Altcoin Sidekick

Speculating in cryptocurrency is not about being right or wrong; instead, the most successful speculators and investors, focus on recognising the moments in time when supply and demand become unbalanced, creating asymmetric trading opportunities, where risk can be quantified, and, even if the position fails, valuable information can be received about the most likely future direction of the trend.

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If you want to invest not over the next hour, day, week, or month, enjoying the benefits of a short-term pop in price, history suggests those who understand the drivers of long term trends, detecting societal shifts whose effect will last not a month or two but years, hold an advantage.

In an era dominated by fake news, in an age where the general public is rapidly losing faith in their governments, and in an environment of rising populist thinking, something needs to be done. A solution needs to be found — the only question is: Are blockchains the solution?

As Bitcoin approaches a fibonacci 38.2 retracement, a level closely watched by technical analysts, let’s talk about the drivers behind long term trends.

The banking system is using a technology that’s 45 years old. The Ripple protocol, using XRP, is designed for faster, almost instant interbank payments, disrupting the global interbank system, but the SWIFT cooperative is not just going to let a new technology like Ripple takeover. FinTech banks are challenging traditional banks, offering app-based services, including multi-currency accounts, and the ability to buy and sell fiat currency at or near the actual exchange rate. But what if you...

With debt levels at record highs, the likelihood of a massive shakeup of the financial system increases. As consumers own higher levels of debt than ever before the likelihood of a six sigma event increases. Out of a future crisis, will blockchain technology emerge like banking, bonds, and stocks, as the fourth great invention of finance?

The tendency for the worst news to coincide with the end of a down move and the best news to coincide with the end of an up move has, like the slope of hope and the wall of worry, been turned into a handy aphorism. It shows up in the stock market, the forex market, the bond market, in fact, all liquid financial markets, including cryptocurrencies, exhibit this behaviour - even real estate.

Maybe, you just intuitively understand the role cryptocurrencies and blockchains will play in the future, but in the absence of engineering or tech skills, and, if you're not a futurist savant, where do you start?

Can cryptocurrencies be used as proxies for the strength of the underlying trend? Speculators have, over the years, tried many approaches to being on the right side of trends, using ideas and techniques ranging from technical analysis to esoterica. They’re all opaque. Traditional financial markets are a discounting mechanism operating in a window between six and eighteen months into the future. So, if TA has limited forward vision, are there other methods you could use?

If the cryptocurrency market has bottomed, hitting the trough of disillusionment in December 2018, then, what is more likely to drive cryptocurrencies forward in the future? Complex bolt-on bionic parts to boost existing blockchain limitations, or could it be something you’re already familiar with?

As the usage of cryptocurrencies increases, especially cryptocurrencies designed to be used as digital cash and payment systems, have governments been given a free case study on the power of data profiling? And, if governments use blockchains as the technology for cashless societies, because of the ability to track and trace every single transaction, will the profiling of social media accounts by Cambridge Analytica look like child’s play compared to the picture the government will have of...

A casino floor covered in slot machines is not a bad metaphor to use if you had to guess which, out of thousands of coins and tokens competing for the big time, will be the household names of tomorrow. One pragmatic approach is to follow the money. Out of the thousands of potential choices, around 95% of the total volume in the cryptocurrency markets flows into the top 20 coins by market capitalisation.

Out of distrust in centralised financial systems, came Bitcoin. And from Bitcoin, blockchains. In the future, what if blockchains are used for something other than their original intent? Could a solution to a debt crisis, an idea born to democratise citizens control of their assets, be used as a system of control? With the public long gone, is this why the big players are interested in cryptocurrencies?

Poker has a lot in common with financial speculation, and as the great Amarillo Slim said, “If you can’t spot the sucker in your first twenty minutes at the table, you are the sucker.” Anytime this is pointed out to someone, they’ll tell you it doesn’t apply to them, unaware that the subconscious patterns that manipulated them in the first place are hard at work behind the scenes protecting them from themselves.

Just like cryptocurrencies, personal computers went through a boom. If you could travel back in time, imagine taking a seat at the inaugural meeting of the Menlo Park Home Brew Computer Club, where enthusiasts were busy programming, designing, and dreaming. Sitting there, in Menlo Park in 1975, would you recognise the man who would be king?

The biggest problem with technical indicators is not the indicator itself, but you. Human beings are pattern recognition machines. Subtle shifts, changes in light or sound, and our fight and flight mechanisms kick in. This kept you alive in our hunter-gatherer prehistory, but it does not serve you so well when looking at patterns or shapes on a chart.

Consistent speculators approach the business of market speculation, just like a building company, who price bids according to their expectation of success, factoring in lost bids because they don’t expect to be awarded every bid they make. Before the 5% engage with the enemy, they have studied the lay of the land, and know the expected cost. Like the building company, the 5% know without reasonably accurate expectations, they have little chance of remaining in business.

A cryptocurrency wants to muscle in on the most valuable business model in history. How big is the potential, and what problem is this upstart cryptocurrency attempting to solve?

The 5% understand controlling the order flow is a complete waste of energy and effort, and it’s mentally draining too. The 95%, in contrast, have not yet figured out that anything can happen at any time and that controlling the process is impossible, like trying to hold back the tide.