How Much Bitcoin Does it Take to Break Into the 1% Club?
The "Bitcoin 1% club" refers to the top 1% of Bitcoin holders worldwide. It's hard to determine how much BTC you need to be in the 1% club, since Bitcoin isn’t evenly distributed among addresses, and there are many lost Bitcoin. Since its creation just over a decade ago, Bitcoin’s price has risen far and fast, becoming one of the best-performing assets in recent years. Theory suggests that you’d need an investment of 15 Bitcoin to join the 1% club. At today’s prices, that’s over $100,000. According to a chart published by Blocklink, 15 Bitcoin is the magic figure. Blocklink reached this conclusion by disregarding wallet and address data, and assuming no lost Bitcoin in its calculations of 25 million Bitcoin owners. The study also reportedly considered power law applied to the distribution of Bitcoin wealth, which was seen as equivalent to global wealth. According to this calculation, it takes 15 BTC to be in the top 1% of holders. Source: Blocklink.info At the time of their study, in 2018, Blocklink also claimed that 225,000 Bitcoin owners held this amount of Bitcoin, making the 1% club pretty exclusive. However, different studies make different assumptions, and because there is no precise or transparent way of identifying who owns which addresses, it’s actually very hard to know how much Bitcoin you would need to enter the crypto community’s elite.
There are signs that a major Bitcoin miner (who was liquidating stored Bitcoins to keep power going) has officially gone busto.
Here you see major hash decline: https://www.blockchain.com/charts/hash-rate Here you can see '1st spends' of Bitcoin https://terminal.bytetree.com/bitcoin (I can't verify the accuracy of this). I've been watching 1st spends a while, averaging like 15,000 more Bitcoins spent than mined for the last year. That's like $180 Mil. First spends can only be done by miners. Spending more than mined basically means they are spending from old blocks (like blocks that paid out 50 BTC, 25 BTC, 12.5 BTC etc). There is some bonus value to first spend coins that I don't quite understand, but basically you get 10% or 20% more than the Bitcoin value when you spend them, because they are completely untraceable or something like that. You can sort of trace Bitcoins, but it's very, very hard to trace newly mined Bitcoins until they are spent and linked up with other assets of said individual. So over the last year, someone has been liquidating these reserve Bitcoins, while hash power of Bitcoin has gone up like double from where it was and payouts have fallen in half, so mining is paying like 25% of what it was this time last year, when BTC was $10k (presuming you stay on old equipment, etc.). I could imagine a situation where a BTC bull holds these first spend coins for a long time, planning on a rapid price jump which takes a long time to materialize. And then combine that with he $3.5k Corona / Oil dip, which basically forced liquidated everyone on margin position (which Bitcoin bulls tend to do), and I could see a scenario where someone had a wonderfully huge Bitcoin position, and mining op, and then got all their free coins liquidated by margin call, and spent their '1st spend' coins to keep ops going, hoping for rapid price acceleration. This is all conjecture but I've been expecting something like this to happen. Maybe it's just a blip, and I'm totally wrong, and hash climbs back up, but if it stays down and the BTC price goes up, then I'm thinking a miner went busto, who had be applying $10's of Millions of sell pressure monthly onto the system.
Wandering From the Path? | Monthly Portfolio Update - August 2020
Midway along the journey of our lifeI woke to find myself in a dark wood,for I had wandered off from the straight path. Dante, The Divine Comedy: Inferno, Canto I This is my forty-fifth portfolio update. I complete this update monthly to check my progress against my goal. Portfolio goal My objective is to reach a portfolio of $2 180 000 by 1 July 2021. This would produce a real annual income of about $87 000 (in 2020 dollars). This portfolio objective is based on an expected average real return of 3.99 per cent, or a nominal return of 6.49 per cent. Portfolio summary
Vanguard Lifestrategy High Growth Fund $733 769
Vanguard Lifestrategy Growth Fund $41 794
Vanguard Lifestrategy Balanced Fund $78 533
Vanguard Diversified Bonds Fund $110 771
Vanguard Australian Shares ETF (VAS) $216 758
Vanguard International Shares ETF (VGS) $64 542
Betashares Australia 200 ETF (A200) $237 138
Telstra shares (TLS) $1 540
Insurance Australia Group shares (IAG) $6 043
NIB Holdings shares (NHF) $5 532
Gold ETF (GOLD.ASX) $121 976
Secured physical gold $19 535
Ratesetter (P2P lending) $8 998
Bitcoin $177 310
Raiz app (Aggressive portfolio) $17 421
Spaceship Voyager app (Index portfolio) $2 759
BrickX (P2P rental real estate) $4 477
Total portfolio value $1 848 896 (+$48 777 or 2.7%) Asset allocation
Australian shares 41.5%
Global shares 22.6%
Emerging market shares 2.2%
International small companies 2.8%
Total international shares 27.6%
Total shares 69.2% (5.8% under)
Total property securities 0.2% (0.2% over)
Australian bonds 4.4%
International bonds 8.9%
Total bonds 13.3% (1.7% under)
Gold and alternatives 17.2% (7.2% over)
Presented visually, below is a high-level view of the current asset allocation of the portfolio. [Chart] Comments The portfolio has increased in value for the fifth consecutive month, and is starting to approach the monthly value last reached in January. The portfolio has grown over $48 000, or 2.7 per cent this month, reflecting the strong market recovery since late March [Chart] The growth in the portfolio was broadly-based across global and Australian equities, with an increase of around 3.8 per cent. Following strong previous rises, gold holdings decreased by around 2.2 per cent, while Bitcoin continued to increase in value (by 2.5 per cent). Combined, the value of gold and Bitcoin holdings remain at a new peak, while total equity holdings are still below their late January peak to the tune of around $50 000. The fixed income holdings of the portfolio continue to fall below the target allocation. [Chart] The expanding value of gold and Bitcoin holdings since January last year have actually had the practical effect of driving new investments into equities, since effectively for each dollar of appreciation, for example, my target allocation to equities rises by seven dollars. New investments this month have been in the Vanguard international shares exchange-traded fund (VGS) and the Australian shares equivalent (VAS). These have been directed to bring my actual asset allocation more closely in line with the target split between Australian and global shares set out in the portfolio plan. As the exchange traded funds such as VGS, VAS and Betashares A200 now make up nearly 30 per cent of the overall portfolio, the quarterly payments they provide have increased in magnitude and importance. Early in the journey, third quarter distributions were essentially immaterial events. Using the same 'median per unit' forecast approach as recently used for half yearly forecasts would suggest a third quarter payout due at the end of September of around $6000. Due to significant announced dividend reductions across this year I am, however, currently assuming this is likely to be significantly lower, and perhaps in the vicinity of $4000 or less. Finding true north: approach to achieving a set asset allocation One of the choices facing all investors with a preferred asset allocation is how strictly the target is applied over time, and what variability is acceptable around that. There is a significant body of financial literature around that issue. My own approach has been to seek to target the preferred asset allocation dynamically, through buying the asset class that is furthest from its target, with new portfolio contributions, and re-investment of paid out distributions. As part of monitoring asset allocation, I also track a measure of 'absolute' variance, to understand at a whole of portfolio level how far it is from the desired allocation. This is the sum of the absolute value of variances (e.g. so that being 3 per cent under target in shares, and 7 per cent over target in fixed interest will equal an absolute variance of 10 per cent under this measure). This measure is currently sitting near its highest level in around 2 years, at 15.0 per cent, as can be seen in the chart below. [Chart] The dominant reason for this higher level of variance from target is significant appreciation in the price of gold and Bitcoin holdings. Mapping the sources of portfolio variances Changes in target allocations in the past makes direct comparisons problematic, but previous peaks of the variance measure matches almost perfectly past Bitcoin price movements. For a brief period in January 2018, gold and Bitcoin combined constituted 20 per cent, or 1 in 5 dollars of the entire portfolio. Due to the growth in other equity components of the portfolio since this level has not been subsequently exceeded. Nonetheless, it is instructive to understand that the dollar value of combined gold and Bitcoin holdings is actually up around $40 000 from that brief peak. With the larger portfolio, this now means they together make up 17.2 per cent of the total portfolio value. Tacking into the wind of portfolio movements? The logical question to fall out from this situation is: to what extent should this drive an active choice to sell down gold and Bitcoin until they resume their 10 per cent target allocation? This would currently imply selling around $130 000 of gold or Bitcoin, and generating a capital gains tax liability of potentially up to $27 000. Needless to say this is not an attractive proposition. Several other considerations lead me to not make this choice:
The problem may solve itself as portfolio grows - Growth and continued investments in the portfolio will tend to reduce the variance caused by gold and Bitcoin. The asset allocation targeting approach I adopt has seen continued contributions to equities, reducing the ability of these alternative assets to add to future variance.
Falls in Bitcoin or gold values will also solve the problem - Conversely, price falls in Bitcoin or gold will tend to reduce the variance issue, and such price falls have significant precedents, with for example Bitcoin holdings falling to a value of around $50 000 as recently as January 2019.
If neither of these happen, there may be bigger issues to solve - The only scenario where neither of these alleviating factors occur is should gold and Bitcoin continue to rapidly appreciate compared to other assets, in which case it is difficult to see the value of reducing exposure now.
Does Bitcoin even fit the asset allocation model? - Bitcoin in particular is not a well established or accepted asset class as yet, so it may not be appropriate to apply traditional allocation rules to it - it may be functioning more as a hedge or option against extreme states of the world. Linked to this is the high degree of volatility in Bitcoin. Adopting too tight a target on Bitcoin holdings would potentially see a need to buy and sell Bitcoin frequently, where my intention is to actually never purchase any more.
This approach is a departure from a mechanistic implementation of an asset allocation rule. Rather, the approach I take is pragmatic. Tracking course drift in the portfolio components As an example, I regularly review whether a significant fall in Bitcoin prices to its recent lows would alter my monthly decision on where to direct new investments. So far it does not, and the 'signal' continues to be to buy new equities. Another tool I use is a monthly measurement of the absolute dollar variance of Australian and global shares, as well as fixed interest, from their ideal target allocations. The chart below sets this out for the period since January 2019. A positive value effectively represents an over-allocation to a sector, a negative value, an under-allocation compared to target. [Chart] This reinforces the overall story that, as gold and Bitcoin have grown in value, there emerges a larger 'deficit' to the target. Falls in equities markets across February and March also produce visibly larger 'dollar gaps' to the target allocation. This graph enables a tracking of the impact of portfolio gains or losses, and volatility, and a better understanding of the practical task of returning to target allocations. Runaway lines in either direction would be evidence that current approaches for returning to targets were unworkable, but so far this does not appear to be the case. A crossing over: a credit card FI milestone This month has seen a long awaited milestone reached. Calculated on a past three year average, portfolio distributions now entirely meet monthly credit card expenses. This means that every credit card purchase - each shopping trip or online purchase - is effectively paid for by average portfolio distributions. At the start of this journey, distributions were only equivalent to around 40 per cent of credit card expenses. As time has progressed distributions have increased to cover a larger and larger proportion of card expenses. [Chart] Most recently, with COVID-19 related restrictions having pushed card expenditure down further, the remaining gap to this 'Credit Card FI' target has closed. Looked at on an un-smoothed basis, expenditures on the credit card have continued to be slightly lower than average across the past month. The below chart details the extent to which portfolio distributions (red) cover estimated total expenses (green), measured month to month. [Chart] Credit card expenditure makes up around 80 per cent of total spending, so this is not a milestone that makes paid work irrelevant or optional. Similarly, if spending rises as various travel and other restrictions ease, it is possible that this position could be temporary. Equally, should distributions fall dramatically below long term averages in the year ahead, this could result in average distributions falling faster than average monthly card expenditure. Even without this, on a three year average basis, monthly distributions will decline as high distributions received in the second half of 2017 slowly fall out of the estimation sample. For the moment, however, a slim margin exists. Distributions are $13 per month above average monthly credit card bills. This feels like a substantial achievement to note, as one unlooked for at the outset of the journey. Progress Progress against the objective, and the additional measures I have reached is set out below. Measure Portfolio All Assets Portfolio objective – $2 180 000 (or $87 000 pa) 84.8% 114.6% Credit card purchases – $71 000 pa 103.5% 139.9% Total expenses – $89 000 pa 82.9% 112.1% Summary What feels like a long winter is just passed. The cold days and weeks have felt repetitive and dominated by a pervasive sense of uncertainty. Yet through this time, this wandering off, the portfolio has moved quite steadily back towards it previous highs. That it is even approaching them in the course of just a few months is unexpected. What this obscures is the different components of growth driving this outcome. The portfolio that is recovering, like the index it follows, is changing in its underlying composition. This can be seen most starkly in the high levels of variance from the target portfolio sought discussed above. It is equally true, however, of individual components such as international equity holdings. In the case of the United States the overall index performance has been driven by share price growth in just a few information technology giants. Gold and Bitcoin have emerged from the shadows of the portfolio to an unintended leading role in portfolio growth since early 2019. This month I have enjoyed reading the Chapter by Chapter release of the Aussie FIRE e-book coordinated by Pearler. I've also been reading posts from some newer Australian financial independence bloggers, Two to Fire, FIRE Down Under, and Chasing FIRE Down Under. In podcasts, I have enjoyed the Mad Fientist's update on his fourth year of financial freedom, and Pat and Dave's FIRE and Chill episodes, including an excellent one on market timing fallacies. The ASX Australian Investor Study 2020 has also been released - setting out some broader trends in recent Australian investment markets, and containing a snapshot of the holdings, approaches and views of everyday investors. This contained many intriguing findings, such as the median investment portfolio ($130 000), its most frequent components (direct Australian shares), and how frequently portfolios are usually checked - with 61 per cent of investors checking their portfolios at least once a month. This is my own approach also. Monthly assessments allow me to gauge and reflect on how I or elements of the portfolio may have wandered off the straight way in the middle of the journey. Without this, the risk is that dark woods and bent pathways beckon. The post, links and full charts can be seen here.
A Physicist's Bitcoin Trading Strategy. No leverage, no going short, just spot trading. Total cumulative outperformance 2011-2020: 13,000,000%.
https://www.tradingview.com/script/4J5psNDo-A-Physicist-s-Bitcoin-Trading-Strategy/ 3. Backtest Results Backtest results demonstrate significant outperformance over buy-and-hold . The default parameters of the strategy/indicator have been set by the author to achieve maximum (or, close to maximum) outperformance on backtests executed on the BTCUSD ( Bitcoin ) chart. However, significant outperformance over buy-and-hold is still easily achievable using non-default parameters. Basically, as long as the parameters are set to adequately capture the full character of the market, significant outperformance on backtests is achievable and is quite easy. In fact, after some experimentation, it seems as if underperformance hardly achievable and requires deliberately setting the parameters illogically (e.g. setting one parameter of the slow indicator faster than the fast indicator). In the interest of providing a quality product to the user, suggestions and guidelines for parameter settings are provided in section (6). Finally, some metrics of the strategy's outperformance on the BTCUSD chart are listed below, both for the default (optimal) parameters as well as for a random sample of parameter settings that adhere to the guidelines set forth in section (6). Using the default parameters, relative to buy-and-hold strategy, backtested from August 2011 to August 2020,
Total cumulative outperformance (total return of strategy minus total return of buy-n-hold): 13,000,000%.
Rolling 1-year outperformance: mean 318%, median 84%, 1st quartile 55%, 3rd quartile, 430%.
Rolling 1-month outperformance: mean 2.8% (annualized, 39%), median -2.1%, 1st quartile -7.7%, 3rd quartile 13.2%, 10th percentile -13.9%, 90th percentile 24.5%.
Using the default parameters, relative to buy-and-hold strategy, during specific periods,
Cumulative outperformance during the past year (August 2019-August 2020): 37%.
12/17/2016 - 12/17/2017 (2017 bull market) absolute performance of 2563% vs buy-n-hold absolute performance of 2385%
11/29/2012 - 11/29/2013 (2013 bull market) absolute performance of 14033% vs buy-n-hold absolute performance of 9247%
Using a random sample (n=20) of combinations of parameter settings that adhere to the guidelines outlined in section (6), relative to buy-and-hold strategy, backtested from August 2011 to August 2020,
Average total cumulative outperformance, from August 2011 to August 2020: 2,000,000%.
Median total cumulative outperformance, from August 2011 to August 2020: 1,000,000%.
EDIT (because apparently not everybody bothers to read the strategy's description): 7. General Remarks About the Indicator Other than some exponential moving averages, no traditional technical indicators or technical analysis tools are employed in this strategy. No MACD , no RSI , no CMF , no Bollinger bands , parabolic SARs, Ichimoku clouds , hoosawatsits, XYZs, ABCs, whatarethese. No tea leaves can be found in this strategy, only mathematics. It is in the nature of the underlying math formula, from which the indicator is produced, to quickly identify trend changes. 8. Remarks About Expectations of Future Results and About Backtesting 8.1. In General As it's been stated in many prospectuses and marketing literature, "past performance is no guarantee of future results." Backtest results are retrospective, and hindsight is 20/20. Therefore, no guarantee can, nor should, be expressed by me or anybody else who is selling a financial product (unless you have a money printer, like the Federal Reserve does). 8.2. Regarding This Strategy No guarantee of future results using this strategy is expressed by the author, not now nor at any time in the future. With that written, the author is free to express his own expectations and opinions based on his intimate knowledge of how the indicator works, and the author will take that liberty by writing the following: As described in section (7), this trading strategy does not include any traditional technical indicators or TA tools (other than smoothing EMAs). Instead, this strategy is based on a principle that does not change, it employs a complex indicator that is based on a math formula that does not change, and it places trades based on five simple rules that do not change. And, as described in section (2.1), the indicator is designed to capture the full character of the market, from a macro/global scope down to a micro/local scope. Additionally, as described in section (3), outperformance of the market for which this strategy was intended during backtesting does not depend on luckily setting the parameters "just right." In fact, all random combinations of parameter settings that followed the guidelines outperformed the intended market in backtests. Additionally, no parameters are included within the underlying math formula from which the indicator is produced; it is not as if the formula contains a "5" and future outperformance would depend on that "5" being a "6" instead. And, again as described, it is in the nature of the formula to quickly identify trend changes. Therefore, it is the opinion of the author that the outperformance of this strategy in backtesting is directly attributable to the fundamental nature of the math formula from which the indicator is produced. As such, it is also the opinion of the author that continued outperformance by using this strategy, applied to the crypto ( Bitcoin ) market, is likely, given that the parameter settings are set reasonably and in accordance with the guidelines. The author does not, however, expect future outperformance of this strategy to match or exceed the outperformance observed in backtests using the default parameters, i.e. it probably won't outperform by anything close to 13,000,000% during the next 9 years. Additionally, based on the rolling 1-month outperformance data listed in section (3), expectations of short-term outperformance should be kept low; the median 1-month outperformance was -2%, so it's basically a 50/50 chance that any significant outperformance is seen in any given month. The true strength of this strategy is to be out of the market during large, sharp declines and capitalizing on the opportunities presented at the bottom of those declines by buying the dip. Given that such price action does not happen every month, outperformance in the initial months of use is approximately as likely as underperformance.
Cryptocurrency Day Trading 101: Day Trading Simplified for Crypto Enthusiasts
https://preview.redd.it/7premb78klu51.jpg?width=800&format=pjpg&auto=webp&s=b91fb62fb384a21b7c48b6726111927185f23f18 Do you feel left out when your friends, who just tried their luck at crypto trading, go on and on about day trading until your ears start to bleed? Day trading, one of the most popularly applied trading methods in stock and commodities financial markets is now being employed by crypto traders as well. Either you are marveled by the day trading success stories shared by your friends or just freaked out by how some traders lose all their money to day trading. What is day trading and is it worth investing your time and money in? Find everything you need to know as a newbie crypto enthusiast in this beginner’s guide to crypto day trading. What is Day Trading? Trading is all about selling an asset for a price higher than its cost price. Many factors including environmental and political fluctuations, research and development, mergers, and acquisitions impact the price of an asset in the financial markets. Rather than adding value to the asset and then making a profit from it, you take the shorter route and make a profit from the price fluctuations in the market. Trading methods differ depending on how long you are willing to hold the assets. In day trading or intraday trading, you enter and exit the market on the same trading day. Day traders keep track of the price fluctuations that happen during a day to make a small profit that adds up to a larger amount over a long period. Although traditional financial markets are only open on business days of the week for a set number of hours, the crypto market is open 24*7. To qualify as a crypto day trader, you confine yourself to a 24-hour time frame. These two examples will help you understand day trading better. Sonny learns from the news that the price of ABC coin is going to see a sudden, fleeting hike during the next few hours owing to a Twitter reference made by a Hollywood celebrity. He purchases 100 ABC coins for $10 each at 10:00 AM and sells it for $12 each at 10:20 AM making a $200 profit in just 40 minutes. Mark has been keeping track of the price charts of crypto coin DEF for a while now. He decides to take his plunge into day trading and buys 200 DEF coins for $6 each. The price goes up to $7 in a few hours. Anticipating further price increase, Mark holds his coins for a few more hours during which the price dips to $6.9 and then $6.8. Mark sells the coins for $6.8 each making a $160 profit. Crypto Day Trading Strategies Many trading strategies are applied by different day traders to earn a profit. Let’s take a quick look at each of them. 1.Scalping In scalping, you exploit small price fluctuations using your technical skills. Rather than focusing on fundamental analysis as these events often pan out over a longer period of time, scalpers develop a deep understanding of the market to make quick decisions. 2.Range trading You can’t rely on price charts solely when it comes to day trading. In range trading, a careful analysis of the support and resistance a cryptocurrency receives is made to buy low and sell high. Here, you should watch out for factors that go beyond what is revealed by the price charts. 3.High-frequency trading (HFT) In HFT day trading, you develop trading bots that enter and exit trade positions exploiting price fluctuations within a time frame of milliseconds. Although the bots are automated, a lot of work goes behind the screen like monitoring and changing the algorithms according to market changes. Things to Know Before You Start Crypto Day Trading
The cryptocurrency market is highly volatile as most crypto ventures are recently set up and yet to prove their competency. Some become a humongous success overnight pushing the prices to even double or triple while many bite the dust a few weeks into listing. Both the profit and loss you make would be significant.
Don’t risk more than 1% of your total bankroll. Here, bankroll is the total amount of money you have available to invest. This will save you from losing all your money at once. Although small, your profits can be added to the bankroll to increase your income over time.
Losses are part of the game. If you believe you incurred losses because of your mistake, learn from it. If external factors were to blame, accept the fate and move on.
With practice comes (near) perfection. Start small and get yourself acquainted with the highs and lows of the market to improve your skills.
Ready to get started? Day trading is one of the safest methods recommended in crypto trading, especially for newbies. If you have decided to try your hands at crypto day trading, you need to find a reliable cryptocurrency exchange that is up and running 24 hours and offers you a range of coins to trade. Bithumb Global is a leading cryptocurrency exchange with more than 1 million registered users. We offer great liquidity and user experience. Since there are 100+ different coins listed on Bithumb Global including Bitcoin, Ethereum, Ripple, Litecoin, and Bitcoin Cash, you won’t run out of your options to trade. We will be a great place for you to learn the basics of day trading. So get started and make your baby steps into the crypto market.
Hi, I'm a software developer and I would like to validade an idea and get some feeback from the community regarding a particular website I'm thinking of. Do you think you would use/visit a website that uses artificial intelligence to forecast the price of Bitcoin? Sort of like a weather forecast site, but for crypto. The site would also bring together the latest news and maybe apply some sentiment analysis on the news text, so that you can have a feel of the market for that day at a glimpse without having to dive into heavy technical graphs and charts. If you think this is a good idea, would you let me know? Your feedback is very much appreaciated.
‘Boring’ Bitcoin Market Sends Miners’ Fee Earnings to 3-Month Low
Image: Andre Francois Mckenzie - Unsplash Bitcoin’s (BTC) on-chain transaction activity has cooled amid the recent lull in price action, and that’s hurting miners’ earnings. The cryptocurrency's blockchain processed 231,437 transactions on Oct. 18, the lowest since May 24, according to data provided by blockchain analytics firm Glassnode. That means the daily transaction count was down nearly 40% from a peak of 382,408 observed on July 1. With network processing far fewer transactions currently, the percentage of miners' revenue derived from fees also dropped to a three-month low of 3.49% over the weekend. Last week, CoinDesk reported bitcoin's hashrate had hit a new high as a record amount of computing power was applied to mining on the network. The slide in the tally of transactions is the result of the cryptocurrency's low-volatility trading of late, and may have bullish implications for price, according to analysts. Continue reading for charts and graphs Originally published by Omkar Godbole | October 19, 2020 Coindesk
COVID-19's Economic Impact in Canada: a collection of stats on jobs losses, investment returns, consumer confidence, interest rates, housing, and future forecasts
Over the past few weeks, the COVID crisis has hurt the Canadian economy and the average Canadian's financial situation in more ways than one. I tried to tally up the damage by going through the info that's been published thus far (by Stats Can, the Bank of Canada, the Parliamentary Budget Officer, news sites, etc.), and have put together some visualizations and commentary on the data. In summary:
Stats Can's March labour force survey showed that 3.1 million Canadians had their job situation impacted negatively during the survey period (March 15 - March 21); that's ~16% of Canada's total labour force
1 million Canadians lost their jobs; 0.8 million had a job but didn't work any hours; 1.3 million had a job but worked less than half of their usual hours
Canadians worked 15% fewer hours in the month of March vs February; the impact was highest in Quebec (-19%), and lowest in Newfoundland and Labrador (-8.4%)
As of April 13th, nearly 6 million Canadians have applied for CERB or EI (reported by the CBC)
Investments (2020 year-to-date returns)
Stock markets are down by roughly 15 - 20% (TSX Composite is down by 17%)
Bond markets are roughly flat
Gold is up by 14% (as investors tend to flock to gold in times of economic uncertainty)
Bitcoin is down by 4%
Canadian oil prices are down by ~70%
Google search volume in Canada for the terms "recession" and "layoff" are the highest on record, even surpassing the search volume during the 2008 recession
The Conference Board of Canada's "Index of Consumer Confidence" registered the largest monthly decline ever in March
The Bank of Canada cut the overnight rate 3 separate times in March, dropping the rate from 1.75% to 0.25%
The rate hasn't been this low since the 2008 recession
The Toronto Regional Real Estate Board showed a 16% decline in home sale volumes in the Greater Toronto Area in the second half of March
RBC Economics expects that “Canada’s housing market will slow to a crawl this spring”, and that housing prices will face a temporary set-back — with an estimated 2.9% year-over-year price decline in the second half of 2020
Post-COVID Economic Forecasts
On April 9th, Canada’s Parliamentary Budget Officer released a “scenario analysis” report on the potential impact of COVID-19 on the Canadian economy.
It’s estimated that the federal government’s responses to the COVID crisis will have a total cost of over $105 billion
As a result, Canada’s budget deficit in the 2020-21 fiscal year will rise to $185 billion, or roughly 8.5% of GDP
Canada’s budget deficit hasn’t been this high (based on % of GDP) since the 1984-85 fiscal year
In 2020, Canada will have real GDP growth of -5.1%, and an unemployment rate of 12.4%; for context, Canada's real GDP only declined by 3.3% in 2009
The number of unemployed Canadians will rise from 1.2 million (Q4 2019) to 3.1 million (Q3 2020)
These points are addressed in chart form at the link above. You can download a spreadsheet which contains all of the source data / charts. There's also a summary of the emergency response initiatives announced by the federal government (CERB, GST credit, CCB one-time payment, the 75% wage subsidy, etc.), and thoughts about steps that Canadians can take today to improve their financial situation. I'll continue to update the page as new economic stats roll-in, and as the government announces new initiatives. I'd love to hear your thoughts about COVID's economic impact in Canada. Also, please feel free to share any other stats, articles, or reports that you think are relevant!
DDDD - The Rise of “Buy the Dip” Retail Investors and Why Another Crash Is Imminent
In this week's edition of DDDD (Data-driven DD), I'll be going over the real reason why we have been seeing a rally for the past few weeks, defying all logic and fundamentals - retail investors. We'll look into several data sets to see how retail interest in stock markets have reached record levels in the past few weeks, how this affected stock prices, and why we've most likely seen the top at this point, unless we see one of the "positive catalysts" that I mentioned in my previous post, which is unlikely (except for more news about Remdesivir). Disclaimer - This is not financial advice, and a lot of the content below is my personal opinion. In fact, the numbers, facts, or explanations presented below could be wrong and be made up. Don't buy random options because some person on the internet says so; look at what happened to all the SPY 220p 4/17 bag holders. Do your own research and come to your own conclusions on what you should do with your own money, and how levered you want to be based on your personal risk tolerance. Inspiration Most people who know me personally know that I spend an unhealthy amount of my free time in finance and trading as a hobby, even competing in paper options trading competitions when I was in high school. A few weeks ago, I had a friend ask if he could call me because he just installed Robinhood and wanted to buy SPY puts after seeing everyone on wallstreetbets post gains posts from all the tendies they’ve made from their SPY puts. The problem was, he actually didn’t understand how options worked at all, and needed a thorough explanation about how options are priced, what strike prices and expiration dates mean, and what the right strategy to buying options are. That’s how I knew we were at the euphoria stage of buying SPY puts - it’s when dumb money starts to pour in, and people start buying securities because they see everyone else making money and they want in, even if they have no idea what they’re buying, and price becomes dislocated from fundementals. Sure enough, less than a week later, we started the bull rally that we are currently in. Bubbles are formed when people buy something not because of logic or even gut feeling, but when people who previously weren’t involved see their dumb neighbors make tons of money from it, and they don’t want to miss out. A few days ago, I started getting questions from other friends about what stocks they should buy and if I thought something was a good investment. That inspired me to dig a bit deeper to see how many other people are thinking the same thing. Data Ever since March, we’ve seen an unprecedented amount of money pour into the stock market from retail investors. Google Search Trends \"what stock should I buy\" Google Trends 2004 - 2020 \"what stock should I buy\" Google Trends 12 months \"stocks\" Google Trends 2004 - 2020 \"stocks\" Google Trends 12 months Brokerage data Robinhood SPY holders \"Robinhood\" Google Trends 12 months wallstreetbets' favorite broker Google Trends 12 months Excerpt from E*Trade earnings statement Excerpt from Schwab earnings statement TD Ameritrade Excerpt Media cnbc.com Alexa rank CNBC viewership & rankings wallstreetbets comments / day investing comments / day Analysis What we can see from Reddit numbers, Google Trends, and CNBC stats is that in between the first week of March and first week of April, we see a massive inflow of retail interest in the stock market. Not only that, but this inflow of interest is coming from all age cohorts, from internet-using Zoomers to TV-watching Boomers. Robinhood SPY holdings and earnings reports from E*Trade, TD Ameritrade, and Schwab have also all confirmed record numbers of new clients, number of trades, and assets. There’s something interesting going on if you look closer at the numbers. The numbers growth in brokers for designed for “less sophisticated” investors (i.e. Robinhood and E*Trade) are much larger than for real brokers (i.e. Schwab and Ameritrade). This implies that the record number of new users and trade volume is coming from dumb money. The numbers shown here only really apply to the US and Canada, but there’s also data to suggest that there’s also record numbers of foreign investors pouring money into the US stock market as well. However, after the third week of March, we see the interest start to slowly decline and plateau, indicating that we probably have seen most of those new investors who wanted to have a long position in the market do so. SPX daily Rationale Pretty much everything past this point is purely speculation, and isn’t really backed up by any solid data so take whatever I say here with a cup of salt. We could see from the graph that new investor interest started with the first bull trap we saw in the initial decline from early March, and peaking right after the end of the crash in March. So it would be fair to guess that we’re seeing a record amount of interest in the stock market from a “buy the dip” mentality, especially from Robinhood-using Millennials. Here’s a few points on my rationalization of this behavior, based on very weak anecdotal evidence
They missed out of their chance of getting in the stock market at the start of the bull market that happened at the end of 2009
They’ve all seen the stock market make record gains throughout their adult lives, but believing that the market might be overheated, they were waiting for a crash
Most of them have gotten towards the stage of their lives where they actually have some savings and can finally put some money aside for investments
This stock market crash seems like their once-in-a-decade opportunity that they’ve been waiting for, so everyone jumped in
Everyone’s stuck at their homes with vast amounts of unexpected free time on their hands
Most of these new investors got their first taste in the market near the bottom, and probably made some nice returns. Of course, since they didn’t know what they were doing, they probably put a very small amount of money at first, but after seeing a 10% return over one week, validating that maybe they do know something, they decide to slowly pour in more and more of their life savings. That’s what’s been fueling this bull market. Sentiment & Magic Crayons As I mentioned previously, this bull rally will keep going until enough bears convert to bulls. Markets go up when the amount of new bullish positions outnumber the amount of new bearish positions, and vice versa. Record amounts of new investors, who previously never held a position in the market before, fueled the bullish side of this equation, despite all the negative data that has come out and dislocating the price from fundamentals. All the smart money that was shorting the markets saw this happening, and flipped to become bulls because you don’t fight the trend, even if the trend doesn’t reflect reality. From the data shown above, we can see new investor interest growth has started declining since mid March and started stagnating in early April. The declining volume in SPY since mid-March confirms this. That means, once the sentiment of the new retail investors starts to turn bearish, and everyone figures out how much the stocks they’re holding are really worth, another sell-off will begin. I’ve seen something very similar to this a few years ago with Bitcoin. Near the end of 2017, Bitcoin started to become mainstream and saw a flood of retail investors suddenly signing up for Coinbase (i.e. Robinhood) accounts and buying Bitcoin without actually understanding what it is and how it works. Suddenly everyone, from co-workers to grandparents, starts talking about Bitcoin and might have thrown a few thousand dollars into it. This appears to be a very similar parallel to what’s going on right now. Of course there’s differences here in that equities have an intrinsic value, although many of them have gone way above what they should be intrinsically worth, and the vast majority of retail investors don’t understand how to value companies. Then, during December, when people started thinking that the market was getting a bit overheated, some started taking their profits, and that’s when the prices crashed violently. This flip in sentiment now look like it has started with equities. SPY daily Technical Analysis, or magic crayons, is a discipline in finance that uses statistical analysis to predict market trends based on market sentiment. Of course, a lot of this is hand-wavy and is very subjective; two people doing TA on the same price history can end up getting opposite results, so TA should always be taken with a grain of salt and ideally be backed with underlying justification and not be blindly followed. In fact, I’ve since corrected the ascending wedge I had on SPY since my last post since this new wedge is a better fit for the new trading data. There’s a few things going on in this chart. The entire bull rally we’ve had since the lows can be modelled using a rising wedge. This is a pattern where there is a convergence of a rising support and resistance trendline, along with falling volume. This indicates a slow decline in net bullish sentiment with investors, with smaller and smaller upside after each bounce off the support until it hits a resistance. The smaller the bounces, the less bullish investors are. When the bearish sentiment takes over across investors, the price breaks below this wedge - a breakdown, and indicates a start of another downtrend. This happened when the wedge hit resistance at around 293, which is around the same price as the 200 day moving average, the 62% retracement (considered to be the upper bound of a bull trap), and a price level that acted as a support and resistance throughout 2019. The fact that it gapped down to break this wedge is also a strong signal, indicating a sudden swing in investor sentiment overnight. The volume of the break down also broke the downwards trend of volume we’ve had since the beginning of the bull rally, indicating a sudden surge of people selling their shares. This doesn’t necessarily mean that we will go straight from here, and I personally think that we will see the completion of a heads-and-shoulders pattern complete before SPY goes below 274, which in itself is a strong support level. In other words, SPY might go from 282 -> 274 -> 284 -> 274 before breaking the 274 support level. VIX Daily Doing TA is already sketchy, and doing TA on something like VIX is even more sketchy, but I found this interesting so I’ll mention it. Since the start of the bull rally, we’ve had VIX inside a descending channel. With the breakdown we had in SPY yesterday, VIX has also gapped up to have a breakout from this channel, indicating that we may see future volatility in the next week or so. Putting Everything Together Finally, we get to my thesis. This entire bull rally has been fueled by new retail investors buying the dip, bringing the stock price to euphoric levels. Over the past few weeks, we’ve been seeing the people waiting at the sidelines for years to get into the stock market slowly FOMO into the rally in smaller and smaller volumes, while the smart money have been locking in their profits at an even slower rate - hence an ascending wedge. As the amount of new retail interest in the stock market started slowed down, the amount of new bulls started to decline. It looks like Friday might have been the start of the bearish sentiment taking over, meaning it’s likely that 293 was the top, unless any significant bullish events happen in the next two weeks like a fourth round of stimulus, in which case we might see 300. This doesn’t mean we’ll instantly go back to circuit breakers on Monday, and we might see 282 -> 274 -> 284 -> 274 happen before panic, this time by the first-time investors, eventually bringing us down towards SPY 180. tldr; we've reached the top EDIT - I'll keep a my live thoughts here as we move throughout this week in case anyone's still reading this and interested. 5/4 8PM - /ES was red last night but steadily climbed, which was expected since 1h RSI was borderline oversold, leaving us to a slightly green day. /ES looks like it has momentum going up, but is approaching towards overbought territory now. Expecting it to go towards 284 (possibly where we'll open tomorrow) and bouncing back down from that price level 5/5 Market Open - Well there goes my price target. I guess at this point it might go up to 293 again, but will need a lot of momentum to push back there to 300. Seems like this is being driven by oil prices skyrocketing. 5/5 3:50PM - Volume for the upwards price action had very little volume behind it. Seeing a selloff EOD today, could go either way although I have a bearish bias. Going to hold cash until it goes towards one end of the 274-293 channel (see last week's thesis). Still believe that we will see it drop below 274 next week, but we might be moving sideways in the channel this week and a bit of next week before that happens. Plan for tomorrow is buy short dated puts if open < 285. Otherwise, wait till it goes to 293 before buying those puts 5/5 6PM - What we saw today could be a false breakout above 284. Need tomorrow to open below 285 for that to be confirmed. If so, my original thesis of it going back down to 274 before bouncing back up will still be in play. 5/6 EOD - Wasn't a false breakout. Looks like it's still forming the head-and-shoulders pattern mentioned before, but 288 instead of 284 as the level. Still not sure yet so I'm personally going to be holding cash and waiting this out for the next few days. Will enter into short positions if we either go near 293 again or drop below 270. Might look into VIX calls if VIX goes down near 30. 5/7 Market Open - Still waiting. If we break 289 we're probably heading to 293. I'll make my entry to short positions when we hit that a second time. There's very little bullish momentum left (see MACD 1D), so if we hit 293 and then drop back down, we'll have a MACD crossover event which many traders and algos use as a sell signal. Oil is doing some weird shit. 5/7 Noon - Looks like we're headed to 293. Picked up VIX 32.5c 5/27 since VIX is near 30. 5/7 11PM - /ES is hovering right above 2910, with 4h and 1h charts are bullish from MACD and 1h is almost overbought in RSI. Unless something dramatic happens we'll probably hit near 293 tomorrow, which is where I'll get some SPY puts. We might drop down before ever touching it, or go all the way to 295 (like last time) during the day, but expecting it to close at or below 293. After that I'm expecting a gap down Monday as we start the final leg down next week towards 274. Expecting 1D MACD to crossover in the final leg down, which will be a signal for bears to take over and institutions / day traders will start selling again 5/8 Market Open - Plan is to wait till a good entry today, either when technicals looks good or we hit 293, and then buy some SPY June 285p and July 275p 5/8 Noon - Everything still going according to plan. Most likely going to slowly inch towards 293 by EOD. Will probably pick up SPY puts and more VIX calls at power hour (3 - 4PM). Monday will probably gap down, although there's a small chance of one more green / sideways day before that happens if we have bullish catalysts on the weekend. 5/8 3:55PM - SPY at 292.60. This is probably going to be the closest we get to 293. Bought SPY 290-260 6/19 debit spreads and 292-272 5/15 debit spreads, as well as doubling down on VIX calls from yesterday, decreasing my cost basis. Still looks like there's room for one more green day on Monday, so I left some money on the side to double down if that's the case, although it's more likely than not we won't get there. 5/8 EOD - Looks like we barely touched 293 exactly AH before rebounding down. Too bad you can't buy options AH, but more convinced we'll see a gap down on Monday. Going to work on another post over the weekend and do my updates there. Have a great weekend everyone!
Wikipedia Commodity channel index Commodity Index indicator is very simple in fact, though it has such a fancy name. Indicators in TSLab are based on C#. For those who have programming skills we provide API and indicator code samples at our Forum. CCI is available in TSLab as other indicators as well, but I would like to demonstrate a self-made one built according to wiki formulas. It is very easy to build new indicators by means of TSLab. CCI consists of Typical Price and Simple Moving Average. TSLab already has all to create CCI, but I showed in the indicator how to create Typical Price and Simple Moving Average. I urge you to study indicators. Making changes to indicators you get a chance to create a better one. Here is a customized CCI indicator. I applied adaptive moving average instead of simple moving average. And I applied exponential average instead of typical price. The chart in the middle shows the original CCI and the self-made one. As you may see their values are identical, as CCI in TSLab is done as it is described in wiki. https://preview.redd.it/qyo63qnda5q51.png?width=1128&format=png&auto=webp&s=01c60fb93ad72dc72d024fb83aec4ec0d99b40ab The lowest chart shows the customized indicator. It has clearly seen divergences. https://preview.redd.it/f3c8vruha5q51.png?width=1913&format=png&auto=webp&s=e8a7aac86d88575907d8792e45e108e1bacb0cfb Though it is not so unstable as the original one, it seems to be more flat. Wiki offers 2 types of strategies, saying that there are different points of view on this indicator. To build these strategies I am going to use my customized indicator instead of the original one. Some people think that in case with long positions we should buy, when CCI is higher than 100 and sell, when it is lower than 100. And for short positions – Sell when CCI is lower than -100 and close a short position, when CCI is higher than -100. For example this strategy doesn’t seem to be profitable with bitcoin at all. https://preview.redd.it/xpgqp5xla5q51.png?width=1919&format=png&auto=webp&s=49fa5366938ef780d95c227ec1d549f6a8047077 Other people recommend using zero value as a signal calling this strategy Zero CCI. It means - buy (open a long position or close a short position), when Commodity Index is higher than zero or sell (close a long position, open a short position), when CCI is below zero. https://preview.redd.it/gyisxbiqa5q51.png?width=1917&format=png&auto=webp&s=1885c903401b9eae93e58772ea46145a2605e47f Let’s build a script which comprises both variants and resolve the dispute by means of optimization. If we think a bit we can see that there is one more strategy besides these two, this is to use average of CCI instead of signal lines. And we can at least combine all three strategies together. For example, we can enter a position at about zero point. And close long positions when CCI crosses its average, when the indicator is higher than 100 and lower than -100 for short positions. My customized indicator won’t do for this strategy because of divergences. The original one won’t do either as it is not stable and there can be many false signals. Try to create an indicator as flat as mine or even better but with fewer divergences. Good luck to everyone!
LOEx Market Research Report on September 30: BTC rebound continued to maintain the original shock space trend
1、 [Venezuela is studying the feasibility of increasing the use of cryptocurrency in trade] According to the Russian satellite news agency on September 30, Venezuelan President Nicolas Maduro said the country is studying the feasibility of increasing the use of cryptocurrency in trade in addition to petrodollars, which may include both private and state tools. 2、 [Ethereum 2.0 test network zinken will be launched on October 5] In the morning of September 30, bitfly (the parent company of ethermine mine pool) officially forwarded a tweet from Daniel Ryan, the project leader of Ethereum 2.0, and said that there would be another Ethereum 2.0 test network zinken. Zinken test network will be launched on October 5. According to the news in the morning today, Daniel Ryan, the project leader of Ethereum 2.0, tweeted that in order to deal with the problems related to the launch of the Ethereum 2.0 test network, before the founding of Ethereum 2.0, the official will have at least another zinken rehearsal. 3、 [bitcoin fund of 3iq is listed on the gibraltarian stock exchange] According to finance magnates on September 30, bitcoin fund of 3iq, a Canadian investment fund management company, has been listed on the gibraltarian stock exchange in an attempt to expand its investor market. Prior to the news in April, the bitcoin fund applied by 3iq fund had been listed on the Toronto Stock Exchange. [Today's market analysis] Bitcoin (BTC) BTC fell to 10636.9 usdt in the morning, and then continued to fluctuate upward. The short-term short-term rise of BTC has just broken through 10850 usdt. The main currency followed the trend of the market and rebounded after falling in the early morning, and just rose slightly. BTC was reported at LOEX international station at 17854.6 usdt, up 0.56% in 24h. Bitcoin faces an upward continuation of $10800 as a short-term breakthrough; the 2-hour chart shows an obvious downward trend structure. Bitcoin has been at a low high since $12400. The lower highs continued this structure until recently rejecting $11000. This was followed by a relatively good performance of bullish deviation, with the market rebounding from its recent low of $10200. The rebound can not exceed $11000 region, and formed a range of concussion structure. However, for any upward continuation, the key breakthrough is $10800. If bitcoin breaks through this order range, it may continue to move towards a huge resistance level of $11200-11400. The failed breakouts were in the $10800 and potential reversals as well as the $10200 area of testing. Don't chase up the price, even if it's good or bad, buy it when it falls, sell it when it rises sharply, and no one can cut it. It is suggested that you should only do the big drop after 11100. The rise in the middle has nothing to do with you. Avoid cutting meat repeatedly Operation suggestions: Support position: 10800 points in the first support position and 10500 points in the second support position; Resistance level: 11000 points in the first resistance level and 11500 points in the second resistance level. LOEx is registered in Seychelles. It is a global one-stop digital asset service platform with business distribution nodes in 20 regions around the world. It has been exempted from Seychelles and Singapore Monetary Authority (MAS) digital currency trading services. Provide services and secure encrypted digital currency trading environment for 2 million community members in 24 hours. https://preview.redd.it/w3561vcgd7q51.jpg?width=554&format=pjpg&auto=webp&s=6c532c221cd7550cbdce8bf452e7cd8297aed7d3
The Next Crypto Wave: The Rise of Stablecoins and its Entry to the U.S. Dollar Market
Author: Christian Hsieh, CEO of Tokenomy This paper examines some explanations for the continual global market demand for the U.S. dollar, the rise of stablecoins, and the utility and opportunities that crypto dollars can offer to both the cryptocurrency and traditional markets. The U.S. dollar, dominant in world trade since the establishment of the 1944 Bretton Woods System, is unequivocally the world’s most demanded reserve currency. Today, more than 61% of foreign bank reserves and nearly 40% of the entire world’s debt is denominated in U.S. dollars1. However, there is a massive supply and demand imbalance in the U.S. dollar market. On the supply side, central banks throughout the world have implemented more than a decade-long accommodative monetary policy since the 2008 global financial crisis. The COVID-19 pandemic further exacerbated the need for central banks to provide necessary liquidity and keep staggering economies moving. While the Federal Reserve leads the effort of “money printing” and stimulus programs, the current money supply still cannot meet the constant high demand for the U.S. dollar2. Let us review some of the reasons for this constant dollar demand from a few economic fundamentals.
Demand for U.S. Dollars
Firstly, most of the world’s trade is denominated in U.S. dollars. Chief Economist of the IMF, Gita Gopinath, has compiled data reflecting that the U.S. dollar’s share of invoicing was 4.7 times larger than America’s share of the value of imports, and 3.1 times its share of world exports3. The U.S. dollar is the dominant “invoicing currency” in most developing countries4. https://preview.redd.it/d4xalwdyz8p51.png?width=535&format=png&auto=webp&s=9f0556c6aa6b29016c9b135f3279e8337dfee2a6 https://preview.redd.it/wucg40kzz8p51.png?width=653&format=png&auto=webp&s=71257fec29b43e0fc0df1bf04363717e3b52478f This U.S. dollar preference also directly impacts the world’s debt. According to the Bank of International Settlements, there is over $67 trillion in U.S. dollar denominated debt globally, and borrowing outside of the U.S. accounted for $12.5 trillion in Q1 20205. There is an immense demand for U.S. dollars every year just to service these dollar debts. The annual U.S. dollar buying demand is easily over $1 trillion assuming the borrowing cost is at 1.5% (1 year LIBOR + 1%) per year, a conservative estimate. https://preview.redd.it/6956j6f109p51.png?width=487&format=png&auto=webp&s=ccea257a4e9524c11df25737cac961308b542b69 Secondly, since the U.S. has a much stronger economy compared to its global peers, a higher return on investments draws U.S. dollar demand from everywhere in the world, to invest in companies both in the public and private markets. The U.S. hosts the largest stock markets in the world with more than $33 trillion in public market capitalization (combined both NYSE and NASDAQ)6. For the private market, North America’s total share is well over 60% of the $6.5 trillion global assets under management across private equity, real assets, and private debt investments7. The demand for higher quality investments extends to the fixed income market as well. As countries like Japan and Switzerland currently have negative-yielding interest rates8, fixed income investors’ quest for yield in the developed economies leads them back to the U.S. debt market. As of July 2020, there are $15 trillion worth of negative-yielding debt securities globally (see chart). In comparison, the positive, low-yielding U.S. debt remains a sound fixed income strategy for conservative investors in uncertain market conditions. Source: Bloomberg Last, but not least, there are many developing economies experiencing failing monetary policies, where hyperinflation has become a real national disaster. A classic example is Venezuela, where the currency Bolivar became practically worthless as the inflation rate skyrocketed to 10,000,000% in 20199. The recent Beirut port explosion in Lebanon caused a sudden economic meltdown and compounded its already troubled financial market, where inflation has soared to over 112% year on year10. For citizens living in unstable regions such as these, the only reliable store of value is the U.S. dollar. According to the Chainalysis 2020 Geography of Cryptocurrency Report, Venezuela has become one of the most active cryptocurrency trading countries11. The demand for cryptocurrency surges as a flight to safety mentality drives Venezuelans to acquire U.S. dollars to preserve savings that they might otherwise lose. The growth for cryptocurrency activities in those regions is fueled by these desperate citizens using cryptocurrencies as rails to access the U.S. dollar, on top of acquiring actual Bitcoin or other underlying crypto assets.
The Rise of Crypto Dollars
Due to the highly volatile nature of cryptocurrencies, USD stablecoin, a crypto-powered blockchain token that pegs its value to the U.S. dollar, was introduced to provide stable dollar exposure in the crypto trading sphere. Tether is the first of its kind. Issued in 2014 on the bitcoin blockchain (Omni layer protocol), under the token symbol USDT, it attempts to provide crypto traders with a stable settlement currency while they trade in and out of various crypto assets. The reason behind the stablecoin creation was to address the inefficient and burdensome aspects of having to move fiat U.S. dollars between the legacy banking system and crypto exchanges. Because one USDT is theoretically backed by one U.S. dollar, traders can use USDT to trade and settle to fiat dollars. It was not until 2017 that the majority of traders seemed to realize Tether’s intended utility and started using it widely. As of April 2019, USDT trading volume started exceeding the trading volume of bitcoina12, and it now dominates the crypto trading sphere with over $50 billion average daily trading volume13. https://preview.redd.it/3vq7v1jg09p51.png?width=700&format=png&auto=webp&s=46f11b5f5245a8c335ccc60432873e9bad2eb1e1 An interesting aspect of USDT is that although the claimed 1:1 backing with U.S. dollar collateral is in question, and the Tether company is in reality running fractional reserves through a loose offshore corporate structure, Tether’s trading volume and adoption continues to grow rapidly14. Perhaps in comparison to fiat U.S. dollars, which is not really backed by anything, Tether still has cash equivalents in reserves and crypto traders favor its liquidity and convenience over its lack of legitimacy. For those who are concerned about Tether’s solvency, they can now purchase credit default swaps for downside protection15. On the other hand, USDC, the more compliant contender, takes a distant second spot with total coin circulation of $1.8 billion, versus USDT at $14.5 billion (at the time of publication). It is still too early to tell who is the ultimate leader in the stablecoin arena, as more and more stablecoins are launching to offer various functions and supporting mechanisms. There are three main categories of stablecoin: fiat-backed, crypto-collateralized, and non-collateralized algorithm based stablecoins. Most of these are still at an experimental phase, and readers can learn more about them here. With the continuous innovation of stablecoin development, the utility stablecoins provide in the overall crypto market will become more apparent.
In addition to trade settlement, stablecoins can be applied in many other areas. Cross-border payments and remittances is an inefficient market that desperately needs innovation. In 2020, the average cost of sending money across the world is around 7%16, and it takes days to settle. The World Bank aims to reduce remittance fees to 3% by 2030. With the implementation of blockchain technology, this cost could be further reduced close to zero. J.P. Morgan, the largest bank in the U.S., has created an Interbank Information Network (IIN) with 416 global Institutions to transform the speed of payment flows through its own JPM Coin, another type of crypto dollar17. Although people argue that JPM Coin is not considered a cryptocurrency as it cannot trade openly on a public blockchain, it is by far the largest scale experiment with all the institutional participants trading within the “permissioned” blockchain. It might be more accurate to refer to it as the use of distributed ledger technology (DLT) instead of “blockchain” in this context. Nevertheless, we should keep in mind that as J.P. Morgan currently moves $6 trillion U.S. dollars per day18, the scale of this experiment would create a considerable impact in the international payment and remittance market if it were successful. Potentially the day will come when regulated crypto exchanges become participants of IIN, and the link between public and private crypto assets can be instantly connected, unlocking greater possibilities in blockchain applications. Many central banks are also in talks about developing their own central bank digital currency (CBDC). Although this idea was not new, the discussion was brought to the forefront due to Facebook’s aggressive Libra project announcement in June 2019 and the public attention that followed. As of July 2020, at least 36 central banks have published some sort of CBDC framework. While each nation has a slightly different motivation behind its currency digitization initiative, ranging from payment safety, transaction efficiency, easy monetary implementation, or financial inclusion, these central banks are committed to deploying a new digital payment infrastructure. When it comes to the technical architectures, research from BIS indicates that most of the current proofs-of-concept tend to be based upon distributed ledger technology (permissioned blockchain)19. https://preview.redd.it/lgb1f2rw19p51.png?width=700&format=png&auto=webp&s=040bb0deed0499df6bf08a072fd7c4a442a826a0 These institutional experiments are laying an essential foundation for an improved global payment infrastructure, where instant and frictionless cross-border settlements can take place with minimal costs. Of course, the interoperability of private DLT tokens and public blockchain stablecoins has yet to be explored, but the innovation with both public and private blockchain efforts could eventually merge. This was highlighted recently by the Governor of the Bank of England who stated that “stablecoins and CBDC could sit alongside each other20”. One thing for certain is that crypto dollars (or other fiat-linked digital currencies) are going to play a significant role in our future economy.
There is never a dull moment in the crypto sector. The industry narratives constantly shift as innovation continues to evolve. Twelve years since its inception, Bitcoin has evolved from an abstract subject to a familiar concept. Its role as a secured, scarce, decentralized digital store of value has continued to gain acceptance, and it is well on its way to becoming an investable asset class as a portfolio hedge against asset price inflation and fiat currency depreciation.Stablecoins have proven to be useful as proxy dollars in the crypto world, similar to how dollars are essential in the traditional world. It is only a matter of time before stablecoins or private digital tokens dominate the cross-border payments and global remittances industry. There are no shortages of hypes and experiments that draw new participants into the crypto space, such as smart contracts, new blockchains, ICOs, tokenization of things, or the most recent trends on DeFi tokens. These projects highlight the possibilities for a much more robust digital future, but the market also needs time to test and adopt. A reliable digital payment infrastructure must be built first in order to allow these experiments to flourish. In this paper we examined the historical background and economic reasons for the U.S. dollar’s dominance in the world, and the probable conclusion is that the demand for U.S. dollars will likely continue, especially in the middle of a global pandemic, accompanied by a worldwide economic slowdown. The current monetary system is far from perfect, but there are no better alternatives for replacement at least in the near term. Incremental improvements are being made in both the public and private sectors, and stablecoins have a definite role to play in both the traditional and the new crypto world. Thank you. Reference:  How the US dollar became the world’s reserve currency, Investopedia  The dollar is in high demand, prone to dangerous appreciation, The Economist  Dollar dominance in trade and finance, Gita Gopinath  Global trades dependence on dollars, The Economist & IMF working papers  Total credit to non-bank borrowers by currency of denomination, BIS  Biggest stock exchanges in the world, Business Insider  McKinsey Global Private Market Review 2020, McKinsey & Company  Central banks current interest rates, Global Rates  Venezuela hyperinflation hits 10 million percent, CNBC  Lebanon inflation crisis, Reuters  Venezuela cryptocurrency market, Chainalysis  The most used cryptocurrency isn’t Bitcoin, Bloomberg  Trading volume of all crypto assets, coinmarketcap.com  Tether US dollar peg is no longer credible, Forbes  New crypto derivatives let you bet on (or against) Tether’s solvency, Coindesk  Remittance Price Worldwide, The World Bank  Interbank Information Network, J.P. Morgan  Jamie Dimon interview, CBS News  Rise of the central bank digital currency, BIS  Speech by Andrew Bailey, 3 September 2020, Bank of England
Coinbase to sponsor two Bitcoin Core developers with community fund grant
Link to AMB Crypto:https://eng.ambcrypto.com/coinbase-to-sponsor-two-bitcoin-core-developers-with-community-fund-grant/ Cryptocurrency exchange Coinbase announced today that it would sponsor at least two Bitcoin developers, who contribute directly to the Bitcoin Core codebase or closely associated Bitcoin projects, through the exchange’s new grants dubbed Crypto Community Fund. Coinbase said it would make the final selections after current Bitcoin Core developers and “important” community members shortlist the proposals. The advisory board for the bitcoin projects includes developers like Carla Kirk-Cohen, Anthony Towns, Amiti Uttarwar, Felix Weis, and Dan Boneh. Coinbase said projects hailing from any location could apply and while it aimed to focus on year-long developer grants, it would also consider shorter projects. Coinbase intended to expand the program to other types of projects and crypto communities if this Fund successfully helped the crypto community. Meanwhile, the crypto community at large, including Square’s Jack Dorsey, welcomed the move. Others saw this as a way to “give back to the coin [bitcoin] that started this industry.” In fact, Coinbase cited how the Bitcoin project, which launched without a fundraise, and kickstarted the industry, had inspired them to help the entire crypto industry “grow and improve.” However, the exchange noted that this “open source community” did in fact provide “critical support” for Bitcoin development, and how various institutions had donated to maintain the Bitcoin ecosystem. Coinbase further illustrated the types of projects it sought to support such as: Direct contributions to Bitcoin Core that improve testing, fuzzing, bug fixes as well as Significant code and Bitcoin Improvement Proposal (BIP) review. Contributor tooling like the open-source bitcoinacks.com and Bitcoin Core libraries and tools were among other project types Coinbase wanted to fund. Bitcoin price today is $11,562.58, at the time of writing, with BTC prices up by 1.5% in the last 24 hours.
Engineering, Technology and Other Talents (Homebrew)
Hello, everyone. I am sharing some homebrew adjustments to some Talents. If you have any suggestions or comments, please share them. Student Talent Additions (Research/Studying Karma Reward): If a PC possesses the Student Talent, he/she can earn +3 Karma for conducting academic research. The research time has to be at least 1 game-hour, and the reward is only given once per game-day. The maximum amount of game-time used per game-day for research is 8 hours, thus [8(3) = 24] 24 Karma is the daily maximum. The PC must declare what he/she is researching before any rewards are distributed. If a PC is studying a form of technology, for example an alien-made robot salvaged from a battle, the same rewards apply. This system could be used if a sorcerer is conducting magical exploration at a mystical library. If the PC holds the Student Talent, going to class could be another way to earn Karma. It could be a physical lab/classroom or going online. Doing so, a PC can earn +3 Karma per class attended. Performing homework assignments are also +3 worth of Karma. To make being a Student challenging, I would have the PC make Reason FEATs to pass tests, quizzes, exams and drafting essays/papers. Passing a science and/or a magical test would require a Yellow Reason FEAT. Passing a liberal studies or humanities test requires a Green Reason FEAT. A passed test would be a (+5) Karma reward, a failed exam would be (-5) Karma score. A PC with the Student Talent could earn 2(1d10) Karma by giving a college/university TEDx Talk. This reward is issued per lecture. In addition, a superhero can earn college credit performing one. *Astronautics: The science of the construction and design of vehicles for travel in space beyond a planet’s atmosphere. A PC with this Talent can study and/or conduct research on existing spacecraft, earning Karma like the Student Talent. In addition, he/she can attempt to build such vehicles, with a +1 CS Reason and -1CS Resource bonus and refer to Aliens & Space Travel spacecraft engineering charts (pp. 5-8). This skill takes up two (2) initial Talent slots. *Salvage: Talent allows an individual to enter any waste area (junkyard, alleyway dumpster, landfill, illegal dumping spot, hazard/trial zone, corporation-owned pocket dimension, etc.) and find components for inventions/modifications. Intuition or Reason, whichever is higher, is (+1CS) when searching. Finding anything takes time (1-10 hours, must be rolled with a 1d10). A successful FEAT determines the found item. This method reduces the cost of a device (-1CS). In addition, a PC with this skill gains a Waste-Facility/Recycling Business Contact. This skill takes up two (2) Talent slots. Cryptocurrency: This is a specialized form of Business/Finance. The PC is familiar with the world of cryptocurrency, blockchain technology, the history of Bitcoin, electronic-coin finance and how digital money can be mined. Initial Resources are a minimum of Good, and the PC gains a +1CS for FEAT rolls dealing with spending, investing and trading digital cash. A hero gains a Contact in the Professional category. A villain gains a Contact in the Criminal Business category and knows how the Black Market/Web works. *Quantum Physics Technology: Having a background in research and development on quantum physics, the hero with this talent can create, repair and tinker with devices that allow teleportation, wormhole travel and integrate warp capabilities and hyperdrive into spacecrafts. Also, this Talent allows the practitioner to create a phase armobattle-suit and/or “phase compatible” devices. The PC can make artificial versions of the following powers: Dimension Travel, Gateway, Teleport Self or Teleport Others (Ultimate Talents Book, p. 23-24). This skill takes up two (2) Talent slots. *Nanotechnology: This specialized skill focuses on modifying created inventions, by reducing their size. PCs with this Talent can ignore any modifiers relating to size reduction (ex. Portable, Cannot Normally Be Seen, Microscopic, Nano-level and/or Pocket-Sized). This skill takes up two (2) Talent slots. References Aliens & Space Travel.https://classicmarvelforever.com/cms/netbooks-and-enhancements.html Ultimate Talents Book. https://classicmarvelforever.com/cms/netbooks-and-enhancements.html
For someone not familiar with Bitcoin, the first question that comes to mind is, "What is Bitcoin?" And another common question that is often asked relates to the Bitcoin price. It started out a under 10 cents per Bitcoin upon its introduction in early 2009. It has risen steadily since and has hovered around $4000 per Bitcoin recently. So regarding Bitcoin value or the Bitcoin rate this is a most remarkable appreciation of value and has created many, many millionaires over the last eight years. The Bitcoin market is worldwide and the citizens of China and Japan have been particularly active in its purchase along with other Asian countries. However, recently in Bitcoin news the Chinese government has tried to suppress its activity in that country. That action drove the value of Bitcoin down for a short time but it soon surged back and is now close to its previous value. The Bitcoin history chart is very interesting. Its creator was an anonymous group of brilliant mathematicians (using the pseudonym Satoski Nakamoto) who designed it in 2008 to be "virtual gold" and released the first Bitcoin software in early 2009 during the height of the USA economic crisis. They knew that to have lasting value, it like gold had to have a finite supply. So in creating it they capped the supply at 21 million Bitcoin. Bitcoin mining refers to the process by which new Bitcoin is created. With conventional currency, government decides when and where to print and distribute it. With Bitcoin, "miners" use special software to solve complex mathematical problems and are issued a certain number of Bitcoin in return. A question that then arises is, is Bitcoin mining worth it. The answer is NO for the average person. It takes very sophisticated knowledge and a powerful computer system and this combination of factors makes it unattainable for the masses. This applies even more to bitcoin mining 2017 than in past years. Many wonder, who accepts Bitcoin? This question gets asked in various ways, what are stores that accept bitcoin, what are websites that accept bitcoins, what are some retailers that accept bitcoin, what are some places that accept bitcoin and where can I spend bitcoin. More and more companies are beginning to see the value of accepting cryptocurrencies as a valid payment option. Some major companies that do are DISH network, Microsoft, Expedia, Shopify stores, Newegg, Payza, 2Pay4You, and others.Two major holdouts at this time are Walmart and Amazon. Ethereum is the strongest rival to Bitcoin in the cryptocurrency market and many wonder at the question of Bitcoin vs Ethereum. Ethereum was created in mid-2015 and has gained some popularity but still ranks far behind Bitcoin in usage, acceptance and value. A question that often comes up often relates to Bitcoin scam. This author has a friend who made a purchase from a company that promised 1-2% growth per day. The company website listed no contact information and after a couple months the website simply vanished one day and my friend lost all the money he had invested which was several thousand dollars. One has to know how to buy Bitcoins, how to purchase Bitcoin or how to buy Bitcoin with credit card in order to get started. Coinbase is a very popular site to do this. Their fee is 3.75% and the buying limit is $10,000 per day. This would probably be the easiest way to buy bitcoins. Others would like to buy Bitcoin with debit card. Coinbase also provides this service and has clear step by step instructions on how to proceed with either your debit or credit card. There are those who would like to buy Bitcoin instantly. This can be done at Paxful, Inc. and can be done through W. Union or any credit/debit card. Other common questions that come up are what is the best way to buy Bitcoins, the best way to get bitcoins or where to buy bitcoins online. The easiest way is probably to purchase it through a digital asset exchange like the previously mentioned Coinbase. Opening an account with them is painless and once you link your bank account with them you can buy and sell Bitcoin quite easily. This is quite likely also the best place to buy Bitcoins. One must know what a Bitcoin wallet is and how to use it. It is simply the Bitcoin equivalent of a bank account. It allows you to receive Bitcoins, store them and send them to others. What it does is store a collection of Bitcoin privacy keys. Typically it is encrypted with a password or otherwise protected from unauthorized access. There are several types of digital wallets to choose from. A web wallet allows you to send, receive and store Bitcoin though your web browser. Another type is a desktop wallet and here the wallet software is stored directly on your computer. There are also mobile wallets which are designed for use by a mobile device. A question that occasionally comes up is that of Bitcoin stock or how to buy Bitcoin stock. By far the most common way to proceed in this area is to buy Bitcoin directly and not its stock. There is one entity called Bitcoin Investment trust which is an investment fund that is designed to track the market flow of Bitcoin. Some analysts however are calling this a risky way to become involved in this marketplace. The Bitcoin exchange rate USD is a closely watched benchmark both on a daily basis and long term over the last 8 years since its introduction to the world's financial marketplace. A popular company to receive the most current rate in Bitcoin valuation is XE. They show Bitcoin to USD valuation and also the complete Bitcoin price chart, the Bitcoin value chart and the Bitcoin to USD chart. If you ask, "How much is one Bitcoin?" you will always know from their continuously updated charts. Similar questions that come up in this area relate to the bitcoin rate history, the bitcoin price chart live, the bitcoin to dollar exchange rate, the bitcoin dollar chart and the bitcoin 5 year chart. The previously mentioned website, xe, is also a good source for answers to these questions. Regarding Bitcoin cash, ie. to get USD from selling Bitcoin, Bitwol is one company that enables you to do this. WikiHow is another company that will take you through this process.
Dow Theory applied to Bitcoin. Bitcoin / U.S. Dollar (BITSTAMP:BTCUSD) Alexander_Nikitin BITSTAMP:BTCUSD Bitcoin / U.S. Dollar. Trend Analysis primary. 11425 views . 158. 15. trendanalysis primary. There are always three trends in any market: Primary, Intermediate and Minor. All three trends are active all the time and may be moving in opposing directions. 1) It all starts from identifying ... This Bitcoin price prediction chart is based on a property long applied to gold and suggests exponential gains lie ahead. These numbers are staggering… Before looking at the idealized EWP chart, let’s consider a popular analysis concept being applied to the bitcoin price chart, namely, Log Regression: Bitcoin logarithmic regression, source: tradingview.com. This chart’s predictive value seems to be self-evident. A log curve fits neatly to the price chart and a series of consecutive “cycles” seem to project into the future as price ... And with applied model formula we get model price in USD: exp(-1,84) * SF ^ 3,36 = 8.875 USD On the chart in this page you can see this formula in action. It is calculating model price from 2010 (because Bitcoin was not traded before that and price information is difficult to obtain) all the way until 2030. On the top of the chart you can ... APPLIED Chart - ein übersichtlicher, großer Chart der APPLIED Aktie. Einstellbar sind verschiedene Zeiträume, Charttypen und Indikatoren.
Is Elliott Wave or any Technical Analysis applicable to Bitcoin and other markets? What is the likely out come of the current correction in Bitcoin and possi... In meinem aktuellen Video schaue ich mir ausnahmsweise die Kurse von Bitcoin, Ethereum und dem Altcoin-Index an. Ich schaue mir jedoch nicht den Markt der le... A huge CME gap in the Bitcoin chart, and I'll show you where the Bitcoin price is going next! BITCOIN TODAY: In this video, I'll go through the Bitcoin news ... Sign in to like videos, comment, and subscribe. Sign in. Watch Queue Queue. Watch Queue Queue. Remove all; Disconnect; The next video is starting stop BITCOIN HEUTE: In diesem Video gehe ich über die heutigen Bitcoin News & Ich mache eine Bitcoin Preis Analyse. Die BTC News oder Analysen können eine Inspira...