Bitcoin and Major Markets – The post you MUST read!

Yesterday I was not worried. Truly, that dip did not bother me.

But things have changed.

We are experiencing the perfect storm. The last straw for the markets seems to be the Trump travel ban (the ludicrous one which excludes the UK and Ireland for “doing a good job” and which ignores the fact that the USA is one of the worst hit and fastest growing Covid-19 countries).

I’ve said on multiple occasions that this dip is not THAT economic crash – the fiat house-of-cards collapse which many of us have been expecting to see in the near future. I stand by that statement. For now…

BUT

That doesn’t mean that THIS collapse will be any better!

And a collapse it is…

The significance:

Yesterday my BTC price long-term base trendline was breached. As I explained on Twitter, there are circumstances under which this can and does happen. It did not matter at that stage.

But BTC has subsequently plunged beyond (and stayed there) to levels which indicate that this will not be a “quick dip below the line” or just a tail on a weekly candle.

The important thing is that a VERY substantial and important BTC trendline has broken down. This is not an analysis fault on my part. It is not a TA fault with a misplaced trendline.

WHAT IS HAPPENING NOW IS NOTHING SHORT OF THE COLLAPSE OF MAJOR ECONOMIC MARKETS!

Read that again, it’s important.

Note that I did not say “dip”. Nor did I say “contraction” or “retracement”.

I said “collapse”, and I meant it!

Remember Bit Brain’s Fourth Law of Crypto which states that: Technical Analysis is a graphical representation of market psychology. It is a way to visualise the feelings of masses of people wrt trading.

TA is psychology on a chart. People don’t panic because charts dip; charts dip because people panic!

The complete breakdown of my long-term base trendline for BTC means that the markets are suffering a complete breakdown!

Do not make the mistake of interpreting this as “analysts who got it wrong and are justifying their poor predictions”. If that were the case then I wouldn’t be writing this post and drawing attention to it.

Also: do not make the mistake of following the predictions of some lucky outlier analyst who guessed right and happened to call this crash from a long way away. Prior to about a month ago, there was no indication as to how bad things would get. A good analyst could have called this as part of a worst case scenario a month ago, maybe some of them did, but I didn’t see any do so.

Future Implications

Firstly: don’t think that this is a crypto issue, it isn’t.

The crypto crash is only a symptom of a much greater problem. To sell crypto now would be foolish: it’s already taken a larger hit than most – so selling it for something else would mean making a loss (even if you are ahead in USD terms). I can’t tell you what to do, but what I am going to do is to hold through this crash until we come out the other side. I’m not selling crypto at a loss.

I can say that because while TA may not longer be on our side, the fundamentals of crypto are as strong as ever!

The charts may have changed, but nothing has changed in the fundamentals of Bitcoin and the alts. Each and every reason we have to believe in the massively disruptive
revolution that public blockchains are is still 100% valid.

My faith in blockchain tech and its associated cryptocurrencies remains absolutely unshaken.

In other words: I have no doubt that crypto will not only recover from this, but thrive. Perhaps next time around BTC will be seen as the ultimate store of value.

The second major implication is that the major fiat crash has yet to come. That will be the crash based on loss of faith in fiat economies. This crash may still turn into that crash, but we have yet to
see significant signs of that happening. If Covid-19 hangs around long enough, it is possible that the fiat monster – already stretched rather close to breaking point – may collapse entirely.

Assuming that the lose-faith-in-fiat-economies crash does not occur; the effect of a corona-crash will be that it is likely to delay that crash. It will do so by resetting the values of over-valued pseudo-assets, a process which is already well underway.

Whatever happens, crypto is still the place to be in the long-term.

The final major implication is China (again).

It was only the other day that I spoke about how I hate having to praise a communist government for its actions, and yet here I am – doing it again! (Perhaps that demonstrates just how seriously our ridiculously liberal and corrupt Representative Democracies have failed?)

China has not only beaten Covid-19 (to all intents and purposes), but it has managed to end up with the bulk of global manufacturing capability located within its very own borders. In a virus-ravaged world, that gives the Chinese economy unrivalled power and far greater ability to recover from a disaster than anyone else. Chinese manufacturing stocks may be the best place to invest right now! Already its economy seems to be weathering this storm better than many others, despite strict lock-downs and the highest number of Covid cases to date.

Conclusion

I realise that this post is somewhat distressing, but unfortunately that can be the nature of the game. As a realist, I must tell it like it is, even when the truth hurts. My own portfolio is lying in tatters, leaving me in an even more precarious situation than usual. I know how it feels. Nevertheless; I do not believe that having faith in crypto is a naive or foolish pursuit, and I will continue to buy more of it if I manage to get money to do so. (I bought yesterday, just by the way.)

If you are looking for Covid-19 insights and information then do not miss my post “Analysis of a Sick Market – Part 1 (The Virus)” from earlier this week. It will not only tell you the important things, it will tell you that which others don’t.

DO NOT UNDERESTIMATE THIS VIRUS! I see far too many complacent people doing that, it is most distressing! (Not to mention selfish and foolish!)

Good luck out there guys. I hope you can weather this storm without too much hardship. The best advice I can possibly give you is this: “don’t panic”. Stay calm, stay rational. Avoid making
decisions in haste. Do what you need to do to get by for now, and we can pick up the pieces on the other side of this disaster.

The Sun will rise again!

P.S. If you just need to chat / unload stress / rant a little / discuss your fears / whatever – my ear is available to you.

Yours in crypto

Bit Brain

“The secret to success: find out where people are going and get there first” 

~ Mark Twain

“Crypto does not require institutional investment to succeed; institutions require crypto investments to remain successful” 

~ Bit Brain

Bit Brain recommends:

Crypto Exchanges:




Bitcoin and Cryptocurrencies 2020

Yes I am still alive. (Sorry to disappoint you politicians, mass media journalists, bankers and other scum – you don’t get off the hook that easily!)

My recent silence has not been voluntary, unfortunately I am once again looking after an injured wife. Sadly this takes up the majority of my time, but now that she is slowly on the mend, I will try to get
back to my neglected blogging.

Let’s take a holistic view of the markets, looking at Bitcoin in particular but also at a few related events/issues/etc.

The year started with a bang – a literal bang if your name is (was) General Soleimani of the Iranian Revolutionary Guard Corps. Let us pause for a moment on this single issue, because the ramifications of that attack are potentially far-reaching. I’m not going to go into whether the attack was justified or not, what Iran did to deserve it etc – go down that path and you get lost in the nitty gritty – that I will leave up to you to decide for yourselves. Since this post is more about BTC than about how the world works, I’ll skip the detailed political/military/economic analysis and will merely mention the high level interesting effects that I think this attack has brought to light.

Bit Brainian thoughts to ponder over:

  • Media coverage was immediate and widespread – to a disproportionate degree if viewed against similar events.
    • This is exactly like the disproportionate amount of coverage received by Greta Thunberg. If you want to know more about how and why this happens, then don’t miss this spectacluar eye-opener: “When Children Cry”.
  • Wars make a very useful national distraction for presidents who are struggling with domestic opposition – Clinton launched a similar attack prior to his impeachment trial.
    • If you want to unite a divided population, then few things work better than a war. People forget their differences when they combine against an external “threat” – whether than threat is real or just a perceived threat created by the government propaganda machine (like the “threat” posed by Jews to Germany in the WWII era).
  • This was an inflationary move (in terms of tension and military aggression) that will destabilise the world. There is no telling how far this destabilising effect will go – a chain reaction is hard to control. With the global economy already on shaky ground, the tipping point of grand-scale economic systems-failure could come sooner (weeks or months) rather than later (within a year or two).
  • Bitcoin price shot up due to instability and uncertainty – or FUD if you prefer. Such a rise is a panic reaction and is based on very little fundamental reasoning.
    • The goldfish-like memories of investors may soon fade, sending the price of BTC back down by maybe $500 to $1000.
    • Ironically the more intelligent long-term investors will have been buying up BTC for years because of long-term instability and uncertainty of the fiat-based markets.
  • It’s interesting to note how BTC was clearly used as a store-of-value as soon as an international crisis loomed.
    • BTC’s transformation into “Digital Gold” in the eyes investors has spread beyond the realm of early adopters and is entering the mainstream collective psyche.
      • …which just makes Peter Schiff’s incoherent panic-ranting look ever more pathetic!

Bitcoin

My last post of 2020 “Bitcoin – Approaching 2020” showed how everything was running exactly according to plan and prediction. Well, it was running exactly according to MY plans and predictions – if you follow lesser analysts and their incorrect tales of weak TA fiction, then that’s your own problem.

The post mentioned above was published on 16 December and I haven’t actually needed to update you since then, because that post has been right on the money ever since. Let’s recap a little and see what’s happening now.

The day after I wrote that post I posted this Tweet:

16 hours after Tweeting that, the price of BTC hit a seven month low and turned (generally) positive. The prediction was based on a triple-line convergence point, the details of which may be found in “Bitcoin – Approaching 2020” and which remain valid.

It must be mentioned that THE BITCOIN PRICE TURNAROUND HAS YET TO BE CONFIRMED!

Until BTC has conclusively broken through the top of the descending channel, the scenario that BTC may continue to trend downwards remains. I BELIEVE that the price movement of BTC (and of crypto in general) has now turned around, but at this stage I am still willing to concede that I may be mistaken – though the evidence suggests that I am not.

To break out of the channel, BTC will have to break through the red zone depicted on the chart below.

Note in the chart above that BTC price is currently well above my projected price line (yellow), so (as I said earlier) don’t panic if the FUD-based buying comes to an abrupt halt and the price drops into the mid $7000s.

On the other hand, this buying spree and obvious faith placed in BTC as a store-of-value may well trigger another bull run and send crypto prices to new ATHs. At this stage we can’t tell what will happen yet, so just keep calm and take it day by day, remembering that crypto investing is a long-term game.

The performance of altcoins in 2020 suggests that crypto sentiment has indeed swung positive. Those who didn’t pick up alts in December (or earlier) may have missed the best opportunity to do so, though seen in the greater scheme of things altcoins are still ridiculously cheap and are well worth buying! Just remember that many altcoins are utter rubbish (even some big name alts, hey XRP? Hey BSV?), so choose carefully. Sure, the price of the bad coins will probably Moon when the other alts do, but so did the price of BitConnect once upon a time…

With the apparent change in sentiment, I have begun constructing new positive Fib levels (as opposed to the negative ones I was using in the descending channel – as seen above). These are still in the test phase and will require considerable tuning before they start to yield information worthy of “prediction value”. For what it’s worth, my positive Fib levels look like this for now:

I will probably keep the positive Fib levels away from my primary BTC chart for the time being, until such a time as I have confirmed that the descending channel is no longer governing BTC’s price movement. Adding too much data to a chart just becomes confusing and is undesirable, the fewer lines there are on a chart, the more I can see.

Conclusion:

As described in my older posts, I expect BTC to now hover just above my Long-term Base Trendline for the foreseeable future – probably most of 2020. At some stage (or possibly stages) BTC will rise sharply up from that line and we will have another bull market – probably an unbelievably strong record-breaking one. Maybe it won’t be one big one, but rather a series of smaller bull runs, much like the mini-run we saw in mid-2019.

Whatever the outcome, I remain more bullish on BTC than ever before. I’m a long-term investor, when I buy something I’m looking at least five years into the future, more likely a decade or longer. I got into crypto because I saw the long-term potential of decentralised blockchain technology, a potential which will surely be realised.

I think that 2020 will be the year that the masses warm up to the idea of BTC, this will be the year that Bitcoin moves from “geek money” to “legitimate alternative investment”.

Remember that crypto is only a part of a balanced portfolio. I believe that crypto is very important, but I also believe in not putting all one’s eggs in one basket. You can, for example, be a fan of both Bitcoin AND Gold, or even Bitcoin and Stocks – don’t let short-sighted fools like Schiff of Buffett polarise your views.

I wish you all a merry 2020, and I look forward to interacting with all of you wonderful blockchain-friendly visionaries over the course of the year.

Yours in crypto

Bit Brain

All charts made by Bit Brain with TradingView

“The secret to success: find out where people are going and get there first” 

~ Mark Twain

“Crypto does not require institutional investment to succeed; institutions require crypto investments to remain successful” 

~ Bit Brain

Bit Brain recommends:

Crypto Exchanges:




Bitcoin – Approaching 2020

Oh how I wish we were seeing the kind of Bitcoin price action that we saw back in December of 2017! Alas, it can’t always be a bull market. However, while reading this post, remember that when looking at investments it is LONG-TERM performance that counts! Everything else is just “noise”.

Let’s fall into the trap of getting lost in some of that noise – just for the hell of it, and thereafter we’ll zoom out and see how the long-term market looks.

All is well

Everything is still going according to plan (almost uncannily so), even if the trend is negative. Counter-intuitively, this is a positive sign: a predictable market is more stable and easier to analyse accurately, it has less chance of giving (good) analysts a shock.

The current market has been incredibly predictable. My post of 27 November (uncreatively titled “Bitcoin – 27 November (Don’t Panic)”) shows exactly how predictable that market is, and how I am still calling the market today based on analysis that is now five months old. I strongly recommend reading that post as background to this one, it gives a much better indication of the age and accuracy of these predictions, as well as an explanation of what they are based on.

Short-term

The yellow price prediction line seen in the post mentioned above is still in play. Remember: it is a rough indication of expected price movement – a “best guess” scenario and should only be taken as such.

The fact that it is still doing a good job 29 days after its creation is a positive sign. With BTC price sitting where it is right now, we can see that the prediction line is sitting about $500 below it. Again, don’t read too much into that, but – it is likely that price may drop another $500 or so before reaching the turnaround level.

The descending channel (you DID read that post I recommended earlier, didn’t you?) is still the dominant local price-governing pattern.

You can see my faint Fib-levels within the structure of the channel, levels which determine short-term price jumps, but which will ultimately become inconsequential in the long-term. Like other savvy investors, I have been making use of these levels to stack sats when BTC dips to the lowest levels, it helps a little with ROI in the long-term.

Medium-term

Looking at 2019 in isolation, it is noteworthy that despite not being a great year, BTC is up 91.69% from its start-of-year price ($3691.87 on Coinbase at 00:00 GMT on 1 January; measured to time of writing). Annual performance is a trivial and arbitrary figure, but the more traditional financial markets are fascinated by such numbers, so why not ask them how many of their assets can match that figure?

Far more importantly on this chart, we see the triple convergence point of three support lines: medium-term, semi-long-term and long-term. We are just passing the end of that convergence point right now!

An explanation of this convergence point can once again be found in the previous post, though we will cover it briefly on the next chart. The significance of passing this point is that BTC price movement should now turn positive.

Hark. Bit Brain has spoken.

“Turning positive” implies that BTC price will start to move towards the top of the six-month-old descending channel and eventually break through it. For what it’s worth, my charts place that breakout date in the second week of March 2020. Consider that date to be highly flexible, though it shouldn’t happen much later than that.

Long-term

As I said above, this chart gives an idea of where the other two converging lines originate from (the third line of the convergence point being the base of the descending channel). This is why BTC is now crossing a triple-support threshold.

The “Long-term base trendline” is the most important of the three lines by a country mile. It is the only line that will carry and meaningful significance into 2020.

It is critical that BTC does not execute a definitive break through this trendline. At five years old, it has been Bitcoin’s reliable support level for half of BTC’s life, a situation which I deem unlikely to change soon. A small break below it (such as that of late 2015) is fine, but a big break would mean that all bets are off and that I need to go back to the analysis drawing board.

It is worth nothing that long-term BTC trends may curve slightly downwards as opposed to being straight like this trendline is. But beware of taking the majority of curved-line posts too seriously! I’m sure you’ve all seen the popular “stock-to-flow” charts circulating around; it’s a pity they are just very broad and largely useless “predictions” – much like a TA version of “psychic” readings or astrology. Perhaps I’ll write a post to debunk them sometime, or perhaps you can just read these two posts and figure the problem out for yourself: (in addition to the problem of the ridiculously wide channels they use – which still get breached.)

In fact, ENSURE you read those posts, since the economics behind halvings is still ridiculously misunderstood in the crypto space.

Conclusion

Passing the convergence zone today finally puts us back on the path towards higher prices. The mini bull run of May/June did us no favours – prematurely pushing the price of BTC high above the base trendline and causing it to fall for the remainder of the year. That fall should now finally come to an end, though is has already caused further damage (after that caused in 2018) to the altcoin market and its credibility.

I see this as a great time to buy: we are at the (probable) end of a descending channel, near the bottom of that channel and about to hit firm support and an upwards trend. The altcoin market lies in tatters, meaning that many literally unbeatable deals await the brave investor. Having spent a little money on large-cap alts recently, I think that I may be ready to chance a little on smaller cap coins now. The opportunity to buy into genuinely good crypto projects with a total market cap of $1 mil or less is too good to pass up on!

If anyone is going away soon and won’t be reading my blog for a while: I wish you a very Merry Christmas and a Happy New Year! Please travel safely and don’t do anything silly like drinking and driving. I did some of that in my younger days and it is nothing to be proud of – it’s just incredibly stupid and selfish. Be better than I was.

May Santa bring all of you big bags of cryptocurrencies!

Yours in crypto

Bit Brain

All charts made by Bit Brain with TradingView

“The secret to success: find out where people are going and get there first” 

~ Mark Twain

“Crypto does not require institutional investment to succeed; institutions require crypto investments to remain successful” 

~ Bit Brain

Bit Brain recommends:

Crypto Exchanges:




It’s a Good Day!

Today is a good day. I’m looking forward to its outcome.

My fight against governments is unending, a daily burden, but one which I undertake willingly.

I pride myself in fighting governments on every front that I possibly can: it doesn’t matter which level of government or even which country’s government I fight. As long as
I am making it hard for tyrants to be tyrants, then I am doing something right.

Today is a good day because, God willing, tonight I will get to confront a government official face to face. Tyrants being what they are, such opportunities are rare. “Democracy”
is only a word, a word which Representative Democracies have become the antithesis of.

I’m not naive, I know that I can’t change a politician. I can’t change a politician, but I may be able to help change politics! I will be in a room of influential people: voters, business elite, political party funders, and I fully intend to make best use of this opportunity to open their eyes.

The groundswell against politics in general is growing large, noticeable large – but that groundswell is generally confined to the lower levels. Richer citizens tend to ignore it,
they have more capacity to absorb tyranny – it doesn’t hurt them much and I doubt that they even notice it much of the time. Tonight I will do my best to enlighten the rich, and I will do this by backing the government
official into a corner, forcing them to expose their lies, greed and alternative agendas.

At least, I’ll make my best efforts to do so.

The rich have much to fear. While the average millionaire is not complicit in the day-to-day tyranny that representative democracies now are, WHEN the torches and pitchforks come out, there is no telling how far down they will go in their quest for vengeance and retribution. The average millionaires would thus do well to
enlighten themselves a little and to sympathise with the plight of those poorer then themselves. When business heavyweights start to pressure political parties and hold them accountable, that can have an immediate positive
effect on communities. No political party wants to deal with the bad press of a large company actively and publicly opposing them. If there is one thing a politician really despises, then it is the truth coming out of the
mouth of a well-known and crespected source.

And so the process continues: continually trying to open the eyes of those who have yet to see, or perhaps don’t want to see.

I’m tired of this fight, I’m really REALLY tired of it. It is a reality that I live 24/7/365, and one which I take seriously. The burden of constantly opposing corrupt governments is rather draining, because there is just so much damn evil to oppose!
I know that my many posts, blogs, emails, discussions etc often go completely ignored – but there is method to my madness.

I saw that earlier this week.

I tend to get a little shunned; not in the nasty “ostracised by the community” kind of way, but more in the “try to avoid him him, he’ll just berate you for voting
and tell you yet again why fiat money is evil” kind of way. People would rather not be around me, because “light conversation” with me tends to become rather heavy, and I won’t let them walk away without
the added burden of what they could be doing to help bring about change.

BUT

I’m right – and they know it.

There is a saying, something along the lines of “Nobody loves a warrior until the enemy is at the gate”. I am such a warrior, in more ways than one, and I wear that lack of love as a badge of pride.

And so it happens, that when the proverbial brown stuff hits the fan, suddenly I find myself to be popular again. That is what happened earlier this week.

Government (in my country) made such a large and obvious mess up, that the usually complacent sheep were temporarily jolted out of their rose-tinted slumber, and they took to social media
en masse to express their disapproval.

The words they used were heart-warming – because I saw them repeating words that I so often speak. You see, when you carry on and on and on until people are sick of you, something
you say sticks in their brains. Deep down they get the nagging feeling that all is not well. When circumstances eventually do become undeniably nasty, a little trigger fires in the back of their minds and they remember your
words.

I have made the most of this opportunity. I did not to welcome the newly awakened with open arms, but rather to chastise them for their regular conduct and to warn them against doing so
again in the future. I’m driving the lesson home. Next time around it they will react quicker and with more conviction…

It doesn’t take a lot of people to oust a tyrannical system of government, but it does take more than we have available at the moment. The longer the sheep keep their heads down and
try to ignore issues, the longer we will all suffer.

It is with that in mind that I go with a smile on my face to tonight’s meeting. I know that the politician stands no chance against me. True, it’s only a big fish in a small
pond, but this particular pond is a relatively large and significant one – the ramifications of losing control of it could have a major ripple
effect for a certain political party and even for my country as a whole. So I will be giving it my all. Wishes of good luck and prayers (irrespective of faith or denomination) are most welcome.

Conclusion

Bitcoin is coming. I absolutely believe in the power of decentralised cryptocurrencies and the revolutionary disruptive effect that they are capable of having on international finance. I
absolutely believe that governments can be starved of funding and can be rendered obsolete by blockchains; both in a financial and in an administrative role.

But Bitcoin is going to take time. The upcoming global stock market crash is not going to automatically result in cryptocurrencies replacing fiat currencies overnight. Sure, it will give
crypto an enormous boost, but this is not the crash that will spell the end of fiat forever, it will only be the beginning of the end.

It is still up to us to fight wherever we can: to fight for what is right – not legal. To fight for true patriotism – not the words and symbols created by politicians. To fight for liberty
and free will, not disguised socialism and “democracies” that aren’t democratic.

The battle is hard and the end is nowhere in sight. But if you and I don’t fight it, who will?

Yours in crypto

Bit Brain

All charts made by Bit Brain with TradingView

“The secret to success: find out where people are going and get there first” 

~ Mark Twain

“Crypto does not require institutional investment to succeed; institutions require crypto investments to remain successful” 

~ Bit Brain

Bit Brain recommends:

Crypto Exchanges:




BrainMetric – IT’S STILL ALIVE!

Does anybody remember reading this?

No? Well I don’t blame you. It’s from THIS POST back on 5 August, so I hardly remember it myself!

In all seriousness, I didn’t forget about it, and I actually have been working on it (albeit at a rather low level) for the last four months. I want to reassure you
that I still fully intend to finish it, though it’s going to take much longer than expected. This is it’s story so far…

A Brief History of BrainMetric

As you can see above, I described my metric as being “a quantitative metric used to determine the investor confidence of the market”. That’s no longer an accurate description of it.

The more I worked on it, the more I realised what else I could do with it by expanding upon it. I’ll spare you the details of the equations, partly to protect my own intellectual property, but mostly
because equations tend to make people’s eyes glaze over!*[1]

I soon realised that my metric needed a benchmark. Finding a good benchmarks is trickier than it seems, because cryptocurrencies are anything but constant. They vary wildly in price compared to other
asset classes, as well as to one another. Even a single cryptocurrency tends to have high price volatility. I reasoned that the best benchmark to have would be an aggregate of the combined data of all of the cryptocurrencies
averaged over different time durations.

The trouble with that approach is that it is practically impossible to do. Wash trading wrecks it. Unlisted coins corrupt it. Delisted coin data are no longer readily available. Data anomalies (e.g. a
spike caused by a data capture error) have a big effect on it. Even in a best case scenario it will only ever provide you with an approximation. With so much data and so many potential points of failure, it becomes a bad idea.

Big Data vs Little Bit Brain

The death blow to the “all coins” approach is the sheer amount of data it requires. Assuming the other issues can be resolved, I would still have to import, capture and process practically
the entire historical database of a site such as CoinMarketCap or CoinGecko. CMC has got almost 4900 coins, CoinGecko (whose API I prefer to use) has over 6200! I’m working alone on this, and that amount of data is way
too much for me to handle! Put it this way: Bitcoin alone represents about 15000 rows of data, each row being several columns wide! In fact, all I’ve managed so far is to process Bitcoin data.

But that’s fine. During this process, I have been able to plan my next steps, and have also found value in BTC data on its own.

Analysis of BTC’s data processed through my most basic algorithm, reveals that it behaves much as as Bollinger Bands do (with similar predictive abilities). It is my hope that I will be able to
calibrate the figures into a form of meaningful “market tension” indicator, an advanced warning sign of when some big price move is about to happen. Take a look at what I mean, this is the most basic form of BrainMetric
data displayed in graphic form:

(Embarrassingly) Made by Bit Brain

Excuse the rudimentary charting, I originally made these strictly for developmental purposes, not for publishing! The aim of charting this was to determine how to use it as a benchmark. What you see
above is basically how BTC trading activity (of which volume is only a part) changes over time. It’s a few months old, but you can notice that the far right side is already very “squashed” – much like the
squeezing of Bollinger Bands. When I calibrate my data, this “squashing” will translate into a market tension; the more squashed it is and the longer it remains squashed, the higher the market tension figure will
be.

Beyond BTC

I have decided that BTC will be my industry benchmark, it’s far easier working with one coin than with thousands! There is the option of using total market data, but this data is very hard to find
for the early years and tends to be inherently corrupted by aggregation, lack of data and coins constantly being added to it. As a constant, it is very poor. It’s also interesting to note that you can’t use something
like the “Top 10” coins, because while the names of those Top 10 may seem fairly constant, they change significantly over time. – making their data impossible for me to process.

I aim to be able to average my BrainMetic over time (in intervals of selectable duration for both macro and micro trends), and then compare it to the values of specific altcoins worked out using the same
method. This will work in much the same way as we currently use BTC/sats price to benchmark the performance of different altcoins. Only, unlike with sats price, with BrainMetric the algorithms will allow us to compare apples
with apples. You can’t say that e.g. DASH is better than TRX just because DASH has a higher sats price. But with BrainMetric you WILL be able to say that one is better than the other, since price will not be a primary
factor.

“Better” is not the correct word, I think “less overbought” would be a more accurate description. BrainMetric will be similar to my 4 November post: “Perspective on Altcoins”, in which I used a pseudo-neutral metric (percentage drop from All Time High) to compare altcoins to one another. (Note: BrainMetric equations will not use ATH.)

Joining the Dots

At the end of the day I have a vision of what I want from BrainMetric, I want something that will show:

· The “Market Tension” of BTC – and maybe selected altcoins too.

· … possibly graphically.

· A fair comparison between various altcoins to show which are undervalued and which are overvalued.

· The later incorporation of an additional metric which I have yet to develop.

BrainMetric will probably take the form of some sort of dashboard with a simple interface that hides all the background number crunching.

Yes, as the last bullet point states, there is a second metric in the pipeline. My brain laid yet another original idea egg that will tie in very nicely with my BrainMetric
vision. So “BrainMetric” will probably become “BrainMetrics” as the second metric literally gets added into the equation. IF I can get it calibrated and start getting good predictive data from it, then the addition of the second metric will:

· Further help to determine “Market Tension” (i.e. how likely the next big jump will be), and

· (importantly) give percentage probabilities as to which direction that big jump will be in.

The second metric will operate on the principle of a rudimentary Kalman filter, calculating future jumps based on the frequency, sizes and directions of previous jumps. At this stage the second metric
exists solely in my head, I haven’t had a chance to even start looking at the equation for it.

Making things happen

After deciding last year that Microsoft has got enough money, I stopped using Excel for my crypto-tracking spreadsheets. After trialling several free alternatives, I settled on the excellent FreeOffice suite for my day-to-day needs. (Visit www.freeoffice.com to check it out for yourself, MS Office users should feel right at home. This post was originally created in FreeOffice.)

Figuring that learning how to import APIs/scrape webpage info into FreeOffice spreadsheets might not be so fun (it can be bad enough in Excel), I decided to switch to the web-based Google Sheets for
my crypto spreadsheet needs. I figured that Google may have better internet data integration tools. That was only partially true, and subsequently took a large step backwards when the most popular crypto plugin ceased working.
But I pushed on and have become moderately competent at getting Google Sheets to work for me.

Level 5+ Excel Grand Wizards will know that with enough time and practise, you can make Excel do just about ANYTHING! It may look similar to its siblings Word and Powerpoint (and the other younger ones that few people use), but under the hood, Excel is a V8-powered, fire-breathing beast! Still used to the formidable capabilities of this beast, I built BrainMetric in Google Sheets.

..and that’s why I’m taking so long to do this.

After much struggling, I realised that it just wasn’t going to work. Using Sheets I simply did not have the tools I needed to effectively process all that data. I don’t blame Google: Sheets
is a very capable web app which can do most things, but it just isn’t Excel which can do absolutely anything!

Knowing what I would have to do, I tried the old “ignore the problem and hope it goes away” trick. It didn’t. Eventually I confronted my demons and dusted off some long-neglected bookmarks in my browser. I started the painful process of re-teaching myself computer programming.

Unfortunately programming is not like riding a bike, it’s a perishable skill – one which I learnt at university two decades ago! Modern programming languages evolve constantly: the little which
I do remember is horribly out of date. It’s like semi-remembering the home phone numbers of people you knew 20 years ago: you dial a few, half of them are wrong, and the other half no longer work anymore. The language
Java is now on version 13. I learnt version 1. An early edition of version 1!

Worse still, I have to fight my way through the badly outdated Java documentation – the hallmark of massive open-source software projects. Since I want to use a specific type of user interface creator
(JavaFX), Java 13 is actually not really suitable for my purposes. Java 11 sort of is. Java 8 is. Don’t ask about the in-between version, just don’t. It’s probably only after
Java 14 is released in Q2 of 2020 that things will work properly again (after some work by the community). If only I’d know that at the beginning, I would have saved days, days which I wasted trying to correctly configure the programming environment of my PC.

Now that everything is running semi- properly, as much as I want to jump straight into coding BrainMetric, I need to first practise the fundamentals and make stupid mistakes as part of the re-learning
process. Yesterday I started writing a very basic word processor program. Once I can get that finished, then I should be about 70% of the way there and will just need to work on charting and data management skills. That and
Christmas madness should take me well into early 2020.

So BrainMetric is coming, but I wouldn’t start holding my breath just yet!

For now, what I can tell you is that the prototype charts show a very squashed BTC profile. Something is going to happen soon.

*[1] Stephen Hawking said that when he was writing “A Brief History of Time”, he was advised that each equation in the book would halve his sales. He took the advice to heart and included only “E=mc2”, acknowledging that leaving it out may have doubled the sales of his wildly successful bestseller.

Yours in crypto

Bit Brain

“The secret to success: find out where people are going and get there first” 

~ Mark Twain

“Crypto does not require institutional investment to succeed; institutions require crypto investments to remain successful” 

~ Bit Brain

Bit Brain recommends:

Crypto Exchanges:




Bitcoin – 27 November (Don’t Panic)

I meant to type this post on Monday, but I was WAY too busy trading. Yesterday my usually quiet family suddenly became super-communicative – ruining my chances of getting a proper post out.

However, here IS a post at last. I believe this post is important to write because – as I often lament – the media is littered with ABSOLUTELY CLUELESS crypto analysis (some purposefully so, some real). I need to set the record straight and to remind people (in the words of the immortal Douglas Adams): “Don’t Panic!”

Background (important)

I need to stress that what has happened to BTC during the last few days is:

  1. Perfectly normal
  2. Expected

If you did not expect it, or if you don’t think it is normal, then I can only shake my head at you and make the universal disappointed clicking noises “tsk tsk”, because it means that you did not listen to Uncle Bit Brain. Maybe next time you will…

When reading and interpreting crypto predictions:

It is important to remember that crypto is inherently unpredictable and that even the best analysts (like me) can’t predict short-term events with a certainty of more than about 60%, even when they are very certain. With that in mind, remember that we WILL get things wrong and that our predictions DO change over time. But also note that the more long-term a prediction is, the higher the chances of it being right. It sounds counter-intuitive, but I can predict BTC prices in 2022 with a much higher certainty than what I can predict BTC prices next week.

Confirmations are vitally important in this game. My regular modus operandi is that usually see a pattern emerge, I wait a day or two for initial confirmation, I publish my idea and then I confirm it with increasing certainty as price movements tie in with my predictions. The confirmation process usually requires the fine-tuning of my predictions or, if they are not working out, abandoning my predictions altogether.

Now that you have the background, let’s look at BTC:

BTC

I have long been predicting the movements of BTC which we are seeing now. I’ve been Tweeting about them, blogging about them and displaying my ideas both graphically and in text form.

With this post I aim to set your mind at rest by showing just how far back these predictions go, and also showing you (once again) why you should always listen to Bit Brain…

To keep this post of realistic length, I’ve limited it mainly to graphical Twitter posts, with a few blog charts dotted in between.

The first time I correctly identified and wrote about the BTC descending channel was on 23 July. That’s really not bad (if I do say so myself); it was only this past weekend (four months later) that I first noticed most other analysts at last referring to a descending channel. Some still haven’t realised it… Here is my 23 July chart (from THIS post):

Price movements in early August confirmed the channel, and my faith in it grew (and allowed me to fine-tune it). This chart is from the 5 August post BTC – Beginning of the Week Analysis:

Further mid-August confirmations as BTC rode the top of the channel lower:

At this stage of the game I was still rather optimistic about price, not realising how long the channel would last (it’s now 5 months old, and will probably last for about another month).

September brought us another channel confirmation (with the possibility of turning it into a pennant):

This late September chart is the kind of information that I buy on: a well confirmed trend indicating that prices are relatively low, but can be expected to recover significantly at a later stage. I feel very comfortable placing buy orders based on charts like this:

…so confident that I can even risk missing out on mid-channel dips in favour of better opportunities later (not recommended).

October movements (the next two charts are from THIS post of 24 October) allowed me to modify my channel and to differentiate “Mean Highs” from “Absolute Highs”. Note that my channel has not needed to be modified since then.

Very importantly; October gave me an indicator that the channel was a long-term one and that I shouldn’t expect it to end before the end of 2019. That is still my current thinking.

When BTC dipped through a smaller local channel on 8 November, I was very confident that we would soon be heading down to the bottom of the main channel again. Once again I set buy orders with supreme confidence (note that “65%+”!) and realistic target prices.

Expecting the price drop, I pencilled in a rough sketch of an expected BTC price trajectory. It’s still on my charts today and I’m still using it as a realistic estimate of what may happen.

Which brings us to today:

Everything that is happening is ABSOLUTELY NORMAL and expected. I’m still perfectly happy with the channel and am confident in its long history of predictions and adjustments.

The keen-eyed may have observed that I have just placed my good old diagonal Fib levels on the chart – I believe that they may help a bit in predicting minor resistance/support levels while this channel remains active.

The medium-term chart gives better perspective and introduces a very interesting possibly coincidence/possible important indicator: the convergence of the bottom of the channel, a long-term support/resistance line and the long-term BTC price support line. No I did not cook the books, the lines just worked out that way. The chart after this one better illustrates where the latter two lines come from.

I think there is a very strong possibility that BTC will receive considerable support from the (white dashed) support/resistance line, as well as from the long-term base trendline. that means that BTC should continue to follow my rough little yellow prediction line, and that we should hit 2020 headed in a positive direction.

It also means that we may dip further during the next couple of weeks as the bottom of the channel continues towards lower lows. I expect a final trend reversal in the vicinity of 16 December.

Remember:

  • It’s not about catching the very bottom of the dip, it’s about getting in at a good enough price. I would rather buy a few hundred dollars away from the bottom of the dip, than miss it altogether.
  • Many excellent altcoins are very near to All Time Lows. DON’T FORGET THE ALTCOINS! As I Tweeted yesterday: if you don’t buy them now, then when will you buy them?
  • Trade with your head, not with your heart.

Yours in crypto

Bit Brain

All charts made by Bit Brain with TradingView

“The secret to success: find out where people are going and get there first” 

~ Mark Twain

“Crypto does not require institutional investment to succeed; institutions require crypto investments to remain successful” 

~ Bit Brain

Bit Brain recommends:

Crypto Exchanges:




Cryptocurrency Drama (Part 3)

Behold, the penultimate instalment in my first and only play! It’s brilliant so far, isn’t it?

In case you missed part’s 1 and 2, you’d better catch up here: (or else you will be totally lost!)

Enjoy!

See you tomorrow for the thrilling conclusion to this drama!

Scene 2

The is a knock on the door. The Director of Automated Networks opens it to reveal Bit Brain standing in the doorway.

DIRECTOR of AUTOMATED NETWORKS
Please, step inside and have a seat Mr Brain!

BB enters and shakes the extended hand of the DAN. They both take a seat.

DIRECTOR of AUTOMATED NETWORKS
Ernie tells me that you wish to discuss something with me?

BB
Thank you Mr Director. Yes, I would.

DAN
I’m guessing that this has to do with your insufficient CPU preventing you from carrying out transactions on our shopping network?

You do realise that this is just temporary right? A month from now the REX lending contracts will expire and things will probably return to normal. Probably. Until then we get to demonstrate how much traffic our network can handle from the EIDOS box; it’s a good thing. Also our franchise will soon upgrade to our optimised “Version 2.0”, that will make us even more efficient!

BB
Well, I suppose that the CPU issue inspired me to be here, but that’s not really why I asked to see you.

DAN
Then I am curious Mr Brain, why are you here?

BB
I am here because I’m concerned Mr Director. I’m concerned because your store is experiencing a rather severe issue, and all anybody says about it is that “it’s a good thing”. Mr Director, I am concerned because you and your supporters are in denial! I haven’t seen this much denial since that German guy said he was going to open a bar that specialises in selling carrot juice; I still can’t believe that so many of the Carrot Bar’s investors were in denial about that scam!

Mr Director, thousands of shoppers can’t shop here at the moment, and you just don’t seem to care because the richest ones still can!  Don’t you see how bad that looks?

DAN
Mr Brain, I think you’re blowing this out of proportion. Anyone who puts enough money into our CPU can still use the system, I don’t see the problem.

BB
I can appreciate that. Can you appreciate that many users can’t afford that? Do you have any idea what it’s like to be in there shoes? My memory is a little fuzzy on this point, remind me again just how much investment capital you attracted when you started up this business?

DAN
Yes, yes, we broke records when we started this business, but that’s not my money, that money belongs to the business.

BB
Yet the board of directors controls it. You get to say how and when it is used. You would never know what it is like to be stuck with only a single unit of credit on your CPU card, because that isn’t a reality that any of you have ever had to experience. But that is a reality that thousands of us customers experience right now, and Mr Director, we can not use your shopping network!

DAN
But can’t you see? The system is working as it should. That is what decentralisation is all about! He who puts the most into the scheme, gets the most benefit from the scheme.

BB
That’s fine, I think we can all accept that. But many of us were led to believe that we had already put sufficient money into the scheme, only to now be told that we will have to invest far more if we want to enjoy predictable, regular access to it! That’s not fair Mr Director! You need to address the problem of EIDOS denying resources to the majority of the network. You need to address the exploitation of your system!

DAN
We don’t see it that way. This is a good thing. There is no problem here.

BB
Damn it Mr Director! Can’t you see that I’m trying to help you guys? Can’t you see that having a whole lot of people who can’t access your network, despite having CPUs, is a big problem? Don’t you appreciate that people don’t want to wait a month to be able to make a transaction? Can’t you understand that nobody wants to create a start-up business as part of your franchise if their customers won’t be able to access their services?

Yesterday I ran into a new guy in town, he says he is the newly appointed District Apothecary. He wants to move into one of the abandoned buildings and start his own District Apothecary service – his DApp,
but he is afraid of the start-up costs. In the past I may have sent him here, to you guys, but now I would never do that to him. Instead I am going to suggest that he joins Ned from across the road and becomes part of his
franchise.

You see Mr Director, your mentality is becoming dangerously elitist, your store no longer cares about serving the man on the street, as long as it can serve a rich happy few, or those who are willing to exploit the system. That’s not right Mr Director, that’s not why we moved out here to the frontier! We are supposed to be moving away from systems like that, we are supposed to be creating fair systems for all! Sure the rich can enjoy benefits, but don’t shut the poor out of the network altogether!

DAN
That’s not our objective Mr Brain, we are neither anti-poor, nor pro-rich, we’re just decentralised.

BB
Don’t you worry about your franchisees? Don’t you worry that they will lose business after having placed their faith in you?

DAN
Our franchisees can create systems whereby they loan their own CPU to their customers, allowing them to continue to use our network of services.

BB
But surely some customers will exploit that to the detriment of others? That sounds like quite a complex undertaking for a start-up business to have to deal with; one which will require a potentially complex solution.

DAN
That’s true. But give it time.

BB
That could be more time and money than what people trying to create a DApp or something similar can afford…

Mr Director, as long as you can’t even admit that there is a problem, you can’t begin to address the problem. You know as well as I do that your franchise is hardly decentralised, the majority of resources and control sits right up at the top here with you! That’s fine, but then use it wisely! You need to address this issue! If you do not, then it will have repercussions for your business! Please just admit that there is a problem so that the problem can be tackled! The frontier is a new place, people accept that mistakes are being made, but in order to retain their confidence and respect you need to be honest with the people! Being realistic, open and honest attracts community support, that’s much better than sitting with disillusioned customers!

DAN
I’m sorry you see it that way Mr Brain. We see no issue. I tell you again, this is a good thing.

BB
Well I’m sorry too Mr Director. I tried to show you an impartial reality, but there are none so blind as those who will not see.

Exit Bit Brain

Cryptocurrency Drama (Part 2)

This post will make little sense if you have not already read “Cryptocurrency Drama”. Read that first before continuing here.

ACT 2 – The Present

Scene 1

Bit Brain is seen entering the same store as before. The store is very busy inside, though the town outside seems almost like a wasteland. Tumble-weeds blow across the main road
and many buildings stand abandoned.

ERNIE the OPPORTUNISTIC SALESMAN
Welcome back sir! It’s been quite a few months since we last saw you!

BIT BRAIN
Thanks Ernie. I’m afraid that I don’t come into town often these days, most of the time I just stay on the other side of the river with my tribe, the Timmites. There doesn’t seem to be any freely available BTC around at the moment, and that which I have, I am struggling to use. Last year I bought three horses for 1 BTC, this year just one horse costs 1 BTC!

EOS
Sadly that is true. You see, while you were away, a large pack of bears marauded their way through our town! They trashed all of our stores and wrecked a lot of the valuables inside. Our store is worth but a fraction of what it once was. Some of the smaller buildings around here were completely flattened, their owners packed up and left, everything inside them was lost.

BB
That’s terrible to hear! I suppose that the reality of being part of a dangerous frontier adventure is that we stand to gain high potential rewards, but at the cost of high potential risk.

EOS
Agreed. Is there anything specific I might help you with today sir?

BB
Well actually Ernie, I was rather hoping that you might. You see I took my CPU to one of your little franchises on the other side of the river last week, but they declined it. They said that it was unable to transact with the your network.

EOS
Oh dear sir, I‘m afraid that your CPU must have been negatively affected by the EIDOS!

BB
What’s an EIDOS?

EOS
The Entrepreneurial-Intentioned Destructive-Outcome Suggestions is the massive suggestion box located in the entrance foyer of our store. EIDOS causes so many suggestions to be submitted that our entire franchise has become completely dedicated to them. Basically, our network of stores has gone into “suggestion mode”.

That’s a good thing because now it shows how many suggestions we can handle!

Soon we will be completely revamping our store, we call it “Version 2.0”. It’s very exciting that we can handle so many suggestions already and we don’t even have our Version 2.0-optimised
store yet!

BB
But Ernie, my CPU doesn’t work. I can’t access your network of stores at all. Despite having deposited way more than the minimum, I’m locked out of the system!

EOS
Well you see, we’ve grown so much that our store is even catching up to Enormous Trade Holdings, the biggest name in the business, apart from Bank Toppling Currency of course! We have so many customers using the suggestion box that there is almost no capacity for anything else right now, but we see that level of activity as being a good thing.

BB
But what about the guaranteed access to your store that you promised me? That was the reason I got the CPU in the first place.
Wasn’t it?

EOS
Well yes, but we weren’t in suggestion mode then. Now that we are, you can see the true cost of using our network. That’s a good thing, because now we all have a more accurate idea of what it really costs to reserve access to our network of stores.

BB
But then you misled people with the whole “guaranteed access” story! You had enormous hidden costs waiting down the line! Ernie this is beginning to remind me of how the banks operate…

So you’re telling me that I’m locked out forever and that it’s just too bad?

EOS
Noooo sir! Of course not!

All you need to do is to increase the size of the deposit on your CPU.

BB
By how much? How big is this hidden cost to “guaranteed access” that you conveniently never mentioned before?

EOS
*mumbling*
Prices have risen roughly 100 000 times.

BB
*visibly shocked*
WHAT?!

EOS
*still mumbling*
But it doesn’t really matter anyway, since you can’t access the network to deposit more onto your CPU…
…because you don’t have enough CPU to get CPU.

BB
Are you kidding me? I can’t get CPU because I don’t have enough CPU? So I am locked out forever!

EOS
Noooo sir! Of course not!
You can use just borrow somebody else’s CPU for a while!

BB
*getting wary*
Okay…
But wouldn’t that be a lengthy and laborious process? How would I find someone? How would that even work in practical terms? How do I even do that? Please, help me here!

EOS
*visibly brightening up and going back into full “salesman mode”*
You can use Ridiculously Extended Xerographics!

BB
Dare I even ask what “Xerographics” means?

EOS
Xerographics, it’s a copying technique, so basically Ridiculously Extended Xerographics – or REX – allows you to lend the same CPU to different people over and over again, hence the copying analogy. You get paid interest for lending out your CPU.

BB
But that’s a ridiculously extended process just to be able to conduct a normal transaction on a shopping network!

EOS
Well, not really. We don’t see it that way, it’s a good thing.
*suddenly Ernie returns to his far more demure state*
Well, to be perfectly honest, there is a little snag with REX too. There still has to be CPU on REX that is available to be lent out.
*Ernie looks downright miserable*
Currently there isn’t any left…

BB
… because everybody is already borrowing all the CPU for EIDOS, right?

EOS
*Brightening up again*
Correct. Almost all the resources on REX and in this store are completely dedicated to EIDOS. But it shows the system works! You must see how many suggestions we process each day! It’s a good thing!

BB
Ernie, thanks for the explanation, but I’d very much like to speak to your manager.

EOS
Very well sir, let me see if the Director of Automated Networks is available.

Cryptocurrency Drama

This is the first full length play I’ve ever written. Fair warning, it’s long – it took most of the day for me to write it. I will split it into four posts of one scene each. For those who wish to wait, I will publish the play in it’s entirety after I have released all of the separate scenes.

Ladies and gentlemen, please take your seats, switch your phones to silent and stow your noisy children. Now sit back as we raise the curtain on tonight’s performance of “Cryptocurrency Drama”!

DRAMATIS PERSONAE

ERNIE, an opportunistic salesman

BIT BRAIN, a customer

THE DIRECTOR OF AUTOMATED NETWORKS, a director of a large franchise

NED, a director of a small franchise

ACT 1 – The Past

Scene 1

Bit Brain enters a large store on the main road of a frontier Western Town established by pioneers. There he is greeted by an opportunistic salesman named Ernie.

ERNIE the OPPORTUNISTIC SALESMAN
Welcome sir! And a very good day to you!

BIT BRAIN
Thank you kind fellow, and a very good day to you too!

ERNIE the OPPORTUNISTIC SALESMAN
Is there anything that I can assist you with?

BIT BRAIN
Perhaps a little later. I’ve heard a lot of good things about this store, it seems to be very popular. I wanted to see for myself what all the hype was about.

ERNIE the OPPORTUNISTIC SALESMAN
No problem, just let me know if you need me.

BB wonders around the store and surveys the merchandise

BIT BRAIN
Ernie! Would you mind if I asked you a few questions?

ERNIE the OPPORTUNISTIC SALESMAN
No problem sir! Ask away!

BIT BRAIN
I see a lot of new businesses have opened up around here recently. What’s happening?

ERNIE the OPPORTUNISTIC SALESMAN
Oh yes sir! You see, this is a frontier town. We have fled the mismanaged areas of the central government and have moved to this free and previously unsettled area. We didn’t feel safe living and working in the big towns anymore. I used to work in a bank in a large town, do you know what the building was made of?

BIT BRAIN
No, do tell.

ERNIE the OPPORTUNISTIC SALESMAN
It was made of cards! It has become common practice for them to construct financial institutions out of playing cards! I would never have believed it if I had not seen it with my own two eyes, I know that many others do not believe it when I tell them!

BIT BRAIN
I believe you Ernie, I too have witnessed the houses of cards with my own eyes. That’s why my people and I have now moved out here to the frontier. What I’m trying to do now is to make a few good investments to set me up for the future. That’s why I’m here today, to see if I’m interested in buying what you guys are selling.

ERNIE the OPPORTUNISTIC SALESMAN
I assume that sir has already been to the largest building in our town, the one with an enormous sign that says “Bank Toppling Currency”? They create most of the money that we use around here – we just abbreviate it as “BTC”. They actually have a mine beneath the building. Anyone with a pickaxe is free to go and mine their own money; wonderful system isn’t it?

BIT BRAIN
Yes indeed! I have been into the mine myself. Unfortunately my mining tools are rather crude compared to some of the advanced mining equipment that people are using down there, so I just bought some of their BTC off them with my dollars.

Speaking of BTC; I’ve taken a little walk around your store, and I like what I see. I would be interested in spending some of my BTC here, does this store accept it?

ERNIE the OPPORTUNISTIC SALESMAN
Oh I’m delighted to hear that sir! Yes of course we take BTC, but we have our own little account system that you will have be to registered on before we can process any transactions.

BIT BRAIN
Okay, how do I do that?

ERNIE the OPPORTUNISTIC SALESMAN
We operate on a system whereby you buy everything on a store loyalty card. We call it the “Customer Purchasing Unit” or “CPU”. I’m afraid that it’s not a quick and easy process to get an account going, but it’s worth it in the long run. What you then do is you deposit a small amount of BTC onto your CPU, and that guarantees that you will always be able to use our store! Great system, isn’t it?

BIT BRAIN
Weeeeelll, it does sound a tad over-complicated, but for guaranteed access to this obviously expanding store, it seems like a fair trade-off.

ERNIE the OPPORTUNISTIC SALESMAN
Yes, I’m afraid that one of the directors here is known for developing very complex in-store economic systems, but he is very popular and there is no lack of customers queueing up to use them! Once you have a CPU, you can transact with any of the stores in our growing franchise!

BIT BRAIN
Sign me up Ernie!

Perspective on Altcoins

Today I would like to do a fun little exercise. Well, I think it’s fun because I’m a crypto lover. If you don’t like crypto, then you should probably stay well clear of my blog!

I spoke about the silliness of altcoin bashing last week, so I’m not going to delve into that again. Suffice to say: I believe in the cyclic nature of markets, and that altcoins will rise again. There ARE signs that that rise has started (meaning that altcoins have bottomed), but that has yet to be confirmed.

For today’s exercise I’m going to look at the following hypothetical situation:

Say I put $100 into the top 20 altcoins. What would they all be worth if they then got back to their All Time Highs?

I will be using the CoinGecko top 20. I know that most people prefer CMC, but I like the added functionality that CoinGecko offers. For example: with CoinGecko I can easily see how far each coin is from its All Time High (ATH).

From https://www.coingecko.com/en?view=all_time_high

Below is a table which I constructed to display those figures. Remember, in each case we are investing $100 at current prices, and then seeing what will happen if that coin gets back to its ATH.

1 BTC $214,59
2 ETH $800,00
3 XRP $1 162,79
4 BCH $1 315,79
5 USDT $132,28
6 LTC $613,50
7 EOS $694,44
8 BNB $194,17
9 BSV $199,20
10 XLM $1 265,82
11 ADA $2 857,14
12 TRX $1 219,51
13 XMR $862,07
14 LEO $200,80
15 OKB $168,07
16 LINK $168,92
17 HT $156,99
18 ATOM $206,19
19 NEO $1 785,71
20 IOTA $1 960,78

It’s true that one shouldn’t read too much into this: the playing field is not entirely level (for reasons such as some coins only being launched after the peak of the bull market). But what it does serve as is a semi-standardised benchmark indicator of potential ROI.

Yes, we all know that BTC is safer than altcoins, but I personally believe in chasing some higher potential ROI at the expense of a little more risk, and even a little bit of extreme ROI at the expense of massive risk. Note: being the top 20 coins, this table does not represent the “massive risk” section of the market – well….. that’s debatable, we’ll get back to that shortly.

Those are the numbers, the raw stats. Let’s now dig into them a little deeper:

At a mere $214.59 return on a $100 investment, BTC looks positively pedestrian when compared to the average – and it is. This is the entire point of investing in altcoins instead of in BTC, that and helping many small projects to become part of our everyday lives – thereby greatly enhancing them.

However, and this applies to all the coins, these returns are only to get back to ATH. They do not include further market growth beyond that point! Only the staunchest bears would believe that BTC has already reached its ultimate ATH. Another term for such people is “idiots who should be ignored”. As the ultimate crypto store of value, I believe that every portfolio should have BTC in it. I would consider 10-20% to be a good figure, though that is largely down to personal taste (and my own percentage is way outside that bracket at the moment!)

Moving lower down the table we see ETH returning $800. Wow, that’s really not a bad potential investment! Ethereum remains the biggest and most popular crypto platform by far, and it is really the only one with many high quality DApps already running on it. No, your 100 casino DApps on your favourite chain are not “high quality”. Even NEO – and you all know how much I love NEO – can boast only a small handful of good DApps at this stage. But Ethereum has hundreds of them, even if it is also packed full of trash coins which should, and probably will, die. The ETH team is also still very active and the platform continues to be developed, albeit that it misses target dates almost as badly as Cardano does! 😄 In summary, Ether is a fairly secure investment with possibly much higher returns than what BTC can offer.

You all know my feelings on Ripple. I mean XRP. I mean Ripple. Apparently XRP is Ripple when Ripple does good things such as forming major partnerships; but XRP is not Ripple when Ripple is criticised for e.g. being centralised or being a company full of ex-bankers. Oh how I hate Ripple and everything it stands for! BUT: like most dodgy investments, Ripple still has a LOT of support. I do not doubt that Ripple will once again see very good returns when the market runs. However, I could never condone investing in such centralised, anti-Satoshi rubbish – so if you want to hold Ripple, then you will be doing so without my support! The returns you may get on Ripple are better than those of ETH, but I would chose to put my money on ETH instead!

BCH and LTC remain viable alternatives to BTC, especially for smaller transactions. I believe that there is a strong future for such coins, a future in which BTC is the store of value, and such coins (you can add DASH, NANO etc to the mix) become the de facto mediums of exchange. It is interesting that BCH offers far higher returns than LTC when looking at their respective ATHs. I surmise that this may be because people once perceived BCH as possible legitimate competition for BTC, whereas LTC was only ever a coin that worked alongside BTC. The two coins are pretty even in my eyes.

Note Tether sitting between BCH and LTC, with a possible return of $132.28! I find that rather amusing! 😆

At $694.44 EOS is not looking as good as ETH. This should serve as a mild warning to EOS investors. I have long said that EOS is good, but over-hyped. I stand by that statement.

At $194.17, BNB is deceptive. As far as exchanges go, Binance is by far the most well known. Crucially, its ROI to ATH is less than that of BTC, which on its own should make the decision to buy BTC instead of BNB a simple one. But BNB is a special case, and I caution against writing it off. While my favourite exchange is KuCoin (and its KCS token), I can not ignore the fact that Binance is also launching programs, projects and platforms left, right and centre. It’s very popular and I have great faith in its CEO. CZ has a brilliant mind and a comprehensive understanding of blockchain technology, business principles, international affairs and also a general sense of what a powerful agent of positive change cryptocurrencies can become.

I assess that if any blockchain company can become the next “Amazon”, “Google” or “Microsoft”, then Binance has the best chance of being that company. It is even possible that as other cryptocurrencies grow, so Binance may one day pass even BTC in terms of market cap! Don’t laugh, just think about it…

BSV is a joke, as is Mr I-did-not-pay-now-I’m-back-in-court Faketoshi. It is sad that such people even exist, they are an ugly scar on the beautiful face of crypto. ‘Nuff said.

Of the top 10 coins, XLM offers the second best potential returns (after BCH) on its climb back to ATH. Personally I consider it a little over-valued, but I far prefer it to its greatly overvalued and far more dodgy cousin XRP.

With the best potential returns of the lot (an incredible $2857.14 for a $100 investment) ADA does look like a prime choice! However, I urge you to remember what I have often said: that US investors are too fixated on US crypto in general, and also that ADA is way behind where it should be: many promises, no deliveries. Other platform coins have since moved far past it, even if market cap has yet to catch up to that fact.

At $1219.51 for $100, TRX is looking strong! It’s not that high up that you would expect it to fall down the market cap ladder, the potential returns look good and Tron is a good product. True, like most of the platforms, it also lacks a large number of good DApps – but those will probably come with time. Justin Sun is a dynamic young entrepreneur with enviable levels of charisma, I think there is a high chance that he will lead Tron to success.

XMR has been quiet lately, which is not always a good sign. But I still see Riccardo Spagni on every episode of “Magical Crypto Friends” and he still seems enthusiastic. While they still have issues to iron out, Monero remains the biggest name in privacy coins, and that is NOT something to ignore! A potential return of $862,07 to ATH is only slightly better than that of ETH, but one could argue strongly in favour of privacy coins, based on the way that crypto regulations are going. With exchanges blocking ZCash (which I no longer endorse), it is clear that privacy coins are a threat to the financial centres of the world. If they do succeed, then XMR may well be the most successful of them all.

LEO has a relatively low potential return (very similar to that of BTC), easily explained because it is so new. However, it is the coin of BitFinex, and I have no love for that exchange. I’m still waiting for the whole dodgy BitFinex/Tether monster to come tumbling down. I’m happy to have closed my account there a long time ago, and I have no intention of having anything further to do with that exchange. I suggest avoiding it.

OKB is the coin of another big exchange, though honestly it isn’t one of my favourites and there are other exchange coins which I would much rather hold. There’s nothing inherently wrong with it though, and like LEO, its price is not reflective of it’s potential, because it was only launched after the demise of the 2017/18 bull run.

To an impartial outside observer, the LINK figure of $168.92 should be very troubling! I keep saying that LINK is way too hyped at the moment. It’s possibly the most over-hyped cryptocurrency of all (at the moment). LINK is not a new coin and it’s not even a special coin in any way. Investors should be very worried that it is hovering so close to its ATH figure. I like LINK, but I would NOT buy it now!

HT is almost identical to OKB for the purpose of this post. I wouldn’t put money there.

ATOM has low returns back up to ATH. But Cosmos has been around since 2014 so it… wait. What’s that you say? Cosmos is a new coin? Oh yes, you’re right. Cosmos is a 2019 coin which (to me) looks remarkably similar to Blocknet (BLOCK) – a coin which has been around since 2014. Why is that relevant? Because BLOCK has a market cap that is more than 130 times smaller than that of very similar Cosmos. What does that mean? It means that ATOM is all new coin hype. No thanks.

NEO’s looking solid with a potential return of $1785.71 for its $100. It’s well known how much I love NEO, and with the current blockchain developments in China (which I have been predicting since the China FUD in 2017), I love it more than ever.

IOTA is a dark (and largely forgotten) horse, sitting at the bottom of the list, but with a figure of $1960.78 per $100 should it make it back to ATH. That’s the second highest in the table, and should not be ignored. I know there have been some criticisms of it, but I honestly haven’t looked deep enough into IOTA lately to know if they are valid or not. As with everything in crypto – you should do your own research.

Conclusion

I believe that good altcoins (note: GOOD altcoins) stand to provide much better returns than Bitcoin will in the near future. Of course with the chance of greater returns comes greater risk. How much risk you are willing to expose yourself to will depend largely on your investing style and current financial situation – I recommend being safe rather than sorry. Having said that, the mere fact that somebody chooses to invest in crypto indicates that they probably have a pioneering spirit (it’s still early days for crypto) and personally I already see BTC as a minor “risk”. If BTC works, then it’s logical that altcoins should work too, thus I invest a decent amount of money in them. As of yesterday, 43.2% of my crypto portfolio is in Bitcoin, which is actually almost the highest percentage it has ever been, a consequence of me holding my alts through the bear market.

I continue to invest slowly and carefully, some in BTC, some in altcoins (though I also keep missing the dips!). In the long-term I believe that altcoin investors will be richly rewarded, and I will continue to invest accordingly. Remember that the table above only deals with the top 20, there are many more coins out there. I suggest that people do their best to make decisions based on facts as opposed to emotional attachment. Crypto is often a sentiment game, but sentiment can’t keep a coin going indefinitely.

Yours in crypto

Bit Brain

“The secret to success: find out where people are going and get there first” 

~ Mark Twain

“Crypto does not require institutional investment to succeed; institutions require crypto investments to remain successful” 

~ Bit Brain

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