The Cryptocurrency Trading Journal

Daal said:
In my mind they are very different. And BTC's and ETH's are very similar. In open source crypto currency projects monetary policy is held by a "social contract"
https://vitalik.ca/general/2021/03/23/legitimacy.html

BTC's 21M hard cap, is not really that hard, it can actually be modified by a soft fork (according to Andreas Antonoupolos). In any event, both BTC's 21M 'hard' cap and ETH's minimum viable issuance they are held by a social contract. If people feel cheated out of that contract (say, because ETH's all of the sudden start to print more and more ETH) they are not going to sit by, they can fork the code and remove all that issuance and continue the coin.
But more importantly, both BTC and ETH dont have that much incentive to print coins and drop their value. Most developers on both coins own a lot of that coin and want to see it suceed. Central banks usually print a lot to accomodate the problems from the fallout of debt crisis, they also are appointed by people that want to be reelected and printing is a way to get there. In crypto currency, printing is a fast way to lost adoption and piss people off. So I see no reason why the Ethereum community would starting printing tons of ETH all of the sudden. And security wise, its probably a better choice rather than choosing the inflation rate and trying letting time tell you whether that is secure or not.

BUT
I do accept that BTC's story in a world of financial repression (cash is trash), flight from fiat, and currency debasement, BTC's is simpler, easier to understand and a more seductive story. And the problems associated with that are 10+ years in the future. So BTC's seems to have an advantage as a Store of Value that is hard for ETH to break
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Valid points.

What comes to mind is that PoS is untested in an adversarial environment. It could also be argued that ETH had not had the same ‘fair launch’ as BTC.

The system would allow large capital to have a greater voice.

Like this recent ‘soft rug’, there are different interpretations of the social contract.

https://twitter.com/x/status/1410307972228694016
 
I bought a Keepkey hardware wallet a couple months ago for like $60, just for test purposes. I did my testing and was not even using the device anymore. Today I found out they are airdropping tokens associated with Shapeshift (the software used to interact with Keepkey) and owners of Keepkey get a bunch of free tokens. I claimed mine and converted into ETH, about $500 worth. Not a bad ROI and I get to keep the device. Lucky but some folks I sure made a killing, very active traders that used Shapeshift to trade (they use Uniswap as a backend) earned tokens based on their volume, I'm sure lots of folks are walking away with big paydays

That's one thing to consider when it comes to crypto companies, if you become a client, you might earn a lot of money one day. This creates an incentive for you to do so even if its unlikely they will airdrop anything. Its an irresistible combination. If the tokenization does occur, it also creates customers that behave more like fans than anything.
I dont particularly like Shapeshift or Keepkey (found it too basic and its more for lay people) so I converted the coins, but I can definetly see myself holding onto tokens from companies I do like because I expect other people to come in and become fans as well

Vitalik says that these tokens are a way get future revenues today, thats more for security tokens but even governance tokens its a way to speed up time and get things now, it also creates fans. So it can be a form of financing for companies. In a debt driven world where companies need to delever, tokens seem to be a smart way of doing that. One day there will probably be a Tesla token, an Apple token (imagine earning tokens buying iPhones, then using those tokens to vote on certain design choices of the next iPhone) and many others
 
upload_2021-7-15_8-10-16.png

https://ecoinometrics.substack.com/p/ecoinometrics-volatility-squeeze
 
2013 peak 11/30/2013
30 day SD: 9.64%
365 day SD: 6.38%

2017 peak 12/16/2017
30 day SD: 6.13%
365 day SD: 4.68%

2021 peak 4/15/2021
30 day SD: 2.37%
365 day SD: 3.47%

Vol at the peak of the market has declined every cycle. Also, its further evidence that in 2021 there were never the excesses in BTC of previous peaks. There was never a final parabolic move up and then a crash

In terms of bottoms:

2015 bottom 1/14/2015
30 day SD: 5.61%
365 day SD: 4.05%

2018 bottom 12/15/2018
30 day SD: 5.41%
365 day SD: 5.01%

2021 bottom, 6/25/2021
30 day SD: 4.9%
365 day SD: 3.82%

Other than the 365SD in the 2018 bottom, everything has declined. Of course, we dont know if THE bottom has arrived this time around, but given the lack of excesses in 2021 vs other times, I have a hard time seeing the -80% predictions making any sense.

This was also my market observation, the 2021 peak never felt like the 2017 peak in terms of price craziness, so its nice to see that the data backs it up. The 2021 peak had almost 1/3 of the vol of 2017 and 1/4 of the vol of 2013, all of the despite record levels of crypto leverage
 
ACH payment network faced an adoption problem early on, the solution: government policy

upload_2021-7-20_9-39-5.png


This is from the book, Payment Systems in the US: A Guide for the Payments Professional 3dd Edition

I think this is relevant for crypto because of two reasons, one because CBDCs will be rolled out and this will force digital wallet and coin adoption into billions of people. Also because Facebook Diem will be rolled out at some point, which will do the same
Then billions of people will have this dead coin in their wallets that is being debased more and more, at some point they will think "what about this Bitcoin/Ether/Other coin thing? People say its a good invesment", then they will see that Coinbase/Kraken/Binance/Huobi accepts their stablecoin for deposits. In a less than 30 minutes they will be able to purchase these more exciting coins.
But my point is that its not about the payment rail (although that will certaintly help to increase the liquidity) its about the familiarity. As people get more comfortable with digital coins they will warm up more and more to the exciting casino versions of digital coins. I believe think will impact not only retail but also asset managers because at some point they will see that trend as well. The smarter ones already have but lots are still on the sidelines waiting for a push to go ahead and buy
 
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