Is Bitcoin a currency, a technology-based product, or ...
Is Bitcoin a currency, a technology-based product, or ...
Guide to Currency Correlation: Part 1 - tradersdna ...
(PDF) Analysis of the relationships between Bitcoin and ...
Bitcoin and Gold Correlation Reaches Record High 70% ...
COMMODITY AND FX CORRELATION PAIRS
End of day summary - 09/08
The Dow fell 632.42, or 2.25%, to 27,500.89, the Nasdaq lost 465.944, or 4.11%, to 10,847.69, and the S&P 500 declined 95.12, or 2.78%, to 3,331.84. The major averages were sharply lower in Tuesday's trading, picking up where they left off before the long holiday weekend. Tech once again was leading the charge lower, with the Nasdaq the laggard among the major averages. Today's selling was largely a continuation of last week, but unlike Friday, buyers appeared unwilling to buy the dip. Tesla's 21% decline was a drag on the Nasdaq, while Apple's 7% decline pressured the large-cap indices and the S&P 500 information technology sector (-4.6%). The energy (-3.7%) and financials (-2.6%) sectors followed suit amid weaker oil prices ($36.76/bbl, -2.94, -7.4%) and lower Treasury yields, while the utilities sector (-0.6%) declined the least. Besides concerns that the market's pullback had more room to go, investors had to contend with Democratic leadership rebuffing the Senate's $300 billion coronavirus relief bill, President Trump suggesting disincentives for U.S. companies to outsource jobs to China, and reports that China's largest semiconductor foundry could be added to a trade blacklist. Production problems at a BA 787 Dreamliner factory have prompted air-safety regulators to review quality-control lapses potentially stretching back almost a decade, The Wall Street Journal reported over the weekend. This morning, Boeing said in a statement to media outlets that inspections stemming from production problems of its 787 Dreamliners are slowing deliveries. AAPL announced an event, to be held from Apple Park on September 15, without offering details on the nature or contents of the meeting. Bloomberg is reporting the event will be focused on the iPad, not the company's new iPhone models. The prospect of potential retaliation on U.S. semiconductor companies was an additional drag on the Philadelphia Semiconductor Index (-4.7%). Separately, Boeing (BA 161.08, -9.97, -5.8%) provided a disappointing update, saying 787 Dreamliner production problems have slowed the pace of deliveries. Among the noteworthy gainers was NKLA, which surged +40.8% after GM, +7.9% formed a strategic partnership that was well-received by investors. WDIS, +1.7% was upgraded to Buy from Hold at Deutsche Bank. Among the notable losers was CRBP, which fell 74% after its RESOLVE-1 Phase 3 study did not meet its primary endpoint. Also lower was ACMR, which declined 26% after Needham analyst N. Quinn Bolton downgraded the stock to Hold from Buy, saying that the company's business outlook could weaken due to its "material exposure" to Chinese chip giant SMIC. The downgrade follows reports that the Pentagon proposed for SMIC to be added to U.S. government trade blacklist. U.S. Treasuries saw increased buying interest amid the decline in equities but closed off highs. The 2-yr yield declined two basis points to 0.14%, and the 10-yr yield declined four basis points to 0.68%. The U.S. Dollar Index rose 0.8% to 93.46. Oil prices were pressured by Saudi Aramco lowering its prices for buyers in Asia and the U.S. due to sluggish demand. Elsewhere, Stoxx 600 provisionally closed over 1% lower, with the tech sector falling another 2% as almost all sectors and major bourses fell into negative territory. Stocks in Asia-Pacific were higher on Tuesday, as Japan released revised gross domestic product figures for the second quarter.
The U.S. Dollar Index climbed 0.8% to 93.46, recording its sixth consecutive advance. In emerging markets, Turkey’s lira hit another record low and Russia’s rouble sagged to its lowest since April amid ongoing talk about fresh Western sanctions.
EUUSD: -0.3% to 1.1777
GBP/USD: -1.3% to 1.2988
USD/CNH: +0.3% to 6.8537
USD/JPY: -0.2% to 106.03
Treasuries overtook their opening levels as the stock market opened for the day, but the buying pressure faded shortly thereafter, allowing Treasuries to inch back to their starting levels as the day went on. Today's $50 bln 3-yr note auction was met with lukewarm demand but Treasuries of most tenors remained near their midday levels into the close.
2-yr: -2 bps to 0.14%
3-yr: -1 bp to 0.17%
5-yr: -3 bps to 0.27%
10-yr: -4 bps to 0.68%
30-yr: -5 bps to 1.42%
WTI crude futures settled sharply lower by 7.4%, or $2.94, to $36.76/bbl. Prices were pressured by Saudi Arabia reducing October prices for buyers in Asia and the U.S. Gold futures settled $8.90 higher (+0.5%) to $1,943.20/oz, recouping earlier declines, as pressure from equities pushed investors into the yellow metal. Gold’s gains came despite a stronger dollar, which rose 0.7% against rivals. Investors are now awaiting an ECB policy meeting due on Thursday, while the U.S. Federal Reserve’s next meeting is scheduled for next week.
WTI crude: -7.4% to $36.76/bbl
Gold: +0.5% to $1943.10/ozt
Copper: -1.3% to $3.023/lb
Bitcoin is again proving itself to be a bit too correlated with financial markets for comfort, continuing to slide right alongside stocks.
Bitcoin: $10,035.96 (24hr: -1.15%)
Ethereum: $337.05 (24hr: -2.62%)
Ripple: $0.23 (24hr: -0.06%)
FAAMG + some penny stocks +20.9% YTD
Spoos +3.1% YTD
Old man -3.6% YTD
Russy -9.7% YTD
In COVID-19 news, Florida reported 650,092 cases of the virus versus 648,269 the previous day, while California reported a 2,676 increase in cases from the prior day. The CEOs of AZN, BNTX, GSK, JNJ, MRK, MRNA, NVAX, PFE and SNY announced a pledge, outlining a "united commitment to uphold the integrity of the scientific process as they work towards potential global regulatory filings and approvals of the first COVID-19 vaccines." The statement reads in part: "We, the undersigned biopharmaceutical companies, want to make clear our on-going commitment to developing and testing potential vaccines for COVID-19 in accordance with high ethical standards and sound scientific principles. The safety and efficacy of vaccines, including any potential vaccine for COVID-19, is reviewed and determined by expert regulatory agencies around the world, such as the United States Food and Drug Administration. FDA has established clear guidance for the development of COVID-19 vaccines and clear criteria for their potential authorization or approval in the US. FDA's guidance and criteria are based on the scientific and medical principles necessary to clearly demonstrate the safety and efficacy of potential COVID-19 vaccines. More specifically, the agency requires that scientific evidence for regulatory approval must come from large, high quality clinical trials that are randomized and observer-blinded, with an expectation of appropriately designed studies with significant numbers of participants across diverse populations...We believe this pledge will help ensure public confidence in the rigorous scientific and regulatory process by which COVID-19 vaccines are evaluated and may ultimately be approved. We believe this pledge will help ensure public confidence in the rigorous scientific and regulatory process by which COVID-19 vaccines are evaluated and may ultimately be approved." The companies also pledged to "only submit for approval or emergency use authorization after demonstrating safety and efficacy through a Phase 3 clinical study that is designed and conducted to meet requirements of expert regulatory authorities such as FDA."
Slack Technologies EPS beats by $0.03, beats on revenue. Reports paying customers of 130k +30%. Shares down by 15%.
Snowflake prices $75-85 IPO with Salesforce, Berkshire Hathaway set to buy
Lululemon slips after earnings beat, execs cautiously optimistic on back half
I’m here to inform you about a suspected major ongoing fraud (ponzi scheme) in the current cryptocurrency market. There’s a virtual currency called “USDT” Created by Tether Treasury. Tether(USDT) is used by most if not all the crypto exchanges. USDT is advertised for being a stable 1:1 coin backed by USD$ (it's mainly used to park your money when trading this volatile market). Tether Treasury claims that each USDT is backed by an actual USD in their reserve. There’s no regular update check or audit to back this claim, their last and only audit date from 2018 when the reserve was relatively infant compared to now, proof on their website. The blockchain transactions are public you can see them printing unlimited USDT within a click and sending it to the many unregulated exchanges to inflate the price of Bitcoin. Everytime they transfer USDT to exchanges the price of Bitcoin goes up. I STRONGLY BELIEVE The printed Tether is USED IN ADVANCED before actually having the real USD to back it in their reserve. They use it to manipulate the price of Bitcoin with buy/sell orders to liquidate shorts & longs then take the profit and put it in their reserve sheets to match those freshly printed USDT. The risk of them printing in advance and recoup the profit from the market is very very low because they can control bitcoin 100%. It's a billionaire ponzi scheme they hijacked crypto. The current bitcoin rally is fake, Tether is printing all day pumpin the price and there's not a better timing to do so with the stimulus hype on the way, the dollar falling, equities/commodities are going up and using correlation to gold as an excuse. Bitcoin price should be decided by the market, not Tether Treasury, the lack of regulation is allowing this ponzi scheme to continue. Please do something, the world needs to know the truth Bitcoin is amazing but it's been hijacked by criminals. Here’s a link to their blockchain transaction https://tronscan.org/#/address/TKHuVq1oKVruCGLvqVexFs6dawKv6fQgFs/transfers and to make it look easier here’s a twitter account that post their transactions aswell https://twitter.com/whale_alert?s=21 It's Kinda funny given everyone preaches the party line of "censorship resistant" and harps on about how Bitcoin is saving the world from censorship. And yet don’t speak about the unlimited Tether print used to manipulate the price. But it doesn’t matter cuz it's just going up right?
Accumulation by institutions: Overlay the NASDAQ chart over bitcoin and you see incredible increase in correlation since November 2019. What has happened here? Simple, the retail investors/miners who have been selling for the last 3 years have been selling to institutions, rather than fellow retail investors. Bitcoin did not die, it was just entered a bear market where money traded hands from retail and into institution's hands.
Buy the rumor sell the news: digital dollar. For those of you who do not know, there has been strong bipartisan interest in the United States creating their own digital currency, using blockchain technology. There was legislation hidden for the creation of this digital dollar inside one of the early stimulus bills that almost passed.
Technical analysis: If it bitcoin breaks 10.5k, expect an explosive price pump to 14k, and I honestly don't think 14k will be very strong resistance, I honestly would expect the most serious level of resistance will be around 19-20k. If bitcoin fails to break 10.5k, expect a shakedown to the 20 week moving average which currently is around 8.2k.
Gold fundamentals are bitcoin fundamentals, both are stronger than ever: The idea of having a currency that is finite, and divorced from any centralized bank or government is super attractive in the post covid world we live in today. Countries have getting a little too comfortable pressing the print button to print their way to riches. On the very long time frames, birth birthrates are freefalling on the global level, especially among the wealthiest countries whose currencies' supply are inflating exponentially to record highs. The supply of unbacked fiat will at some point surpass the demand and we will see the age of centralized banks come to an end.
Bitcoin has already overtaken silver: Bitcoin has a market cap about 4 times larger than silver, and gold has a market cap about 75 times larger than bitcoin. Bitcoin has plenty of room to grow in this niche, and the digitization of it's nature could allow for it to expand in many areas where gold can not.
The inflation rate gets cut in half every four years: it's current yearly inflation rate is 1.80%. In four years, the inflation rate will be approximately 0.9%. In 8 years, the inflation rate will be at ~0.45%, etc... Even if the demand stays the same for gold and bitcoin, bitcoin will overtake gold's market cap in a few decades just by looking at the stock to flow ratio of both commodities.
Thoughts On The Market Series #1 - The New Normal?
Market Outlook: What to Make of This “New Normal”
By ****\* March 16, 2020 After an incredibly volatile week – which finished with the Dow Jones Industrial Average rallying over 9% on Friday – I suppose my readers might expect me to be quite upbeat about the markets. Unfortunately, I persist in my overall pessimistic outlook for stocks, and for the economy in general. Friday’s rally essentially negated Thursday’s sell-off, but I don’t expect it to be the start of a sustained turnaround. We’re getting a taste of that this morning, with the Dow opening down around 7%. This selloff is coming on the back of an emergency interest rate cut by the Federal Reserve of 100 basis points (to 0%-0.25%) on Sunday… along with the announcement of a new quantitative easing program of $700 billion. (I will write about this further over the next several days.) As I have been writing for many weeks, the financial bubble – which the Fed created by pumping trillions of dollars into the financial system – has popped. It will take some time for the bubble to deflate to sustainable levels. Today I’ll walk you through what’s going on in the markets and the economy… what I expect going forward and why… and what it means for us as traders. (You’ll see it’s not all bad news.)
Coronavirus’ Strain on the Global Economy
To start, let’s put things in perspective: This asset deflation was coming one way or another. Covid19 (or coronavirus) has simply accelerated the process. Major retailers are closing, tourism is getting crushed, universities and schools are sending students home, conventions, sporting events, concerts, and other public gatherings have been cancelled, banks and other financial service firms are going largely virtual, and there has been a massive loss of wealth. Restaurant data suggests that consumer demand is dropping sharply, and the global travel bans will only worsen the situation. Commercial real estate is another sector that looks particularly vulnerable. We are almost certain to see a very sharp and pronounced economic slowdown here in the United States, and elsewhere. In fact, I expect a drop of at least 5% of GDP over the next two quarters, which is quite severe by any standard. Sure, when this cycle is complete, there will be tremendous amounts of pent-up demand by consumers, but for the time being, the consumer is largely on the sidelines. Of course, the problems aren’t just in the U.S. China’s numbers look awful. In fact, the government there may have to “massage” their numbers a bit to show a positive GDP in the first quarter. Europe’s numbers will also look dreadful, and South Korea’s economy has been hit badly. All around the world, borders are being shut, all non-essential businesses are being closed, and people in multiple countries are facing a lockdown of historic proportions. The coronavirus is certainly having a powerful impact, and it looks certain that its impact will persist for a while. Consider global tourism. It added almost $9 trillion to the global economy in 2018, and roughly 320 million jobs. This market is in serious trouble. Fracking in the U.S. is another business sector that is in a desperate situation. Millions of jobs and tens of billions of loans are now in jeopardy. The derivative businesses that this sector supports will be likewise devastated as companies are forced to reduce their workforces or shut down due to the collapse in oil prices. This sector’s suffering will probably force banks to book some big losses despite attempts by the government to support this industry. In a similar way, the derivative businesses that are supported by the universities and colleges across America are going to really suffer. There are nearly 20 million students in colleges across the U.S. When they go home for spring vacation and do not return, the effect on the local businesses that colleges and university populations support will be devastating. What does this “new normal” mean going forward? Let’s take a look…
The new normal may become increasingly unpleasant for us. We need to be ready to hunker down for quite some time. Beyond that, the government needs to handle this crisis far better in the future. The level of stupidity associated with the massive throngs of people trapped in major airports yesterday, for example, was almost unimaginable. Instead of facilitating the reduction of social contact and halting the further spread of the coronavirus, the management of the crowds at the airports produced a perfect breeding ground for the spread of the virus. My guess is that more draconian travel restrictions will be implemented soon, matching to some extent the measures taken across Europe. This will in turn have a further dampening effect on economic activity in the U.S., putting more and more pressure on the Fed and the government to artificially support a rapidly weakening economy. Where does this end up? It is too early to say, but a very safe bet is that we will have some months of sharply negative growth. Too many sectors of the economy are going to take a hit to expect anything else. The Fed has already driven interest rates to zero. Will that help? Unlikely. In fact, as I mentioned at the beginning of this update, the markets are voting with a resounding NO. The businesses that are most affected by the current economic situation will still suffer. Quantitative easing is hardly a cure-all. In fact, it has been one of the reasons that we have such a mess in our markets today. The markets have become addicted to the easy money, so more of the same will have little or no impact. We will need real economic demand, not an easier monetary policy. It won’t help support tourism, for example, or the other sectors getting smashed right now. The government will need to spend at least 5% of GDP, or roughly $1 trillion, to offset the weakness I see coming. Is it surprising that the Fed and the government take emergency steps to try to stabilize economic growth? Not at all. This is essentially what they have been doing for a long time, so it is completely consistent with their playbook. Next, I would anticipate the government implementing some massive public-works and infrastructure programs over the coming months. That would be very helpful, and almost certainly quite necessary. But there’s a problem with this kind of intervention from the government…
What Happens When You Eliminate the Business Cycle
The Fed’s foolish attempt to eliminate business cycles is a significant contributing factor to the volatility we are currently experiencing. Quantitative easing is nothing more than printing lots and lots of money to support a weak economy and give the appearance of growth and prosperity. In fact, it is a devaluation of the currency’s true buying power. That in turn artificially drives up the prices of other assets, such as stocks, real estate and gold – but it does not create true wealth. That only comes with non-inflationary growth of goods and services and associated increases in economic output. Inflation is the government’s way to keep people thinking they are doing better. To that point: We have seen some traditional safe-haven assets getting destroyed during this time of risk aversion. That has certainly compounded the problems of many investors. Gold is a great example. As the stock market got violently slammed, people were forced to come up with cash to support their losing positions. Gold became a short-term source of liquidity as people sold their gold holdings in somewhat dramatic fashion. It was one of the few holdings of many people that was not dramatically under water, so people sold it. The move may have seemed perverse, particularly to people who bought gold as a safe-haven asset, but in times of crisis, all assets tend to become highly correlated, at least short term. We saw a similar thing happen with long yen exposures and long Bitcoin exposures recently. The dollar had its strongest one-day rally against the yen since November 2016 as people were forced to sell huge amounts of yen to generate liquidity. Many speculators had made some nice profits recently as the dollar dropped sharply from 112 to 101.30, but they have been forced to book whatever profits they had in this position. Again, this was due to massive losses elsewhere in their portfolios. Is the yen’s sell-off complete? If it is not complete, it is probably at least close to an attractive level for Japanese investors to start buying yen against a basket of currencies. The major supplies of yen have largely been taken off the table for now. For example, the yen had been a popular funding currency for “carry” plays. People were selling yen and buying higher-yielding currencies to earn the interest rate difference between the liability currency (yen) and the funding currency (for example, the U.S. dollar). Carry plays are very unpopular in times of great uncertainty and volatility, however, so that supply of yen will be largely gone for quite some time. Plus, the yield advantage of currencies such as the U.S. dollar, Canadian dollar, and Australian dollar versus the yen is nearly gone. In addition, at the end of the Japanese fiscal year , there is usually heavy demand for yen as Japanese corporations need to bring home a portion of their overseas holdings for balance sheet window dressing. I don’t expect that pressure to be different this year. Just as the safe-haven assets of yen and gold got aggressively sold, Bitcoin also got hammered. It was driven by a similar theme – people had big losses and they needed to produce liquidity quickly. Selling Bitcoin became one of the sources of that liquidity.
Heavy Price Deflation Ahead
Overall, there is a chance that this scenario turns into something truly ugly, with sustained price deflation across many parts of the economy. We will certainly have price deflation in many sectors, at least on a temporary basis. Why does that matter over the long term? Price deflation is the most debilitating economic development in a society that is debt-laden – like the U.S. today. Prices of assets come down… and the debt becomes progressively bigger and bigger. The balance sheet of oil company Chesapeake Energy is a classic example. It’s carrying almost $10 billion worth of debt… versus a market cap of only about $600 million. Talk about leverage! When the company had a market cap of $10 billion, that debt level didn’t appear so terrifying. Although this is an extreme example for illustrative purposes, the massive debt loads of China would seem more and more frightening if we were to sink into flat or negative growth cycles for a while. The government’s resources are already being strained, and it can artificially support only so many failing companies. The U.S. has gigantic levels of debt as well, but it has the advantage of being the world’s true hegemon, and the U.S. dollar is the world’s reserve currency. This creates a tremendous amount of leverage and power in financing its debt. The U.S. has been able to impose its will on its trading partners to trade major commodities in dollars. This has created a constant demand for the dollar that offsets, to a large extent, the massive trade deficit that the U.S. runs. For example, if a German company wants to buy oil, then it needs to hold dollars. This creates a constant demand for dollar assets. In short, the dollar’s status as the true global reserve currency is far more important than most people realize. China does not hold this advantage.
What to Do Now
In terms of how to position ourselves going forward, I strongly recommend that people continue with a defensive attitude regarding stocks. There could be a lot more downside to come. Likewise, we could see some panic selling in other asset classes. The best thing right now is to be liquid and patient, ready to pounce on special opportunities when they present themselves. For sure, there will be some exceptional opportunities, but it is too early to commit ourselves to just one industry. These opportunities could come in diverse sectors such as commercial real estate, hospitality, travel and leisure, and others. As for the forex markets, the volatility in the currencies is extreme, so we are a bit cautious. I still like the yen as a safe-haven asset. I likewise still want to sell the Australian dollar, the New Zealand dollar, and the Canadian dollar as liability currencies. Why? The Bank of Canada, the Reserve Bank of Australia, and the Reserve Bank of New Zealand have all taken aggressive steps recently, slashing interest rates. These currencies are all weak, and they will get weaker. Finding an ideal entry for a trade, however, is tricky. Therefore, we are being extra careful with our trading. We always prioritize the preservation of capital over generating profits, and we will continue with this premise. At the same time, volatility in the markets is fantastic for traders. We expect many excellent opportunities to present themselves over the coming days and weeks as prices get driven to extreme levels and mispricings appear. So stay tuned.
CFTC Committee to Hold Virtual Meeting on Digital Currencies and Blockchain
Link to article:https://blockchain.news/news/cftc-committee-to-hold-virtual-meeting-on-digital-currencies-and-dlt The Commodity Futures Trading Commission (CFTC) is set to hold a virtual meeting centered around digital currencies. The meeting scheduled by the Technological Advisory Committee (TAC) of the CFTC has drafted discussions centered around decentralized ledger technology (DLT) and digital currencies per its agenda. The CFTC has been showing a positive attitude towards digital currencies as detailed in its earlier released regulatory framework. The TAC meeting is scheduled for the 16th of July and will feature public hearings from TAC sub-committees. The CFTC is Bullish on Digital Currencies As a regulatory body, the CFTC has adequately recognized the role of digital currencies and decentralized ledger technologies in today’s changing digital economy. In its framework, the commission acknowledged cryptocurrencies as commodities that can be traded. The CFTC has affirmed that it will utilize a “principle-based” system in driving innovations in the blockchain advancements as well as other tradable markets under its purview. As part of the arranged virtual meeting, the TAC will have hearings based on the scalability and resiliency of decentralized ledger technology systems with Shaunna Hoffman, a Global Cognitive Legal Leader with IBM, an organization renowned for advancing blockchain development. The meeting will also feature CentralBank Digital Currency design, the volatility of Bitcoin (BTC) against other assets as well as the impact of Covid-19 on asset price correlation. Scheduling this meeting following its released framework gives an inclination that the CFTC is keen on consolidating its bullish approach towards digital currencies. Expectations of Massive Crypto Boom The CFTC role in the blockchain space has been conspicuous in recent times. In November 2019, the United States CFTC commissioner Brian Quintenz acknowledged that crypto powered derivative contracts have had an enormous impact on the U.S economy. The relevance of blockchain technology during the COVID-19 induced pandemic has also shown how invaluable decentralized ledger technology and cryptocurrencies can be. The CFTC is thus set to assert a positive oversight role in order to “stay ahead of the curve” as CFTC Chairman Heath Tarbert asserted.
Gold standard? End the Federal Reserve? I'm pretty sure this has been debated before and asked a lot in this forum but pardon me being new here. I am a history major and have been trying to read as much about economics as I can during my spare time. I'm about finished with Gregory Mankiw's Principles of Macroeconomics and plan to read his Principles of Microeconomics soon enough. I have also read Thomas Sowell's Basic Economics and am about halfway through reading Henry Hazlitt's Economics in One Lesson. I have also recently seen Milton Friedman's Free to Choose and also plan on reading his works, as well as Friedrich Hayek and Frederick Bastiat. One of the topics I really want to delve into is in regard to the merits of having a Federal Reserve and whether it is more beneficial to go back to a gold standard. I think that there is an economic consensus that the money supply has a great correlation with the level of inflation and the value of the dollar, as the more that is printed, the more worthless the dollar becomes, and the less printed it is, the more worth it becomes. Particularly also, fiat currency tends to be valued only in, so, far, as there is confidence in the financial systems. For this reason, there seems to be two issues and questions at hand. The first one is if it would be more beneficial to go back to a gold standard? I understand that there are various ways in which this could occur. This could include going back to the physical use of gold as money, pegging the dollar back to gold, or begging it to some other commodity such as Bitcoin. The purpose of any of these approaches is to control the money supply by something that is finite and hence limited in nature. This seems to solve the problem of controlling the quantity of the dollar. Some have criticized the gold standard due to the overly restricted circulation of currency that has historically led to deflationary, as opposed to inflationary periods, which could be just as devastating as inflationary periods. The second question and problem concern the Federal Reserve. To what extent is it beneficial to have a Fed? Should the Fed be reconstructed, and or more heavily regulated? Should we outright do away with the Fed? Or should the Fed be kept the way it is? On the one hand, it makes sense in theory to have an institution such as the Fed to help regulate banks, ensuring that things such as bank runs, and or banking disasters are preventing. It also seems sensible in theory to have an institution such as the Fed, which is independent of the government, to help in coordinating monetary policy. However, in practice, it also seems that the Fed has often been the cause of such disasters such as the Great Depression and the Great Recession by creating boom and bust cycles through arbitrarily changing interest rates, and through its various tactics at influencing monetary policy and controlling the money supply. A similar, yet different issue would be laws passed by the government encouraging risky lending such as forcing financial institutions, whether private or public to give out bad loans to risky people such as those who can't afford to take the loan. Would it not make more sense to simply let the "invisible hand" (the forces of supply and demand) to allocate the money supply and interest rates? If there is more demand for borrowing this will push interest rates up, as banks and other financial institutions would want to charge higher interests and they would ideally want to be careful as to who they are lending money to. If there is a greater demand for saving than lending, this would push interest rates down as banks would not want to give out as much money in interest and other financial institutions would want to encourage more borrowing. I would appreciate any resource recommendations whether they be books or other media platforms that you think do a good job at tackling any of these two issues.
I'm sorry if these two topics have already been heavily asked about in this forum. I am new to this forum and am trying to understand these issues better. Gold standard? End the Federal Reserve? I am a history major and have been trying to read as much about economics as I can during my spare time. I'm about finished with Gregory Mankiw's Principles of Macroeconomics and plan to read his Principles of Microeconomics soon enough. I have also read Thomas Sowell's Basic Economics and am about halfway through reading Henry Hazlitt's Economics in One Lesson. I have also recently seen Milton Friedman's Free to Choose and also plan on reading his works, as well as Friedrich Hayek and Frederick Bastiat. One of the topics I really want to delve into is in regard to the merits of having a Federal Reserve and whether it is more beneficial to go back to a gold standard. I think that there is an economic consensus that the money supply has a great correlation with the level of inflation and the value of the dollar, as the more that is printed, the more worthless the dollar becomes, and the less printed it is, the more worth it becomes. Particularly also, fiat currency tends to be valued only in, so, far, as there is confidence in the financial systems. For this reason, there seems to be two issues and questions at hand. The first one is if it would be more beneficial to go back to a gold standard? I understand that there are various ways in which this could occur. This could include going back to the physical use of gold as money, pegging the dollar back to gold, or begging it to some other commodity such as Bitcoin. The purpose of any of these approaches is to control the money supply by something that is finite and hence limited in nature. This seems to solve the problem of controlling the quantity of the dollar. Some have criticized the gold standard due to the overly restricted circulation of currency that has historically led to deflationary, as opposed to inflationary periods, which could be just as devastating as inflationary periods. The second question and problem concern the Federal Reserve. To what extent is it beneficial to have a Fed? Should the Fed be reconstructed, and or more heavily regulated? Should we outright do away with the Fed? Or should the Fed be kept the way it is? On the one hand, it makes sense in theory to have an institution such as the Fed to help regulate banks, ensuring that things such as bank runs, and or banking disasters are preventing. It also seems sensible in theory to have an institution such as the Fed, which is independent of the government, to help in coordinating monetary policy. However, in practice, it also seems that the Fed has often been the cause of such disasters such as the Great Depression and the Great Recession by creating boom and bust cycles through arbitrarily changing interest rates, and through its various tactics at influencing monetary policy and controlling the money supply. A similar, yet different issue would be laws passed by the government encouraging risky lending such as forcing financial institutions, whether private or public to give out bad loans to risky people such as those who can't afford to take the loan. Would it not make more sense to simply let the "invisible hand" (the forces of supply and demand) to allocate the money supply and interest rates? If there is more demand for borrowing this will push interest rates up, as banks and other financial institutions would want to charge higher interests and they would ideally want to be careful as to who they are lending money to. If there is a greater demand for saving than lending, this would push interest rates down as banks would not want to give out as much money in interest and other financial institutions would want to encourage more borrowing. I would appreciate any resource recommendations whether they be books or other media platforms that you think do a good job at tackling any of these two issues.
Over the past 100 days, Grayscale has bought every third bitcoin
Over the past 100 days, Grayscale has bought every third bitcoin The Grayscale Investments cryptocurrency investment fund acquired every third bitcoin mined in the last 100 days. And in April, the fund bought 50% of all ETH mined. At the same time, despite the financial crisis and the fall of the cryptocurrency market in March, shares of Grayscale crypto funds in the first quarter of 2020 attracted record investments, which indicates a growing interest of institutional investors in the crypto industry. Why does the company need so many coins, what is its current position regarding the crypto market and what role does it play on it?
Aggressive Grayscale crypto purchases have recently been spotted with respect to ether. So, by April 24, the company had bought about 756 539 ETNs (accurate data are not publicly available) for its Ethereum Trust fund. This is about 48.4% of all 1.5 million coins mined since the beginning of this year. As a result, the company already owns 1% of all coins in circulation and only increases the pace of purchases. The first user to notice this was Reddit under the nickname u/nootropicat. According to the latest quarterly report by Grayscale, the flow of investments in ETN reached a record level for the first three months of 2020 — $110 million. This is a very sharp increase, given that total investments in ETN for the previous two years amounted to $95.8 million. The total demand for the Ethereum fund grew over the quarter is almost 2.5 times compared with the fourth quarter of 2019. From the beginning of the year until the end of April, the company issued 5.23 million shares of the fund at 0.09427052 ETN apiece. At the same time, shares are traded with a premium of 420% relative to the current price of the coin — $92 against $17.70. That is, investors are willing to pay extra pretty much not to deal with cryptocurrency on their own. Most likely, the increase in the rate of purchase of the coin is associated with the upcoming upgrade of the network to the state of Ethereum 2.0. It can take place at the end of July, but, most likely, it will happen not earlier than the end of the year. After the upgrade, the network will become more scalable and there will be the possibility of staking — validators will be able to receive passive income for providing their funds to confirm the blocks. The crypto market, by the way, is also preparing for the transition of the ecosystem to a new stage. ETH has grown 55% since the crash in March, from $110 to $202 on the day of publication. At the end of April, CoinDesk drew attention to the increase in the number of long positions in ETH futures — this indicates expectations for further growth of the coin.
Last quarter — the most successful in the history of the company
In May, Grayscale released a report on the results of the first quarter of this year. “Despite the decline in risky assets this quarter, Grayscale’s assets continue to approach record highs, as does our share of the digital asset market,” the document says. And this despite the coronavirus pandemic, the global recession and the traditional cryptocurrency market volatility. A record $503.7 million investment was raised in the first quarter. This is almost twice the previous quarterly maximum of $254 million in the third quarter of last year and accounts for 83% of the total capital of $1.07 billion raised for the entire 2019. New investors accounted for $160 million of raised funds. The main products of Grayscale Bitcoin Trust and Grayscale Ethereum Trust raised $388.9 million and $110 million, respectively. It is noteworthy that the company reduced the premium on stocks of funds relative to the price of assets. 88% of investments came from institutional investors, among which hedge funds prevail; 5% — from accredited individuals, 4% — from pension accounts (yes, pension funds are extremely conservative in nature, but also invest in bitcoin against the background of a decrease in the profitability of other assets); 3% came from family offices, and 38% of customers invested in several products at once. It is noteworthy that two years ago the share of institutional investors was about 50% — it is obvious that they no longer consider bitcoin as something criminal. “Many of our investors see digital assets as medium and long-term investment opportunities and the main component of their investment portfolios. Quarterly inflows doubled to $ 503.7 million, demonstrating that demand is reaching new peak levels even in conditions of “risk reduction”, the document says. Today, more than 46.5% of the inflow of funds was attracted from multi-strategic investors. Crypto investors accounted for only 11.2% of the inflow, according to the report. Grayscale currently operates ten cryptocurrency investment products targeted at institutional investors. They cover PTS, ETN, ETS, BCH, ZEC, XRP, LTC, ZEN, XLM. The value of the assets under his management is more than $3.8 billion. GBTC is the most demanded product, most investors invest in it and it takes about 1.7% of the total volume of circulating bitcoins. Aggregate quarterly flow of funds to different Grayscale products. Pay attention to the growing share of investors diversifying portfolios with products tied to altcoins. Since January of this year, the Grayscale Bitcoin Trust has been registered with the US Securities and Exchange Commission (SEC). According to it, the company provides quarterly and annual reports in the form of 10-K. The status makes it possible to sell shares of a trust in the secondary market after 6 months, rather than 12, as before, and also increases the confidence of conservative investors. Other products comply with OTCQX reporting standards in the OTC market and are approved by the US Financial Services Regulatory Authority (FINRA) for public offering. Amount of assets managed by Grayscale as of May 20, 2020. It is noteworthy that the news about the success of Grayscale comes amid news of how panicky investors in traditional assets are fleeing from market turmoil. So, the largest fund managers — BlackRock, Vanguard and State Street Global Advisors — lost several trillion in capitalization of their assets, and BlackRock in the first quarter for the first time in five years saw a net outflow of funds from its long-term investment products.
Bitcoin is the best asset for hedging portfolios in crisis
At the end of April, Grayscale also released a separate report on the analysis of the impact of regulators during a pandemic and the crisis caused by it and how it affected the bitcoin and cryptocurrency market as a whole. The document said fiat currencies are at risk of devaluation as central banks print more and more money. Even the US dollar, which is the world’s reserve currency, risks being devalued if the US Federal Reserve continues to print the currency in trillions. A decrease in interest rates to zero and negative values deprives government bonds of the status of “safe haven” during the crisis. Therefore, investors are trying to diversify their portfolios with alternative instruments. Cryptocurrencies are the best choice for this, according to the authors of the report. The text emphasizes the historical significance of gold as a global standard, but it is noted that in the modern digital world it is becoming increasingly burdensome for investors — it has complex logistics. Bitcoin seems resistant to the problems that other assets face. Therefore, in times of economic uncertainty, the first cryptocurrency is one of the best assets that investors can use to hedge their portfolios. The coin performs better than any other asset, including fiat currencies, government bonds, and traditional commodities like gold. The authors of the report emphasize that Bitcoin has already begun to show signs of becoming a protective asset. At the same time, the company believes that bitcoin is an excellent asset not only in times of crisis. So, in December 2019, Managing Director of Grayscale Investments Michael Sonnenshine said that the company expects an influx of investments in bitcoin after the transfer of $68 trillion of savings between generations in the next 25 years. Today, this capital is invested in traditional assets, but a significant part of these wealth millennials will invest in cryptocurrencies. Already, according to him, investments in GBTC are among the five most popular among young people, ahead of, for example, investments in Microsoft and Netflix.
The unprecedented financial measures taken by the US Federal Reserve, as well as the worsening recession, are forcing even the most conservative investors to rethink their current strategies and portfolio composition. Many of them are increasingly beginning to appreciate the fixed emission and non-correlation of Bitcoin — it is becoming a tool for risk diversification. Growing institutional interest is driving the acceleration of coin prices. Subscribe to our Telegram channel
(Oddly I posted this in /bitcoins and it was no idea why as it meets all rules...) Here’s my theory around the last 24 hours and why the next year is going to be one hell of a good ride for Bitcoin... Take a minute and consider how price responded the week Facebook announced Libra... the addition of 2 billion digital wallets, regardless that the focus was not on Bitcoin was a huge positive for us. As the Senate, the Fed.. mainstream media... all poo-poo’d the idea we then saw correlated pullback in price. Recently big names have been jumping ship... further eroding the hope for those +2 billion wallets. Enter the digital dollar discussion.... https://techcrunch.com/2019/10/20/in-a-big-reversal-libra-reportedly-could-peg-its-cryptocurrencies-to-national-currencies/ (Similar article is on Bloomberg behind a paywall if someone can grab it.. ) The timing of this discussion couldn’t be better. Last week the former chairman of the Commodity Futures Trading Commission took out a full page ad pushing the eUSD along with this opinion piece. https://www.wsj.com/articles/we-sent-a-man-to-the-moon-we-can-send-the-dollar-to-cyberspace-11571179923 And then we had both the European Central Bank and some at our own Fed begin openly considering or endorsing the idea.. Germany’s finance minister in July stated they could not allow Libra, now he’s pushing for a national German cryptocurrency... https://www.theblockcrypto.com/linked/42244/german-finance-minister-olaf-scholz-wants-to-introduce-digital-euro Members of Congress have formally asked the Fed to get on board.. https://www.coindesk.com/us-congressmen-ask-fed-to-consider-developing-national-digital-currency And now even the Fed admits it is ‘actively debating’ the idea when just two months ago they stated there was no need or interest to do so https://www.coindesk.com/top-fed-official-says-us-central-bank-actively-debating-digital-dollar Even mainstream financial conversation are starting to see the benefits of the eUSD especially as we get closer to the next recession https://www.marketwatch.com/story/why-the-coming-recession-could-force-the-federal-reserve-to-swap-greenbacks-for-digital-dollars-2019-09-06 The people behind LIbra project are now shifting their position and considering not using a ‘synthetic basket’ of currencies but instead peg the Libra directly to national digital currencies. Even better, Zuckerberg is scheduled to testify in form of Congress Oct 23 (Wednesday) and I will place a strong bet that his response to attackers on the Libra project will be what his team just ‘floated’... “Fine, if you launch a digital currency (eUSD) then we will build on top of that and all (most) of your concerns will disappear.....but if you don’t we are moving forward regardless”. We will then spend the next 3-4 months watching the debate in Washington to launch eUSD accelerate 10x... with a lot of movement but in general half commitments and vague statements... until eYuan. China has already stated they are working on their own digital currency and while they backpedaled a bit last month, that was likely due to difficulties on the development side (cause, you know...coding is hard) and not a real change in intention or goals. They want a digital currency that allows them to shift the commerce they control to something other then the USD. They do trillions of business with countries other then the US and so the move has real implications (note the US is actually China’s third largest trading partner exporting $1.6 trillion. In 2018). It not only reduces the power the dollar has over them, it helps blunts the impacts US tariffs have on their economy. Immediately after China’s official announcements, the US will likely act like they’ve been ‘onboard’ to launch the eUSD from the beginning, and are working quickly to get there. These two world leaders, China and US will create far more then Facebooks 2 billion digital wallets... and the new space race to launch a digital currency will have been started for EVERY country in the world. I’d expect the eEuro will announce sometime after China and the US, they tend to need to talk and debate for 2x longer then other countries on major EU policies (which is understandable given their diverse political make-up). Here’s the timeline I see as realistic:
Last Week : Both FB Libra and some in congress and the Fed, ‘Float’ the benefits of eUSD
This Week : Zuckerberg w/ Congress lays out the challenge “IF you build it, THEN we use it, ELSE we build our own”
Next Week : The conversation around the eUSD intensifies as the alternative (not doing something) isn’t realistic
3-4 Months : China officially announces the limited launch of their eYuan
5-6 Months : The US having debated and half committed for months reacts with full commitment
6-9 Months : Every country in the world is either developing their own digital currency or aligning with a partner
And to be clear, Bitcoin doesn’t need to be ‘the’ currency... but it will almost certainly be available in 99% of all digital wallets people use. It might not be in the official Chinese or US wallet but no one will use ‘just those’... and it’s digital so it really doesn’t matter. The eUSD and eYuan will trade on the same exchanges you trade bitcoin today, even better the lines between traditional forex trading and crypto trading will almost immediately blur. The confidence in Bitcoin, and blockchain as a whole will SKYROCKET... Imagine 2billion+ crypto onramps... that don't require fiat deposits because your national currency is already digital. The second greatest thing to happen with Bitcoin price will be an the launch of an ETF.. but I’ll explain why that will happen in the next 12 months as well, in my next post. Btw, this is obviously all just my opinion and I am posting so that others (possibly smarter then myself) can punch holes and refine the theory. So you don’t need to be a dick, just explain where or why my hypothesis breaks down and let’s figure this shit out. -peace out.
https://preview.redd.it/5ihj6bi79dr41.jpg?width=6480&format=pjpg&auto=webp&s=babfa7255e9c017508197ec0bc7319d74b1050c9 Many of the investors and financial institutions that I talk to are hesitant to invest in cryptocurrencies, often saying that they can’t determine their real value. For example, if we were looking to buy equity in a company, we could look at its fundamentals and make a prudent decision about whether to invest in it or not. Crypto is different in that, it is in its early days and cannot present evidence of a long track record. Admittedly, the process of value assessment may not be as straightforward for cryptocurrencies as for some of the more traditional asset classes. However, we can still refer to certain other drivers to help us form an assessment of value. Let’s start with the original cryptocurrency, Bitcoin, and discuss how it compares to gold and commodities. Valuing Bitcoin — Stock to Flow Ratio Bitcoin is often valued using the stock to flow ratio, which quantifies the “hardness” of an asset. A report by Bayerische Landesbank found that: “Applied to Bitcoin, an unusually strong correlation emerges between the market value of this cryptocurrency and the ratio between existing stockpiles of Bitcoin (“stock”) and new supply (“flow”).” The book “The Bitcoin Standard” by Saifedean Ammous introduced the stock-to-flow approach in relation to valuing Bitcoin. The supply of Bitcoin can be engineered at will. Satoshi set into the protocol a drastic decline in supply growth (due to halving every 4 years). Price is decoupled from mining efforts, so as the price rises, the difficulty of mining Bitcoin increases. Subsequently, new supply, or flow, correspondingly reduces. The supply profile is guaranteed by the existing setup — if the supply profile were to change, it would adversely affect the peer to peer network that holds bitcoin and dilute the value of their coins. As a comparison, the stock to flow ratio is the way gold is valued. Gold is used as a store of value in hard times. The supply of gold cannot be increased in huge quantities, and the annual production of fresh gold (“flow”) is limited, adding only incrementally to the existing stockpile (“stock”). So gold is described as having a high stock to flow ratio. However much the price of gold increases, the amount produced will not be increased exponentially, which would dilute the stock to flow ratio. The next Bitcoin halving is due to take place in May 2020, potentially hugely increasing the stock to flow ratio of Bitcoin. It will be interesting to see what that does to the Bitcoin price. Valuing according to utility A cryptocurrency must have a strong use case to incentivize people to have the coins. How useful a coin is feeds through to the value of the coin. If we take the example of Ether, in order to execute commands and develop applications in the Ethereum blockchain, you need to own Ether. The Ether is converted into “Gas”, which is used to run the network. Ether is, therefore, the currency used to drive transactions and development on the Ethereum blockchain. The more people that are transacting with and on Ethereum, the greater the demand for Ether becomes, eventually leading to a price increase. “Users will use the infrastructure that offers them the applications they need. And yes, at the moment this is clearly Ethereum. There are more Apps and smart contracts deployed on Ethereum than on all other application-focused blockchain protocols put together.” Max Lautenschläger, Managing Partner, Iconic Holding Therefore, price of utility protocols is contingent upon the community engaging them and adoption of applications built on top of them. As long as they continue to build and adopt, because it is useful for them, the growing utility that will continue to drive value. There are many other types of cryptocurrencies and crypto assets, as my colleague highlighted in a recent article. Crypto may be in its early stages and be extremely volatile, but traditionally-minded investors and financial institutions can rest easy knowing there are standard ways through which value can be calculated. # # # This article is strictly for educational purposes and isn’t to be construed as financial advice. By Sara Sabin, Business Development, Iconic Holding
Bitcoin as gold in a time of economic experimentation and geo-political tension
Boss Crypto Letter To Investors #5 - August Note: Research data compiled from blockchain.info, coinmetrics and unchainedcapital. Bitcoin As Gold The narrative around Bitcoin as “digital gold” or “gold 2.0” has been strengthening in recent months and we have even seen Bitcoin slip into a strong inverse correlation to US stocks. For us, this is not a new story and the potential for Bitcoin to shine in this arena is something we have been propagating for years. The topic is hotly debated given the potential diversification benefits that exposure to Bitcoin has in portfolio construction. There are certain times when Bitcoin trades in line with risk assets, selling off when equity volatility spikes and when liquidity runs dry, however it has little to no correlation with traditional asset classes like commodities, bonds, currencies, or stocks. The world unfolding around us is brewing the perfect storm that most perma Bitcoin bulls have been waiting for since the beginning. Bitcoin has only ever existed in a global bull-market and perhaps for the first time in 10 years that might be about to change. Amid extreme monetary policies and rising geopolitical tensions the narrative for Bitcoin as digital gold has scarcely been stronger. Combine this with the fact that investors are starving for growth and unable to hit their benchmarks with traditional portfolio’s the comparison between the current Bitcoin market cap and the market cap for investible gold becomes an enticing proposition. The best part? A comparison to gold might not even be the end of the road for Bitcoin. Right now there are almost no assets that largely sit outside the purview of any single government. If we see the political tensions in our world rise and the ability of these governments to service their debts comes into question the demand for non-sovereign assets is likely to boom. The rising risk of currency devaluation, especially among reserve currencies, combined with its non sovereign nature is a longer-term catalyst that may propel BTC to new untold heights. The opportunity cost of not holding Bitcoin is getting higher every day as the long-term outlook for traditional asset classes and growth continues in a downward spiral. Late In The Cycle In this edition I wanted to take a step back to look at the global macro economic environment. I believe that we are entering an era where the understanding of economics and appropriate investment principles will be imperative for success. As of July we have now officially seen the longest period of sustained growth in history and it’s getting late (perhaps very late) in that cycle. -Bleak global growth projections -Trade wars -Weak inflation -$14 trillion of negative yielding debt -Unprecedented monetary policies -Late in the cycle stimulus -Declining corporate profits -Stocks rallying into the promise of rate cuts and additional stimulus -Explosion of low quality credit -Explosion of IPO’s showing just as explosive losses The global slowdown everyone has been fearing is starting to show up in economic data. With short term interest rates already low economic stimulus measures may need to be more extreme to be effective. The central banks of our world are preparing the global market for more rate cuts and additional stimulus as they attempt to prolong the current economic expansion, seemingly “forever”. The implication of economic policies favouring growth (including the forecast for multiple rate cuts by the end of 2019) are already impacting market prices and portfolio structure. As we have talked about many times in previous letters, investors are being pushed further and further out on the risk curve in their search for a return high enough to satisfy their benchmarks. With government debt yields, fixed income and traditional value assets underperforming the focus has shifted to growth assets throwing support behind Bitcoin for the time being. Money Supply and Risk Assets Monetary policy plays a significant role in markets. When there is an increase in the money supply there tends to be a strong performance in risk assets while at the same time pushing investors further out the risk curve as they compete for the best returns. Lower rates and more relaxed monetary policy not only encourages borrowing (creating a surplus of money) it also forces investors to change the way they invest because it damages the potential returns from traditionally safe assets. It is speculated that the Fed will keep the door open for further rate cuts by the end of 2019, but be careful when analysing how much of this has already been priced into the markets, including Bitcoin. Generally speaking investors are willing to pay higher multiples when the other alternatives available to them are unattractive. Right now bond yields across the board from sovereign to corporate debt are very unattractive which has pushed investors towards equities. Analysis The almost illogically high concentration of Bitcoin and high-caps in our portfolio has continued to bring in immense rewards over the past few months. There were only 12 projects with a market capitalization over $15 million which outperformed Bitcoin year-to-date. UTXO Analysis When looking at the base of Bitcoin holders compared to our previous reports not much has changed in the last three months. Holders in the 3-5 year bands have decreased however the reason for the decrease is not from selling, it is because they have been moved into the 5+ year bands which is sitting around all time highs at 21.5% of total Bitcoin supply. The only longer dated band with a noticeable amount of sellers was the 1-2 year band where sellers accounted for about half of the 1.8% decline in that band, and a shift into the 2-3 year band representing the other half. By far the largest amount of selling during the recent rally can be found in the youngest bands. Holders in the 3-6 month band and 6-12 month band respectively. The 3-6 month band has come down from down from 10.2% to 6.8% with selling accounting for the majority of the drop. Liquid Supply (Defined as coins that have moved in the last 90 days) The majority of this liquid supply is continuing to come from short term UTXO’s (traders). When compared to the previous cycle bottom we can see a very similar pattern emerge. Around July 2015 the liquid supply began to increase as trading activity began to draw in speculators again. During this same period long term holders remained unphased. This type of movement is correlated with a rise in volatility as trading volumes begin to influence the velocity of price. From a cyclical perspective it is likely that volatility is peaking now. If that proves to be true it is likely that the liquid supply will again decrease over the coming months. It wasn’t until then 2017 bull run that long term holders started to contribute to the increased liquid supply, so without large increases or decreases in price I feel it is unlikely that long term holders will be drawn into trading and the current cycle of holding will dominate. Conclusion One thing that I would like for you to remember here is that despite the potentially favorable economic environment for Bitcoin it is very important to note the following: In the face of any serious economic downturn, market crash or correction there will be a shortage of credit and a shortage of liquidity. This forces investors to sell off assets as they scramble for cash and risk assets are often sold off first. When investors need cash, they may need to sell their Bitcoin, no matter how badly they “wish” to hold it. A prudent Bitcoin investor will understand that Bitcoin is still an asset and has not yet proven itself in serious crisis as a miracle hedge, or even as a viable digital gold. . . . Taken from the Boss Crypto VIP Newsletter at: https://bosscrypto.co/
Original post from blog.projectpiglet.com. However, because there is promotional activity, a text post was more appropriate, thank you Mod's for working with me.
Pitfalls of Granger Causality
One of the most common forms of analysis on the stock market is Granger Causality, which is a method for indicating one signal possibly causes another signal. This type of causality is often called “predictive causality”, as it does not for certain determine causality – it simply determines correlations at various time intervals. Why Granger Causality? If you search “causality in the stock market“, you’ll be greeted with a list of links all mentioning “granger causality”: Search on DuckDuckGo In other words, it’s popular and Clive Granger won a Nobel on the matter. That being said, there are quite a few limitations. In this article, we’ll be covering a brief example of Granger Causality, as well as some of the common pitfalls and how brittle it can be.
What is Granger Causality?
Granger Causality (from Wikipedia) is defined as:
A time series X is said to Granger-cause Y if it can be shown, usually through a series of t-tests and F-tests on lagged values of X (and with lagged values of Y also included), that those X values provide statistically significant information about future values of Y.
In other words, Granger Causality is the analysis of trying to find out if one signal impacts another signal (such that it’s statistically significant). Pretty straightforward, and is even clearer with an image: From Wikipedia n a sense, it’s just one spike in a graph causing another spike at a later time. The real challenge with this is that this needs to be consistent. It has to repeatedly do this over the source of the entire dataset. This brings us to the next part: one of the fragile aspects of this method is that it often doesn’t account for seasonality.
Granger Causality and Seasonality
One common aspect of markets is that they are seasonal. Commodities (as it relates to the futures market) related to food are extremely impacted by seasonality. For instance, if there is a drought across Illinois and Indiana during the summer (killing the corn crop), then corn prices from Iowa would likely rise (i.e. the corn from Iowa would be worth more). From Wikipedia In the example, there may be decades where some pattern in the market holds and Granger Causality is relevant. For instance, during summer heat waves in Illinois, corn prices in Iowa increase. On the other hand, with the advent of irrigation methods that deliver water underground, heat waves may no longer impact crops. Thus, the causality of heat waves in Illinois may no longer impact the corn prices in Iowa. If we then attempt to search for Granger Causality on the entire time range (a) pre-irrigation and (b) post irrigation, we will find there is no causality! However, during the pre-irrigation time range we will find probable causality, and for post-irrigation time range we likely won’t find probable causality. Any time you combine two timeframes like this, the default is no Granger Causality (unless it’s a very small portion of the dataset). Bringing us to the conclusion, that:
Granger Causality is very sensitive to timeframe(s)
Just a few data points in either direction can break the analysis. This makes sense, as it is a way to evaluate if two time series are related. However, it does lead one to note how brittle this method can be.
Granger Causality and Sparse Datasets
Yet another potential issue with Granger Causality is sparse datasets. Let’s say we have dataset X and dataset Y: if dataset X has 200 data points and data set Y as 150 data points, how do you merge them? Assuming they are in (datetime, value) format, if we do an inner join on “datetime”, we get something that looks like the following: From W3School Then we will have 150 data points in a combined X and Y dataset, i.e.: (datetime, x, y). Unforunately, this also means if the data is continuous (as most timeseries data is), then we have completely broke our Granger Causality analysis. In other words, we are just skipping over days, which would break any causality analysis. In contrast, we could do an outer join: From W3School We will have 200 data points in a combined X and Y dataset. Again, there’s an issue – it means we probably have empty values (Null, NULL, None, NaN, etc. ) where the Y data set didn’t have data (recall Y only had 150 data points). The dataset would then have various entries that look as such: (datetime, x, NULL). To fix the empty values, we can attempt to use a forward or back fill technique. A forward/back fill technique is where you fill all the empty values with the previous or following location(s) real value. This code could look like the following: From blog.projectpiglet.com From the sound of it, this method sounds promising! You’ll end up with something that’s continuous with all real values. You’ll actually get a graph like this: Change in BCH price vs Random Walk (with NaNs) As you can see, there are large sections of time where the data is flat. Recall the seasonality issue with Granger Causality? This method of outer joins + forward / back filling will definitely cause issues, and lead to minimal to no meaningful correlations. Sparse datasets make it very difficult (or impossible) to identify probable causality.
Granger Causality and Resampling
There is another option for us, and that is “resampling”. Where instead of just filling the empty values (Nulls / NaNs) with the previous or following real values, we actually resample the whole series). Resampling is a technique where we fill the holes in the data with what amounts to a guess of what we think the data could be. Although there are quite a few techniques, in this example we’ll use the python package Scipy, with the Signal module. From blog.projectpiglet.com At first glance, this appears to have solved some of the issues: Change in Bitcoin Price vs Random Walk However, in reality it does not work; especially if the dataset starts or ends with NaN’s (at least when using the Scipy package): Change in BCH price vs Random Walk (with NaNs) If you notice, prior to the ~110 data point, the values are just oscillating up and down. The resampling method Scipy is using does not appear to be functional / practical with so few data points. This is because I selected data set for Bitcoin Cash (BCH) and the date range is prior to Bitcoin Cash (BCH) becoming a currency (i.e. there is no price information). In a sense, this indicates it’s not possible (at least given the data provided) to attempt Granger Causality on the given date ranges. Small gaps in time can have dramatic impacts on whether or not “probable causality” exists.
When determining Granger Causaily it is extremely important to have two complete overlapping datasets.
Without two complete datasets, it’s impossible to identify whether or not there are correlations over various time ranges.
Resampling can cause artifacts that impact the Granger Causality method(s).
In fact, the most recent example was actually positive for Granger Causality (p-value < 0.05)… That is the worst scenario, as it is a false positive. In the example, the false positive occurs because when both datasets are resampled they had a matching oscillation… it wouldn’t have even been noticed if the raw data sets weren’t being reviewed. This is probably the largest issue with Granger Causality: every dataset needs to be reviewed to see if it makes sense. Sometimes what at first appears to make sense, in reality the underlying data has been altered in some way (such as resampling).
Granger Causality and Non-Linear Regression
Changing gears a bit (before we get to a real-world ProjectPiglet.com example), it’s important to note that most Granger Causality uses linear regression. In other words, the method is searching for linear correlations between datasets: From austingwalters.com However, in many cases – especially in the case of markets – correlations are highly likely to benon-linear. This is because markets are anti-inductive. In other words, every pattern discovered in a market creates a new pattern as people exploit that inefficiency. This is called the Efficient Market Hypothesis. Ultimately, this means most implementations of Granger Causality are overly simplistic; as most correlations are certainly non-linear in nature. There are a large number of non-linear regression models, below is an example of Gaussian Process Regression: From Wikipedia Similar, non-linear regression techniques do appear to improve Granger Causality. This is probably due to most linear correlations already being priced into the market and the non-linear correlations will be where the potential profits are. It remains to be seen how effective this can be, as most research in this area is kept private (increasing profits of trading firms). What we can say is that non-linear methods do improve predictions on ProjectPiglet.com. They also require a larger dataset than their linear regression counterparts.
Overall, Granger Causality has quite a few potential pitfalls. It is useful for indicating a potential correlation, but is only a probable correlation. It can help to identify market inefficiencies and open the opportunity to make money, but will probably require more finesse than simple linear regression. All that being said, hope you’ve found some of the insights useful!
Is there a correlation between the Bitcoin, cryptocurrency and traditional markets?
In our previous material, we figured out whether there is a correlation between Bitcoin and other coins. We have clearly demonstrated that a direct correlation is observed between almost all digital assets. Somewhere – to a greater extent, somewhere – to a lesser extent. But what is the relationship between the digital asset market and the traditional market? Does this help predict the dynamics of the movement of coins? Let’s get it right. When Bitcoin was created 11 years ago, it was believed that its main advantage as a new class of assets would be the lack of correlation with other classes of assets. But a decade has passed, and we can say for sure whether this is actually so or not. A few years ago, digital assets didn’t actually correlate with traditional assets (stocks, commodities, currencies in the circulation of countries). But now a different situation is already observed. Many investors are trying to understand whether it is possible to hedge risks associated with the traditional market with the help of cryptocurrencies. Based on last year’s data from reputable publications, we’ll try to discover the connection of Bitcoin with other markets. JPMorgan analysts conducted a detailed analysis, during which it turned out that over the past five years, the correlation of Bitcoin with the S&P 500 index, US government bonds and gold has been at zero level. Studies have shown that the volatility of digital assets is significantly higher than that of stocks (which, incidentally, was already understandable). Experts concluded that “it is not known how the coins will behave during financial turmoil, but they can be used to diversify due to the low correlation with stocks and bonds.” However, this is not the only opinion. For example, analysts at Bitwise Asset Management, on the contrary, believe that the correlation between the two markets is only growing from year to year. They found that the correlation of Bitcoin with stocks and bonds is 0.12 and 0.25, respectively (as you remember, the ideal case is +1). For comparison, we can cite their data on the correlation of US and global stocks. Here the indicator is 0.88. Sifr Data found a negative correlation between Bitcoin and the S&P 500 index (-0.27). This tells us about their weak correlation. For gold, the indicator is even lower (-0.1 – both types of assets are neutral to each other). By the way, experts consider their information closer to reality. We told you about this when we analyzed the correlation table of digital currencies. Blockforce Capital, an American asset management company, also revealed a slight correlation between Bitcoin and Standard & Poor’s 500. Rolling Correlation Crypto correlation with stock market. The low correlation has its own reason: the growth factors of the two markets are different. In the case of traditional markets – economic growth, interest rates, corporate profits. And for cryptocurrencies, legislative changes and investor confidence are important. However, digital assets continue and, most likely, will continue to be popular with investors. Due to the low correlation with traditional markets, during economic and financial shocks, investors invest a certain part of funds in this sphere, since such a maneuver often saves investors from huge losses. Some experts believe that the cryptocurrency industry will undergo major changes in the future. Tim Enneking, managing director of Digital Capital Management, claims that after institutional investors enter the digital currency market, they will become more like securities.
Iranian Conflict a Successful Beta Test for Bitcoin as Wartime Safe Haven
Bitcoin’s primary use-case is continuously evolving. At first, many thought the cryptocurrency would be the next generation payment method. Scaling issues and extreme volatility deterred many merchants from accepting BTC. At that point, critics thought that the virtual currency would die. But, the number one crypto proved to be resilient as its value proposition changed into a store of value and as the only non-correlated asset in the world. In the last week, bitcoin’s use-case is making another transformation. An analyst tracked bitcoin’s performance as the turmoil in Iran escalated. It appears that one of the surprising consequences of geopolitical risk is bitcoin’s breakout from a six-month falling wedge. This could indicate that the top cryptocurrency is evolving to become a wartime safe-haven asset. Safe-haven assets such as gold, silver and even oil skyrocketed as tensions in Iran heightened. What’s surprising is that bitcoin’s value rose along with these commodities. A chart by Messari illustrates the timeline of the Iranian conflict alongside BTC’s price action. https://www.ccn.com/iranian-conflict-successful-beta-test-bitcoin-safe-haven-asset/
Elaborating on Datadash's 50k BTC Prediction: Why We Endorse the Call
As originally published via CoinLive I am the Co-Founder at CoinLive. Prior to founding Coinlive.io, my area of expertise was inter-market analysis. I came across Datadash 50k BTC prediction this week, and I must take my hats off to what I believe is an excellent interpretation of the inter-connectivity of various markets. At your own convenience, you can find a sample of Intermarket analysis I've written in the past before immersing myself into cryptos full-time. Gold inter-market: 'Out of sync' with VIX, takes lead from USD/JPY USD/JPY inter-market: Watch divergence US-Japan yield spread EUUSD intermarket: US yields collapse amid supply environment Inter-market analysis: Risk back in vogue, but for how long? USD/JPY intermarket: Bulls need higher adj in 10-y US-JP spread The purpose of this article is to dive deeper into the factors Datadash presents in his video and how they can help us draw certain conclusions about the potential flows of capital into crypto markets and the need that will exist for a BTC ETF. Before I do so, as a brief explainer, let's touch on what exactly Intermarket analysis refers to: Intermarket analysis is the global interconnectivity between equities, bonds, currencies, commodities, and any other asset class; Global markets are an ever-evolving discounting and constant valuation mechanism and by studying their interconnectivity, we are much better positioned to explain and elaborate on why certain moves occur, future directions and gain insights on potential misalignments that the market may not have picked up on yet or might be ignoring/manipulating. While such interconnectivity has proven to be quite limiting when it comes to the value one can extract from analyzing traditional financial assets and the crypto market, Datadash has eloquently been able to build a hypothesis, which as an Intermarket analyst, I consider very valid, and that matches up my own views. Nicolas Merten constructs a scenario which leads him to believe that a Bitcoin ETF is coming. Let's explore this hypothesis. I will attempt to summarize and provide further clarity on why the current events in traditional asset classes, as described by Datadash, will inevitably result in a Bitcoin ETF. Make no mistake, Datadash's call for Bitcoin at 50k by the end of 2018 will be well justified once a BTC ETF is approved. While the timing is the most challenging part t get right, the end result won't vary. If one wishes to learn more about my personal views on why a BTC ETF is such a big deal, I encourage you to read my article from late March this year. Don't Be Misled by Low Liquidity/Volume - Fundamentals Never Stronger The first point Nicholas Merten makes is that despite depressed volume levels, the fundamentals are very sound. That, I must say, is a point I couldn't agree more. In fact, I recently wrote an article titled TheParadox: Bitcoin Keeps Selling as Intrinsic Value Set to Explode where I state "the latest developments in Bitcoin's technology makes it paradoxically an ever increasingly interesting investment proposition the cheaper it gets." However, no article better defines where we stand in terms of fundamentals than the one I wrote back on May 15th titled Find Out Why Institutions Will Flood the Bitcoin Market, where I look at the ever-growing list of evidence that shows why a new type of investors, the institutional ones, looks set to enter the market in mass. Nicholas believes that based on the supply of Bitcoin, the market capitalization can reach about $800b. He makes a case that with the fundamentals in bitcoin much stronger, it wouldn't be that hard to envision the market cap more than double from its most recent all-time high of more than $300b. Interest Rates Set to Rise Further First of all, one of the most immediate implications of higher rates is the increased difficulty to bear the costs by borrowers, which leads Nicholas to believe that banks the likes of Deutsche Bank will face a tough environment going forward. The CEO of the giant German lender has actually warned that second-quarter results would reflect a “revenue environment [that] remains challenging." Nicholas refers to the historical chart of Eurodollar LIBOR rates as illustrated below to strengthen the case that interest rates are set to follow an upward trajectory in the years to come as Central Banks continue to normalize monetary policies after a decade since the global financial crisis. I'd say, that is a correct assumption, although one must take into account the Italian crisis to be aware that a delay in higher European rates is a real possibility now. !(https://coinlive.io/ckeditor_assets/pictures/947/content_2018-05-30_1100.png) Let's look at the following combinations: Fed Fund Rate Contract (green), German 2-year bond yields (black) and Italy's 10-year bond yield (blue) to help us clarify what's the outlook for interest rates both in Europe and the United States in the foreseeable future. The chart suggests that while the Federal Reserve remains on track to keep increasing interest rates at a gradual pace, there has been a sudden change in the outlook for European rates in the short-end of the curve. While the European Central Bank is no longer endorsing proactive policies as part of its long-standing QE narrative, President Mario Draghi is still not ready to communicate an exit strategy to its unconventional stimulus program due to protectionism threats in the euro-area, with Italy the latest nightmare episode. Until such major step is taken in the form of a formal QE conclusion, interest rates in the European Union will remain depressed; the latest drastic spike in Italy's benchmark bond yield to default levels is pre-emptive of lower rates for longer, an environment that on one hand may benefit the likes of Deutsche Bank on lower borrowing costs, but on the other hand, sets in motion a bigger headache as risk aversion is set to dominate financial markets, which leads to worse financial consequences such as loss of confidence and hence in equity valuations. !(https://coinlive.io/ckeditor_assets/pictures/948/content_2018-05-30_1113.png) Deutsche Bank - End of the Road? Nicholas argues that as part of the re-restructuring process in Deutsche Bank, they will be facing a much more challenging environment as lending becomes more difficult on higher interest rates. At CoinLive, we still believe this to be a logical scenario to expect, even if a delay happens as the ECB tries to deal with the Italian political crisis which once again raises the question of whether or not Italy should be part of the EU. Reference to an article by Zerohedge is given, where it states: "One day after the WSJ reported that the biggest German bank is set to "decimate" its workforce, firing 10,000 workers or one in ten, this morning Deutsche Bank confirmed plans to cut thousands of jobs as part of new CEO Christian Sewing's restructuring and cost-cutting effort. The German bank said its headcount would fall “well below” 90,000, from just over 97,000. But the biggest gut punch to employee morale is that the bank would reduce headcount in its equities sales and trading business by about 25%." There is an undeniably ongoing phenomenon of a migration in job positions from traditional financial markets into blockchain, which as we have reported in the past, it appears to be a logical and rational step to be taken, especially in light of the new revenue streams the blockchain sector has to offer. Proof of that is the fact that Binance, a crypto exchange with around 200 employees and less than 1 year of operations has overcome Deutsche Bank, in total profits. What this communicates is that the opportunities to grow an institution’s revenue stream are formidable once they decide to integrate cryptocurrencies into their business models. One can find an illustration of Deutsche Bank's free-fall in prices below: !(https://coinlive.io/ckeditor_assets/pictures/946/content_2018-05-30_1052.png) Nicholas takes notes of a chart in which one can clearly notice a worrying trend for Italian debt. "Just about every other major investor type has become a net seller (to the ECB) or a non-buyer of BTPs over the last couple of years. Said differently, for well over a year, the only marginal buyer of Italian bonds has been the ECB!", the team of Economists at Citi explained. One can find the article via ZeroHedge here. !(https://coinlive.io/ckeditor_assets/pictures/953/content_2018-05-30_1451.png) Equities & Housing to Suffer the Consequences Nicholas notes that trillions of dollars need to exit these artificially-inflated equity markets. He even mentions a legendary investor such as George Soros, who has recently warned that the world could be on the brink of another devastating financial crisis, on lingering debt concerns in Europe and a strengthening US dollar, as a destabilizing factor for both the US's emerging- and developed-market rivals. Ray Dalio, another legend in the investing world and Founder of Bridgewater Associates, the world’s largest hedge fund, "has ramped up its short positions in European equities in recent weeks, bringing their total value to an estimated $22 billion", MarketWatch reports. Nicholas extracts a chart by John Del Vecchio at lmtr.com where it illustrates the ratio between stocks and commodities at the lowest in over 50 years. As the author states: "I like to look for extremes in the markets. Extremes often pinpoint areas where returns can be higher and risk lower than in other time periods. Take the relationship between commodities and stocks. The chart below shows that commoditieshavennot been cheaper than stocks in a generation. We often hear this time it is different” to justify what’s going on in the world. But, one thing that never changes is human nature. People push markets to extremes. Then they revert. " !(https://coinlive.io/ckeditor_assets/pictures/954/content_2018-05-30_1459.png) Bitcoin ETF the Holy Grail for a Cyclical Multi-Year Bull Run It is precisely from this last chart above that leads Nicholas to believe we are on the verge of a resurgence in commodity prices. Not only that but amid the need of all this capital to exit stocks and to a certain extent risky bonds (Italian), a new commodity-based digital currency ETF based on Bitcoin will emerge in 2018. The author of Datadash highlights the consideration to launching a Bitcoin ETF by the SEC. At CoinLive, our reporting of the subject can be found below: "Back in April, it was reported that the US Securities and Exchange Commission (SEC) has put back on the table two Bitcoin ETF proposals, according to public documents. The agency is under formal proceedings to approve a rule change that would allow NYSE Arca to list two exchange-traded funds (ETFs) proposed by fund provider ProShares. The introduction of an ETF would make Bitcoin available to a much wider share of market participants, with the ability to directly buy the asset at the click of a button, essentially simplifying the current complexity that involves having to deal with all the cumbersome steps currently in place." Nicholas refers to the support the Bitcoin ETF has been receiving by the Cboe president Chris Concannon, which is a major positive development. CoinLive reported on the story back in late March, noting that "a Bitcoin ETF will without a doubt open the floodgates to an enormous tsunami of fresh capital entering the space, which based on the latest hints by Concannon, the willingness to keep pushing for it remains unabated as the evolution of digital assets keeps its course." It has been for quite some time CoinLive's conviction, now supported by no other than Nicholas Merten from Datadash, that over the next 6 months, markets will start factoring in the event of the year, that is, the approval of a Bitcoin ETF that will serve as a alternative vehicle to accommodate the massive flows of capital leaving some of the traditional asset classes. As Nicholas suggests, the SEC will have little choice but to provide alternative investments. Bitcoin as a Hedge to Lower Portfolios' Volatility Last but not least, crypto assets such as Bitcoin and the likes have an almost non-existent correlation to other traditional assets such as stocks, bonds, and commodities, which makes for a very attractive and broadly-applicable diversification strategy for the professional money as it reduces one’s portfolio volatility. The moment a Bitcoin ETF is confirmed, expect the non-correlation element of Bitcoin as a major driving force to attract further capital. Anyone Can BeWrongDatadash, But You Won't be Wrong Alone Having analyzed the hypothesis by Nicholas Merten, at CoinLive we believe that the conclusion reached, that is, the creation of a Bitcoin ETF that will provide shelter to a tsunami of capital motivated by the diversification and store of value appeal of Bitcoin, is the next logical step. As per the timing of it, we also anticipate, as Nicholas notes, that it will most likely be subject to the price action in traditional assets. Should equities and credit markets hold steady, it may result in a potential delay, whereas disruption in the capital market may see the need for a BTC ETF accelerate. Either scenario, we will conclude with a quote we wrote back in March. "It appears as though an ETF on Bitcoin is moving from a state of "If" to "When." Datadash is certainly not alone on his 50k call. BitMEX CEO Arthur Hayes appears to think along the same line. On behalf of the CoinLive Team, we want to thank Nicholas Merten at Datadash for such enlightening insights.
"Valuing Bitcoin: Which Metrics Do Matter?" - Suggestions/Input/Data Sources needed
Hello together, I am currently in the final months of my Masters at Imperial College and I am slowly getting started with my final project: “Valuing Bitcoin: Which Metrics Do Matter? An Empirical Analysis” Well, sounds boring at first, and I found a few papers that tried to value Bitcoin before. However, each paper went into detail with only a number of metrics (either trading volume, or transactions per second, etc.). This feels like not looking at the whole picture. Here are some examples:
Instead of following this narrow approach, my idea is to pack as many metrics as possible into a regression and see how their importance changes over time. To be more specific, I would sort metrics roughly into three categories: - Bitcoin as a speculative asset
Google Trends Activity
Number of Trades/Volume at exchanges
Momentum (impact of today’s price on tomorrows)
- Bitcoin as a commodity and store of value
Security of the network (hash rate, probability of 51% attack, number of nodes, hash rate distribution)
Correlation with other asset classes
Cost of production
- Bitcoin as a currency
Network capacity (1st and 2nd layer)
Number of transactions (on-chain/off-chain)
Now I was wondering if you guys could help me out with a few things:
Suggest other metrics (that are not too hard to obtain) that might be of interest for running a regression.
WSB101 - THE BOOK OF YOLO: BEGINNERS GUIDE TO TRADING LIKE A DEGENERATE AND EVERYTHING WSB
The Book of Yolo: COMPLETE GUIDE TO WSB The goal of this is to actually create something that all of you WSB newbies can read - because we’re all tired of seeing the endless wave of uninformed and unavoidable stupidity from those who have never touched the stock market. CALLING ALL NEWFAGS AND NORMIES. If you can’t read, GFY now. Now that we will be on the popular section of reddit, this has become pertinent. WSB can't avoid newcomers, so we might as well explain how the clock ticks here. This one is for you all. This is to serve as a reference what values we hold, what instruments we use, and as a general place to educated the uneducated. First off, this is the LEAST helpful stock market-based community for newcomers. Sarcastic answers are the only thing of true value here. It isn't a place to learn, but a place to plan out where you will dock your yacht. Newcomers are usually berated upon asking the inevitable stupid questions that they could learn slowly from reading here, or just using a damn search engine. Instead of embarrassing yourself here, you now have the opportunity to read this and get what we’re all rambling about. This will help you understand what to expect if you make the decision to undertake a WSB style trading career, so you can stay here and contribute to the yolo lifestyle or otherwise GFY. I will edit in any suggestions that our frequenting users or mods want to add to this as well. To begin: Here are our topics for WSB101 -Basics (Equities/Stocks) ; -ETF's ; -Options ; -Futures Trading ; -SubCulture ; BASICS/EQUTIES Skip if you understand basic stock stuff Okay, so what is an equity/stock? An equity is essentially what you’d think of as your “vanilla” trading tool. They move up or down depending on market forces, and can range from pennies to thousands of dollars per share. To explain how stocks work, let's define a few terms. Volume: The number of shares of stock traded during a particular time period, normally measured in average daily trading volume. Spread: The difference between the bid and the ask price Bid Price: The current price in which someone wants to buy at Ask Price:The current price in which someone wants to sell at Volatility: The WSB favorite. Volatility is referring to the price movements of a stock as a whole. The higher the volatility, the more the stock is moving up or down. Highly volatile stocks are ones with extreme daily up and down movements and wide intraday trading ranges. Margin: A margin account lets a person borrow money (take out a loan essentially) from a broker to purchase an investment. The difference between the amount of the loan, and the price of the securities, is called the margin. Margin is one of WSB’s popular instruments of wealth and destruction. Dividend: This is a portion of a company’s earnings that is paid to shareholders, or people that own hat company’s stock, on a quarterly or annual basis. Not all companies do this. PPS: Acronym for “Price per Share” Moving Average: A stock’s average price-per-share during a specific period of time. Bullish: Expecting the stock to go up Bearish: Expecting the stock to go down Any raised hands can redirect themselves to here: http://www.investopedia.com/articles/investing/082614/how-stock-market-works.asp?ad=dirN&qo=investopediaSiteSearch&qsrc=0&o=40186 Now that these terms are defined, let's move into the details of why this is even useful. Most people know what a stock is, but how and why stocks move is a different story. The stock market is essentially a big virtualization of supply and demand - meaning that usually high positive volume creates upwards movement in the PPS, where high negative volume does the opposite. This creates a trader’s opportunity; Generally, the most effective time to buy or sell is where the candlesticks (volume data) are thinning out. When you are ready to take an entry point or execute an exit point, waiting till the volatility (candlesticks) thin out is one method to give you best trade possible. WSB FAVORITE EQUITIES: Of many equities, WSB favors the riskier ones - but avoiding penny stocks is a policy. AMD - CEO Lisa Su, Next Gen Processors, chips, graphics. It’s the gamers gambit. Up roughly 1400% as of 2/7/2017 since WSB first mentioned it NVDA - AMD’s sister? Mother? Daddy? Who knows. NVDA has been a sexy semiconductor leader. Is up 400% since gaining traction on WSB. FNMA / pfds - Mnunchin, Trump, Big fat fannies. Get your self deep in the fannie. We all want it. WSB 10 bagger candidate for reforming the housing market. WSB holds a large cumulative position that can be seen below. Also a good read is the beginners guide to FNMA. Any post by u/NOVACPA is very often VERY informative on FMNA/pfds. https://www.reddit.com/wallstreetbets/comments/5oissp/results_wsb_fnmafmcc_holdings https://www.reddit.com/wallstreetbets/comments/5t7gba/beginngers_guide_to_fnma_fmcc_read_this_before/ ARRY - A biotech champion that prevailed after a lot of failures and huge losses in the biotech sector. Dark times for WSB. Up ~300% since getting traction on the subreddit. TWTR - WSB likes to buy put option contracts on her. Exemplary of a social media platform that is unable to monetize itself. TSLA - Maybe not unanimously a favorite, but loved for it’s sexy volatility, Elon Musk, and ridiculously expensive options. GILD - A Shkreli pump and dump? The greatest large cap pharma recovery of all time? Who knows. Martin took the time to make a post on this reddit and it is up $5 dollars since. ETF'S Welcome to the world of investing made easy. Exchange traded funds (etfs) are devices that can be traded like stocks, but often track the value of many companies by investing in their listed assets accordingly. Specifically, An ETF, or exchange traded fund, is a marketable security that tracks an index, a commodity, bonds, or a basket of assets like an index fund. Unlike mutual funds, an ETF trades like a common stock on a stock exchange. ETFs experience price changes throughout the day as they are bought and sold. ETFs typically have higher daily liquidity and lower fees than mutual fund shares, making them an attractive alternative for individual investors. ETF’s come in beautiful and delicious varieties, often with a BEAR form and a BULL form of each; but the most delicious to WSB are the 3x etf’s. A 3x ETF is one in which the underlying movement of the ETF is leveraged 3:1. Meaning for every movement within the underlying index or stocks, the 3x ETF moves well.... 3x as much.. WSB FAVORITE AND USEFUL ETF’S: JNUG - 3x Gold Miner Bull - A hit or miss, has extreme intraday movements and essentially tracks GDX (gold miner’s index). Jnug will usually move with a pretty strong correlation to gold, which is affected by the mentioning of rate hikes (negatively), movement of the US dollar (inversely), uncertainty (positively), and supply and demand. NUGT - Jnug with a different price tag JDST - The inverse 3x etf of JNUG - or the bear etf. It does almost exactly the opposite movements of JNUG by the tick. Moves for the same reasons, but obviously opposite directions. DUST - Jdst with a different price tag. UGAZ - Natural Gas 3x Bull ETF - essentially tracks the price value of the commodity Natural Gas, but more specifically the S&P GSCI Natural Gas Index ER. The index comprises futures contracts on a single commodity and is calculated according to the methodology of the S&P GSCI Index. Natural gas is most affected by Weather temperature conditions (use your brain), petroleum prices, and broader economic conditions. DGAZ - Inverse of UGAZ UWT - Crude Oil Bull 3x ETF - extreme intraday movements, closely follows the price of oil. More specifically, it tracks futures. UWT seeks to replicate, net of expenses, three times of the S&P GSCI® Crude Oil Index ER. The index tracks a hypothetical position in the nearest-to-expiration NYMEX light sweet crude oil futures contract, which is rolled each month into the futures contract expiring in the next month. The value of the index fluctuates with changes in the price of the relevant NYMEX light sweet crude oil futures contracts. DWT - Inverse of UWT FAS - Financial Bull, specifically FAS seeks daily investment results, before fees and expenses, of 300% of the performance of the Russell 1000 ® Financial Services Index. The fund creates long positions by investing at least 80% of its assets in the securities that comprise the Russell 1000 ® Financial Services Index and/or financial instruments that provide leveraged and unleveraged exposure to the index. Can be used when bullish on US financial services - so banks, lenders, etc. FAZ - Inverse of FAS UPRO - S&P500 Bull 3x ETF, essentially tracks the S&P500 and multiplies it’s returns by 3x. BRZU - Tracks Brazil (in its most basic form). It creates long positions in the MSCI Brazil 25/50 Index. LABU - Tracks the Biotech sector, or specifically 300% of the performance of the S&P Biotechnology Select Industry Index ("index"). It should be noted that LABU has doubled since just before the election of Donald Trump. LABD - Inverse of LABU RUSL - roughly creates 300% of the performance of the MVIS Russia Index. RUSS - Inverse of RUSL SPY - Tracks the S&P500, but is not 3x. OPTIONS: Alright, so half you are going to understand this, and half of you are not. Pull up an options chain now on any stock (penny stocks and specific stocks do not have chains because of their market cap). Options are truly the ultimate way to achieve maximum risk/reward. An option is a contract that gives the buyer the right to buy or sell 100 shares of a stock at a certain price, on a certain date. This concept makes options a commodity themselves. KEY TERMS: A CALL - is the right to buy. Buying calls is taking a bullish position in its most extreme form. A PUT - is the right to sell. The underlying - is the stock that the option is covering i.e. AAPL, GOOG, AMZN Strike Price - the price at which a put or call option can be exercised. ITM, In the money - In the money means that a call option's strike price is below the market price of the underlying asset or that the strike price of a put option is above the market price of the underlying asset. Being in the money does not mean you will profit, it just means the option is worth exercising. OTM, Out of the money - a call option with a strike price that is higher than the market price of the underlying asset, or a put option with a strike price that is lower than the market price of the underlying asset. ATM - At the money - Strike price at the same price as the underlying Expiration - Expiries for options are every friday of every week usually, with exceptions such as every month, or every other day - depending on the underlying. SPY and SPX are great examples of very active option chains with expiries every other day. On the expiry date or any time before (with american options), an option can be, but doesn’t have to be exercised, meaning the holder of the option can use it to buy or sell shares of the underlying stock at the strike price. Most people on WSB do not exercise the contracts, but merely flip them for increases in value as the underlying moves. For example, when AAPL was at 120 before its earnings report, Joe Shmoe Yolo buys 10 FEB 17th CALLS at strike 127 for .60 , each. Now .60 cents is really 60 dollars each, because the contract is multiplied by 100 (the right to 100 shares). In total, Joe Shmoe Yolo spends $600 dollars + commision on this trade. The next day, AAPL leaps to 130 upon great news. These same option contracts are now worth 3.50 each. $350 dollars per contract, times ten contracts is $3500 dollars. Joe Shmoe Yolo just turned $600 into $3500 dollars. MAGIC. Spoiler alert: Joe Shmoe Yolo was me. That same Joe Shmoe later buys FEB 17th XOM calls at 90, hoping for similar results. However, XOM ends up never reaching anywhere close to the strike price, and the options expire worthless. Get it? Now what determines the pricing of options? OPTION PRICING: Below is sourced from investopedia Intrinsic Value: The intrinsic value is the actual value of a company or an asset based on an underlying perception of its true value including all aspects of the business, in terms of both tangible and intangible factors. This value may or may not be the same as the current market value. Additionally, intrinsic value is primarily used in options pricing to indicate the amount an option is in the money. Time Value: Time Value = Option Price - Intrinsic Value. The more time an option has until it expires, the greater the chance it will end up in the money. The time component of an option decays exponentially. The actual derivation of the time value of an option is a fairly complex equation. As a general rule, an option will lose one-third of its value during the first half of its life and two-thirds during the second half of its life. This is an important concept for securities investors because the closer you get to expiration, the more of a move in the underlying security is needed to impact the price of the option. Time value is basically the risk premium that the option seller requires to provide the option buyer the right to buy/sell the stock up to the date the option expires. It is like an insurance premium of the option; the higher the risk, the higher the cost to buy the option. Makes sense, right? Time value is determined by the expiration date. An expiration date in derivatives is the last day that an options contract is valid. When investors buy options, the contracts gives them the right but not the obligation, to buy or sell the assets at a predetermined price, called a strike price, within a given time period, which is on or before the expiration date. If an investor chooses not to exercise that right, the option expires and becomes worthless, and the investor loses the money paid to buy it. Volatility: In an options pricing, you see IV. This stands for implied volatility. The higher that is, the higher the options will be priced Volatility is the extent to which the return of the underlying asset will fluctuate between now and the option's expiration. Volatility, as expressed as a percentage coefficient within option-pricing formulas, arises from daily trading activities. How volatility is measured will affect the value of the coefficient used. Decaying Nature of Options: Decay refers to derivative trading (i.e. options). When you sell or buy a call/put (using those two for simplicity purposes) you don't get an infinite time frame to make your dreams come true. Time is your enemy; the further out the expiration date, the less time decay there is. Time decay really hits the worst the week of expiration. Sound confusing? Say you're buying options of the stock WSB (I hope you're seeing what I did there) - and the option costs $1, the expiration is this Friday. Say today is Monday. You buy a call expecting WSB to take you to the moon and beyond. Each day the stock doesn't move closer to your strike price or remains stagnant/drops, you lose value on your option + the time decay. Meaning if it finishes closer to your strike price, your option could be worthless because of that time decay. Questions? Ask away. A great example of these factors in action is TSLA. TSLA’s options are among the most expensive for companies in its price range, why? An in the money TSLA call expiring this week is worth around $1100 per contract. Insanely expensive. But for a reason. TSLA has extreme intraday movements and calls have an implied volatility of 40.92%. Which is fairly high. In addition to that, it holds high intrinsic value / price per share, and a week of time value. -Futures 101 - The Ultimate YOLO Guide (thanks to u/IncendiaryGames) Okay, a lot of you have been YOLOing on faggot delights on SPY options. How would you like to trade something with the same or more leverage, 1.0 delta, and no time premium costs? Have you considered futures? What are futures? Unlike options, futures is a contract where both the buyer and seller is obligated to perform the transaction by the expiration. Conversely, in options, only the seller is obligated to perform. That means you can lose more than your investment. Originally they were used by farmers to sell future crops early and guarantee some amount of sales. Since then futures have expanded not just to commodities but currency and equity indices like the S&P 500. Why the heck would I want to trade futures? Here are the advantages: Leverage $5k is the margin requirement for most contracts. For example with the E-mini S&P 500 with 5k you're trading $120k worth of stuff. 1 contract = 500 spy shares. Some brokers offer intraday daytrading margin rates too - TD Ameritrade is 25% of the overnight margin rate($1,250.) Some brokers go as low as $500 an /ES future. SPAN Margin If 24x overnight leverage and 240x day trade leverage didn't give you a hard on there is also SPAN margin, which is like portfolio margin on steroids. The beauty of SPAN margin is you don't need a $125k+ account to be eligible. SPAN will greatly reduce your margin requirements if you hold uncorrelated or inversely correlated positions (up to an 80% discount, here is a list of groups that give discounts) and if you hedge with options. Hedge with the right option or asset and now you have up to 500x day trading margin. 23/7 and day trading Ever get in and out of an equity only to have your broker yell at you to stop doing that or deposit $25k? There is no pattern day trading restrictions on futures. Feel free to day trade and blow up your account as often as you want! You can also trade 23 hours a day. Get trading on how the S&P 500 index will react to news from China right away. Taxes No matter how long or how short you hold you always get taxed under the 60/40 rule. 60% of your profit from futures will be taxed as a long term gain and 40% will be taxed as short term gain. No wash sales. Trade your hearts out. Just remember holding past Dec 31st will treat you as if you closed all your positions that day and you'll be taxed on unrealized gains. Long/Short No need to pay interest or borrow shares as being short a future contract is being a writer, just like an options writer. Options Of course there are options. What fun would it be without options? Unlike stock options each contract gives different number of future contracts. Research what you're trading. Ok. I'm convinced. I want to strat trading futures! What are some good strategies? YOLO Strategies Swing trading Trying to guess/predict/ride sudden market momentum. A low volume average day in the S&P 500 (/ES) for one contract can swing +- $500. Get it right and you can see a huge appreciation of value. /ES is usually highly liquid during regular hours with average volume of 1 million trades and usually bid-ask spreads of one tick. One approach is to buy or short in your direction and put in a stop loss to an amount you're comfortable to lose (say $200.) Since it's so liquid you'll likely be filled at or near your stop loss during the day if your trade goes against you. If you can guess the direction 50% of the time and have trades like this: trade 1 - gain $800 trade 2 - lose $200 Then you may profit over the time period. If you have a 50% chance of being wrong and losing $200 or 50% chance of being right and gaining $800 then over time you'll gain more than you lose. Also, since the present value of your futures contract is included in your margin calculation then if it goes strongly in your favor your position can quickly grow to cover its own margin and you can let it ride for a while. You'll want to be sure you enter a combo buy/short order along with a stop loss order simultaneously, like this for Thinkorswim. Futures can move suddenly and a sudden movement can make you lose a ton of money. Exploiting outdated SPAN margin guidelines There are several out of date correlations between popular futures like oil and say things like wheat that SPAN gives you margin credits on. Take whatever position you want in oil (/cl) then take the opposite in something that doesn't move much day to day with less volatility such as /w (wheat)) and your /cl and /w positions will get a 75% credit, giving you 50% more buying power on crude oil. (2 positions * .25 = 0.5). Trade your heart out on the more volatile future then when you're done close your safer future pair. SPAN is constantly changing but such a complex system definitely has its exploits. Automated/algorithmic trading For you programmer geeks out there it's really hard to algorithmic trade on small accounts due to pattern day trading rules and economies of scale with broker fees. Futures is probably the best way to get your feet wet. Join us on /algotrading if you want to explore more! Boring safer strategies I'm including these for completeness but these belong on /investing. Scalping With high frequency trading scalping is less guaranteed. Basically scalping is using tiny momentum as usually there are small micro patterns in futures buying and selling activity where it will rise or fall a couple of ticks. Since the notional value of each tick is $12.5 it's profitable for retail investors and small accounts to act as a market maker after fees at the smallest bid-ask spread possible. Spreads Just like you can trade spreads in options, you can trade calendar spreads in futures. Futures have contracts with different expiration dates and the prices are different for each month of expiration based on the market's expectations. You can go long or short the near month expiration and the opposite for the far month. This will hedge out any sudden market moves as that would likely affect both months. Bull markets in general tend to increase the price of the near month faster than the far month. Basically with a spread trade you're making a long term bet on bull or bear for the underlying future. Pairs trading You can go long in one future say the dow jones (/ym) and short the S&P 500 index and profit off the relative growth. This is a hedged trade as any market ups or downs will likely affect both positions with the same % value. For the past 180 days /ym - /es has been really profitable. Even if you don't do a full perfect pairs trade it is still a great option to reduce the leverage too on whatever index future you're trading so you can stay in longer or overnight. Interest rate and optimal leverage plays Since the $5k investment is equal to $120k of the S&P 500 index currently then you'll likely beat out the market by buying one future contract and putting $115k in safe treasuries or bonds or uncorrelated assets. Some people choose to leverage their stock portfolio and you can get the exact leverage ratio of liquid investments to future ratios. In probability theory the max leverage you can gain is determined by the Kelly Criterion which modeling shows indicates the S&P 500 index to be leveraged to 1.40x. Yes, you could do the same with options but even on SPY deep in the money call leaps are illiquid and have a time premium. Even today they are so deep ITM that the options you would need to use have 0 open interest and a bid-ask spread of $5 per share (so $500 per contract.) You'd need ~5 contracts per 120k so you're already eating $2.5k/$120k - 2% interest rate a year for that leverage. SPX isn't better, it's bid ask is 22 so you'd be eating $2.2k/$120k - 1.83% interest rate. It's doubtful you won't get much past the ask as its only market makers providing liquidity and guess what the market maker will do if you buy/sell the option? They will hedge with the underlying futures until their minimum profit is the risk free interest rate. Hedging Going long and short in various non correlated or negatively correlated assets to seek out a high sharpe ratio and have a higher risk free return that is market neutral. Basic hedge fund stuff. The variety and price efficiency of futures makes things pretty attractive in this area. SUBCULTURE Wallstreetbets is a community that has become infamous for the most wild west, moon or cardboard box trades on the planet earth. WSB is a place where you can take out thousand dollar loans, refinance your homes, cash advance all of your credit cards only to put it all on JNUG, and we will still love you. Your mother won't. Your father will never understand your spectrum of autism, but we will always love you. It is a uniquely beautiful community focused on praising its biggest losers as much as its biggest winners. To begin on the subculture, we should define some key moments in the sub's history. HISTORY: (As made by u/digadiga) + my additions 2012: Jartek [+1] creates /wallstreetbets, and word slowly starts to ooze out. 2013: americanpegasus discovers pennies. AP has seen the light, and is a penny stock evangelist. Jartek & AP have an epic options vs pennies battle - they both lose a couple of hundred bucks, but we are entertained, and WSB is officially born. AP blows up his retirement, swears off pennies and moves onto bitcoins. 2014: fscomeau [+3] discovers options. He repeatedly bets five figures on AAPL calls before earnings. FS claims a supernatural clairvoyance of AAPL. FS then posts about his chest pains and ER visits. He finally suffers an epic loss. Is he dead? Is he alive? Is he is mother? Is he banned? Who cares? 2015: Photos from the 3rd annual meetup are posted. Where a bunch of dudes hang out on the romantic beaches of Guerrero Mexico. In a completely unrelated event, the wsb banner is changed to thousands of ejaculating dicks. Modpocalypse occurs. Hundreds of random users are added as moderators for a few months. None of the new mods can change the CSS. The constant whining about how "wsb isn't what it used to be" continues. Someone attempts to show how selling covered calls is idiot proof, but gets lazy, bets all six figures on Apple, and suffers significant losses. Robinhood gets popular. Should you buy one share of AMZN or one share of GOOGL? Who gives a fuck. 2016: Everyone starts saying "go fuck yourself." Except me. Because I am what I am. And if you don't like it, you can all go fuck yourselves. u/World_Chaos performs one of the more impressive yolo's of the sub, starting with 900 dollars, and turning it into 55k. https://www.reddit.com/wallstreetbets/comments/414blh/yofuckinglo_900_to_55k_in_12_days/?ref=share&ref_source=link 2017: u/fscomeau preforms what he calls "The Final Yolo", a 300k trade against AAPL before earnings (that I, u/thor303456 inversed), supposedly supposed to net fscomeau 2.5 million or so, in which he will finally stop trading. FSC is featured on several market related articles and newspapers, showing up on yahoo, etc. Later we find proof during his livestream of AAPL earnings that he was paper trading. Even later, FSC writes a near 200 page book called "Wolfie Has Fallen" describing how he trolled the entire internet, some following him into that AAPL trade. Martin Shkreli visits the sub and proclaims that GILD pharma is worth over $100 a share and is deeply undervalued. KEY FIGURES: Donald J Trump - He is the Marmalade Manchurian, the Tangerine Tycoon, and our spray tan Stalin. Unbelievable night of election. WSB demographics show a primarily capitalist and right wing (or at least joking to be so) point of view, and thus we are generally pro trump. In actuality though, WSB is focused on pro-market, which Trump happens to be. u/Jartek - Founder of the sub, original yoloer. Believe he has retired from reddit for the most part. Mostly inactive. u/Fscomeau - The Canadian as some call him, and perhaps one of the most profound internet trolls of 2016-2017. A French-Canadian trader who deals with mostly options. The man has been called "The Great Inverse", and for a good reason. Nearly all of the trades or statements he made on WSB were completely wrong or mostly wrong. Truly the strongest technical indicator. Martin Shkreli - An idol to many WSBers, Martin stands as the master of the biotech sector. A very debated character for very stupid reasons. Martin regularly tweets about the stock market, occasionally does a youtube channel, and livestreams fairly regularly. u/theycallme1 - Educated trader, and mod of WSB. Roasts people often and roasts them good. Ask him the questions that aren't stupid. One of the most active mods. u/world_chaos - some fucking college student with some real net worth. Sits on 100k or so (needs verification), and was an inspiring yoloer to all, with his 900 to 55k yolo with options. Lingo, Terminology, and Nomenclature: The Faggots Delights - Truly the most suicidal, yet clearest shot to the moon. This term is usually used to define either weekly, or daily option plays on the SPY/SPX. Some users trade them very profitably, such as u/MRPguy and many in the past. Cuck - Truly the worst thing you could be. A cuck is a man who likes watching his wife/girlfriend fuck other guys. Weak, spineless, and a term often throw around here. The YOLO - You only live once. This is something that is, and should be realized as undeniably true. Why are you sitting on a 5k emergency fund that is making you less interest in a year than what I just made in 10 minutes? Why haven't you used all of the credit on your 5 credit cards or used your testicles as collateral for a loan yet? YOLO or YOLOING is as much a psychological decision to embrace absurdism, and win with everything you have while risking it all. Yolo is what it means to be a WSB trader. Bagholding or a Bagholder - When you're stuck with the most ass trade of your life, because you know it'll go back up. A bagholder is the 59 year old guy at the grocery store who won't quit his Job because he knows he only has to wait another year until he gets a return on his investment (of his life). Anyone holding SUNEQ is the definition of a bagholder. Autists - Something we embrace, something we call each other, something we all are. Autism isn't used in an offensive way as much as it is a generally accepted term that defines us. The best traders have autism because of their distance from emotion. I bet you never made it to this part of the reading because you're such a damn autist. Tendies - Tendies are what you get after you make a small amount of money. "I SOLD AMD TODAY FOR A $13 DOLLAR PROFIT, GOING TO MCD's TO GET MY TENDIES". Tendie money is usually shameful and insignificant, but at least it got you tendies. Chicken tenders at McDonalds are the least expensive for the most cholesterol. I know some of the writing was half ass, full of errors, or otherwise not the best explanation. But I believe this will serve its purpose, and maybe help to promote new ideas from moderately educated traders. WSB has very strong traders, and the most uniquely risky trading styles on the planet. Hopefully this can serve to better the overall community. You guys are all faggots, upvote this so we can get the noobs to stop trying to bite on our cocks. Also I'd really appreciate input on anything to add to this overall. It took my over 3 hours to write up, so I eventually grew tired and probably have missing spots. Enjoy your time here at WSB. EDIT: Added a shit ton of stuff, fixed errors. THANKS FOR ALL OF YOUR INPUT, ACTUALLY MAKING WSB GREAT AGAIN MODS: Can we make this editable by others mods or something? My fingers aren't enough. Seems like this could serve as a good "official" thing. Paging u/theycallme1u/CHAINSAW_VASECTOMY etc
Daily analysis of cryptocurrencies 20191017(Market index 40 — Fear state)
https://preview.redd.it/blzepxcqk3t31.jpg?width=3000&format=pjpg&auto=webp&s=9431f19759fec05e63bc1c34af8633d6b8dcee2a The Number Of BTC Whale Transfers Up By 41.72% Monitored by CoinNess.com, as of 00:00, October 17 (UTC), 1) the number of Bitcoin active addresses is on a day-to-day decrease of 0.16%, marking 638,100. 2) The number of Bitcoin on-chain transactions is 335,900 with a day-to-day decrease of 2.27%. 3) The number of BTC whale transfers (over 100 BTC each) is 479 with a day-to-day increase of 41.72%. 4) Active addresses on Ethereum report 322,900 with a day-to-day decrease of 3.67%. Note: On-chain transactions and active addresses of a cryptocurrency have a positive correlation with its price. Samsung SDS Pilots Blockchain-Based Medical Insurance Network Samsung SDS, an IT solution developer partially owned by the South Korean tech conglomerate, is expecting to roll out a blockchain-based medical claims processing system in October. According to a CoinDesk Korea report on Oct 16, Yoon Shim, a vice president of Samsung SDS, said at the Blockchain Seoul 2019 event that the firm has been piloting the system since August, 2019. Samsung SDS is 22.6 percent owned by Samsung Electronics and 17.1 percent owned by Samsung C&T. Joint Statement Issued On Activities Involving Digital Assets The Chairman of the U.S. Commodity Futures Trading Commission (CFTC), the Director of the Financial Crimes Enforcement Network (FinCEN), and the Chairman of the U.S. Securities and Exchange Commission (SEC) issued a rare joint statement on activities involving digital assets. This combined statement makes it clear that regardless of whether the digital asset qualifies as a security, commodity or some other regulated asset, the regulatory regime for digital assets is here to stay and key regulatory bodies are focused on ensuring AML/CFT obligations are met by those in the industry. The Swiss Federal Council Continues To Monitor Stablecoins And Blockchain In a press release on Oct 16, the Swiss Federal Council is continuing to keep close tabs on global stablecoin projects and their possible opportunities and challenges. The Swiss Federal Council stated that it was recently informed about “current opportunities and challenges associated with stablecoins” and that Switzerland will continue to monitor new digital technology developments, such as blockchain and distributed ledger technology.
Encrypted project calendar（October 17, 2019）
Holo (HOT):17 October 2019 Redgrid AMA “Join us for the AMA with RedGrid on October 17th. Submit your questions before the AMA on our Holochain Dev Forum.”IOST (IOST):17 October 2019 Breeding Competition Ends “Join IOST 2nd Breeding Competition by@FishChainGamenow! The competition only lasts till 17 Oct”Aragon (ANT):17 October 2019 Seoul Meetup “You are invited to join@licuendefor a meetup and presentation on ‘Aragon and DAOs: What’s next after ICOs and DeFi?’”Skycoin (SKY):17 October 2019 NYC Skywire Meetup NYC Skywire Mainnet Meetup in NYC from 6–8 PM.Horizen (ZEN):17 October 2019 Weekly Insider Team updates at 3:30 PM UTC/ 11:30 AM EDT: Engineering, Node network, Product/UX, Helpdesk, Legal, BD, Marketing, CEO Closing thoughts, AMA.AE/Aeternity:Aeternity (AE), held by members of the DCARPE Alliance, will be held in New York on October 17.PYC/Privacy Chian:The Privacy Chian (PYC) BiKi platform will open the PYC recharge and withdrawal at 15:00 on October 17th and open the PYC/USDT trading pair transaction on October 18th at 5:00.FBT/Fanbi:Fanbi (FBT) BKEX Global will launch FBT on October 17, 2019, Singapore at 15:00, open trading pair: FBT/USDT.MFCC/Marsfarmer:Marsfarmer (MFCC) CoinW will start MFCC recharge on October 15th from 16:00 to October 17th at 16:00, and officially open MFCC/CNYT transaction in potential area on October 17th at 16:00.GT/Gatechain Token:The Gatechain Token (GT) GateChain test network will be released on October 17.
Encrypted project calendar（October 18, 2019）
BTC/Bitcoin:The SEC will give a pass on the VanEck/SolidX ETF on October 18th and make a final decisionHB/HeartBout:HeartBout (HB) will officially release the Android version of the HeartBout app on October 18.OKB (OKB):18 October 2019 Rotterdam Meetup “Meet us in Rotterdam on 18 Oct as we partner up with Crypto010 Meetup to bring you a talk on ‘Decentralized Finance’.”HeartBout (HB):18 October 2019 Android Version “18th of October 2019 will be officially released Android version of HeartBout app.”BTU Protocol (BTU):and 2 others 18 October 2019 Paris Blockchain Summit The event will gather major international key players of the Blockchain ecosystem including well-known influencers, investors, government.YDS/YDS Blockchain:YDS Blockchain (YDS) ZG.COM will open YDS’s currency and coin transfer business at 14:00 on October 18th, and open the YDS/USDT transaction pair at 19:00 on October 19th.BTU/BTU Protocol:The BTU Protocol (BTU) Paris Block Summit will be held on October 18.EWS/EWS Token:EWS Token (EWS) EXX will open the EWS recharge business at 10:18 on October 15th, Hong Kong time. It is expected to open the EWS/ETH trading market at 10:18 on October 18, Hong Kong time.SIN/SIN Token:The SIN Token (SIN) BiKi platform will open SIN’s recharge and withdrawal at 18:00 on October 18th, and open the SIN/USDT trading pair transaction on October 21st at 5:00.
Encrypted project calendar（October 19, 2019）
PI/PCHAIN Network:The PCHAIN (PI) backbone (Phase 5, 82 nodes, 164, 023, 802 $ PI, 7 candidates) will begin on October 19.LINK/ChainLink:Diffusion 2019 will be held in Berlin, Germany from October 19th to 20thDeepBrain Chain (DBC):19 October 2019 (or earlier) Deploy Main Chain “Deploy Main Chain,” during the third week of October.General Event (CRYPTO):and 1 other 19 October 2019Free State Blockchain “This “unconference” style event brings together some of the top financial tech innovators, researchers, company leaders, and other…”PCHAIN (PI):19 October 2019 Main Chain Voting “Main chain: Epoch 5, 82 nodes, 164,023,802 $PI, 7 Candidates, voting will start on Oct. 19th.”Nash Exchange (NEX):19 October 2019 Nash Anniversary Nash will present their work from the third quarter of 2019. Team members will be present and to answer your questions in person.
Encrypted project calendar（October 20, 2019）
GameCredits (GAME):20 October 2019 (or earlier) Mining Reward Drop GameCredits mining reward will be cut in half at block 2519999 (~October 20). This will be the 4th halvening of the GAME mining reward!Aeternity (AE):20 October 2019 Starfleet 3 App Deadline #Starfleet3 is happening in Malta and you have by October 20th to apply!FN/IPFS&Filenet:IPFS&Filenet (FN) will be launched on the UP project Filenet (FN). The UP subscription time is from 14:00 on October 20, 2019 to 18:00 on October 20, 2019.
Encrypted project calendar（October 21, 2019）
KNC/Kyber Network:The official online hackathon of the Kyber Network (KNC) project will end on October 21st, with more than $42,000 in prize money.Horizen (ZEN):21 October 2019 Sidechains Alpha Release Horizen releasing the alpha version of industry first decentralized and unfederated sidechains.Horizen (ZEN):21 October 2019 Updated Whitepaper Horizen releasing an updated whitepaper.Kuverit (KUV) :IDAX will list #Kuverit (KUV) and open trading for KUV/BTC trading pair. is going to be listed on 21 Oct, at 10:00 am (UTC+8).
Encrypted project calendar（October 22, 2019）
ZRX/0x:The 0x protocol (ZRX) Pantera blockchain summit will be held on October 22.Locus Chain (LOCUS):22 October 2019 Public Test Begins Public test runs for three days from October 22nd to October 24th.IOTA (MIOTA):22 October 2019 EclipseCon Europe Next week, join Lewis Freiberg, our Director of Ecosystem, to learn how to build an ecosystem around IoT focused distributed ledgers.
Encrypted project calendar（October 23, 2019）
MIOTA/IOTA:IOTA (MIOTA) IOTA will host a community event on October 23rd at the University of Southern California in Los Angeles with the theme “Connecting the I3 Market and Experiencing Purchase and Sales Data.”BTC/Bitcoin:The WBS World Blockchain Summit (Middle East) will be held in Dubai from October 23rd to 24th.Cardano (ADA) and 1 other:23 October 2019 WBS Dubai “One of a kind gathering of 500+ curated & pre-qualified investors, CEOs, CIOs, CTOs, Heads of Blockchain, Chief Digital OfficersCloakCoin (CLOAK):23 October 2019 (or earlier) CloakCoin Competition “CloakCoin competition : solve the CloakCoin ENIGMA transaction, 3rd round.”Loom Network (LOOM):23 October 2019 Singapore Meetup “Unstack the Stack Series: Loom Network” from 6:30–8:30 PM (SST).
Encrypted project calendar（October 24, 2019）
BCN/Bytecoin:Bytecoin (BCN) released the hidden amount of the Bytecoin block network on October 24.Horizen (ZEN):24 October 2019 Weekly Insider Team updates at 3:30 PM UTC/ 11:30 AM EDT: Engineering, Node network, Product/UX, Helpdesk, Legal, BD, Marketing, CEO Closing thoughts, AMA.ANT/Aragon: Aragon (ANT) Aragon Network will hold the theme “DAO: ICO and DeFi next step” in Hong Kong on October 24th?DATA/Streamr DATAcoin:Streamr DATAcoin (DATA) Streamr Network Technology Exchange and Project Development Conference will be held in London on October 24th.Lisk (LSK):24 October 2019 Coding Workshop — Berlin “During this workshop you will acquire the skills to create custom transactions with the Lisk Alpha SDK using Node.js.”
Encrypted project calendar（October 25, 2019）
ADA/Cardano:Cardano (ADA) The Ada community will host a community gathering in the Dominican Republic for the first time on October 25.Crypto.com Coin (CRO):25 October 2019 Live AMA with CEO “Live AMA with our CEO@Kris_HKon@cryptocom’s Twitter next Friday, 25 October, 11AM HKT.”
Encrypted project calendar（October 26, 2019）
KAT/Kambria:Kambria (KAT) Kambria will host the 2019 Southern California Artificial Intelligence and Data Science Conference in Los Angeles on October 26th with IDEAS.BTC/Bitcoin:CoinAgenda Global Summit will be held in Las Vegas from October 26th to 28thHorizen (ZEN):26 October 2019 (or earlier) ZEN 2.0.19 Upgrade Zen 2.0.19 upgrade at block #610000, which is expected around October 26.
Encrypted project calendar（October 27, 2019）
ICON (ICX):27 October 2019 Money 20/20 USA Event Money 20/20 USA in Las Vegas from October 27–30.
Encrypted project calendar（October 28, 2019）
LTC/Litecoin:Litecoin (LTC) 2019 Litecoin Summit will be held from October 28th to October 29th in Las Vegas, USABTC/Bitcoin:Mt.Gox changes the debt compensation plan submission deadline to October 28ZEC/Zcash:Zcash (ZEC) will activate the Blossom Agreement on October 28thStellar (XLM):28 October 2019 Protocol 12 Upgrade Vote Horizon v0.22.0 has been released, which supports Protocol 12. This gives everyone ample time to prepare for the Protocol 12 upgrade voteCelsius (CEL)and 3 others: 28 October 2019 Litecoin Summit “…The Litecoin Summit offers two fun, jam-packed days with something for everyone.”
Encrypted project calendar（October 29, 2019）
BTC/Bitcoin:The 2nd World Encryption Conference (WCC) will be held in Las Vegas from October 29th to 31st.ICON (ICX):29 October 2019 Decentralization “As a result, the decentralization schedule of the ICON Network has been changed from September 24, 2019 to October 29, 2019.”Ark (ARK):and 10 others 29 October 2019 WCC 2019 Second annual Blockchain and Cryptocurrency Technology event, World Crypto Conference (WCC), October 29th — October 31, 2019.Insifa (ISF):29 October 2019 Prototype Alpha “We from Insifa have decided to be more open. Our Prototype will be developed in scrum. This means new releases every two weeks.”
Encrypted project calendar（October 30, 2019）
MIOTA/IOTA:IOTA (MIOTA) IOTA will host a community event on October 30th at the University of Southern California in Los Angeles on the topic “How to store data on IOTA Tangle.”TRON (TRX):30 October 2019 SFBW19 Afterparty “TRON Official SFBW19 Afterparty from 7–10:30 PM in San Francisco.”Horizen (ZEN):30 October 2019 Horizen Quarterly Update Join our first Quarterly Update on October the 30th at 5 PM UTC/ 1 PM EST. Deeper look into Engineering, BD, Marketing, and more.Aeternity (AE):30 October 2019 Hardfork “The third hardfork of the æternity Mainnet is scheduled for October 30, 2019.”Valor Token (VALOR):30 October 2019 Transaction Fees Resume “It’s September and the SMART VALOR Platform is still waiving transaction fees for all members, until October 30th!”Aragon (ANT):30 October 2019 Singapore Meetup “Aragon on DAOs and DeFi” from 6:30–8:30 PM.Kambria (KAT):30 October 2019 Outliers Hashed Awards Outliers Hashed awards from October 30–31.Ethereum Classic (ETC):30 October 2019 Cohort Demo Day “ETC Labs hosts it’s 2nd Cohort Demo Day. Learn about the companies and project being accelerated through the Ethereum Classic ecosystem.”
Encrypted project calendar（October 31, 2019）
Spendcoin (SPND):31 October 2019 (or earlier) Cross Ledger Mainnet “Cross Ledger Mainnet Release and SPND Token Swap,” during October 2019.Spendcoin (SPND):31 October 2019 (or earlier) Blkchn University Beta “Blockchain University Beta goes live,” during October 2019.Stellar (XLM):31 October 2019 (or earlier) Minor Release “We will have 6 Minor Releases in 2019; one each in February, March, May, June, August, and October.”Bitcoin SV (BSV):31 October 2019 (or earlier) BSV Conference Seoul No additional information.Seele (SEELE):31 October 2019 (or earlier) Public Network Mainne launch has been moved to Oct 31 .Howdoo (UDOO):31 October 2019 (or earlier) Howdoo Live on Huawei Howdoo begins its exciting partnership with Huawei with listing as a featured app starting in October.Chiliz (CHZ):31 October 2019 (or earlier) App Soft Launch Soft launch of Socios App by end of October.Dent (DENT):31 October 2019 (or earlier) Loyalty Program “Afterburner loyalty program launch for all 21,6 Million mobile #DENT users will be in October!”IceChain (ICHX):31 October 2019 (or earlier) Wallet Release IceChain releases wallet during October.Chiliz (CHZ):31 October 2019 (or earlier) New Partnerships New sports and new teams joining Socios (+more updates and events) will be announced in the upcoming weeks.Horizen (ZEN):31 October 2019 Weekly Insider Team updates at 3:30 PM UTC/ 11:30 AM EDT: Engineering, Node network, Product/UX, Helpdesk, Legal, BD, Marketing, CEO Closing thoughts, AMA.PCHAIN (PI):31 October 2019 (or earlier) New Website No additional information.IOST (IOST):31 October 2019 (or earlier) New Game on IOST “Eternal Fafnir, a new role-playing game developed by INFUN is coming to you in Oct.”
Encrypted project calendar（November 1, 2019）
INS/Insolar:The Insolar (INS) Insolar wallet and the redesigned Insolar Block Explorer will be operational on November 1, 2019.
Encrypted project calendar（November 6, 2019）
STEEM/Steem:The Steem (STEEM) SteemFest 4 conference will be held in Bangkok from November 6th to 10th.
Encrypted project calendar（November 8, 2019）
BTC/Bitcoin:The 2nd Global Digital Mining Summit will be held in Frankfurt, Germany from October 8th to 10th.
Encrypted project calendar（November 9, 2019）
CENNZ/Centrality:Centrality (CENNZ) will meet in InsurTechNZ Connect — Insurance and Blockchain on October 9th in Auckland.
Positive currency correlation exists between different currencies or securities in general, when they tend to move in the same direction. The opposite is true in the case of the negative currency correlation. Not all currencies are correlated by the same degree. To measure this the trades use the so-called ‘correlation coefficient’. The actual number can range from -1.00 to 1.00. Here 1.00 ... The prices of bitcoin and gold have reached a monthly average correlation of 70%, an all-time-high, according to data analytics firm Skew. The previous peak of just under 60% was reached earlier ... One noticeable correlation since the pandemic first struck is the fact that gold (XAU), the Australia Dollar (AUD), and the Canadian Dollar (CAD) have all traded almost lock and step. Gold – the most valuable precious metal by market cap – is a unique asset in the financial space due to its position as a commodity or a currency. XAUUSD is ... This phenomenon is known as currency correlation – and it’s something that is essential for every forex trader to have a strong understanding of. In this series, we shall be looking at all the relevant aspects of currency correlation, such as how to calculate currency correlations, how to read a currency correlation table, and how to leverage this knowledge in your own trading activities. Positive Correlation Between the S&P500 and Bitcoin Price. Even more interestingly, there is a direct, positive correlation between the stock market and Bitcoin. The correlation rule states that in a portfolio, one should not add a new asset if the correlation exceeds 0.5% (in a positive correlation) or -0.5% (in a negative correlation). This way, the diversification benefit can be obtained ...
Forex Currencies Correlation with Dollar Index and Commodities
What is Bitcoin? Is it a currency? I mean it is a system of money, it is a store of value and it can be exchanged and traded. But its not legal tender and it is not controlled by a Government. NEW CHANNELS: TechStockHouse: https://www.youtube.com/channel/UC8IzbdgN-IDXlWH0dNdgGag TechCryptoHouse: https://www.youtube.com/channel/UCp7Gqpl9Kqiggr_Rs03X... If you want to watch me go into more detail about currency correlation and other great trading strategies sign up for a webinar. https://goo.gl/CNT69S Unders... Do you have an idea of where oil and gold are heading? Use your existing experience in other markets to supplement your currency trading. This class will exp... Brian Dolan, chief currency strategist at FOREX.com, shares his view on how the various commodity markets correlate with the currencies and what he thinks about gold's recent rise.