfolios to cryptocurrencies like Bitcoin and Ethereum, the use of TA indicators has a simple goal: use existing data to make more informed decisions that will likely lead to desired outcomes. As markets grow increasingly more complicated, the last decades have produced hundreds of different types of TA indicators, but few have seen the popularity and consistent usage of moving averages (MA).
    ...
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  • Liquidity Explained

    Liquidity Explained

    Liquidity is the measure of how easily you can convert an asset into cash or another asset. You may have the rarest, most valuable old book in your backpack, but if you're alone on a remote island, it will be difficult to find a buyer.

    On the other hand, if you'd like to buy $100 USD of BTC on the BTC/USDT pair on Binance, you'll be able to do it almost instantly without any impact on price. This is why liquidity is important when it comes to financial assets.


    ...
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  • Bollinger Bands Explained

    Bollinger Bands Explained

    What are the Bollinger Bands?

    The Bollinger Bands (BB) were created in the early 1980s by financial analyst and trader John Bollinger. They are broadly used as an instrument for technical analysis (TA). Basically, the Bollinger Bands work as an oscillator measurer. It indicates whether the market has high or low volatility, as well as overbought or oversold conditions.

    The main idea behind the BB indicator is to highlight how prices are dispersed around an average value....
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  • What Is the RSI Indicator?

    What Is the RSI Indicator?

    The Relative Strength Index Indicator

    Technical analysis (TA) is, essentially, the practice of examining previous market events as a way to try and predict future trends and price action. From traditional to cryptocurrency markets, most traders rely on specialized tools to perform these analyses, and the RSI is one of them.

    The Relative Strength Index (RSI) is a TA indicator developed in the late 1970s as a tool that traders could use to examine how a stock is performing...
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  • What Is a Coin Burn?

    What Is a Coin Burn?

    Note: The first section of this article explains the previous burn function of Binance Coin while it was on the Ethereum network. Binance Coin is now on the Binance Chain, so the burn function behaves differently. However, the discussion still applies to all current ERC-20 tokens that support the burn function.




    Coin burning is the process of permanently removing cryptocurrencies from circulation, reducing the total supply. To explain how this works, we will be using...
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  • What Is Tulip Mania?

    What Is Tulip Mania?

    The Tulip Mania is considered by many as the first recorded story of a financial bubble, which supposedly occurred in the 1600s. Before discussing if the Tulip Mania was really a financial bubble or not, let’s go through the most common narrative that considers it to be a real bubble.



    The Tulip Mania Bubble


    The Tulip Mania took place in the Netherlands, during the Dutch Golden Age. The country had the highest global per capita income at that time, thanks...
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  • What Is Ripple?

    What Is Ripple?

    Formerly known as OpenCoin, Ripple is a privately held company that is building a payment and exchange network (RippleNet) on top of a distributed ledger database (XRP Ledger). The main goal of Ripple is to connect banks, payment providers and digital asset exchanges, enabling faster and cost-efficient global payments.



    History


    Ripple was first idealized in 2004 by Ryan Fugger, who developed the first prototype of Ripple as a decentralized digital monetary...
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  • The 2008 Financial Crisis Explained

    The 2008 Financial Crisis Explained

    Past and present


    In 2008, the financial crisis shook the global economy. Now ten years later, people are wondering how the rules have changed, and more importantly, how this type of economic crisis can be avoided in the future.

    What began as a crisis in regards to the subprime mortgage market, later developed into a large-scale, global financial crisis and recession. From massive bailouts to the resulting economic downturn, many are now questioning the stability...
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  • What Is Fiat Currency?

    What Is Fiat Currency?

    What is Fiat Currency?


    Simply put, fiat currency is legal tender that derives its value from its issuing government rather than a physical good or commodity. The strength of the government that establishes the value of fiat currency is key in this type of money. Most countries around the world use the fiat currency system to purchase goods and services, invest, and save. Fiat currency replaced the gold standard and other commodity-based systems in establishing the value of legal...
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  • What Is Fractional Reserve?

    What Is Fractional Reserve?

    Fractional reserve is a banking system that allows commercial banks to profit by loaning part of their customers’ deposits, while just a small fraction of these deposits are stored as real cash and available for withdrawal. Practically speaking, this banking system creates money out of nothing using a percentage of their customers’ bank deposits.

    In other words, these banks are required to hold a minimum percentage (a fraction) of the money that is deposited in their financial...
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  • What Is Quantitative Easing (QE)?

    What Is Quantitative Easing (QE)?

    Quantitative Easing (QE) may present different and controversial definitions. But basically speaking, it is a market operation (performed by central banks) that increases liquidity and inflation, with the alleged intention of stimulating the economy of a nation, encouraging businesses and consumers to borrow and spend more.



    How does it work?


    Usually, the operation consists of a central bank injecting money into the economy by purchasing securities (such...
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  • What Is Hyperinflation?

    What Is Hyperinflation?

    All economies experience some level of inflation, which occurs when the average price of goods increases, as the purchasing power of that currency decreases. Usually, governments and financial institutions work together to ensure inflation occurs at a smooth and gradual rate. However, there have been many instances in history where inflation rates have accelerated at such an unprecedented degree that it caused the real value of that country's currency to be diminished in alarming proportions. This...
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