The Cryptocurrency Trading Journal

[Daal]

I just run the numbers on ETH fees as well

The trend is similar, but the total 'tax' is smaller. And the reason is because people are moving a lot more money when they move ETH than when people move BTC

Historically, 6x more money (right now 11x). People get richer on Bitcoin and then some of them move to ETH with more funds to transact. Meanwhile new crypto entrants come into Bitcoin without a lot of funds.

So, my conclusion is that Bitcoin has some advantages over ETH right now:
-Segwit can temporarily give something people can use to deal with high fees. Batching transactions can do that too(One transaction that pays multiple people, used by exchanges for withdraws)
-ETH is having the same problem as BTC in terms of on-chain fees right now, without having any immediate answers
-ETH has wealthier folks that are more fee insensitive (especially with DeFi around), while Bitcoin has poorer folks that are more fee sensitive. ETH fee spikes will be worse then BTC

Indeed, Bitcoin fees when priced in BTC are doing ok

Meanwhile on ETH, fees priced in ETH, the trend looks stronger

So ETH is facing a double whammy, fees are squeezing out new entrants AND current holders (that are seeing a bigger share of their ETH go to miners as they move it around). But on Bitcoin only new entrants are getting squeezed

So, currently, Bitcoin has actually an advantage over ETH in terms of adoption in the fee department. But I think in a few years, IMO that will be a different story

Once ETH2 comes out (and/or ADA/DOT is finalized) that will change because the Segwit/Batching game will be up (since you can only do so much with it). And proof of stake transactions fees will be super low. Meanwhile Bitcoin adoption will be through the roof, which means fees will be through the roof. In the last few years, fees have gone up almost 1-1 with the price, so $500K bitcoin means $150 fees. At that point, lots of people might decide to store funds in other coins...

So, I'm a massive Bitcoin bull for this cycle, but in the next one I want ETH/DOT/ADA (my belief is that any other blockchain cannot scale, that goes for BCH LTC XMR, etc). In my view their charts against BTC can provide an important indicator for any change in adoption trends and are one of the most important crypto indicators for the coming years

 

[trade4succes]

Very interesting discussion, do you mind if I use this space to ask how I should get started if I want to understand everything from the ground up, including the math (I know/knew college math, including discrete)?

 

[Daal]

Very interesting discussion, do you mind if I use this space to ask how I should get started if I want to understand everything from the ground up, including the math (I know/knew college math, including discrete)?

Certaintly. I would recommend the youtube channel of Andreas Antonopoulos for all things BTC and ETH. For some of the math, his books Mastering Bitcoin and Mastering Ethereum (The Internet of Money is also excellent but doesnt contain math), they are avaliable online for free as well as on amazon. As far as going deeper than that I cant help because I havent done it myself. I'm yet to finish Mastering Ethereum and I'm reluctant on learning deeper details like ECDSA math, etc. I'm not sure is necessary
For overall thoughts on the space from a trader/investor perspective I like Novogratz interviews and to some extent Raoul Pal although he doesnt seem to understand the technicalities of cryptos

 

[johnarb]

You underestimate my commitment to a lack of bias,

How about a 30 minute youtube video?

I'm not trying to sell you on BNB. I'm only sharing something that I'm actually seeing and experiencing first hand. The guy on the video doesn't even do defi but he's presenting metrics I was not aware of.

some disclosures: my biggest crypto holding is btc, no more plans to sell any btc for a long time and any cashout to fiat will come from other crypto holdings.

i hold eth, actually added a little bit today. i have 2 eth defi cryptos, i have 1 bnb defi crypto, and of course, i hold bnb.

i have other significant portion of the crypto pfolio in erc-20 cryptos

i do not like the fact that bsc is not decentralized, but i am worried that the video is making too much sense on our dire situation on the ethereum blockchain

when i perform defi actions on ethereum (i.e. dex trades, deposits, stakes, unstake, withdrawals), i need to wait for a little bit of time so the gwei is not so high, sometimes, 30 minutes, and sometimes i give up and pay a high transaction fee

when i perform defi action on bsc, there's no waiting, fees are always cheap, and transactions are fast to complete/confirm. this is especially good for dex trades when dividing into many orders saves on slippage. if you do this on ethereum, the fees will kill you so you have to balance a bigger slippage (bigger amount for dex buy/sell) and ethereum transaction fees

https://elitetrader.com/et/threads/defi-going-bankless.349553/page-11#post-5329444

 

[Daal]

How about a 30 minute youtube video?

I'm not trying to sell you on BNB. I'm only sharing something that I'm actually seeing and experiencing first hand. The guy on the video doesn't even do defi but he's presenting metrics I was not aware of.

You know what would solve all scalability issues on ETH? For Vitalik to pay for dozens of supercomputers on AWS and have everything run from there as a proof of stake algorithm. That would do it, but of course, it not would be much of an improvement over the current financial system. I fail to see much difference between Pancake swap and depositing funds on Binance and trading coins/tokens. So you say you are not in for the long-run on BNB, great, congratulations on the trade, when you will take profits? Because the trader in myself would definetly be taking half or more when the coin has 10xed and youtubers are all excited about it

 

[Daal]

Also, consider that when UNI launches a Layer 2 solution (v3) its game over for pancake

 

[Daal]

When Uni/Token transfer fees soared, lots of traders/investors started to look for solutions. One of them was to move funds to exchanges and do the trading from there. To me, Pancake is nothing but an exchange, its not DeFi. I'm sure Kraken, Binance (the exchange), Coinbase and many others have seen their volumes go up a lot after fees rocketed. That doesnt mean moving to CeFi is sustainable long-term

 

[Sprout]

When Uni/Token transfer fees soared, lots of traders/investors started to look for solutions. One of them was to move funds to exchanges and do the trading from there. To me, Pancake is nothing but an exchange, its not DeFi. I'm sure Kraken, Binance (the exchange), Coinbase and many others have seen their volumes go up a lot after fees rocketed. That doesnt mean moving to CeFi is sustainable long-term

I just started playing with some L2 solutions- xDaichain and zkswaps. Both are live and demonstrating L2 here and now. If you wanted to explore some LP opportunities they are promising.

DeFi is unstoppable!

On another note, a microcap I have a fondness for, has discovered an potential exploit. Instead of keeping it hush-hush, they took a snapshot of current holders and then informed the community to remove their funds from the LP’s. Super impressed by their integrity and responsible action. The communities that form around these various projects further differentiates tradFi and DeFi.

 

[johnarb]

When Uni/Token transfer fees soared, lots of traders/investors started to look for solutions. One of them was to move funds to exchanges and do the trading from there. To me, Pancake is nothing but an exchange, its not DeFi. I'm sure Kraken, Binance (the exchange), Coinbase and many others have seen their volumes go up a lot after fees rocketed. That doesnt mean moving to CeFi is sustainable long-term

Man, you told me you have a dedication to the truth with no bias, yet your responses have been focused on DEXes. You are selectively choosing your facts

Listen, DeFi is not just dexes. You don't defi so you don't know. AAVE, COMP, MKR, SYN, YFI, CREAM, etc, etc

You're turning it around to me and my BNB trade. Let's go there. Please do not worry about my BNB and XVS trades. I traded half of my XVS position which is original risk capital and some profits, I have not traded a single BNB out and actually added yesterday

Here's the thing, BNB trade is worth $330K+ at this time, original risk capital invested a week ago was low $130K not counting the additional yesterday since the funds came from XVS profits. That was a trade, not an all in bet

If BNB goes to $0 tomorrow, let it go to $0. It will not destroy me. Remember risk capital was $130K. If BNB goes to $0, it would most likely mean Eth has found a solution to our problems on Ethereum blockchain which means my investment in Eth will make up for my losses in BNB

I am not cashing out of BNB or XVS. Defi is growing on BSC. If it stops growing, I trade out of those 2 coins. You talk about long term trades and locking your coins so you can't be tempted to sell, let me tell you, I don't have to do that. I have self control not to sell my cryptos through 2 bear markets. I'm still here

For your sake, I really hope you watched the youtube video and tried to understand it even if you don't do defi

 

[Daal]

I have self control not to sell my cryptos through 2 bear markets. I'm still here

It looks like the difference between my style and yours is a different approach to risk
How did you do in the last bear market? IIRC you lost the majority of your networth. I lost 2% in ICOs and a little bit on BTC in a long-term position I stablished during the crash, which was made up in traditional investments and I finished 2018 up slighly. Check the Global Macro Trading journal, I was screaming to sell bitcoin back in November and December.

Meanwhile, you think losing $330K is fine because you invested $130K, I dont. You think risking your coins in places like Celsius and Blockfi for a few percent is a smart idea, I don't. You think going all-in crypto is a smart idea, I dont, I want exposure but limited and with plenty of other assets so my lifestyle does not change if cryptos dont work out.

Your sort of thinking will help you make a lot more during bull markets but you will also lose a lot more in bears. I'm not comfortable with that risk, I want great risk-adjusted returns. The best CAGR/Max DD ratio (or the best K-Ratio) possible. I dont like drinking much kool-aid, you seem comfortable with it. Great, you are going to rock this bull market, but in the bear market, I bet things wont be so fun. You accuse me of trying to turning this around to your BNB trade, lol, you were the one who posted a BNB video here out of nowhere, when there is already an ET thread dedicated to it. And as far as me wanting to focus on DEXs, DeFi and DEXs on BSC both contain trust risk to Binance, so I dont see the difference. They dont solve much but rather, just provide a means in which people can do the gambling that they cant do ETH now.