What can Ethereum do?
Cryptocurrency - Bitcoin Continues to Soar!
Re: Cryptocurrency - Bitcoin Continues to Soar!
You didn't understand what he wrote. Blockchain can be very successful in the future, but bitcoin and Ethereum could still fail.Prahasaurus wrote: ↑Mon May 17, 2021 10:12 pmIt's all about fundamentals. If crypto is a scam, if it's about convincing a "greater fool" to buy something with no value, then longer term the crypto market will go to zero. If, on the other hand, crypto will become a foundation of many industries, including finance, then its 2 trillion USD total market cap is peanuts.nisiprius wrote: ↑Mon May 17, 2021 6:02 pmWere you paying attention to the stock market circa the year 2000?Prahasaurus wrote: ↑Mon May 17, 2021 3:07 amLOL.Forester wrote: ↑Mon May 17, 2021 2:00 am Interesting new dynamic is the divorce of Elon Musk and the crypto community, it's like the tech scene splitting in two, beforehand QQQ/ARKK/Tesla/Bitcoin were all on the same page and all moving to the top right on the chart. As the tech growth story disintegrates there will be in-fighting and recrimination.
Yeah, tech growth is going to disintegrate. Let's all bet against technology! /s
Global Crossing. WorldCom. Webvan. Globalstar. Lycos. 3Com. Lucent. There was just no way you can avoid winning. Just invest in technology. In the "New Economy." The future is undervalued.
Yes, technology rolls on but there are bubbles and busts within it, and simply buying technology stocks isn't the master key to wealth without work.
Shorter term, there are always ups and downs. I'm a long term believer.
It doesn't have to be a scam for you to lose.
3Com and Lucent weren't scams, but people who invested in them basically lost everything.
Just like you could be right about blockchain, but wrong about Bitcoin and Ethereum (not to mention all the other alt-coins)
"The best tools available to us are shovels, not scalpels. Don't get carried away." - vanBogle59
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Re: Cryptocurrency - Bitcoin Continues to Soar!
You didn't understand what I wrote. I didn't say anything in that particular post about Bitcoin or Ethereum, did I? Go back and look. I'll wait...HomerJ wrote: ↑Mon May 17, 2021 11:21 pmYou didn't understand what he wrote. Blockchain can be very successful in the future, but bitcoin and Ethereum could still fail.Prahasaurus wrote: ↑Mon May 17, 2021 10:12 pmIt's all about fundamentals. If crypto is a scam, if it's about convincing a "greater fool" to buy something with no value, then longer term the crypto market will go to zero. If, on the other hand, crypto will become a foundation of many industries, including finance, then its 2 trillion USD total market cap is peanuts.nisiprius wrote: ↑Mon May 17, 2021 6:02 pmWere you paying attention to the stock market circa the year 2000?Prahasaurus wrote: ↑Mon May 17, 2021 3:07 amLOL.Forester wrote: ↑Mon May 17, 2021 2:00 am Interesting new dynamic is the divorce of Elon Musk and the crypto community, it's like the tech scene splitting in two, beforehand QQQ/ARKK/Tesla/Bitcoin were all on the same page and all moving to the top right on the chart. As the tech growth story disintegrates there will be in-fighting and recrimination.
Yeah, tech growth is going to disintegrate. Let's all bet against technology! /s
Global Crossing. WorldCom. Webvan. Globalstar. Lycos. 3Com. Lucent. There was just no way you can avoid winning. Just invest in technology. In the "New Economy." The future is undervalued.
Yes, technology rolls on but there are bubbles and busts within it, and simply buying technology stocks isn't the master key to wealth without work.
Shorter term, there are always ups and downs. I'm a long term believer.
It doesn't have to be a scam for you to lose.
3Com and Lucent weren't scams, but people who invested in them basically lost everything.
Just like you could be right about blockchain, but wrong about Bitcoin and Ethereum (not to mention all the other alt-coins)
Asset Allocation: VT
Re: Cryptocurrency - Bitcoin Continues to Soar!
You are just playing games now. Annoying.Prahasaurus wrote: ↑Mon May 17, 2021 11:27 pmYou didn't understand what I wrote. I didn't say anything in that particular post about Bitcoin or Ethereum, did I? Go back and look. I'll wait...HomerJ wrote: ↑Mon May 17, 2021 11:21 pmYou didn't understand what he wrote. Blockchain can be very successful in the future, but bitcoin and Ethereum could still fail.Prahasaurus wrote: ↑Mon May 17, 2021 10:12 pmIt's all about fundamentals. If crypto is a scam, if it's about convincing a "greater fool" to buy something with no value, then longer term the crypto market will go to zero. If, on the other hand, crypto will become a foundation of many industries, including finance, then its 2 trillion USD total market cap is peanuts.nisiprius wrote: ↑Mon May 17, 2021 6:02 pmWere you paying attention to the stock market circa the year 2000?Prahasaurus wrote: ↑Mon May 17, 2021 3:07 am
LOL.
Yeah, tech growth is going to disintegrate. Let's all bet against technology! /s
Global Crossing. WorldCom. Webvan. Globalstar. Lycos. 3Com. Lucent. There was just no way you can avoid winning. Just invest in technology. In the "New Economy." The future is undervalued.
Yes, technology rolls on but there are bubbles and busts within it, and simply buying technology stocks isn't the master key to wealth without work.
Shorter term, there are always ups and downs. I'm a long term believer.
It doesn't have to be a scam for you to lose.
3Com and Lucent weren't scams, but people who invested in them basically lost everything.
Just like you could be right about blockchain, but wrong about Bitcoin and Ethereum (not to mention all the other alt-coins)
You mentioned the 2 trillion market cap of crypto. 70% of that is bitcoin and ethereum. You have posted many times that you are heavily invested in both of them.
But fine, let's leave their names out... The point is still valid.
Whatever you are invested in now (AAVE, etc.) might not be the winner.
It doesn't have to be a scam for you to lose. You can be right that blockchain may become a huge part of the financial world, just like people were sure the Internet would be a huge part of the world, but you still might invest in the wrong crypto or blockchain protocols. Just like many people were right about the Internet, but still lost money by investing in the wrong companies.
Just being a strong believer in the future of crypto isn't enough.
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Re: Cryptocurrency - Bitcoin Continues to Soar!
Thanks, I had never even considered the possibility my specific crypto investments could fail!HomerJ wrote: ↑Mon May 17, 2021 11:35 pm You are just playing games now. Annoying.
You mentioned the 2 trillion market cap of crypto. 70% of that is bitcoin and ethereum. You have posted many times that you are heavily invested in both of them.
But fine, let's leave their names out... The point is still valid.
Whatever you are invested in now (AAVE, etc.) might not be the winner.
It doesn't have to be a scam for you to lose. You can be right that blockchain may become a huge part of the financial world, just like people were sure the Internet would be a huge part of the world, but you still might invest in the wrong crypto or blockchain protocols. Just like many people were right about the Internet, but still lost money by investing in the wrong companies.
Just being a strong believer in the future of crypto isn't enough.
No, seriously. I think we are all adults here and we know what we are doing. I may be making a huge mistake, but I believe the risk/reward ratio is very favorable. I don't think I could live with myself if I didn't go for this once in a lifetime opportunity.
The beauty is that we are all free to do as we like (provided the government doesn't censor crypto). You can choose to sit on the sidelines and warn others, I can choose to invest heavily in ETH and AAVE, putting my money where my mouth is, so to speak. That is what's great about capitalism and options. You are free to succeed and fail! And hopefully learn from your mistakes/success.
Asset Allocation: VT
Re: Cryptocurrency - Bitcoin Continues to Soar!
Given how cyclical the market has been in the past, do you have sell orders pre-planned for ETH and AAVE at particular price points?Prahasaurus wrote: ↑Mon May 17, 2021 11:44 pm I can choose to invest heavily in ETH and AAVE, putting my money where my mouth is, so to speak.
Or just HODL?
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Re: Cryptocurrency - Bitcoin Continues to Soar!
The cyclicality was due to Bitcoin's dominance within the entire sector. Bitcoin is a commodity like asset with little utility, no surprise it behaves more like gold than Amazon. However, I realize BTC still dominates total crypto market cap, and it will likely take another 4-5 years before we can throw off the shackles of Bitcoin dominance. Although it could also happen much sooner than most people think...watchnerd wrote: ↑Mon May 17, 2021 11:47 pmGiven how cyclical the market has been in the past, do you have sell orders planned for ETH and AAVE?Prahasaurus wrote: ↑Mon May 17, 2021 11:44 pm I can choose to invest heavily in ETH and AAVE, putting my money where my mouth is, so to speak.
Or just HODL?
My personal belief is we'll see Ethereum rise substantially from current levels throughout 2021. We likely will see a large pullback later in 2021 or 2022 (more likely), but not as substantial as many believe. So I'm looking for ETH at 25k USD, perhaps falling to 10k USD. And it won't take another 4 years for ETH to get back to 25k... I think the fall will be brief.
Bitcoin, on the other hand, I have no clue. Bitcoin will need to come to terms with the rise of ETH, and it's going to be interesting to watch. Psychologically, it could be quite devastating for BTC to lose its position as the "top" crypto.
I'm amazed most people still don't get ETH. Most don't even understand the differences between ETH and BTC. And most have crazy assumptions about how the so called "ETH killers" will compete against ETH. I think we'll have more clarity in 2021 on that issue, which will be extremely bullish for Ethereum in general.
My plan is to sell some crypto later in the year to reduce my dependence on this sector. I have already been selling some more riskier tokens. I've sold about 75% of my UNI position, for example, even though I'm still a massive bull on UNI moving forward. I have not sold any AAVE, though. As a customer of both, I can't see any world in which AAVE's market cap is lower than Wells Fargo. Since that implies a 30x from here, I'll just wait. And the beauty of Aave is their brand is so strong, they can potentially port their solution onto other blockchains if required (although not trivial in some cases, but still, they have a great team and a fantastic brand). We've already seen that with Aave on Matic.
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Re: Cryptocurrency - Bitcoin Continues to Soar!
That's the theory right. As a non-kool aid drinker, I have a hard time swallowing that as it's not what the data seem to show. Bitcoin is supposed to be the same story. Let's look:decapod10 wrote: ↑Mon May 17, 2021 10:18 amTransaction fees are not generally dependent on the price of the underlying coin, they are dependent on supply and demand for blockspace.typical.investor wrote: ↑Mon May 17, 2021 9:37 amI think you have twisted this inside out.Gadget wrote: ↑Mon May 17, 2021 9:13 amI think the part you're missing are the current transaction statistics. The ETH 2.0 merge is future. Just like ADA smart contracts are off in the future. Let's talk about today.HomerJ wrote: ↑Mon May 17, 2021 12:18 amUntil Ethereum transitions to 2.0 and PoS, it's technically still in the theoretical column as well.decapod10 wrote: ↑Mon May 17, 2021 12:07 amCardano supposedly has a lot of benefits over Ethereum on paper, however until it can actually run dApps, it is all theoretical. Cardano can claim they have lower gas fees the Ethereum, but it cannot be proven until they handle the same amount of traffic that Ethereum does. Cardano will have low gas fees now because there are so few transactions on it.
That being said, it is always possible that everything could work out, you never know. Ethereum still has to transition to 2.0, there is always a chance that it falters. Or Cardano could just turn out to be really awesome and overtake Ethereum. Or they could co-exist also. The question does that chance make Cardano worth 1/6 to 1/7 of Ethereum? Up to each person to decide.
Today, the 7 day average of actual fees paid DAILY on ETH is $69 million. I think you'd agree, even with high transaction costs currently, that this means there is just so much network traffic that people are willing to pay actual crypto that they could have cashed in for dollars on something. You may not agree with the use case for that something, but obviously a large number of people do.
If you scroll way down the list at https://cryptofees.info/ you'll find Cardano. Its 7 day average of fees paid DAILY is $26,000. Even if you make the claim that their transactions are cheaper (they are significantly), why isn't everyone using Cardano? Shouldn't its lower transaction fees encourage more network usage? The answer is because it can't do any of the things today that ETH can.
Just to put those numbers into different context... Cardano network fees are currently 0.0376% of ETH's fees. Yet the market cap for Cardano is 17% of Ethereum.
As ETH gets more valuable, transaction fees get more and more expensive when measured in USD. This is simply a fact.
That's it. So no, the lower market cap of Cardano is not necessarily because people are so willing to pay transaction fees on ETH because the smart contracts are so useful. The transaction fees are simply high because the ETH price is. Same with bitcoin.
Whether or not ETH does something with its contracts that adds value is another questions Some argue those contracts will raise the network congestion and raise the transaction fees. Some day people will examine whether the costs are worth it.
As it is, POW (proof of work by miners) seems extremely inefficient.
I'm curious what that $69 million in fees actually bought that Visa couldn't have done cheaper. But yeah, illegal transactions are always expensive.
Daily Confirmed Transactions (Bitcoin)
Jan 2017 around 260,000 to 313,000
May 2021 around 250,000 to 312,000
Transaction fees (0.00000001 BTC)
Jan 2017 75 to 118 satoshis/byte
May 2021 51 to 71 satoshis/byte
Transaction costs (USD)
Jan 2017 0.21 to 0.34 USD/tx
May 2021 5.29 to 10.24 USD/tx
BTC Price (USD)
Jan 2017 $1000
May 2021 $45,000 to 58,000
My eyes see the same number of transactions being executed at a far higher cost which correlates to price of bitcoin. I know that's bitcoin and ETH is a little different but both are still POW (proof of work).
As someone else has written:When you submit a transaction, it is essentially an auction process. You submit a gas fee along with your transaction, and the miners will choose the transactions which have submitted the highest transaction fee. If there is no demand for the network, people can submit low gas fees and miners just have to accept because there is no other business. It doesn't matter what the spot price of Ether is at the time.
There is an association between gas fees and Ether prices, but you have the cause and effect slightly out of order.
High demand for the network is the root cause of both high network fees and Ether prices (though Ether prices also have speculation boosting them as well).
Edit to add: I will say though that total network fees both is and isn't a good way of measuring what a network is worth I think, but there are a lot of way to look at it.
Actually, speculation that Dogecoin and Shibu Inu will rise dramatically is also pushing up ETH transaction fees tremendously because they run on the same network. I don't think these coins are doing anything meaningful other than increasing in price due to speculation. So yeah, an increasing price is pushing up transaction costs.Assuming the network has the same level of congestion, a transaction when ETH price is $1200 will use the same amount of Ether as the same transaction when ETH price is $1500.
In terms of the dollar amount spent the value will de different.
Re: Cryptocurrency - Bitcoin Continues to Soar!
Being a Kool-Aid drinker doesn't mean that my theory is incorrect, and I'm even agnostic about how important "total fees" on a network really is. I agree that "total fees" isn't necessarily a perfect way of measuring how "good" a network is.typical.investor wrote: ↑Tue May 18, 2021 4:45 am
That's the theory right. As a non-kool aid drinker, I have a hard time swallowing that as it's not what the data seem to show. Bitcoin is supposed to be the same story. Let's look:
Daily Confirmed Transactions (Bitcoin)
Jan 2017 around 260,000 to 313,000
May 2021 around 250,000 to 312,000
Transaction fees (0.00000001 BTC)
Jan 2017 75 to 118 satoshis/byte
May 2021 51 to 71 satoshis/byte
Transaction costs (USD)
Jan 2017 0.21 to 0.34 USD/tx
May 2021 5.29 to 10.24 USD/tx
BTC Price (USD)
Jan 2017 $1000
May 2021 $45,000 to 58,000
My eyes see the same number of transactions being executed at a far higher cost which correlates to price of bitcoin. I know that's bitcoin and ETH is a little different but both are still POW (proof of work).
Actually, speculation that Dogecoin and Shibu Inu will rise dramatically is also pushing up ETH transaction fees tremendously because they run on the same network. I don't think these coins are doing anything meaningful other than increasing in price due to speculation. So yeah, an increasing price is pushing up transaction costs.
But regardless, in my model, the gas prices of ETH and the value of ETH are also correlated, so showing correlation between the two doesn't necessarily prove or disprove my thesis. However, I think you're right that the price of ETH being higher causes gas prices to go higher because the value of the transactions occuring also go higher, and therefore people are willing to pay more for the transactions. So maybe I'm just playing sematntics to an extent, and I will concede that yes higher ETH prices does ultimately correlate with high gas prices and probably is some driver of high gas prices as well (when valued in USD).
However, it is definitely true that demand for the Ethereum network also drive gas prices as well. Whether it's POS or POW at this point doesn't really matter because Ethereum network has been running at > 98% capacity since October 2020, so the miner's costs are pretty much irrelevant and it's the users bids that are determining the gas prices.
Dogecoin does not use Ethereum (DOGE is it's own blockchain, a fork of Litecoin), however Shiba Inu is an ERC-20 token and uses Ethereum for transactions yes. Also true that spiking Shiba Inu prices did drive up Ethereum gas prices, yes. But that would seem to contradict your thesis that high Ethereum gas prices are caused by high ETH prices. The increased price of Shiba Inu caused increased demand for Ethereum network so people could trade Shiba Inu, which caused gas prices to spike.
Date Gas price (gwei) ETH (USD)
5-May-21 59.39 3522
6-May-21 65.94 3490
7-May-21 68.35 3479
8-May-21 139.81 3905
9-May-21 130.67 3922
10-May-21 238.39 3947
11-May-21 298.77 4167
12-May-21 281.83 3811
13-May-21 170.57 3719
14-May-21 128.8 4075
15-May-21 93.12 3641
May 10/May11 was the peak of Shiba Inu transactions, and it was the desire to trade SHIB and the other dog coins that was driving up gas prices.
Reference:
https://www.coindesk.com/ethereum-gas-f ... -imitators
Notice that in gwei the gas prices almost 5x from May 5 to May 11. Yes, it's also true that ETH value increased during this time, but only by around 20%. By far the biggest driver of increased gas prices was demand for blockspace (caused by love of dog coins) rather than ETH prices.
May 12th, Vitalik famously donated SHIB to the Covid relief fund, (I think it was the same day as the Elon tweet as well but I may be wrong on that). But in any case, the network demand from the dog coins dropped off after that, and gas prices dropped down along with the decreased demand.
So, I think it may be fair to say that ETH prices has some effect on gas prices when looking at USD values, but my opinion is that it's not the only factor or even the predominant one.
(FWIW, anecdotally I look at Ethereum gas prices several times per day and see which sources are creating the demand for block space, and I can also confirm that the Shiba contract was in the top 4 or so gas guzzlers at the peak, which is unusual. Today for example it is #18. But just my own observation)
Re: Cryptocurrency - Bitcoin Continues to Soar!
The economics are reminding me of when I owned oil and gas pipeline MLPs.decapod10 wrote: ↑Tue May 18, 2021 10:36 am Notice that in gwei the gas prices almost 5x from May 5 to May 11. Yes, it's also true that ETH value increased during this time, but only by around 20%. By far the biggest driver of increased gas prices was demand for blockspace (caused by love of dog coins) rather than ETH prices.
May 12th, Vitalik famously donated SHIB to the Covid relief fund, (I think it was the same day as the Elon tweet as well but I may be wrong on that). But in any case, the network demand from the dog coins dropped off after that, and gas prices dropped down along with the decreased demand.
So, I think it may be fair to say that ETH prices has some effect on gas prices when looking at USD values, but my opinion is that it's not the only factor or even the predominant one.
(FWIW, anecdotally I look at Ethereum gas prices several times per day and see which sources are creating the demand for block space, and I can also confirm that the Shiba contract was in the top 4 or so gas guzzlers at the peak, which is unusual. Today for example it is #18. But just my own observation)
Strictly speaking, the payout was related to the volume going through the pipe, but the volume went up in periods of high demand, as did the price of oil/gas.
So there was a strong correlation between pipeline volume and commodity price.
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Re: Cryptocurrency - Bitcoin Continues to Soar!
Yeah, it's tough because sometimes it's sort of a chicken and the egg problem.watchnerd wrote: ↑Tue May 18, 2021 11:19 amThe economics are reminding me of when I owned oil and gas pipeline MLPs.decapod10 wrote: ↑Tue May 18, 2021 10:36 am Notice that in gwei the gas prices almost 5x from May 5 to May 11. Yes, it's also true that ETH value increased during this time, but only by around 20%. By far the biggest driver of increased gas prices was demand for blockspace (caused by love of dog coins) rather than ETH prices.
May 12th, Vitalik famously donated SHIB to the Covid relief fund, (I think it was the same day as the Elon tweet as well but I may be wrong on that). But in any case, the network demand from the dog coins dropped off after that, and gas prices dropped down along with the decreased demand.
So, I think it may be fair to say that ETH prices has some effect on gas prices when looking at USD values, but my opinion is that it's not the only factor or even the predominant one.
(FWIW, anecdotally I look at Ethereum gas prices several times per day and see which sources are creating the demand for block space, and I can also confirm that the Shiba contract was in the top 4 or so gas guzzlers at the peak, which is unusual. Today for example it is #18. But just my own observation)
Strictly speaking, the payout was related to the volume going through the pipe, but the volume went up in periods of high demand, as did the price of oil/gas.
So there was a strong correlation between pipeline volume and commodity price.
Conceptually, I think about the scenario where people are just hoarding ETH and not moving it, like Bezos just decides to buy and hold 50% of the Ether supply or something. but people aren't really transacting much and network capacity is say 60%. This constricts the supply of ETH and causes prices to go up. However I don't think gas prices would be particularly high in this case, they would probably ride somewhere just above miner's costs I'm guessing. Because there is plenty of free block space in this scenario, so you don't need to worry about outbidding other users to fight for space. You just need to bid enough that the miners will be interested in taking your transaction, and miners' costs are based on fiat, not ETH prices.
Re: Cryptocurrency - Bitcoin Continues to Soar!
Purely anecdotal observations on portfolio behavior from holding a small (~2%) allocation to crypto in what is otherwise approximate a global stock/bond portfolio close to 60/40:
1. As a high volatility, high beta asset, even a 2% allocation has noticeable impact on daily portfolio fluctuations -- far more than I expected.
2. Risk parity analysis puts the 2 blue chip cryptos (BTC, ETH) at about a 1:6-7 risk parity ratio versus global equities. So even 2% in crypto "feels like" you increased your equity exposure by 12-14%.
3. More correlated with equities than expected, less correlated with gold than expected, despite discussion about BTC being "digital gold".
=====
As a footnote on trying to hold crypto at market cap...
There is a Total Market Cap token in existence that I wasn't aware of, in *beta* (danger zone):
https://cryptex.finance/
However, I'm not holding it (yet), haven't used it, and it isn't available on any of the major exchanges.
I may add 1 share to my wallet just to see how it goes.
1. As a high volatility, high beta asset, even a 2% allocation has noticeable impact on daily portfolio fluctuations -- far more than I expected.
2. Risk parity analysis puts the 2 blue chip cryptos (BTC, ETH) at about a 1:6-7 risk parity ratio versus global equities. So even 2% in crypto "feels like" you increased your equity exposure by 12-14%.
3. More correlated with equities than expected, less correlated with gold than expected, despite discussion about BTC being "digital gold".
=====
As a footnote on trying to hold crypto at market cap...
There is a Total Market Cap token in existence that I wasn't aware of, in *beta* (danger zone):
https://cryptex.finance/
However, I'm not holding it (yet), haven't used it, and it isn't available on any of the major exchanges.
I may add 1 share to my wallet just to see how it goes.
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Re: Cryptocurrency - Bitcoin Continues to Soar!
Or like someone keeps taking my portfolio to the dog track!
(Which is why my crypto gets its own spreadsheet. That way I can continue lying to myself: "I'm not REALLY invested in it".)
OOOOO! I want some of that.
Really. Thanks. I will check that out today.
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Re: Cryptocurrency - Bitcoin Continues to Soar!
Can you help me understand this better? I saw your reply to my UPRO/TMF post yesterday, but I didn't really understand what you were saying.
(FWIW, my original crypto investment at 50/50 BTC/ETH was 35bps of our portfolio. More like a trip to a casino [a place I loathe] than an actual investment allocation.)
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Re: Cryptocurrency - Bitcoin Continues to Soar!
Never heard of cryptex, a 5 minute review of their Whitepaper shows a synthetic asset using Chainlink oracles to mirror total market cap. I don't see anything too interesting or useful here, to be honest. I would not want to put a lot of money on a synth, especially with a new protocol with likely limited liquidity. A massive draw down could be disastrous. I much prefer to own the underlying assets. No matter what happens, I still have control of my ETH, BTC, etc. With derivatives, you add another layer or risk.watchnerd wrote: ↑Tue May 18, 2021 12:09 pm Purely anecdotal observations on portfolio behavior from holding a small (~2%) allocation to crypto in what is otherwise approximate a global stock/bond portfolio close to 60/40:
1. As a high volatility, high beta asset, even a 2% allocation has noticeable impact on daily portfolio fluctuations -- far more than I expected.
2. Risk parity analysis puts the 2 blue chip cryptos (BTC, ETH) at about a 1:6-7 risk parity ratio versus global equities. So even 2% in crypto "feels like" you increased your equity exposure by 12-14%.
3. More correlated with equities than expected, less correlated with gold than expected, despite discussion about BTC being "digital gold".
=====
As a footnote on trying to hold crypto at market cap...
There is a Total Market Cap token in existence that I wasn't aware of, in *beta* (danger zone):
https://cryptex.finance/
However, I'm not holding it (yet), haven't used it, and it isn't available on any of the major exchanges.
I may add 1 share to my wallet just to see how it goes.
I think you are overcomplicating things. Just buy BTC and ETH, perhaps a decent DeFi index like DEFI5 from Indexed Finance or DPI, and you are done.
Asset Allocation: VT
Re: Cryptocurrency - Bitcoin Continues to Soar!
Risk parity is a measurement of relative risk contribution of one asset vs another.Texanbybirth wrote: ↑Tue May 18, 2021 12:18 pm
Can you help me understand this better? I saw your reply to my UPRO/TMF post yesterday, but I didn't really understand what you were saying.
(FWIW, my original crypto investment at 50/50 BTC/ETH was 35bps of our portfolio. More like a trip to a casino [a place I loathe] than an actual investment allocation.)
So in the example above, I need to hold *approximately* $60-70k in VT to equal the risk of $10k in blended GBTC/ETHE.
At that ratio, a portfolio composed of only those will have similar risk exposure to stocks and crypto.
Note: risk metrics change over time and crypto hasn't been around that long so data subject to change.
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Re: Cryptocurrency - Bitcoin Continues to Soar!
Thanks, but I'm having fun following a different path.Prahasaurus wrote: ↑Tue May 18, 2021 12:28 pm
I think you are overcomplicating things. Just buy BTC and ETH, perhaps a decent DeFi index like DEFI5 from Indexed Finance or DPI, and you are done.
I know you're all in on DeFi, but DEFI5 isn't total market cap, so not the same thing.
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Re: Cryptocurrency - Bitcoin Continues to Soar!
I have to echo the risks here. Just at a glance it looks like TCAP is trading on Sushiswap at like $316 USD but from the whitepaper it sounds like it should trade at $208 (1/10,000,000,000 of $2.08 billion market cap). That is way off peg already for something that's just been out for a few days. I'd definitely wait to jump into TCAP until the dust settles a bit (unless I'm misunderstanding how it works / should be priced).Prahasaurus wrote: ↑Tue May 18, 2021 12:28 pmNever heard of cryptex, a 5 minute review of their Whitepaper shows a synthetic asset using Chainlink oracles to mirror total market cap. I don't see anything too interesting or useful here, to be honest. I would not want to put a lot of money on a synth, especially with a new protocol with likely limited liquidity. A massive draw down could be disastrous. I much prefer to own the underlying assets. No matter what happens, I still have control of my ETH, BTC, etc. With derivatives, you add another layer or risk.watchnerd wrote: ↑Tue May 18, 2021 12:09 pm Purely anecdotal observations on portfolio behavior from holding a small (~2%) allocation to crypto in what is otherwise approximate a global stock/bond portfolio close to 60/40:
1. As a high volatility, high beta asset, even a 2% allocation has noticeable impact on daily portfolio fluctuations -- far more than I expected.
2. Risk parity analysis puts the 2 blue chip cryptos (BTC, ETH) at about a 1:6-7 risk parity ratio versus global equities. So even 2% in crypto "feels like" you increased your equity exposure by 12-14%.
3. More correlated with equities than expected, less correlated with gold than expected, despite discussion about BTC being "digital gold".
=====
As a footnote on trying to hold crypto at market cap...
There is a Total Market Cap token in existence that I wasn't aware of, in *beta* (danger zone):
https://cryptex.finance/
However, I'm not holding it (yet), haven't used it, and it isn't available on any of the major exchanges.
I may add 1 share to my wallet just to see how it goes.
I think you are overcomplicating things. Just buy BTC and ETH, perhaps a decent DeFi index like DEFI5 from Indexed Finance or DPI, and you are done.
EDIT: Maybe there's an arbitrage opportunity here, haha. I guess you can mint TCAP tokens directly rather than buy on the secondary market. I guess secondary market demand is quite high leading to a huge premium.
Re: Cryptocurrency - Bitcoin Continues to Soar!
Oh, I'm not planning on putting any major money in it.txhill wrote: ↑Tue May 18, 2021 12:42 pm
I have to echo the risks here. Just at a glance it looks like TCAP is trading on Sushiswap at like $316 USD but from the whitepaper it sounds like it should trade at $208 (1/10,000,000,000 of $2.08 billion market cap). That is way off peg already for something that's just been out for a few days. I'd definitely wait to jump into TCAP until the dust settles a bit (unless I'm misunderstanding how it works / should be priced).
EDIT: Maybe there's an arbitrage opportunity here, haha. I guess you can mint TCAP tokens directly rather than buy on the secondary market. I guess secondary market demand is quite high leading to a huge premium.
Like they warn, it's beta.
But buying one token for $300 and change isn't going to do me any harm if it explodes.
And it will be fun to watch evolve.
Global stocks, IG/HY bonds, gold & digital assets at market weights 75% / 19% / 6% || LMP: TIPS ladder
Re: Cryptocurrency - Bitcoin Continues to Soar!
You could try minting a TCAP token yourself, as it would be at the actual peg of $208 and it might be a fun project. I don't know exactly how one does it but their website supposedly walks through the process. Of course it might not be worth minting just one token if gas fees are high, I guess.watchnerd wrote: ↑Tue May 18, 2021 12:55 pmOh, I'm not planning on putting any major money in it.txhill wrote: ↑Tue May 18, 2021 12:42 pm
I have to echo the risks here. Just at a glance it looks like TCAP is trading on Sushiswap at like $316 USD but from the whitepaper it sounds like it should trade at $208 (1/10,000,000,000 of $2.08 billion market cap). That is way off peg already for something that's just been out for a few days. I'd definitely wait to jump into TCAP until the dust settles a bit (unless I'm misunderstanding how it works / should be priced).
EDIT: Maybe there's an arbitrage opportunity here, haha. I guess you can mint TCAP tokens directly rather than buy on the secondary market. I guess secondary market demand is quite high leading to a huge premium.
Like they warn, it's beta.
But buying one token for $300 and change isn't going to do me any harm if it explodes.
And it will be fun to watch evolve.
Re: Cryptocurrency - Bitcoin Continues to Soar!
I was thinking of doing that.txhill wrote: ↑Tue May 18, 2021 12:57 pm
You could try minting a TCAP token yourself, as it would be at the actual peg of $208 and it might be a fun project. I don't know exactly how one does it but their website supposedly walks through the process. Of course it might not be worth minting just one token if gas fees are high, I guess.
I'll need to read through the docs on the weekend.
It's stakeable, too.
Global stocks, IG/HY bonds, gold & digital assets at market weights 75% / 19% / 6% || LMP: TIPS ladder
Re: Cryptocurrency - Bitcoin Continues to Soar!
This looks very interesting, but it feels so not legit. I just can't bring myself to trust the website yet and connect my crypto wallet to try their mint your own token feature. It also says to make sure to always have a ratio above the minimum ratio to avoid being liquidated. What does that even mean if I'm minting my own token?watchnerd wrote: ↑Tue May 18, 2021 12:59 pmI was thinking of doing that.txhill wrote: ↑Tue May 18, 2021 12:57 pm
You could try minting a TCAP token yourself, as it would be at the actual peg of $208 and it might be a fun project. I don't know exactly how one does it but their website supposedly walks through the process. Of course it might not be worth minting just one token if gas fees are high, I guess.
I'll need to read through the docs on the weekend.
It's stakeable, too.
Re: Cryptocurrency - Bitcoin Continues to Soar!
I didn’t read it carefully and I’d be super cautious. But I think the way it works is you have to collateralize the token you mint with either ETH or DAI (a stable coin), I think with 200% the value of the TCAP token minted. And in order to get your ETH/DAI back you would have to burn a TCAP token. I can see how in theory this sort of works but it isn’t very tested and any time you lock crypto into a protocol you’re at the mercy of glitches and even malicious back doors by developers, so proceed with caution. I guess that alone explains some of the premium associated with just buying the token instead of risking 200% of the token’s value in ETH.Gadget wrote: ↑Tue May 18, 2021 8:19 pmThis looks very interesting, but it feels so not legit. I just can't bring myself to trust the website yet and connect my crypto wallet to try their mint your own token feature. It also says to make sure to always have a ratio above the minimum ratio to avoid being liquidated. What does that even mean if I'm minting my own token?watchnerd wrote: ↑Tue May 18, 2021 12:59 pmI was thinking of doing that.txhill wrote: ↑Tue May 18, 2021 12:57 pm
You could try minting a TCAP token yourself, as it would be at the actual peg of $208 and it might be a fun project. I don't know exactly how one does it but their website supposedly walks through the process. Of course it might not be worth minting just one token if gas fees are high, I guess.
I'll need to read through the docs on the weekend.
It's stakeable, too.
Re: Cryptocurrency - Bitcoin Continues to Soar!
Well, it would be nice to have that Crypto in Free Fall thread unlocked right now cause it's bye bye biirrrrrrrrddddieee all over.
Someone even kicked my Doge... despicable!
Someone even kicked my Doge... despicable!
Re: Cryptocurrency - Bitcoin Continues to Soar!
Almost a total crushing.
Some of the little alt smart chains or swaps are still green.
I think LINK and SUSHI are still green.
Global stocks, IG/HY bonds, gold & digital assets at market weights 75% / 19% / 6% || LMP: TIPS ladder
Re: Cryptocurrency - Bitcoin Continues to Soar!
I have no idea.Gadget wrote: ↑Tue May 18, 2021 8:19 pm This looks very interesting, but it feels so not legit. I just can't bring myself to trust the website yet and connect my crypto wallet to try their mint your own token feature. It also says to make sure to always have a ratio above the minimum ratio to avoid being liquidated. What does that even mean if I'm minting my own token?
I'd expect to potentially lose any money, not necessarily through outright scam, but perhaps just through bugs, even.
Last edited by watchnerd on Tue May 18, 2021 10:35 pm, edited 1 time in total.
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Re: Cryptocurrency - Bitcoin Continues to Soar!
Crypto is falling, but since that thread is locked...
My dog scowled when I mentioned doggycoin. So clearly he does not approve.
My dog scowled when I mentioned doggycoin. So clearly he does not approve.
Re: Cryptocurrency - Bitcoin Continues to Soar!
I'm not a trader and I don't put a lot of faith in charting, but the traders do.Kookaburra wrote: ↑Tue May 18, 2021 10:35 pm Crypto is falling, but since that thread is locked...
My dog scowled when I mentioned doggycoin. So clearly he does not approve.
And they say if BTC drops below the '$35k support level', it's a steep drop off after that.
I guess that's bad if you're trying to make money in the near term?
Or is it a buying opportunity and time to lever up?
*shrug*
I don't know how traders live that life without going crazy.
Global stocks, IG/HY bonds, gold & digital assets at market weights 75% / 19% / 6% || LMP: TIPS ladder
Re: Cryptocurrency - Bitcoin Continues to Soar!
Smashing idea! UDOGE (DOGE 3x Daily Leveraged Fund)watchnerd wrote: ↑Tue May 18, 2021 10:43 pmI'm not a trader and I don't put a lot of faith in charting, but the traders do.Kookaburra wrote: ↑Tue May 18, 2021 10:35 pm Crypto is falling, but since that thread is locked...
My dog scowled when I mentioned doggycoin. So clearly he does not approve.
And they say if BTC drops below the '$35k support level', it's a steep drop off after that.
I guess that's bad if you're trying to make money in the near term?
Or is it a buying opportunity and time to lever up?
*shrug*
I don't know how traders live that life without going crazy.
Re: Cryptocurrency - Bitcoin Continues to Soar!
I must have drank the kool aid because this just seems like an ETH buying opportunity for the long term. Seems like there’s a lot of signals that prices go much lower though.
Re: Cryptocurrency - Bitcoin Continues to Soar!
I was able to do some tax loss harvesting, maybe I will do it again if ETH drops another 15% or so.
Re: Cryptocurrency - Bitcoin Continues to Soar!
Yeah, I don't think the blood-letting is stopping right now. I will keep going with my DCA, for ETH.
Re: Cryptocurrency - Bitcoin Continues to Soar!
Levered coins actually do exist, although I'm not sure about 3x DOGE.
I ran across some on Coinbase, although they were in the 'Not Traded' category, i.e. can't buy them on Coinbase.
Global stocks, IG/HY bonds, gold & digital assets at market weights 75% / 19% / 6% || LMP: TIPS ladder
Re: Cryptocurrency - Bitcoin Continues to Soar!
BTC below $40k, now at $39.6k
The "stock to flow" pricing predictions seem pretty far off base right now.
ETH below $3K.
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Re: Cryptocurrency - Bitcoin Continues to Soar!
Re: Cryptocurrency - Bitcoin Continues to Soar!
Well, the Falling thread is locked, so....where else?Marseille07 wrote: ↑Tue May 18, 2021 11:45 pm
Is it OK to talk about falling in this thread? I realize it's hard not to, given a massive crash that's happening right now.
Global stocks, IG/HY bonds, gold & digital assets at market weights 75% / 19% / 6% || LMP: TIPS ladder
Re: Cryptocurrency - Bitcoin Continues to Soar!
Statements like this, from yesterday, make me laugh at technical analysis:
Seriously, I can't believe anyone believes chartists...
https://www.coindesk.com/bitcoin-stabil ... ce-50k-53kBitcoin (BTC) buyers continued to defend support around $42,000 on Monday. The sell-off that began last week appears to be weakening as the cryptocurrency registers oversold signals. However, upside appears limited towards $50,000-$53,000 resistance.
The cryptocurrency was trading around $45,000 at the time of writing.
The relative strength index (RSI) on the four-hour chart is now oversold similar to the last week in April, which preceded a price bounce.
The RSI is also oversold on the daily chart and is neutral on the weekly chart, which could signal a brief price recovery as sellers capitulate.
Initial resistance is around $50,000 and then at the 100-period moving average on the four-hour chart at $53,000.
Bitcoin continues to consolidate and is now at the bottom of a three-month range.
The broader uptrend remains intact, albeit vulnerable to sharp swings and frequent drawdowns.
Seriously, I can't believe anyone believes chartists...
Global stocks, IG/HY bonds, gold & digital assets at market weights 75% / 19% / 6% || LMP: TIPS ladder
Re: Cryptocurrency - Bitcoin Continues to Soar!
Yeah charts are nonsense but some signals are more telling than others. Like yesterday a huge amount of inflow into exchanges, which can only mean that whales are getting ready to sell. When outflows from exchanges pick up then that will be a good signal for a bottom. But with a long term view this is just fun to watch. Isn’t a loss if you never sellwatchnerd wrote: ↑Tue May 18, 2021 11:51 pm Statements like this, from yesterday, make me laugh at technical analysis:
https://www.coindesk.com/bitcoin-stabil ... ce-50k-53kBitcoin (BTC) buyers continued to defend support around $42,000 on Monday. The sell-off that began last week appears to be weakening as the cryptocurrency registers oversold signals. However, upside appears limited towards $50,000-$53,000 resistance.
The cryptocurrency was trading around $45,000 at the time of writing.
The relative strength index (RSI) on the four-hour chart is now oversold similar to the last week in April, which preceded a price bounce.
The RSI is also oversold on the daily chart and is neutral on the weekly chart, which could signal a brief price recovery as sellers capitulate.
Initial resistance is around $50,000 and then at the 100-period moving average on the four-hour chart at $53,000.
Bitcoin continues to consolidate and is now at the bottom of a three-month range.
The broader uptrend remains intact, albeit vulnerable to sharp swings and frequent drawdowns.
Seriously, I can't believe anyone believes chartists...
Re: Cryptocurrency - Bitcoin Continues to Soar!
Flow data definitely makes sense to look at.txhill wrote: ↑Tue May 18, 2021 11:59 pm
Yeah charts are nonsense but some signals are more telling than others. Like yesterday a huge amount of inflow into exchanges, which can only mean that whales are getting ready to sell. When outflows from exchanges pick up then that will be a good signal for a bottom. But with a long term view this is just fun to watch. Isn’t a loss if you never sell
But a double head and shoulders death cross pattern transitioning to a cup and handle whatever......
I'd have more respect if they just skipped the schtick and whipped out some Tarot cards.
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Re: Cryptocurrency - Bitcoin Continues to Soar!
I don't recall ever speaking with such certainty about the unknown, or things I have no clue about, so it's hard for me to sympathize... but I wonder how it must feel to be the author right now. hahawatchnerd wrote: ↑Tue May 18, 2021 11:51 pm Statements like this, from yesterday, make me laugh at technical analysis:
[...]
https://www.coindesk.com/bitcoin-stabil ... ce-50k-53k
Seriously, I can't believe anyone believes chartists...
I liked this gem:
"
Bitcoin continues to consolidate and is now at the bottom of a three-month range. The broader uptrend remains intact, albeit vulnerable to sharp swings and frequent drawdowns.
"
Ok the storm is over... and we're taking flight... but not really.
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Re: Cryptocurrency - Bitcoin Continues to Soar!
historical volatility like this downwards is why many have no issue to pay 10-20%/year to borrow a cryptocurrency. you make that interest back in no time
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Re: Cryptocurrency - Bitcoin Continues to Soar!
Not sure if this even qualifies as a correction. -80% and we are talking crash. This is crypto.
Re: Cryptocurrency - Bitcoin Continues to Soar!
Locked: See this post by the site owner: New Forum Policy Prohibiting Discussions of Cryptocurrency, Market Manipulation Schemes, etc as Investing Strategies