Trading Bitcoin 006
Hello satoshi snipers!
It’s been a wild week and, as you know, the range of prices of our favorite asset of all time has been $28,500 to $31,500 — a solid 3,000 points of trading potential! If you even did well-timed spot buys / sells you could have easily added 10%+ to your entire satoshi stack; I hope you did this anon!
I know I did (and a handful of us degenerate sat snipers)!
I had quite a few wins this week but, on-balance, I’m a bit behind my monthly goal since I’ve spent more time just firing-off on Twitter (god I love trolling maxis) and I simply cannot help myself:
And in addition I’ve spent a bit of time doing mobile-only worfklows and also a ton of time sprucing up our Discord Community and make a big change to the paid subscriptions: Personalized 1-on-1 coaching and mentorship!
🎯💰 — I’ve got room (literally) for just 3 or 4 folks right now but would love to spend the next month trialing this offer and seeing how it goes. Learn more here.
Finally, there are a bunch of juicy links below that should provide you with context on what I’m reading and what I’m watching out for.
I get it, I really do. Most folks want a price prediction but that’s not really what I’m into since as a trader I don’t really care about the price since I simply care about how much alpha I can get on the delta moves.
But, having the larger context in-mind is very important for the trader — even and especially those that day trade — since it helps you place positions with this larger bias to off-set risk. Practically-speaking it means that you’ll create more long orders than short in a "secular bull market” and you’ll short bitcoin more often than you’ll long her in “bear markets”.
And right now I’m shorting her like a mf.
If you must know then here’s “the juice” and this is nothing that you don’t already know: Bitcoin is a risky asset class and those are the first to be dumped when times are tight and hard. Right now, with rampant inflation and economic downturns in our global economic system, people are scared and they are hoarding cash as a natural, basic instinct.
And I don’t think that we’re even close to done:
I want all of you to stack as many satoshis as you possibly can in whatever synthetic way you think is best. Of course, as traders, we leverage our knowledge of bitcoin to maximize our stacking and it’s true alpha the longer you get to know her.
Good luck friends and stay safe.
To infinity & bitcoin,
— 8ɃIT
Weekly Notes:
This is a collection of articles and reads that I believe are important to consider when trading bitcoin since the (notional) value is directly impacted by all sorts of market participants, sentiment, and analysis. I hope you find them useful!
Maxis really are a lonely crew. Everything’s bigger in TX and Norway is thinking big too while the “kimchi” premium is wearing thin while banditos are doing China, of course (if not directly). But you promised that it wouldn’t die in a fire! Mortgage problems are big problems and will have already impact(ed) bitcoin. The battle for your privacy has only just begun (and your future self, possibly). New wallet. Cloudflare. Testnets. The dollar and euro are dancing. Tether, that you? Deeper integration into professional sports could be very, very good for bitcoin. Institutes. Mo money, mo problems. RIP good times.
And good luck to you, Arthur. BitMEX created perps and I’m so grateful for it.
The market value to realized value ratio compares the current value of all coins to the al coins to the value they have been purchased for. A ratio of 1 means the market is overall at a loss. The larger the ratio the more coins are in profit.
Things are not looking good for the long-term hodlers! Better learn to trade it (down) while you still can!
The “state” of crypto (at least according to these ponzi lovers):
This is everything:
Truth hurts:
A few good videos:
And finally, a quick overview of Terra / UST debacle:
The CEO of Terraform Labs, Do Kwon, the company that built the Terra blockchain that fell to pieces last week, has a proposal to reboot a system whose value fell from $20.7 billion Monday to as low as $58 million Friday.
Why it matters: Currently, Terra's infrastructure is basically gone. All its value has been obliterated, but, theoretically, it still has a community of users and entrepreneurs.
If it succeeds in a reboot, it will be evidence that all of the crypto rhetoric about "community" has some merit.
Catch up quick: Terra's key product was its terraUSD (UST) stablecoin, which collapsed last week from its $1 peg. The Terra project began as a way for Asian e-commerce companies to improve their profit margins, but it pivoted to decentralized finance in 2020.
Details: The plan basically comes down to redistributing a new governance token to various stakeholders, most likely on the theory that if they stick around the blockchain can be resurrected, and some of the value of the community Terra built up can be recovered.
In Kwon's new proposal, 40% of the new governance token would go to everyone who held terraUSD at the last moment it was worth $1, 40% would go to anyone who holds UST now, 10% would go to holders of luna at the very end and 10% would go to a community fund.
Governance tokens are kind of like equity in a company. They can vote on the direction a blockchain takes. In Terra's prior iteration, the governance token also defended the price of the stablecoin.
Zooming out: This is essentially a fork, which usually happens when some set of users disagree with the direction of a blockchain and start a new version. It's also feasible for one to just stop running and restart.
If people use it, it will have value. If they don't, it won't.
What we're watching: If speculators start scooping up luna and terraUSD tokens, that means those people believe there's a reasonable chance this new chain will have some value. It makes these tokens a bargain today but sounds like they are holding off on launching a brand new stablecoin.
What they are saying: "So what remains? While UST has been the central narrative of Terra’s growth story over the last year, the Terra ecosystem and its community is what is worth preserving," Kwon wrote.
"While UST has not been successful, the Terra community will find ways of iterating on the idea at some point in the future," Kwon added.
The bottom line: Terra's crash and burn might be the most dramatic of any blockchain ever. If it can salvage anything, that will either prove crypto technology's resilience or its investors' masochism. But it's a long shot.