Cryptos: time to get the hell out?

Ramin of Pension Craft just posted a video about risk management for crypto currencies by basically managing a portfolio of cryptos based on market cap or even better based on various risk factors. The idea does not sound too bad if you have time always checking/adjusting your portfolio of cryptos…

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Indeed, my answer was a little bit too harsh. You are right that in the past, the low was usually(!) above the previous peak. But that also depends on how you define the previous peak.

E.g. beginning of September 2017, BTC “peaked” at 4’750 USD, before doing a small correction and then peaking around 18k mid of December 2017. The low was reached at 3’250 USD mid of Dec 2018, and it stayed below 4k until March 2019. In March 2020, it bottomed again around 5’400 USD (which, coincidentally, was also the bottom of the stock market).

My take on this one is: as long as the asset inflation / quantitive easing is ongoing, money will flow into crypto market as well. If there’s going to be corrections in the stock market or even a bear market, the crypto market will follow along and money will be withdrawn.

I can totally feel you on this one! Sounds like my story from 2017 / beginning of 2018. I also put a significant amount (back then) into cryptos, read whitepapers, did some mining, participated in ICOs etc. So the stories we are currently reading in this forum sound very familiar to me. I can just tell you: my crypto portfolio was not performing well until Oct/Nov 2020. Only then, I had reached the initial investments again. Due to those experiences, I’m way more sceptical.

Man, this also sounds way too familiar! But let me tell you this: going ALL-IN in such investments is not wise. Yes, you will have people who made fortunes by doing it. But you also have thousands of people who didn’t make fortunes and lost a lot of money.

wallstreetbets is one of those things, where people get the totally wrong idea. Yes, the Gamestop frenzy worked for some people, but check how many people went ALL-IN for something and lost all of their savings.

Every good financial advisor will tell you to diversify and not put all eggs in one basket. And that’s a very good advice in the long-term. Yes, you might not get rich overnight, but the propability that you’ll use most of your money is way lower than going ALL-IN on cryptos / GameStop / “insertWhatEverMemeStock/MemeCoin here”

On a side note: I’m not sure if it was ever discussed in the other Bitcoin thread, but did anyone ever question the whole BTC story? I mean one guy named Satoshi Nakamoto creates some world-/life-changing (don’t take it literally) piece of software, all by his own. Really?
Did anyone ever think about that this could be an insider thing from e.g. secret service or something in those lines? What would happen if this is the real story behind it? Then BTC would drop to almost zero. Just food for thought…

@mabi thx a lot for the link!

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Bitcoin has a lot of skeletons, not hiding in the closet, but in plain sight. The whole story of the “little guy” taking back control from the evil financial system, creating a better, free world for all might not be totally wrong, but is self-serving and exaggerated. As Nouriel Roubini for example points out, control over BTC, mining etc is extremely concentrated, the opposite of people power. And it’s concentrated in the hands of people you might not want to have control or earn a lot of money.

People chose to overlook those skeletons. Once people choose to realize their existence, BTC might crash, just like it crashed when Elon Musk suddenly decided to acknowledge the environmental impact. No idea though whether these skeletons will ever have a permanent impact and even if they will eventually, there still might be a lot of money to be made in the meantime. But it’s for sure a hellishly risky investment.

I don’t buy the Elon Musk / China forbidding BTC stories at all, tbh. Yes, Elon Musk has a lot of followers, but that doesn’t mean all of them are selling BTC just because he tweeted something.

The crash three days ago had nothing to do with Musk, but big fish dumping the price to buy BTC cheaper again. Most probably this was a concentrated action (I mean 750 million USD being moved in 10min, come on…)

For the skeletons - I totally agree. Majority of miners are in China, and the Chinese government would be totally insane if they would actually force the shutdown of the miners. I mean, that’s a huge leverage for China vs the US. At least if BTC is NOT an inside job from US secret service.

From what I read, he didn’t do it all on his own. Ideas had been around for years, among interested circles, see b-gold or Nick Szabo’s Bitgold (if he isn’t Satoshi himself, of course).

This is conspiracy-theory style rationalisation.

Fact is, somebody cashed in a lot of money. After one of the biggest market runups in history (for probably any asset class). Just as that market was showing signs of massive correction, if not a crash. He might just have been thinking: “time to get the hell out!”. Or somebody may have told him to.

That’s normal, if not rational investor behaviour. It doesn’t need any suggestion of concerted action in attempts to manipulate the price by dumping. In fact, if this were indeed a concerted attempt at price manipulation, doing it all within 10 minutes would be downright silly and obvious. Still, it’s of course likely that that same investor may invest millions in Bitcoin - or other crypto - in the future.

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Isn’t it expected to have more volatility anyway whenever things go up or down? I think DeFi is something new from the last 1-2 years, and that increased leverage a lot, so when things go down, collaterals get liquidated, things go down more, etc.

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Maybe “he” was reading our thread :joy: Was it you, @lumo?

It would be interesting to see how many BTC were actually moved around that time three days ago. The 750M I was talking about were mentioned by @Oliv in the other thread.
Also, don’t forget: it hit almost all crypto currencies equally. So if it would really be only one person, he would have to made a lot of trades in parallel.

From a very simplistic point of view, it should be easy to find out how many and which addresses were involved (because they are all on the blockchain(s)).

There was exactly the same phenomenon with the last crypto spike (end 2017). Around the peak, people diversify into altcoins (probably people think, the old Bitcoin doesn’t go up, let’s try with another crypto), then the whole market goes down together.

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I’ve been in it, so yes - the phenomenon was similar. But the market went down over a longer period, unlike Wednesday when it tanked for 10 or 15min only. When I tried to buy some coins, the price already shot up again.

Quoting myself here, but whatever. Does anyone have an idea how to actually check how many transactions took place at a certain time? I’m trying to use different blockchain explorers, but I can’t go further than 20 min ago.

Little anecdote here:

Few years back I was walking in Geneva and at one point I ran into a homeless old dude who was asking for a coin. I politely denied (told him I had no cash on me) but then he replied « No problem sir! You could tip me some cryptos if you want! » while casually showing me the electronic wallet he had on his phone (I remember he had a small balance of mBTC in it). :joy:
I stopped and proceed to have a funny small chat with him. It was clear to me that the guy was partly crazy but at the same time it looked like he had some good knowledge on the technical aspects of crypto currencies. And he assured me 100% that Bitcoin was in fact a creation made by the russian secret services and that they are waiting for it to become really big (to the point that big companies or even central banks start to buy it) to completely shut it down.

You’ve all been warned now.

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Sorry to disappoint you. It wasn’t me, but certainly someone watching the retail/media frenzy that is typical of spike of a bubble + seeing the downtrend.

Knowing a bit of technical analysis, I can tell you there is a clear downtrend and likely to keep going downwards (technical analysis is not an exact science of course, but at some point the money inflows that keep pushing the price up, stop). There is some noise on the way down, like it happen with the flash crash where is jumped back to the 40k, but history tells that bottoms don’t come a few weeks after the top.

Again, I am not a crypto sceptic, probably 1 BTC will be $1M at some point in like 10+ years. I prefer just to cash in when I see a clear frenzy! Maybe I’ll miss out? Maybe, but I sleep well like this.

Totally agree. The fact is the BTC/crypto is just a shift of power, humans behind it are all the same. The big banks and governments aka “the bad guys”, for sure work with self interest in mind. But the way I see it, Crypto just works as a train with no brakes (no one to create policies when crisis arise for example). Not to speak that I don’t see any of the big crypto holders doing much to make the world a better place + the huge carbon footprint it entails. Most seem to be just “whaling” around i.e. manipulating prices to get richer or creating more crypto projects. Those, mostly, are probably guys that were lucky/clever enough to get way early into buying Bitcoin basically.
At least most millionaires/billionaires in fiat world achieved so by generating value to the society mostly through companies (or herited from someone who did).

I know this is a controversial line of though and I am happy to hear counter arguments.

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FYI:

What are we supposed to take out of that?

Ships sinking, really?

Parallel stories are stupid even though they work because it makes you believe the result is the same, but the two things have nothing to do with each other…

Hey little guys, don’t dump your bitcoins, we are in this together (speaks the big whale pirate, that is not your capitan…)

I heard this guy before and thought he was serious. Looks like he turned into Oprah style show. Probably more followers like this.

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Perhaps it also goes down for a longer period, but you don’t have yet the data…

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Given where the price ended up; there should be some de-leveraging liquidations; meaning additional downward pressure.

Does anyone know how „liquid“ the market is? Do transactions require hours to be processed or are transactions atill fairly fast? Aka are these foresales already priced in or do we have a bunch of sales that still await settlement?

I follow some on-chain analysts on Twitter that track this type of info (Willy Woo, William Clemente, “this is bullish” to name a few). Usually, they get their info from Glassnode but you may need a subscription for this specific data.

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Difficulty is lowering a lot these days, and the number of transactions seems flat. The mempool is not full from what I see but the time between blocks remain constant, so no particular delay in transactions. I don’t know if there is a “Sunday” effect in all of that.

It seems to depend on the exchange. It seems pretty liquid on Binance, less on Kraken and Bitfinex. I haven’t followed these data until now so can’t tell how the scores compare to the usual liquidity (just that they’re scored on a scale of 1-1000): Bitcoin price today, BTC live marketcap, chart, and info | CoinMarketCap

There are few big chunks in the mempool for a couple of days, like this:

//Potentially that guy tried to sell 1120 Bitcoin at around 50k$/BTC and his transaction is still in the mem pool.

Edit: Looks more like an internal transaction from an exchange wallet at second glance

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