I would have to agree with this, its hard not to conclude that Gold is being disrupted. Thats what I said about the Lindy effect last year (something that Taleb is taking comfort on to think Gold is fine). The effect says nothing about investment returns but only about existence. So yeah, gold will continue to exist and be used but that does not mean that investors wont suffer. Taxis and typewriter factories still exist, that does not mean that owners of medallions or shareholders of factories did not lose a ton of money when they got disrupted
The Cryptocurrency Trading Journal
- Thread starter Daal
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I would have to agree with this, its hard not to conclude that Gold is being disrupted. Thats what I said about the Lindy effect last year (something that Taleb is taking comfort on to think Gold is fine). The effect says nothing about investment returns but only about existence. So yeah, gold will continue to exist and be used but that does not mean that investors wont suffer. Taxis and typewriter factories still exist, that does not mean that owners of medallions or shareholders of factories did not lose a ton of money when they got disrupted
Another example, horses were domesticated around 3500 BC but when cars came along it didnt really matter how long people used that for transportation. Cars decreased the demand for horses for transportation and that never recovered. Yes, horses are still used so the Lindy Effect still holds but that does not mean that it made any sense to make a large investment in the horse industry many years after cars were being mass produced. Most likely those investments lead to either poor returns or outright capital losses
I say all of this but I have 10% of my assets in gold. I never go all-in on any particular view. So I own the asset that is probably being disrupted but I also own the hedge and in bigger amounts. So if BTC wins, I lose some in gold but make a lot in BTC. If gold wins, I end up with a net loss but that loss is a fraction of the potential gain.
What I think it is insane is to be long a significant amount of gold without the BTC hedge. BTC being globally avaliable offers a very good hedging opportunity. Its like being a taxi driver with startup uber shares. Or owning a horse farm but shares of Ford Motor at the same time early in the last century.
If you add-in rebalancing in that hedge position, then it becomes even possible to make money on the hedge EVEN IF the hedge eventually fails. For that, all you need is volatility on the hedge (which makes rebalancing a profitable trading strategy)
That's another reason why I think BTC vol will go down, there are just too many free money trading opportunities on it
What I think it is insane is to be long a significant amount of gold without the BTC hedge. BTC being globally avaliable offers a very good hedging opportunity. Its like being a taxi driver with startup uber shares. Or owning a horse farm but shares of Ford Motor at the same time early in the last century.
If you add-in rebalancing in that hedge position, then it becomes even possible to make money on the hedge EVEN IF the hedge eventually fails. For that, all you need is volatility on the hedge (which makes rebalancing a profitable trading strategy)
That's another reason why I think BTC vol will go down, there are just too many free money trading opportunities on it
Here is some interesting data:
BTC last 100 day volatility: 76.8%
ETH is 113.94%
LTC 125%
XMR 124.9%
BCH 138%
DOT 139%
DASH 143%
NEO 151%
XLM 114%
ZEC 153%
So BTC has lower volatility than pretty much all coins, even coins that are a fork of its own code
And BTC did had bigger volatility than this in the beginning
Historical standard deviation of daily returns:
BTC has graduated from alt coin levels of volatility to a level of its own. The volatility pick up this year is the reflection of retail mania, much like 2017 where vol was similar. So this year, was a repeat of 2017 vol wise. I dont see anything meaningful for the long-term value of Bitcoin, I have no idea how Taleb arrives to the conclusion that all is lost because vol did a 2017 repeat. Is he not paying attention? 2020/2021 was all about the rise of the retail investor as a result of lockdowns, retail chases moves and cause volatility. There is nothing meaningful about this. Short-term traders often say that volatility = opportunity, so there are tons of opportunity for hedge funds to play something like BTC. I bet as they do that more and more, these opportunities will get overfished and the net result will be a dampening effect in volatility. But the volality achievements on BTC already look the most significant of the crypto ecosystem
BTC last 100 day volatility: 76.8%
ETH is 113.94%
LTC 125%
XMR 124.9%
BCH 138%
DOT 139%
DASH 143%
NEO 151%
XLM 114%
ZEC 153%
So BTC has lower volatility than pretty much all coins, even coins that are a fork of its own code
And BTC did had bigger volatility than this in the beginning
Historical standard deviation of daily returns:
BTC has graduated from alt coin levels of volatility to a level of its own. The volatility pick up this year is the reflection of retail mania, much like 2017 where vol was similar. So this year, was a repeat of 2017 vol wise. I dont see anything meaningful for the long-term value of Bitcoin, I have no idea how Taleb arrives to the conclusion that all is lost because vol did a 2017 repeat. Is he not paying attention? 2020/2021 was all about the rise of the retail investor as a result of lockdowns, retail chases moves and cause volatility. There is nothing meaningful about this. Short-term traders often say that volatility = opportunity, so there are tons of opportunity for hedge funds to play something like BTC. I bet as they do that more and more, these opportunities will get overfished and the net result will be a dampening effect in volatility. But the volality achievements on BTC already look the most significant of the crypto ecosystem
Attachments
"Celsius doesnt to that"
https://www.coindesk.com/custodian-prime-trust-cuts-ties-with-crypto-lender-celsius
"Custodian Prime Trust has given cryptocurrency lending platform Celsius Network 30 days to get off its platform, citing “red flags,” people familiar with the matter said. " "A person familiar with the situation, who did not want to be identified because of the sensitivity of the matter, said Prime Trust’s risk team was concerned about Celsius’ strategy of “endlessly re-hypothecating assets.”"
I would also note that given that Celsius is a leveraged bank that can go under if everyone withdraws, they have a big incentive to lie
https://www.coindesk.com/custodian-prime-trust-cuts-ties-with-crypto-lender-celsius
"Custodian Prime Trust has given cryptocurrency lending platform Celsius Network 30 days to get off its platform, citing “red flags,” people familiar with the matter said. " "A person familiar with the situation, who did not want to be identified because of the sensitivity of the matter, said Prime Trust’s risk team was concerned about Celsius’ strategy of “endlessly re-hypothecating assets.”"
I would also note that given that Celsius is a leveraged bank that can go under if everyone withdraws, they have a big incentive to lie
The "Celsius doesn't do that" was my phrase re: GBTC discount trade that BlockFi was doing
Celsius lends out the crypto assets deposited on their platform to Institutional traders such as Susquehanna and a couple of hundred others
Prime brokerage and Securities lending
That's their business model
*Disclosure: I own CEL tokens again, converted my Eth to CEL a month ago
In a lot of ways Celsius looks worse than BlockFi. The BTC interest rate offered is higher and they lost their custodian, thats unheard of. There is what is said and what is not said, what they custodian didnt say is probably way worse than what they did say. Celsius slogan is 'unbank yourself' lmao, unbank yourself and then tie your BTC to counterparty risk of so many financial entities that they are fired by their custodian
But yeah, since you are a cool aid drinker, you think none of this makes any sense. Crypto people are often oblivious to risks that finance people aren't, ignore at your own peril
https://www.linkedin.com/pulse/money-credit-debt-ray-dalio/
"The debasement of the currency leads it to devalue and have people run from it and debt denominated in it into something else. There is a whole litany of things people run to when money is devalued, including rocks (used for construction) in Germany’s Weimar Republic. "
For people that are being devalued, anything that is not being devalued is a reserve asset
"The debasement of the currency leads it to devalue and have people run from it and debt denominated in it into something else. There is a whole litany of things people run to when money is devalued, including rocks (used for construction) in Germany’s Weimar Republic. "
For people that are being devalued, anything that is not being devalued is a reserve asset
I'm not a cool aid drinker. I already made thousands of percent ROI on my Celsius investments and I've cashed out
I believe Celsius has proven itself and its business in over 2 years of giving the same interest week after week and growing the business
I got in at 20 cents, some got in at even 5 cents a few months before me that was last year. It's over $5.40
Have you ever heard "don't argue with the market"? Clearly the market is smarter than you think you are
By the way, I only put what I invested in Eth to Cel (actually sold a few thousand to purchase btc, but a different story). The reason I moved from eth to cel was because I noticed Cel was holding better than Eth during fast down moves. Truth be told, should have just sold it to cash
Daal, I do not know why you hate Celsius (or BlockFi) so much. You do not want to invest in it, that's your choice, but the way you mock it in your posts is just childish, imo
Cryptos are an open financial system. I do not like Cardano or Xrp, but I do not attack them with my posts. Ultimately, projects will survive on their own merits
Because I lived through 2008 and I have been around finance long enough to see something fishy when I see it. When I look at the BTC rates offered by TS Crypto and open protocols like AAVE and Compound and I look at rates offered by Celsius, I know they are doing something shaddy. In banking the banks that offer the highest yields are the riskier ones, you never see JPM offering high yields, you always see some shady bank somewhere doing that. Except in crypto banking there is no FDIC, so real people are going to get hurt when these pigs go under. Congress will probably do hearings on this, the SEC will be pressure to come in hard on crypto. Its probably going to set back the industry for a while