Blockchain Revolution: from the internet of information to the internet of value

[kneehighs]

6 hours ago, HappyinHeels said:

I have a friend who called me before I retired telling me he had bought some rural land in Vermont largely with money made from buying Bitcoin. Just another way to invest. I would, however, offer one word of advice when contemplating any investment involving Facebook or Google: RUN!  Both these companies have shown their disdain for the privacy of ordinary people and have helped make the City of San Francisco unlivable for average folks. Better than 44,000 evictions since 1991 is evidence of that. No wonder the homeless problem is at epic levels there. HinH

Agreed!  FB and Google will be able to fill every KYC (Know Your Customer) nook and cranny in existence -- and then some.  Orwellian dystopia made reality when data privacy is compromised to gain regulatory approval.  

 

 

[kneehighs]

 

Currency Wars galore nowadays!

Emotions moving the market based on Trump vs. Fed.  See my Trading View chart attached.

Trump/Mnuchin for the first time in 25 years accused a major US trading partner, China, of being a currency manipulator.  Just a thought, but Trump with his history of Bankruptcies could be the Fall Guy/scapegoat for being the President easy to blame for Bankrupting the US.  The straw that broke the camels back....since he is pressuring for easier money, which is unsustainable. 

Truth is, China is just keeping a regular schedule. 

The US FED announces it wants to start it's own real time payments system, since that would be independent (LOL, and I have bottled water from Mars to sell you)

Meanwhile, Bitcoin which is Hard Money (hard to inflate, hard to reproduce, basically impossible to fractionally reserve, can't be controlled by any government, unconfiscatable) is quietly doing it's thing leading up to it's May/June 2020 halving.  

The Real War is Easy Money (FIAT) versus Hard Money (Bitcoin).

Buy Bitcoin. (Dollar Cost Average).  It's not just another investment. 

It's a whole new monetary system.

 

 

 

 

Edited August 6, 2019 by kneehighs
Able to add higher res S&P 500 chart

[kneehighs]

So in this easy money credit/debt cycle, imho, Bitcoin provides the best Risk/Reward ratio for long asymmetric upside that exists.

BONDS: US Bond yields are nearing All Time Lows

EQUITIES: Equities are at All Time historical Highs (SPX)

REAL ESTATE: (London here) is near All Time Highs

Less than optimal timing to get into any of the above, imho.

With a low time preference (Stanford Marshmallow test. 2 later or just 1 now=I'll wait for ROI), with delayed gratification and long term perspective, bitcoin just screams bullish.

 

 

 

 

 

[kneehighs]

As of today, BAKKT will launch physically settled Bitcoin Futures for Institutions in September. 

BAKKT is owned by ICE, who owns the New York Stock Exchange.  

https://medium.com/bakkt-blog/cleared-to-launch-8dfc3e6f9ed0

The regulatory hoops they had to jump through to achieve this are remarkable  (SEC, CFTC, NY State Department of Financial Services, etc)

The narrative that Bitcoin is only for Drug Money and Money Launderers is dying.  (quite laughable since it's a decentralized, transparent ledger)

I can't wait till the rest of the world catches up in 10 years so I can say a big "Told you so" to all the people who thought they were so smart trying to poke holes in Bitcoin. 

It will be greatly pleasing.

[Bubba136]

Yeah!  Then we all could say “We knew him when”.   :-)

[kneehighs]

Absolutely unreal.  Argentina's Central Bank now prohibiting citizens from buying 10K + in $USD.  Can you imagine the effect on the wealth of it's people?

https://www.clarin.com/economia/restriccion-cambiaria-personas-fisicas-podran-comprar-10-000-dolares-mes_0_HonH2Z9Wo.html

This is another reason why a Censorship Resistant Store Of Value like Bitcoin makes great sense.

Edited September 1, 2019 by kneehighs

[kneehighs]

Advance planning my exit for the next 2021/2022 parabolic advance of Bitcoin/crypto.  Manage entry point risk with Stop/Loss (stop limit orders).  Manage exit risk with advance planning now.  At least another 18 months left to mature my exit strategy.

This blow off top could be unlike anything imagined by this generation.  The euphoria will reach staggering heights as Wall Street money now can finally FOMO (Fear Of Missing Out) in.  If Wall Street drives 60-70% of volume and price action in traditional markets, imagine what impact it will have on an uncorrelated asset like Bitcoin?  All previous market cycle tops were purely driven by retail investors (with some hedge funds playing).  Emotions will be the enemy.  People will feel irrationally elated.  Bitcoin to a million dollars!  Bitcoin to the moon!  Lambo!  People will be taking out second mortgages.  IT WILL BE EPIC.  That will mark the time to sell. 

Managing risk in exit strategy will involve a confluence of indicators.  The weekly RSI will be among them.  All indicators subject to change with new market data.  Black vertical lines signify Bitcoin Halvenings, where daily Bitcoins mined gets cut in half. If history repeats itself, parabolic gains will occur after the 1/2ing and after Bitcoin clears it's former All Time High (ATH) which is 20K (blue horizontal trend lines in chart).

Edited September 14, 2019 by kneehighs

[kneehighs]

The above formula for RSI topping over 84.82 on the weekly would give 1 week advance notice to sell off portions during blow off top.  

By the way, anyone mocking Bitcoin as an investment is really mocking their own risk management strategy.

If you buy Bitcoin at 10K + expect it to hit 50K in 2 years + stop loss at 6K, your Risk to Reward ratio is 1:10.  

If you buy Bitcoin at 10K + expect it to hit 50K in 2 years + stop loss at 5K, your RR ratio is 1:8.

There is no better RR ratio in any other asset class now.

Edited September 15, 2019 by kneehighs

[kneehighs]

I'm sure Bitcoin has its skeptics reveling in the pleasure of it's current correction.  

The break from 3.2K  to 14K caught a lot of retail by surprise.  Not a single person I know predicted it.  IMHO, if it was a "real" whale or institutions front running BAKKT, they would have first bought futures and options.  That would have signaled to observers an incoming move.  After they bought futures/options, a "real" whale would've then bought at spot, sold the futures, and then sold the spot. 

My opinion is that the Plus Token Ponzi Scheme from China was responsible for the sudden bullish price action.  They still have 95,000 Bitcoin's in their addresses.  And if you track those addresses at the spike up, they increased in the number of BTC.  And if you cite the date their executives were arrested, price spikes downwards from there.  I've been ridiculed for this "conspiracy theory" on Bitcoin, but hold to my belief: the bull market was caused by the Chinese Plus Token Ponzi.

And for those critics who use this event to devalue Bitcoin.  So be it.  Such issues are common with new innovation.  

 

[kneehighs]

I haven't updated this thread in forever.

Any kind of Technical Analysis here is purely speculative in nature.  It runs largely independent of China's Xi actions towards "blockchain" and other fundamental drivers that can impact price action.  Debates infinitely abound.  Eventually, one must make their own decision.  This is mine.

This chart (my work, not someone else's) times the probability for the next Bitcoin Top at Q4 2022 (total crypto market cap will follow).

I chose historical patterns for my planning.

1.  TIME from Bitcoin halvings to next market top: 12 months and 17 months.  Assume next is 24 months.

2.  TIME from Bitcoin bottoms  to next market top: 8 months, 24 months, 36 months.  Assume next is 48 months.

3.  Both times overlap in Q4 2022.

Assuming the rate of time increase stays the same, the chart would suggest a market top probability in Q4 2022.

[kneehighs]

Current fear index is HIGH.  Even Buffet says buy when others are fearful and sell when others are greedy.

https://alternative.me/crypto/fear-and-greed-index/

Calculate downside risk by calculating time horizon. 

If Time Horizon is hold out past the 2023 crash:

Downside Risk: 2019 entry price of 7.0K = 5 units at $700/unit with Stop Loss at 3.5K

Upside Reward: 2023 price after correction of 85% from top of 50K (conservative estimate for high) = $15,000 per bitcoin or 11.4 Units of Reward 

So 5/11 Risk To Reward Ratio if hold bitcoin past the next blow off top and ensuing correction.  

However if Dollar Cost Average out on the parabola starting at $50,000 per bitcoin, 5/11 easily starts to translate to a 5/61 RIsk/Reward ratio.

Side note: If all goes as planned, I'll have $10,000 to throw away on 10 alt coins at the start of 2022 (could be 2021, but I doubt it).  That 10K which I'm prepared to lose all of, will be distributed across 10 alt coins.  I'll plan on selling the alt coins during the manic phase of the parabola.  The manic phase of the alt coin parabola follows the Bitcoin parabola.  Not that history will repeat itself, but if alt coin gains in the next parabola mirror the gains from the 2017 bull run, this strategy could work.  1K invested in Ethereum in Jan of 2017 was over 90K in Dec, 1K invested in Ripple in Jan of 2017 was over 300K in December, 1K invested in Dash in Jan 2017 was over 90K in December 2017.  This is all subject to change as new data enters the market.  

 

Edited December 15, 2019 by kneehighs

[kneehighs]

Happy New Years to anyone who still reads this thread!   IMHO, 2022 will be the year of the next parabolic bull market, in which euphoria and excitation gets everyone talking about buying Bitcoin and crypto.  

That's when I'll be selling. 

Here's an interview with billionaire Jack Dorsey, who "stacks sats" regularly.  A sat is the smallest denomination of Bitcoin and thus "#Stacksats" is the community hashtag for collecting small units of Bitcoin.  https://www.coindesk.com/most-influential/2019/jack-dorsey?utm_source=twitter&utm_medium=coindesk&utm_term=&utm_content=&utm_campaign=Organic

My monthly chart basics haven't changed.  Forecasting a market top near December 2022.  The most conservative estimates predict a Bitcoin price top at $50K.  The most liberal predict a Bitcoin price top at $200K.  This chart doesn't analyze for price top, it analyzes for time.

 

Edited January 1, 2020 by kneehighs

[kneehighs]

Learning so much so fast.  This LOG chart and another LOG-LOG chart (where both X-axis Time and Y-axis price) are log driven are fast becoming my chart of choice.

This is a LOG chart of predicted Bitcoin price action for the coming 3 years.

Coupled with Fibonacci levels adjusted for the LOG chart, it suggests a minimum new low All Time High of 96K USD per Bitcoin in Q4 2022 and maximum new All Time High of 200K USD per Bitcoin in Q4 2022.  The LOG chart is not my original content.  Nor are the logged FIB levels.

The chart also suggests the current price range of 7K (ish) is an accumulation zone bottom. I bought a position on Thursday under 7K.  Prepared to buy more positions under 7K, but not counting on it.

As always, not financial advice.  And data always subject to change with new info.  

[kneehighs]

Here's the whole weekly chart from the Brave New Coin Liquid Index (BLX).  Data ranges back to Bitcoin price action in July, 2010

There is debate in the community about when the next blow off top (parabolic needle) will occur.  Some think Q4 2021, they're adherents of the 4 year cycle.  Others think Q4 2022.  This is based on the law of diminishing returns.  With increased market cap, increased volume, price swings aren't as steep.   On average, All Time Highs are taking longer to achieve measured from both All Time Lows and Halvings.

The bottom line is this system with Fib lines inside it accommodates for blow off top in both 2021 and 2022.  I'll be lead by a combination of fib lines, rsi, macd, and then set position exits accordingly.

Combined with other indicators, this fib line action has evolved to be my go to chart of choice for identifying today's price bottom and the future price top.

Edited January 4, 2020 by kneehighs

[kneehighs]

Bitcoin as hedge during global uncertainty?  It's possible.  Especially given it's price action correlation with Soleimani's assassination, and the Iran missile strikes.

https://twitter.com/MessariCrypto/status/1215030003261460497?s=20

Edited January 9, 2020 by kneehighs

[kneehighs]

I'm just about done accumulating Bitcoin.  For me, once it passes 10K, I'm done.  

The following are tools I will use to Identify the next blow off top:

The Golden Ratio Multiplier

The MVRV Z-Score

Bitcoin Logarithmic Growth Curves

I will never stop learning, especially as the next bubble euphoria approaches.  

This will probably be the greatest wealth generating event (and losing event for some) of the 2020's decade.  Not gonna miss this.

[kneehighs]

Bought ETH/USD over the weekend.

Target is 5k, 7.5K, and 8K USD per ETH/USD. 

Plan is to dollar cost average out, since timing the top will be tough (but not impossible)

Risk:Reward is about 1/240

I'll shelf this for the top of the next bull run.  Prepared for that to be Q4 2021 or later.

Edited February 19, 2020 by kneehighs

[kneehighs]

So I really haven't had a chance to update lately.

Here's my personal humble opinion of the current market economy.

1.  Fiat currencies like the $USD aren't pegged to anything now.  The British Pound isn't pegged to gold, the Euro isn't pegged to gold.  Nothing is.

2.  The US government spending is exceeding tax revenue.  Probably the same in other major global economies

3.  Powell from the US FED just announced interest rates are ZERO.  US FED also now requires ZERO reserves for banks.  Banks are required to keep ZERO reserve.  

4.  The US Bond market is a 100 Trillion dollar market.  If Bonds now yield less than inflation, the entire bond market will be at risk.  

5.  Eventually people will wonder what's wrong with bonds?  They're denominated in $USD.

6.  This will be a global currency crisis, uncovered because ot the problem with bonds.

7.  There will be many options to how countries choose to resolve this issue.  Bitcoin could be one.  So could Gold.  Bitcoin settles equity ownership almost instantly though.

8.   It's a crisis right now, so markets are psychologically in panic mode.  Fear is causing market to sell off risky assets (Risk Off Environment) to preserve cash for basic living expenses.  When markets sell risky assets for fiat currency, it's called BIDDING the dollar.  Markets are bidding the $USD.  All assets correlate in a peak emotional panic.  Conversely, assets correlate in peak greed/exuberance mode too.  In between is when specifically bitcoin non-correlates with the S&P.

9.  When Corona hits a key inflection point on the below chart, it will be time to long fast (for me).  Keep that gun powder dry.  For me, the Inflection point occurs when the new numbers are smaller than the previous day for 3 days in a row.  When new numbers are smaller, people will feel safe again and turn Risk On.  Until the key inflection point occurs, I'm in full cash preservation mode.  (I did buy the wick down from Thursday and sell for a small profit, but not repeating as risk is way high now).

10.  Governments will overinflate the economy.  The buying power of fiat from whatever country one is in will be at risk.  

That's my plan for how I view the current financial situation.  

Edited March 16, 2020 by kneehighs

[Shyheels]

Bitcoin has dropped like a stone and gold is soaring to a seven-year high....

[kneehighs]

Gold will continue to drop during the crisis.  Look at how it performed in 2007/8.   Currently,  it's down 11% over the last few days.

I think Gold along with other assets will pump after the inflection point.  

Of course Bitcoin dropped.  Everything dropped. 

 

Something interesting.  Despite Gold's daily price downtrend in this crisis, there's an increased demand for custody of physical gold.

Seems smart since there's a risk there's more gold traded on paper than there is physical gold to back the paper traded version.

 

 

Edited March 16, 2020 by kneehighs

[kneehighs]

On 3/16/2020 at 2:14 AM, kneehighs said:

4.  The US Bond market is a 100 Trillion dollar market.  If Bonds now yield less than inflation, the entire bond market will be at risk.  

 

 

In other words, US Treasuries can't carry their own weight.  FED magic money prints to bailout. 

 

 

[kneehighs]

From Tyler Durden at Zero Hedge, “The endgame is simple: an initial deflationary bust followed by hyperinflation, first in asset markets and soon after, as the Fed triples down on helicopter money until it eventually buys gold outright in the final dollar devaluation, everywhere else.”

Eventually Bitcoin will shine.

EDIT: I took out Gold.  Took the time to investigate it.  Look at the difference between the bid and ask price for physical gold (merchant price screen shot).  Bid Gold at $1760 and ask at $1590?  Bid at $17765 and ask at $16095?  This is known as the bullion premium.  Why pay that premium when I can pay .5-1% maximum to trade Bitcoin?  

# of new bitcoins mined daily gets cut in 1/2 this May.

--unlike Gold, Bitcoin has low storage costs.  Cold storage of Bitcoin in an electrum wallet is far cheaper than storage of physical gold in a vault.
--unlike Gold, precise supply schedule
--unlike Gold, verifiable authenticity
--unlike Gold, easily divisible, easily transferable
--unlike Gold, maximum Supply cap (21 million)
--unlike Gold, nearly instant settlement

Edited April 7, 2020 by kneehighs

[kneehighs]

“The root problem with conventional currency is all the trust that’s required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust. Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve.” — Satoshi Nakamoto

Future of the $USD in attached picture.

[kneehighs]

"With the initiation of the Fed’s complete takeover and control of the US financial economy, there is now absolutely no accurate pricing discovery in the capital markets and we have entered a period of total manipulation. In light of this, the only markets I have an interest in are those where the heavy hand of government is not involved or only minimally involved." Bob Rodriguez

"this is the end of the capital markets as we have known them. We have now entered unlimited QE and MMT where there is no escape" Bob Rodriguez

https://www.advisorperspectives.com/articles/2020/03/24/preliminary-thoughts-the-new-world-order

Bitcoin anyone?

[Shyheels]

Er...no. I’ll stick with coin of the realm, thanks. 

[meganiwish]

I'm with Shyheels.  The rest is all tosh.  Money isn't an actual thing, it's just a token for a share of actual things.  The greengrocer will sell me potatoes because he trusts the money I give him, which he can use to pay his rent.  He trusts the money because an authority guarantees its value.

  Dealing in currency is just usury, and bitcoin is pure usury, trying to get a bigger share without doing any work.  Ultimately, usury is stealing from the poor.  Proud of yourselves, Bitcoin Boys?

[Bubba136]

Times are hard!  Buy land so you can grow your own food..  buy bullets so you can keep it for your family.

[kneehighs]

On 4/10/2020 at 4:43 PM, Shyheels said:

Er...no. I’ll stick with coin of the realm, thanks. 

 

On 4/10/2020 at 11:54 PM, meganiwish said:

I'm with Shyheels.  The rest is all tosh.  Money isn't an actual thing, it's just a token for a share of actual things.  The greengrocer will sell me potatoes because he trusts the money I give him, which he can use to pay his rent.  He trusts the money because an authority guarantees its value.

  Dealing in currency is just usury, and bitcoin is pure usury, trying to get a bigger share without doing any work.  Ultimately, usury is stealing from the poor.  Proud of yourselves, Bitcoin Boys?

Cool.  Bids and Asks.  Two sides to the market.  You take yours.  I take mine.

 

[meganiwish]

In English?

[kneehighs]

You're long fiat currency.  I'm short fiat currency (mid term, long term).  These two sides make the market what it is.