Global Macro Trading Journal

[Daal]

But its funny this BTC. I was talking to a buddy and told him that BTC was due a correction at 10K, I thought the same at 11k, 12k, 13k and 14k. At 14K it finally came and yet it was still 2K higher than where I originally thought it was due for a correction.

This is TYPICAL in convexity markets that are running. Now, did I ACT on what I thought? Not in a million years, I didn't sell a single satoshi. Had I acted I would have been punished hard by my skepticism. But this is what a lot of the skeptics miss out, there are certain PERSONALITY TRAITS that fit well with a market and some that don't. In a convexity market, the traits are different from what it takes to do well in say, bond investing. Being a moronic skeptic that second guesses everything, who tries to sell and buy lower, who is afraid to chase the price up, etc are all bad traits in this market.

I learned a lot of lessons in 2017 trading BTC, now I will use them to my advantage

 

[Daal]

And BTW, Roubini has little to none of the traits that I see as beneficial for BTC trading. He is just a loser economist, a one hit wonder really. If you want to see read good commentary on this space look for the top guys in Silicon Valley. They understand a lot better, even if only intuitively, this space. I havent had the time to read Andreesen's, Wilson's comment on libra but I bet they are very different from roubini's

 

[neke]

I say BTC makes a new ATH within 12 months. $30-$40K is a resonable target after the ATHs

Beware! The last time such projections were being tossed about (late 2017), Bitcoin was topping out.

 

[Specterx]

But its funny this BTC. I was talking to a buddy and told him that BTC was due a correction at 10K, I thought the same at 11k, 12k, 13k and 14k. At 14K it finally came and yet it was still 2K higher than where I originally thought it was due for a correction.

This is TYPICAL in convexity markets that are running. Now, did I ACT on what I thought? Not in a million years, I didn't sell a single satoshi. Had I acted I would have been punished hard by my skepticism. But this is what a lot of the skeptics miss out, there are certain PERSONALITY TRAITS that fit well with a market and some that don't. In a convexity market, the traits are different from what it takes to do well in say, bond investing. Being a moronic skeptic that second guesses everything, who tries to sell and buy lower, who is afraid to chase the price up, etc are all bad traits in this market.

I learned a lot of lessons in 2017 trading BTC, now I will use them to my advantage

The underlying reality of the BTC market is that it's all manipulated by fake transactions, in other words basically a penny-stock pump-and-dump scam. That doesn't mean it can't be traded, quite the opposite - classical TA for example was developed based on observing the highly manipulated stock markets of the 1920s-30s, and these days probably works better in crypto than anywhere else.

It does however mean that true underlying value is impossible to discern, and you'd best not still be holding when the momentum shifts. Short term one can play breakouts and momentum but longer term is a pure gamble.

 

[Daal]

Beware! The last time such projections were being tossed about (late 2017), Bitcoin was topping out.

Short-term this might be the top but I doubt it stops. This is like a train where a lot of people know it has left the station, as soon as it stops people will jump on board (buy the dip).

Again, dont understimate this libra thing, 2 billion people (ok less but at least 1 billion, and it rises every quarter) will get familiar with crypto. It will legitimize the space. For a ton of these people to start to buy BTC with their libras wont be that much of a stretch. They will think 'I can own libra and make nothing, or i can own bitcoin and get rich, i mean, it goes up everyday it must be a good investment'. It doesnt have to make sense. I'm a trader not an academic!

 

[Daal]

The underlying reality of the BTC market is that it's all manipulated by fake transactions, in other words basically a penny-stock pump-and-dump scam. That doesn't mean it can't be traded, quite the opposite - classical TA for example was developed based on observing the highly manipulated stock markets of the 1920s-30s, and these days probably works better in crypto than anywhere else.

It does however mean that true underlying value is impossible to discern, and you'd best not still be holding when the momentum shifts. Short term one can play breakouts and momentum but longer term is a pure gamble.

I dont believe BTC is manipulated in a large scale, here and there? Sure but these days BTC is a $100B-$200B "stock". It trades $10-$30B dollars a day. I have seen a LOT of manipulation in my life (I'm primarely a OTC stock trader) and I have serious doubts that something so big and liquid can be manipulated for more than a day or two. It would take a huge amount of money, and you cant "corner the float" easily

 

[Specterx]

I dont believe BTC is manipulated in a large scale, here and there? Sure but these days BTC is a $100B-$200B "stock". It trades $10-$30B dollars a day. I have seen a LOT of manipulation in my life (I'm primarely a OTC stock trader) and I have serious doubts that something so big and liquid can be manipulated for more than a day or two. It would take a huge amount of money, and you cant "corner the float" easily

It's been claimed that up to 95% of BTC trading is fake: https://www.wsj.com/articles/most-bitcoin-trading-faked-by-unregulated-exchanges-study-finds-11553259600

So it's a thinly-traded asset, with no "anchor" whatsoever to any concept of fair value (unlike a stock with earnings) or economic supply/demand (unlike a commodity with producers and end-users), and no regulation or oversight at all. What's the reason I can't set up two wallets and bounce the same BTC between them a million times?

 

[Daal]

It's been claimed that up to 95% of BTC trading is fake: https://www.wsj.com/articles/most-bitcoin-trading-faked-by-unregulated-exchanges-study-finds-11553259600

So it's a thinly-traded asset, with no "anchor" whatsoever to any concept of fair value (unlike a stock with earnings) or economic supply/demand (unlike a commodity with producers and end-users), and no regulation or oversight at all. What's the reason I can't set up two wallets and bounce the same BTC between them a million times?

Yeah but there is a difference between wash trading and pegging an asset to a fake (non-equilibrium) value. I see wash trading in penny stocks all the time, it makes the stock appear strong, it shows up in people's trading scanners, it gives technicians and even non-technicians people confidence that the move is real but what makes the manipulators succeed is not that. Its the fact that they control most of the float. If they didnt, that float (supply) would come out and kill the move

Its a manipulator worst nightmare, he buys like crazy to get the thing to some higher non-real price and sellers show up and kill the move (taking advantage of the ridiculous price). That's why they make sure they control the float before the move.

If BTC were trading at some absurd unreal price, real sellers would show up and sell until the price got to its true equilibrium because the float is not tightly held. Its supply and demand 101

Furthermore a lot of manipulation involve "squeezing the shorts". There is not a lot of shorting happening in BTC, the futures (to my knowledge) is small compared to the real market. I'm sure there might be some gaming around futures expiration, for a few hours or even a day or two, but the manipulation claimers make it seem like BTC's real price is $100 and it only at $11k because of this manipulation, that is ridiculous

 

[Daal]

BTC has value because people rightly or wrongly consider it a good store of value. Just like Gold is worth trillions because of that. It might not make sense to Warren Buffett but it makes sense to the millions of people that price it, so it will continue to have value until they decide differently

 

[GRULSTMRNN]

It will never fly with any government. No government in the world is going to give away its control on the supply of money, especially not to a tainted company like facebook and the US. Also, the danger of dependency on the US would be way too large not just for adversaries but for allies as well. If you think this will work anywhere in Latin America, Asia, or Europe then you are a hopeless optimist.

Roubini's comments in that article you linked align pretty much with my own thinking, and certainly don't contradict anything I said. Obviously, FB's motivation here is to set up an ostensibly supra-national payments system which can be smoothly integrated into Whatsapp, as a way to move in on the money-transfer business and avoid grappling with the Balkanization of users into different countries/currencies. Equally obviously, the only way this would fly with governments is if the whole thing is heavily controlled and closely overseen.

I certainly see a ton of obstacles to actually getting the system operating - in particular, all the details that need to be hammered out across multiple jurisdictions and regulatory bodies. Frankly, they'd be better off just integrating a Venmo or Paypal level of functionality into Whatsapp and growing out from there.