Bitcoin (BTC) Today Historical Price Data DigitalCoinPrice
Bitcoin (BTC) Today Historical Price Data DigitalCoinPrice
Bitcoin Price from 2009 to 2019 - knoema.com
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Información en DASH : Estrategia elemental para cronificar SIN CURAR una jerarquía ponzi y sus parásitos.
u / dnale0ru / dashcryptou / DashUncensored It is not possible to add posts about censorship suffered in the thread anchored at the beginning of this reddit and it is important so that the open files do not sink to the bottom of the list. If you still come to this reddit, please open it.____________________________________________________________________________________________________ Information in DASH: Elemental strategy to chronify WITHOUT CURING a ponzi hierarchy and its parasites.( Development of the facts and presentation / monitoring of the corruption of the Valenzuela parasite and the repressive, intoxicating and corrupt strategy of the kidnapping elite of a deeply corrupt project ) With no prior breach of rules, I was banned by Valenzuela on the Dast Talk discord (probably the most unworthy parasite on DASH's infographic distortion channels - whose only contribution to the project and the reason for their alms is the information intoxication of the existing supporters to hide the endless defaults and incapacities of the project managers ... and the deception of new users / capital contributors to parasitize through the extractive structure by DASH-) for quoting a video of his (in the line of ignorance, cosmetic propaganda and habitual vacuity ) of an irrelevant interview with two inhabitants of the Ponzi (of absolutely empty perspectives too). Anyway ... an hour of topics, inaccuracies and brain death live ... nothing new. As the manipulation of the censoring cockroach Valenzuela is so evident - And as here I will not refer to the census rules of the official channels of the project nor do I need to save the forms to show a respect that I lack for the legion of parasites that, installed ponzi created, expand the metastasis of crap and repression that allows the entire cascade of incapable bummers to continue sucking) I copy and paste ALL the crossing of the message clarifier: Purpelado12 / 10/2020 https://odysee.com/@DigitalCashNetwork:c/Dash-Podcast-156:5?r=FqowB2QREmrBV4DcLpAWb8cz2K4gYVUV u/TheDesertLynx ... when you make economic references ... (and I mean both these and the rest of your past expositions on economic aspects of DASH) ... are you really convinced of what you say? The whole interview is a succession of (let's be nice and not say "manipulations") glaring inaccuracies. But as a sign of DASH's wacky economic approach, it works. TheDesertLynx12 / 10/2020 u/Purpelado do not mention or address me again, this will be considered harassment. Thank you \* Purpelado12 / 10/2020 And that in what libertarian code is it written? There is nothing to consider personally beyond some analyzable approaches like any other. (for my part, of course). *\* bigrcanada12 / 10/2020 Thank god i can't understand his English. **\* >>>>>>>>>>>>>>>>>>>>>>>>>>>>>> 5 days later, the kindergarten guru (or a neighborhood tavern full of hicks more ignorant than he himself still) uploads another of his "existential illuminations" (in his line of obviousness and emptiness "signature mark") TheDesertLynx 17/10/2020 There's a few @ p5yc071c it depends which one because there's two I made this to explore some of the bigger adoption issues we face: https://odysee.com/@DigitalCashNetwork:c/Adoption:3?r=FqowB2QREmrBV4DcLpAWb8cz2K4gYVUV Odysee The REAL Reasons Cryptocurrency Adoption Hasn't Happened ! [image] (https://thumbs.spee.ch/view/2/72565375fff13b62.png) Cryptocurrency has been around for over 10 years since Bitcoin's birth in 2009. But it still hasn't reached anything resembling mainstream ... >>> Of course, disregarding his sly previous threats, I quote its ridiculous sermon, in direct contradiction to his previous (pseudo) historical theses, downplaying and ridiculing the need for stable resources in DASH. Purpelado17 / 10/2020 u/TheDesertLynx ... volatility is an adoption problem? Now? (the first one you name) after a 96% wealth drain during which you have spread the message on DASH networks that stable coins "are a fad"? (A fashion that bills, only in one currency, as much daily money as BTC, ETH and Ripple together - and more than the rest of the united sector, thousands of projects -). How do you think that BTC has maintained reasonable volatility compared to all other projects, if not for Tether? (which is worth nothing less than the throne of the industry light years from the rest). Without Tether, Bitcoin would have fallen to 3 figures, like the rest ... and would be suffering a martyrdom to regain its lost status - like the rest of the relevant currencies ... and DASH especially -). In order for the demand for DASH AS A MEANS OF PAYMENT, which is what you defend even by directly encouraging spending, to eliminate the volatility suffered by the currency, you do not need to go up in adoption, but to achieve a MONSTER adoption ( that is, subordinate a current problem, short-term, to a future and long-term solution ... and it is not necessary to clarify the asynchrony of that approach and its effects: Just look at the DASH price statement). But DASH needs effective stable resources TODAY to mitigate its volatility and reaffirm itself as a store of value (and on top of that, create a progressive growth structure). As u/xcdc says, that is what users are looking for to entrust their money to a project: A SOLID asset. Until that is resolved, this will be a destructive spiral of wealth ... even if the best technology for payments is available. TheDesertLynx17/10/2020 u/Purpelado do not mention me or address me again, this will be considered harassment. Thank you / (copypaste of its threat from days ago - "supposedly" loaded with reason for those who had not read it and seen the pure invention of "harassment") u/TheDesertLynx Some people just don't learn: Facepalm: Purpelado17 / 10/2020 By the way ... being a good means of payment and a good store of value ARE NOT EXCLUSIVE (an argument that continually underlies the monetary qualities of DASH). BTC has sacrificed - to this day - qualities such as speed in exchange for being the "Gold" of the sector (an approach that is being very beneficial) ... but for sheer technical limitations. However, DASH is technically prepared to address both challenges: the solution is strategic and therefore perfectly within reach. bigrcanada at 5:54 Yeah ... FUCK! Like why is Purple Dick still on here too?!? Fuck fuck !!!!!!! ***\* >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> 1- notes and clarifications \* He accuses me of harassment when there are not even previous posts between him and me (in fact, it would be difficult to find a quote from me, looking back MONTHS ... probably and except by chance, there is not ... that is: NOTHING of harassment - I know that his censorious, ignorant and manipulative attitude fits easily into my IMPERSONAL AND GENERIC criticisms of the objectionable practices in DASH ... and I also know that "thedesertlynx / Valenzuela" is corrupt, cowardly and complex, with which, except Express mention of me, I will not give you excuses to express your cowardice and one-sided authoritarianism -) *\* I expose your invention on a non-existent harassment. **\* Thanks to a post that tries to ridicule me ... to which he adds a request for an automatic translation of the discord (it does not seek to expose a problem or harassment ... but to excuse the censorship he wants to execute on my posts, ridicule me and call for my harassment the group of trolls that systematically intoxicate the DASH Talk Discord) ***\* The group of trolls keeps harassing me (in text and thank you icons) 2- Links 1- Invention of infraction ... and threat of ban. https://discord.com/channels/484546513507188745/484546513935269918/765205520347824128 2- Execution of ban https://discord.com/channels/484546513507188745/484546513935269918/767040388505927730
The Blockchain Paradox: Decentralization Through Centralized Institutions
Link to Cointelegraph article:https://cointelegraph.com/news/the-blockchain-paradox-decentralization-through-centralized-institutions Institutional adoption of blockchain can offer great benefits, as truly decentralized control often comes from the roots of centralization. The power of blockchain technology to decentralize control of our financial economy is well documented. It is one of the cornerstones of the origins of the technology, with the genesis block of Satoshi Nakamoto’s Bitcoin (BTC) containing a reference to the 2008–2009 financial crisis: "The Times 03/Jan/2009 Chancellor on brink of second bailout for banks." The message, although never explicitly outlined by Bitcoin’s creator, is from the headline of a London Times article dated Jan. 3, 2009 that details banks being bailed out by the British government. Bitcoin, according to Nakamoto, is a means of reforming this corrupt and inefficient financial system to create a fairer, more democratic system of financial governance. What, then, would Nakamoto say to the current state of the blockchain and crypto industry? Increasingly, it is institutions rather than individuals that appear to be garnering control of the means of production in the blockchain sector. Facebook’s announcement of plans for its digital payments platform, Libra, was the initial public icebreaker for many last summer. However, the reality is that many governments and incumbent institutions from a range of sectors — including the likes of Walmart, JPMorgan Chase and PayPal — have been quietly building blockchain operations and capabilities for several years now. The recent decision by the United States Office of the Comptroller of the Currency to allow nationally chartered banks in the U.S. to provide custody services for cryptocurrencies is another significant affirmation of the legitimacy of crypto, which is likely to spark a race among financial institutions to build or acquire secure custody solutions. Such centralization appears to be at odds with the vision of the fair, democratic system of finance envisioned by Nakamoto and the original cypherpunks. Critics decry the end of the decentralized blockchain utopia as governments and institutions adopt the technology — but the situation is far more complex than such a black and white reading allows. Rather than institutions being fundamentally antithetical to the democratic ideals of crypto, I would argue that they are actually essential to fulfilling such a vision. The entry of centralized institutions to the crypto economy cannot possibly represent in itself a blow to the values of crypto. While public trust in centralized institutions may be at a historical low in countries such as the U.S., such institutions are not by their nature inherently malevolent or corrupt. The same counterpoint applies to decentralized organizations: They do not make inherently trustworthy or morally responsible actors. Numerous scandals in the crypto industry involving wallet hacks, initial coin offering scams and dubious projects illustrate that often, this is anything but the case. Institutional adoption of blockchain can offer tremendous benefits to the blockchain ecosystem as a whole: It is a key step in the evolution of the sector, which can significantly scale up adoption from a limited cohort of tech-savvy users (limited in terms of gender, age range and location) to truly global demographic spanning markets that the fractured crypto industry is incapable of reaching in its current form.
﷽ The Federal Reserve and the United States government are pumping extreme amounts of money into the economy, already totaling over $484 billion. They are doing so because it already had a goal to inflate the United States Dollar (USD) so that the market can continue to all-time highs. It has always had this goal. They do not care how much inflation goes up by now as we are going into a depression with the potential to totally crash the US economy forever. They believe the only way to save the market from going to zero or negative values is to inflate it so much that it cannot possibly crash that low. Even if the market does not dip that low, inflation serves the interest of powerful people. The impending crash of the stock market has ramifications for Bitcoin, as, though there is no direct ongoing-correlation between the two, major movements in traditional markets will necessarily affect Bitcoin. According to the Blockchain Center’s Cryptocurrency Correlation Tool, Bitcoin is not correlated with the stock market. However, when major market movements occur, they send ripples throughout the financial ecosystem which necessary affect even ordinarily uncorrelated assets. Therefore, Bitcoin will reach X price on X date after crashing to a price of X by X date.
Stock Market Crash
The Federal Reserve has caused some serious consternation with their release of ridiculous amounts of money in an attempt to buoy the economy. At face value, it does not seem to have any rationale or logic behind it other than keeping the economy afloat long enough for individuals to profit financially and politically. However, there is an underlying basis to what is going on which is important to understand in order to profit financially. All markets are functionally price probing systems. They constantly undergo a price-discovery process. In a fiat system, money is an illusory and a fundamentally synthetic instrument with no intrinsic value – similar to Bitcoin. The primary difference between Bitcoin is the underlying technology which provides a slew of benefits that fiat does not. Fiat, however, has an advantage in being able to have the support of powerful nation-states which can use their might to insure the currency’s prosperity. Traditional stock markets are composed of indices (pl. of index). Indices are non-trading market instruments which are essentially summaries of business values which comprise them. They are continuously recalculated throughout a trading day, and sometimes reflected through tradable instruments such as Exchange Traded Funds or Futures. Indices are weighted by market capitalizations of various businesses. Price theory essentially states that when a market fails to take out a new low in a given range, it will have an objective to take out the high. When a market fails to take out a new high, it has an objective to make a new low. This is why price-time charts go up and down, as it does this on a second-by-second, minute-by-minute, day-by-day, and even century-by-century basis. Therefore, market indices will always return to some type of bull market as, once a true low is formed, the market will have a price objective to take out a new high outside of its’ given range – which is an all-time high. Instruments can only functionally fall to zero, whereas they can grow infinitely. So, why inflate the economy so much? Deflation is disastrous for central banks and markets as it raises the possibility of producing an overall price objective of zero or negative values. Therefore, under a fractional reserve system with a fiat currency managed by a central bank – the goal of the central bank is to depreciate the currency. The dollar is manipulated constantly with the intention of depreciating its’ value. Central banks have a goal of continued inflated fiat values. They tend to ordinarily contain it at less than ten percent (10%) per annum in order for the psyche of the general populace to slowly adjust price increases. As such, the markets are divorced from any other logic. Economic policy is the maintenance of human egos, not catering to fundamental analysis. Gross Domestic Product (GDP) growth is well-known not to be a measure of actual growth or output. It is a measure of increase in dollars processed. Banks seek to produce raising numbers which make society feel like it is growing economically, making people optimistic. To do so, the currency is inflated, though inflation itself does not actually increase growth. When society is optimistic, it spends and engages in business – resulting in actual growth. It also encourages people to take on credit and debts, creating more fictional fiat. Inflation is necessary for markets to continue to reach new heights, generating positive emotional responses from the populace, encouraging spending, encouraging debt intake, further inflating the currency, and increasing the sale of government bonds. The fiat system only survives by generating more imaginary money on a regular basis. Bitcoin investors may profit from this by realizing that stock investors as a whole always stand to profit from the market so long as it is managed by a central bank and does not collapse entirely. If those elements are filled, it has an unending price objective to raise to new heights. It also allows us to realize that this response indicates that the higher-ups believe that the economy could crash in entirety, and it may be wise for investors to have multiple well-thought-out exit strategies.
Economic Analysis of Bitcoin
The reason why the Fed is so aggressively inflating the economy is due to fears that it will collapse forever or never rebound. As such, coupled with a global depression, a huge demand will appear for a reserve currency which is fundamentally different than the previous system. Bitcoin, though a currency or asset, is also a market. It also undergoes a constant price-probing process. Unlike traditional markets, Bitcoin has the exact opposite goal. Bitcoin seeks to appreciate in value and not depreciate. This has a quite different affect in that Bitcoin could potentially become worthless and have a price objective of zero. Bitcoin was created in 2008 by a now famous mysterious figure known as Satoshi Nakamoto and its’ open source code was released in 2009. It was the first decentralized cryptocurrency to utilize a novel protocol known as the blockchain. Up to one megabyte of data may be sent with each transaction. It is decentralized, anonymous, transparent, easy to set-up, and provides myriad other benefits. Bitcoin is not backed up by anything other than its’ own technology. Bitcoin is can never be expected to collapse as a framework, even were it to become worthless. The stock market has the potential to collapse in entirety, whereas, as long as the internet exists, Bitcoin will be a functional system with a self-authenticating framework. That capacity to persist regardless of the actual price of Bitcoin and the deflationary nature of Bitcoin means that it has something which fiat does not – inherent value. Bitcoin is based on a distributed database known as the “blockchain.” Blockchains are essentially decentralized virtual ledger books, replete with pages known as “blocks.” Each page in a ledger is composed of paragraph entries, which are the actual transactions in the block. Blockchains store information in the form of numerical transactions, which are just numbers. We can consider these numbers digital assets, such as Bitcoin. The data in a blockchain is immutable and recorded only by consensus-based algorithms. Bitcoin is cryptographic and all transactions are direct, without intermediary, peer-to-peer. Bitcoin does not require trust in a central bank. It requires trust on the technology behind it, which is open-source and may be evaluated by anyone at any time. Furthermore, it is impossible to manipulate as doing so would require all of the nodes in the network to be hacked at once – unlike the stock market which is manipulated by the government and “Market Makers”. Bitcoin is also private in that, though the ledge is openly distributed, it is encrypted. Bitcoin’s blockchain has one of the greatest redundancy and information disaster recovery systems ever developed. Bitcoin has a distributed governance model in that it is controlled by its’ users. There is no need to trust a payment processor or bank, or even to pay fees to such entities. There are also no third-party fees for transaction processing. As the ledge is immutable and transparent it is never possible to change it – the data on the blockchain is permanent. The system is not easily susceptible to attacks as it is widely distributed. Furthermore, as users of Bitcoin have their private keys assigned to their transactions, they are virtually impossible to fake. No lengthy verification, reconciliation, nor clearing process exists with Bitcoin. Bitcoin is based on a proof-of-work algorithm. Every transaction on the network has an associated mathetical “puzzle”. Computers known as miners compete to solve the complex cryptographic hash algorithm that comprises that puzzle. The solution is proof that the miner engaged in sufficient work. The puzzle is known as a nonce, a number used only once. There is only one major nonce at a time and it issues 12.5 Bitcoin. Once it is solved, the fact that the nonce has been solved is made public. A block is mined on average of once every ten minutes. However, the blockchain checks every 2,016,000 minutes (approximately four years) if 201,600 blocks were mined. If it was faster, it increases difficulty by half, thereby deflating Bitcoin. If it was slower, it decreases, thereby inflating Bitcoin. It will continue to do this until zero Bitcoin are issued, projected at the year 2140. On the twelfth of May, 2020, the blockchain will halve the amount of Bitcoin issued when each nonce is guessed. When Bitcoin was first created, fifty were issued per block as a reward to miners. 6.25 BTC will be issued from that point on once each nonce is solved. Unlike fiat, Bitcoin is a deflationary currency. As BTC becomes scarcer, demand for it will increase, also raising the price. In this, BTC is similar to gold. It is predictable in its’ output, unlike the USD, as it is based on a programmed supply. We can predict BTC’s deflation and inflation almost exactly, if not exactly. Only 21 million BTC will ever be produced, unless the entire network concedes to change the protocol – which is highly unlikely. Some of the drawbacks to BTC include congestion. At peak congestion, it may take an entire day to process a Bitcoin transaction as only three to five transactions may be processed per second. Receiving priority on a payment may cost up to the equivalent of twenty dollars ($20). Bitcoin mining consumes enough energy in one day to power a single-family home for an entire week.
Trading or Investing?
The fundamental divide in trading revolves around the question of market structure. Many feel that the market operates totally randomly and its’ behavior cannot be predicted. For the purposes of this article, we will assume that the market has a structure, but that that structure is not perfect. That market structure naturally generates chart patterns as the market records prices in time. In order to determine when the stock market will crash, causing a major decline in BTC price, we will analyze an instrument, an exchange traded fund, which represents an index, as opposed to a particular stock. The price patterns of the various stocks in an index are effectively smoothed out. In doing so, a more technical picture arises. Perhaps the most popular of these is the SPDR S&P Standard and Poor 500 Exchange Traded Fund ($SPY). In trading, little to no concern is given about value of underlying asset. We are concerned primarily about liquidity and trading ranges, which are the amount of value fluctuating on a short-term basis, as measured by volatility-implied trading ranges. Fundamental analysis plays a role, however markets often do not react to real-world factors in a logical fashion. Therefore, fundamental analysis is more appropriate for long-term investing. The fundamental derivatives of a chart are time (x-axis) and price (y-axis). The primary technical indicator is price, as everything else is lagging in the past. Price represents current asking price and incorrectly implementing positions based on price is one of the biggest trading errors. Markets and currencies ordinarily have noise, their tendency to back-and-fill, which must be filtered out for true pattern recognition. That noise does have a utility, however, in allowing traders second chances to enter favorable positions at slightly less favorable entry points. When you have any market with enough liquidity for historical data to record a pattern, then a structure can be divined. The market probes prices as part of an ongoing price-discovery process. Market technicians must sometimes look outside of the technical realm and use visual inspection to ascertain the relevance of certain patterns, using a qualitative eye that recognizes the underlying quantitative nature Markets and instruments rise slower than they correct, however they rise much more than they fall. In the same vein, instruments can only fall to having no worth, whereas they could theoretically grow infinitely and have continued to grow over time. Money in a fiat system is illusory. It is a fundamentally synthetic instrument which has no intrinsic value. Hence, the recent seemingly illogical fluctuations in the market. According to trade theory, the unending purpose of a market or instrument is to create and break price ranges according to the laws of supply and demand. We must determine when to trade based on each market inflection point as defined in price and in time as opposed to abandoning the trend (as the contrarian trading in this sub often does). Time and Price symmetry must be used to be in accordance with the trend. When coupled with a favorable risk to reward ratio, the ability to stay in the market for most of the defined time period, and adherence to risk management rules; the trader has a solid methodology for achieving considerable gains. We will engage in a longer term market-oriented analysis to avoid any time-focused pressure. The Bitcoin market is open twenty-four-hours a day, so trading may be done when the individual is ready, without any pressing need to be constantly alert. Let alone, we can safely project months in advance with relatively high accuracy. Bitcoin is an asset which an individual can both trade and invest, however this article will be focused on trading due to the wide volatility in BTC prices over the short-term.
Technical Indicator Analysis of Bitcoin
Technical indicators are often considered self-fulfilling prophecies due to mass-market psychology gravitating towards certain common numbers yielded from them. They are also often discounted when it comes to BTC. That means a trader must be especially aware of these numbers as they can prognosticate market movements. Often, they are meaningless in the larger picture of things.
Volume – derived from the market itself, it is mostly irrelevant. The major problem with volume for stocks is that the US market open causes tremendous volume surges eradicating any intrinsic volume analysis. This does not occur with BTC, as it is open twenty-four-seven. At major highs and lows, the market is typically anemic. Most traders are not active at terminal discretes (peaks and troughs) because of levels of fear. Volume allows us confidence in time and price symmetry market inflection points, if we observe low volume at a foretold range of values. We can rationalize that an absolute discrete is usually only discovered and anticipated by very few traders. As the general market realizes it, a herd mentality will push the market in the direction favorable to defending it. Volume is also useful for swing trading, as chances for swing’s validity increases if an increase in volume is seen on and after the swing’s activation. Volume is steadily decreasing. Lows and highs are reached when volume is lower.
Therefore, due to the relatively high volume on the 12th of March, we can safely determine that a low for BTC was not reached.
VIX – Volatility Index, this technical indicator indicates level of fear by the amount of options-based “insurance” in portfolios. A low VIX environment, less than 20 for the S&P index, indicates a stable market with a possible uptrend. A high VIX, over 20, indicates a possible downtrend. VIX is essentially useless for BTC as BTC-based options do not exist. It allows us to predict the market low for $SPY, which will have an indirect impact on BTC in the short term, likely leading to the yearly low. However, it is equally important to see how VIX is changing over time, if it is decreasing or increasing, as that indicates increasing or decreasing fear. Low volatility allows high leverage without risk or rest. Occasionally, markets do rise with high VIX.
As VIX is unusually high, in the forties, we can be confident that a downtrend for the S&P 500 is imminent.
RSI (Relative Strength Index): The most important technical indicator, useful for determining highs and lows when time symmetry is not availing itself. Sometimes analysis of RSI can conflict in different time frames, easiest way to use it is when it is at extremes – either under 30 or over 70. Extremes can be used for filtering highs or lows based on time-and-price window calculations. Highly instructive as to major corrective clues and indicative of continued directional movement. Must determine if longer-term RSI values find support at same values as before. It is currently at 73.56.
Secondly, RSI may be used as a high or low filter, to observe the level that short-term RSI reaches in counter-trend corrections. Repetitions based on market movements based on RSI determine how long a trade should be held onto. Once a short term RSI reaches an extreme and stay there, the other RSI’s should gradually reach the same extremes. Once all RSI’s are at extreme highs, a trend confirmation should occur and RSI’s should drop to their midpoint.
Trend Definition Analysis of Bitcoin
Trend definition is highly powerful, cannot be understated. Knowledge of trend logic is enough to be a profitable trader, yet defining a trend is an arduous process. Multiple trends coexist across multiple time frames and across multiple market sectors. Like time structure, it makes the underlying price of the instrument irrelevant. Trend definitions cannot determine the validity of newly formed discretes. Trend becomes apparent when trades based in counter-trend inflection points continue to fail. Downtrends are defined as an instrument making lower lows and lower highs that are recurrent, additive, qualified swing setups. Downtrends for all instruments are similar, except forex. They are fast and complete much quicker than uptrends. An average downtrend is 18 months, something which we will return to. An uptrend inception occurs when an instrument reaches a point where it fails to make a new low, then that low will be tested. After that, the instrument will either have a deep range retracement or it may take out the low slightly, resulting in a double-bottom. A swing must eventually form. A simple way to roughly determine trend is to attempt to draw a line from three tops going upwards (uptrend) or a line from three bottoms going downwards (downtrend). It is not possible to correctly draw a downtrend line on the BTC chart, but it is possible to correctly draw an uptrend – indicating that the overall trend is downwards. The only mitigating factor is the impending stock market crash.
Time Symmetry Analysis of Bitcoin
Time is the movement from the past through the present into the future. It is a measurement in quantified intervals. In many ways, our perception of it is a human construct. It is more powerful than price as time may be utilized for a trade regardless of the market inflection point’s price. Were it possible to perfectly understand time, price would be totally irrelevant due to the predictive certainty time affords. Time structure is easier to learn than price, but much more difficult to apply with any accuracy. It is the hardest aspect of trading to learn, but also the most rewarding. Humans do not have the ability to recognize every time window, however the ability to define market inflection points in terms of time is the single most powerful trading edge. Regardless, price should not be abandoned for time alone. Time structure analysis It is inherently flawed, as such the markets have a fail-safe, which is Price Structure. Even though Time is much more powerful, Price Structure should never be completely ignored. Time is the qualifier for Price and vice versa. Time can fail by tricking traders into counter-trend trading. Time is a predestined trade quantifier, a filter to slow trades down, as it allows a trader to specifically focus on specific time windows and rest at others. It allows for quantitative measurements to reach deterministic values and is the primary qualifier for trends. Time structure should be utilized before price structure, and it is the primary trade criterion which requires support from price. We can see price structure on a chart, as areas of mathematical support or resistance, but we cannot see time structure. Time may be used to tell us an exact point in the future where the market will inflect, after Price Theory has been fulfilled. In the present, price objectives based on price theory added to possible future times for market inflection points give us the exact time of market inflection points and price. Time Structure is repetitions of time or inherent cycles of time, occurring in a methodical way to provide time windows which may be utilized for inflection points. They are not easily recognized and not easily defined by a price chart as measuring and observing time is very exact. Time structure is not a science, yet it does require precise measurements. Nothing is certain or definite. The critical question must be if a particular approach to time structure is currently lucrative or not. We will measure it in intervals of 180 bars. Our goal is to determine time windows, when the market will react and when we should pay the most attention. By using time repetitions, the fact that market inflection points occurred at some point in the past and should, therefore, reoccur at some point in the future, we should obtain confidence as to when SPY will reach a market inflection point. Time repetitions are essentially the market’s memory. However, simply measuring the time between two points then trying to extrapolate into the future does not work. Measuring time is not the same as defining time repetitions. We will evaluate past sessions for market inflection points, whether discretes, qualified swings, or intra-range. Then records the times that the market has made highs or lows in a comparable time period to the future one seeks to trade in. What follows is a time Histogram – A grouping of times which appear close together, then segregated based on that closeness. Time is aligned into combined histogram of repetitions and cycles, however cycles are irrelevant on a daily basis. If trading on an hourly basis, do not use hours.
Daily Lows Mode for those Months: 1, 1, 2, 4, 12, 17, 18, 24, 25, 28, 29, 30
Hourly Lows Mode for those Months (Military time): 0100, 0200, 0200, 0400, 0700, 0700, 0800, 1200, 1200, 1700, 2000, 2200
Minute Lows Mode for those Months: 00, 00, 00, 00, 00, 00, 09, 09, 59, 59, 59, 59
Day of the Week Lows (last twenty-six weeks):
Weighted Times are repetitions which appears multiple times within the same list, observed and accentuated once divided into relevant sections of the histogram. They are important in the presently defined trading time period and are similar to a mathematical mode with respect to a series. Phased times are essentially periodical patterns in histograms, though they do not guarantee inflection points Evaluating the yearly lows, we see that BTC tends to have its lows primarily at the beginning of every year, with a possibility of it being at the end of the year. Following the same methodology, we get the middle of the month as the likeliest day. However, evaluating the monthly lows for the past year, the beginning and end of the month are more likely for lows. Therefore, we have two primary dates from our histogram. 1/1/21, 1/15/21, and 1/29/21 2:00am, 8:00am, 12:00pm, or 10:00pm In fact, the high for this year was February the 14th, only thirty days off from our histogram calculations. The 8.6-Year Armstrong-Princeton Global Economic Confidence model states that 2.15 year intervals occur between corrections, relevant highs and lows. 2.15 years from the all-time peak discrete is February 9, 2020 – a reasonably accurate depiction of the low for this year (which was on 3/12/20). (Taking only the Armstrong model into account, the next high should be Saturday, April 23, 2022). Therefore, the Armstrong model indicates that we have actually bottomed out for the year! Bear markets cannot exist in perpetuity whereas bull markets can. Bear markets will eventually have price objectives of zero, whereas bull markets can increase to infinity. It can occur for individual market instruments, but not markets as a whole. Since bull markets are defined by low volatility, they also last longer. Once a bull market is indicated, the trader can remain in a long position until a new high is reached, then switch to shorts. The average bear market is eighteen months long, giving us a date of August 19th, 2021 for the end of this bear market – roughly speaking. They cannot be shorter than fifteen months for a central-bank controlled market, which does not apply to Bitcoin. (Otherwise, it would continue until Sunday, September 12, 2021.) However, we should expect Bitcoin to experience its’ exponential growth after the stock market re-enters a bull market. Terry Laundy’s T-Theory implemented by measuring the time of an indicator from peak to trough, then using that to define a future time window. It is similar to an head-and-shoulders pattern in that it is the process of forming the right side from a synthetic technical indicator. If the indicator is making continued lows, then time is recalculated for defining the right side of the T. The date of the market inflection point may be a price or indicator inflection date, so it is not always exactly useful. It is better to make us aware of possible market inflection points, clustered with other data. It gives us an RSI low of May, 9th 2020. The Bradley Cycle is coupled with volatility allows start dates for campaigns or put options as insurance in portfolios for stocks. However, it is also useful for predicting market moves instead of terminal dates for discretes. Using dates which correspond to discretes, we can see how those dates correspond with changes in VIX. Therefore, our timeline looks like:
2/14/20 – yearly high ($10372 USD)
3/12/20 – yearly low thus far ($3858 USD)
5/9/20 – T-Theory true yearly low (BTC between 4863 and 3569)
BitOffer Institute: After halving, Bitcoin likely hitting above 100k
https://preview.redd.it/f9f8sdabmm851.png?width=1200&format=png&auto=webp&s=c035a14edf1bffeceee3db7dba24e28bb6cdc653 The currency founding block was born on January 3, 2009. Satoshi Nakamoto designs that the miners can obtain 50 BTC rewards with the packaging of one block. The number of bitcoins created about every 10 minutes which has halved every four years from 2012. Since the maximum supply of bitcoins is 21 million, halving means it will take longer for all bitcoins to circulation. But it also means there will be limited bitcoins over time. Historically, halving bitcoin has proven to be an important catalyst for a new bull market in the currency. On November 28, 2012, bitcoin been halved for the first time, alongside with block awards reduced from 50 BTCS per 10 minutes to 25. The total issued amount of BTC is 21 million, with the improvement of people’s cognition and consensus on Bitcoin, the scarcity of Bitcoin shows obvious after halved. While other factors in the market remain stable, the relationship between supply and demand will determine the price of goods. In 2012, before the halving, the price of Bitcoin was around $12. After November 28, the price rose to the peak of $1,175. On December 4, 2013, the price doubled by 100 times and set an all-time high for Bitcoin at that time. This has helped the earlier bitcoin owners to achieve wealth freedom and increased the public awareness of the value of bitcoin. On July 9, 2016, the 420,000th bitcoin block was completed, and the block reward was halved for the second time, which reduced from 25 BTC in 10 minutes to 12.5. This halving increased the scarcity of Bitcoin and alongside with the bull market of Bitcoin again. At the second halving, the price of bitcoin was around $660, after the halving, the price firstly experienced more than three months of backtracking, then suffered over seven months of sideways trading, eventually skyrocketed. By December 16, 2017, the price of Bitcoin reached $19,991 at its peak, a new record with an increase of nearly 30 times. After twice time of bull markets in which bitcoin was halved, many institutions stepped into the market, countless investors saw the infinite possibilities of its future. Image how long would it take a traditional industry to multiply its capital 30 times? But in the currency circle, it only takes one year, which is why institutions and retail investors are unanimously bullish on Bitcoin, and many even use it as a tool to avoid risks. This year marks the third time that bitcoin has halved. On May 12, the number of bitcoin block awards was reduced from 12.5 to 6.25. According to the results of the previous halving, where does the price will go? https://preview.redd.it/9hgnln2emm851.png?width=900&format=png&auto=webp&s=ce37be510e643d9aa2daa690ec4a2b569b771508 Through the halving, numerous investors have seen the huge business opportunity behind Bitcoin. In earlier 2020, many large organization institutions started to lay out BTC. According to a recent report released by Glassnode, the number of whales that holding more than 1,000 bitcoins has increased sharply since 2016. This data reflects a strong bullish signal after Bitcoin halved for the third time. After the first time of halving, the price of Bitcoin increased more than 100 times, and after the first time of halving, the price of Bitcoin increased more than 30 times. History doesn’t repeat itself — but it often rhymes. According to Lucian, the chief analyst at BitOffer Exchange, said that the bitcoin will have a bull market within a few months after the halving, with the increase of at least 10 times, that is, it is expected to break the $100,000 price. Therefore, it is the best time to buy Bitcoin. However, rather than buying Bitcoin, it is better to trade Bitcoin ETF at BitOffer, which starts with a minimum yield of 3 times. Besides, it also includes the intelligent dynamic warehousing mechanism and the calculation of fund compound interest, with a maximum yield of 17 times. If the price of bitcoin goes up more than 10 times, the ETF will go up as much as 170 times. Without a doubt, the Bitcoin ETF is the best investment choice.
The earliest price I could find for 1 Bitcoin is $0.0009. This means that Bitcoin has appreciated against the USD by 859,555,455% since October 12, 2009, even after today's pullback. Gold, in comparison (the world's premier SoV) has appreciated by a mere 60.32% over the exact same time period. It's very important during extreme volatility over short time periods to retain overall perspective.
Why Global Deflation May Not Be Bad News for Bitcoin
Contrary to expectations, bitcoin could see a positive performance during a possible bout of global deflation if it acts not just as an investment asset, but as a medium of exchange and a perceived safe haven like gold. The top cryptocurrency by market value is widely considered to be a hedge against inflation because its supply is capped at 21 million and its monetary policy is pre-programmed to cut the pace of supply expansion by 50 percent every four years. As such, one may consider any deflationary collapse as a price-bearish development for bitcoin. Talk of deflation began earlier this month after the U.S. reported massive job losses due to the coronavirus outbreak. The prospects of a deflationary collapse have strengthened with this week’s oil price crash. “The oil price rout will send a deflationary wave through the global economy,” tweeted popular macro analyst Holger Zschaepitz on Tuesday. Read more: First Mover: What the Oil Price Collapse Means for Bitcoin’s Halving Valuation Cash typically becomes king during deflation because the drop in the general price levels boosts the monetary unit’s purchasing power, or the ability to purchase goods and services. “Unlike inflation, when people try to get out of the dollar because it’s losing value, during deflation people are more comfortable with the dollar because its value is going up,” said Erick Pinos, ecosystem lead for the Americas at the public blockchain and distributed collaboration platform Ontology. The rush for cash, however, may not have a substantially negative impact on bitcoin’s price because deflation would also boost the purchasing power of the cryptocurrency. “While the price per coin may stagnate during a period of aggressive economic deflation, the inherent buying power of the currency will actually rise, possibly quite significantly,” said Brandon Mintz, CEO of the bitcoin ATM provider Bitcoin Depot. As time goes on and people become more comfortable with digital assets, the average person begins to see Bitcoin as a legitimate viable alternative to gold.** The uptick in the purchasing power will likely draw greater demand for bitcoin, as the cryptocurrency is already used as means of payment. “Hundreds of thousands of businesses, brands and merchants do accept the ‘digital gold’ as payment, and thousands more every day are realizing the benefits of diversifying their revenue stream and accepting bitcoin as payment for their goods and services,” said Derek Muhney, director of sales and marketing at Coinsource, the world’s leader in Bitcoin ATMs. Moreover, the cryptocurrency’s appeal as a medium of exchange is likely to continue strengthening with the growing prevalence of technology in consumers’ everyday lives caused by the coronavirus pandemic. ##Digital gold ## Ever since its inception, bitcoin has been dubbed “digital gold.” Like the yellow metal, the cryptocurrency is durable, fungible, divisible, recognizable and scarce. Both assets share features that fulfill Aristotle’s call for a currency to be practical and functional. Bitcoin has actual utility as the means of payment, which gold lacks, according to Coinsource’s Muhney. “As time goes on and people become more comfortable with digital assets, the average person begins to see Bitcoin as a legitimate viable alternative to gold. Thus, it’s reasonable to assume that during a period of deflation bitcoin would perform well like gold has in the past,” said Erick Pinos, America’s ecosystem lead at the public blockchain and distributed collaboration platform Ontology. Read more: Looking for a Safe Haven Digital Asset? Try Gold Hence, gold’s performance during the previous bouts of deflation could serve as a guide for bitcoin investors. Historical data shows gold performs well during deflation, which includes a sharp rise in financial stress and increased risk of corporate defaults; highly levered companies tend to go bust during deflation because their revenues fall while their debt service payments remain the same. Of course, gold’s shine is particularly bright during periods of inflation as well. As in periods of sizable deflation, inflation brings a set of price distortions that shake-up income statements and economies. A commonly-used measure of stress is the “Ted spread” or the difference between the three-month U.S. interbank rate and the three-month T-Bill rate. Ted SpreadSource: St. Louis Fed Research“Massive spikes in the Ted spread in the 1970s were accompanied by a sharp rise in gold. The Ted spread also rose sharply in the early 1980s; in 1987 in the wake of the stock market crash and during the global financial crisis of 2007-2009 – both also periods of stronger gold prices,” according to Oxford Economics’ research note. Gold’s performance in stress periodsSource: Oxford ResearchThe real or inflation-adjusted price of gold rose an average 33 percent per annum in the 1970s, 18 percent in 1980s and 15.8 percent in 2000. Underscoring all of the scenarios is that a sudden rise in economic stress usually fuels a global dash for cash, forcing investors to sell everything from stocks to gold. However, once economic uncertainty starts settling, people again start looking for safe havens. “During the Great Recession, while gold initially declined alongside other equities, it found its footing and rallied faster than stocks recovered,” Ontology’s Pinos told CoinDesk. The Ted spread spiked as high as 4.6 following the collapse of Lehman Brothers in August 2008. Gold fell from $920 to $680 per troy ounce in the August to October period, as investors treated the yellow metal as a source of liquidity, but still ended that year with 5.5 percent gains. More importantly, it rallied by 24 percent in 2009 and went on to hit a record high above $1,900 in 2011. Read more: First Mover: Bitcoin Jumps as Fed Assets Top $6.5T and Traders Focus on Halving The yellow metal’s recent price gyrations suggest history may be repeating itself. As the Ted spread rose from 0.11 to 1.42 in the four weeks to March 27, gold fell from $1,700 to $1,450 yet is now trading near $1,725 per ounce, having hit a 7-year high of $1,747 ten days ago. Bitcoin, too, was treated as a source of liquidity last month, as evidenced from the near 40 percent drop to levels under $4,000 seen on March 12. Since then, however, the cryptocurrency has risen by nearly 85 percent to $7,500. If gold’s historical data and the recent market activity is a guide, then the path of least resistance for bitcoin appears to be on the higher side. ##Unprecedented stimulus to undermine fiat currencies ## Both the U.S. government and the Federal Reserve have unleashed massive amounts of liquidity into the system over the past few weeks to contain the economic fallout from the coronavirus pandemic. Notably, the Fed is running an open-ended asset purchase program and its balance sheet has already risen to record highs above $6.5 trillion. Meanwhile, central banks from New Zealand to Canada have slashed rates to zero and have recently announced bond purchase programs. What’s more, the amount of fiscal stimulus announced by 22 countries in March is equivalent to 75 percent of the global gross domestic product (GDP), according to JPMorgan. However, most governments and central banks appear to have run out of ammo. Hence, if the coronavirus pandemic continues to spread or leads to corporate defaults, investors may lose trust in traditional finance and look for alternatives like bitcoin and cryptocurrencies in general. Moody’s Analytics recently warned of the heightened risk of corporate defaults in the oil and gas sector across the globe, and weakness in entertainment and leisure giving way to pressure on consumer durables. “The willingness to fight deflation should bode well for bitcoin,” said Richard Rosenblum, head of trading at GSR. Meanwhile, Ashish Singhal, CEO and founder of the cryptocurrency exchange Coinswitch.co, said, “In a deflationary scenario, the chances of negative interest rates are high, and users would want to move their existing assets into more stable assets like bitcoin to prevent loss in their asset value.” Interest rates are already set below zero across Europe and in Japan and are hovering at or near zero in other advanced countries. Further, with central banks willing to do whatever it takes to defeat deflation, the real yield or inflation-adjusted returns on bonds are likely to remain negative or meagerly positive at best. As a result, zero-yielding assets like gold and bitcoin may attract more buyers. Bank of America’s analysts noted earlier this week that the stimulus frenzy amid the coronavirus pandemic would put pressure on the currencies and send gold to $3,000 by October 2021. While bitcoin could perform well during deflation, bitcoin and cryptocurrencies have seldom tracked macro developments on a consistent basis in the past. “Blockchain-based currencies are really their own beasts,” said Bitcoin Depot CEO Brandon Mitz. DisclosureRead MoreThe leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. Source: https://thedailyblockchain.news/2020/05/24/why-global-deflation-may-not-be-bad-news-for-bitcoin/
As the 4th Bitcoin Gaining Cycle Comes, How to Maximize Your Profit and Avoid the Risks?
Background: By reviewing the bitcoin market movements last month, the bitcoin price on Nov. 1st was $9,054. When the end of Nov came, the bitcoin price dropped to $7,318. As the historical trend of bitcoin has gone, the bitcoin price has been through 3 cycles of gaining:
From 2009.01 to 2013.04, the bitcoin price rose from $0 to $198. At the initial point of the 1st period, the bitcoin had no price, and its value was defined by Satoshi Nakamoto and other early miners. At that time, bitcoins had nowhere to trade, the early miners only could hold it. It is one of the reasons why the bitcoin price pumps or dumps sharply because the early holders can choose anytime to sell it and quit. In the middle of 2010, the first bitcoin exchanges such as Mt.Gox launched. And as exchanges like Bitstamp, Kraken and Coinbase started operating, the era of “Bitcoin Online Trading” came, and the bitcoin price had soared to $198.
As the bitcoin price firstly touched $198, some of the early miners started selling the bitcoins they hold for arbitrage. When the date past 2013.07, the bitcoin price fell to $69. Then, the bitcoin price boomed to $1,000 when some of the institutions with a traditional financial background and some personal investors injected capital into the bitcoin market in the second half of 2013.
In early 2014, the biggest heist of bitcoin on Mt.Gox happened urged the bitcoin price to slump. the bitcoin price did not go back to $1,000 until Feb 2017. And as the ICO projects got popular and the fork of bitcoin happened, the trading volume of bitcoins reached the peak and the price of bitcoin also reach the peak of $20,000.
After reviewing the gaining cycles of the bitcoin price until now, the corollary that we are now going through the fourth cycle. Just as the financial history repeats itself, the percentage of holding bitcoin more than 12 months has decreased to 40%, which is similar to the situation that the last time the bitcoin price boomed to $1,000. We can easily draw a conclusion that the decentralization of bitcoin holding means that the trading demand of bitcoin is increasing. And when the bitcoin trading becomes diversified with the bitcoin finance derivatives became more and more robust, more and more financial institutions and personal investors will enter the bitcoin market. Thus, in the next period, the bitcoin price will present an uptrend in total. So, how to achieve the benefit maximization and avoid the risk when the fluctuations happen in this period? Hedging is definitely an important part you should plan for your bitcoin trading. With hedging work for your trading, you will avoid the risk of holding a bitcoin but the price drops in some time. For example, 3 weeks ago, the bitcoin price decreased from $8,150 to $6,665, if you hold 1 bitcoin, then you would lose $1,485 during this decline. However, if you chose bitcoin derivatives such as futures or options to buy a contract for BTC Short, then you will save $1,458 loss when the bitcoin price dropped. Here are two solutions I’ve mentioned above: Futures&Swap, Options.
In futures trading, you can open leveraged BTC Short contracts with the principal, margins and fees. If you hold 1 bitcoin at that time, and you select the leverage in 20X, to save the loss of $1,485, you will need the principal in $400, and the margins at least 0.00024 BTC (but usually you will need to input more to prevent from liquidation). It is a useful way for you to hedge the risk of holding 1 bitcoin.
In options trading, for example, if you open a 7-days put contract on BitOffer Bitcoin Options, usually it only needs around $200. Moreover, it does not request any margin and any fees.
Here is how it works: When you hold a 7-days put contract, if bitcoin price drops from $8,000 to $7,000, you will earn $1,000 profit, and in total, your loss of the bitcoin you hold will be hedged because you earn $1,000 from BitOffer Bitcoin Options. What if the bitcoin price rises from $8,000 to $9,000? You will lose $200 with the 7-days put contracts you buy, but you still earn $1,000 with the bitcoin you hold. BitOffer Bitcoin Options, the best hedging tool ever, is now the easiest and cheapest hedging solutions you can see in the market. Ending: With an effective hedging strategy, I deeply trust you all should be able to maximize your profit and avoid the risk even the bitcoin market fluctuates acutely like always.
Aurei VS Bitcoin Bitcoin has been in the news a lot lately, and in its wake other crypto-currencies, sometimes called Altcoins like Aurei. The multiplicity of these virtual currencies can be confusing, especially when you don’t look closely at the differences between them. The Bitcoin created in 2009 demonstrated the power of the blockchain system to manage a complex system of secure transactions. The Aurei (ARE), created in 2019, built on the success of the Ethereum blockchain, and harnesses its power to perform financial transactions. The main differences between Bitcoin and Aurei are detailed here. Cryptocurrencies have been building a reputation since the first Bitcoin exchanges in 2009. In fact, it was this crypto-currency that started the blockchain revolution. A decentralized system of financial transactions, based on a network of individuals who undermine, i.e. solve complex mathematical operations to make the system work, in exchange for Bitcoins. Bitcoin historically precedes Aurei The advantage of the blockchain system is that it replaces all the intermediaries generally needed to establish confidence in transactions. Certain information, such as the amounts that move from one portfolio address to another, is public, which makes it easy to check whether a transaction has been carried out. The blockchain manages a finite number of Bitcoins, introducing a notion of scarcity. Thus, in addition to being a means of payment, Bitcoin is also an investment. It is now attracting some institutional investors who wish to create products on the classical markets based on the Bitcoin price. Moreover, Bitcoin is open source, which means that anyone can see its code, and propose improvements. But also use it to create other crypto-currencies. It is because the source code of Bitcoin, or rather of the blockchain technology is open source that other crypto-currencies have been quickly created in its wake. Aurei is a good example of this since its creation in 2019. Aurei (ARE) has some originalities compared to Bitcoin. Aurei even rarer than Bitcoin Eventually there will be a finite number of Bitcoins — about 21 million. These are created progressively by the miners in exchange for making their computing capacity available to the network. This is rather a good thing for storing value — although it also doesn’t guarantee that it will remain high: the value of the price will always be a matter of supply and demand, i.e. enough people must be willing to buy the Bitcoins at a certain price for the crypto-money to have a certain value. For Aurei, Initially, Only 50 000 tokens will be issued on the Ethereum Blockchain and kept in reserve by Aurei Association. These tokens will be gradually and slowly offered for sale on exchanges. However, we hard-coded, inside the smart contract, an original and innovative mechanism to economically incentivize developers if and only if the token’s value appreciates significantly, in line with the investors interests. Every time the price of AUREI token (ARE) on exchanges reach a new level, 500 new tokens are minted and distributed equally among the addresses of the developers. A level is defined as a certain price to reach in order to trigger the next minting process. The minting process related to a level can only be triggered once and only once. The price of AUREI token (ARE) used to unlock a new level is determined using a price index which is an average price obtained by aggregating the prices of AREs quoted on different exchanges. This price index is fed to the smart contract using an oracle. It is important to note that the number of levels is non-finite. This design choice was made on purpose to ensure that the developers are continuously economically incentivized over the long term. Aurei vs Bitcoin: two different goals that make both crypto-currencies very interesting to invest in In the end, the biggest difference between Bitcoin and Aurei is their origin: Bitcoin led the way, creating a new unit of value based on the innovative blockchain system. Aurei is a state-of-the-art crypto-currency using the Ethereum blockchain that companies and individuals can use as real management and transaction tools. The interest for these firms is the possibility to create business applications that are both extremely complex and fully automated and at the same time interoperable with other projects thanks to the ERC-20 standard developed by ETH and used by Aurei (ARE). Tomorrow, we could use Aurei to use connected objects, in food distribution, energy distribution or in the insurance sector. And this is precisely what makes it a value of choice for investment: Aurei already does everything Bitcoin does, but has the efficiency, low transaction costs and low environmental footprint. As well as the ability to create intelligent contracts based on the Ethereum blockchain While Bitcoin has been exploding in value for some time, Aurei represents a more stable alternative, with promising performance. And you, have you invested in Bitcoin and/or Aurei? Where can I find Aurei ? Aurei live on Liquid You can find Aurei on Liquid.com, the world’s most comprehensive and secure trading platform You can also trade Aurei on P2pB2b
05-11 12:14 - 'Bitcoin Third Halving D-Day: Understand Everything in 5 Minutes' (self.Bitcoin) by /u/ThisisMariusKramer removed from /r/Bitcoin within 116-126min
''' For months now, the entire Bitcoin community has been waiting for this great day. This incredible expectation has now surpassed the cryptocurrency world as shown by the explosion of search volume for the term “Bitcoin Halving” on Google. This Monday, May 11, 2020, Bitcoin third Halving will take place. A lot has been written about this third Halving. Nevertheless, some people still ask me questions about what the Bitcoin Halving is. To help you get ready, I give you in 5 minutes the keys for understanding everything about this third Bitcoin Halving. Bitcoin’s Monetary Policy is Predictable and Transparent Bitcoin supply is finite. There will never be more than 21 million Bitcoins in circulation. This limit is written into Bitcoin’s source code, and it cannot be changed without a consensus within the community. Concretely, this limit of 21 millions will never change, because it is an incredible strength of Bitcoin. At the time of this writing, 18,373,937 BTC have already been mined. This means that 87.49% of all Bitcoins have already been created. There are only 12.51% of Bitcoins left that can be created. Bitcoin is therefore the scarcest invention ever created by man. Transactions on the Bitcoin network are grouped into blocks. In order to correctly add a block of transactions to the Bitcoin Blockchain, some specific users of the network will have to solve a mathematical puzzle that requires phenomenal computing power. These particular users are called miners. They put their computing power at the disposal of the network in order to secure the network. When a miner successfully solves this mathematical puzzle for a given block, that block of transactions is added to the Bitcoin Blockchain. As a reward, the miner, or more generally the pool of miners, receives a Bitcoin reward. The new Bitcoins are created at that moment. Bitcoin Halving Reduces the Production of New Bitcoins Over Time When Satoshi Nakamoto launched the Bitcoin network on January 3, 2009, this reward was 50 BTC. For every 210,000 blocks of transactions validated, this reward is halved in an operation called Halving. Currently, Bitcoin is at block height 629,942: Since a Bitcoin Halving takes place every 210,000 blocks mined, this means that there have already been two Halvings so far: The first took place at block height 210,000 on November 28, 2012. The reward was then decreased from 50 BTC to 25 BTC. The second took place at block level 420,000 on July 9, 2016. The reward then went from 25 BTC to 12.5 BTC. Bitcoin third Halving will take place at block height 630,000, in 85 blocks. On average, a new block is issued every 10 minutes. This gives predictability to the issuance of new Bitcoins. We can therefore estimate that 6 blocks are mined per hour, or a total of 144 blocks per day. With a current reward of 12.5 BTC per mined block, the daily production of new Bitcoins is 1800 BTC. At block height 630,000, the third Bitcoin Halving will take place. From that moment on, the reward will be 6.25 BTC. The average daily production of new Bitcoins will then be 900 BTC. This third Halving will be a historic supply shock that will bring inflation down below 2% to 1.8%. The date of each Halving cannot be accurately predicted. The reason is simple: the production of the blocks will depend on the computing power available on the Bitcoin network. This computing power is called the Hash Rate. When the Hash Rate rises sharply, time between production of each block falls below 10 minutes. When the Hash Rate drops, time between production of each block rises above 10 minutes. The average delay between each mined block clearly shows this: In order to keep the predictability of new block issuance on the Bitcoin network, the difficulty to mine a block is adjusted every 2016 blocks, approximately every 2 weeks. If the Hash Rate has increased sharply previously, causing the block production time to drop below 10 minutes, the difficulty will increase. If the Hash Rate has previously dropped sharply, the difficulty will decrease. The evolution of the mining difficulty since the creation of Bitcoin clearly shows that mining a new block has become more and more demanding in terms of computing power: Bitcoin’s Predictability Provides Its Users With Essential Guarantees By guaranteeing this predictability, Bitcoin allows its users to know in advance how Bitcoin supply inflation will evolve in the coming Halvings: At block height 840,000, probably in 2024, the reward will be 3,125 BTC. The daily average production of new Bitcoins will be 450 BTC. At block height 1,050,000, probably in 2028, the reward will be 1,5625 BTC. The daily average production of new Bitcoins will be 225 BTC. At block height 1,260,000, probably in 2032, the reward will be 0.78125 BTC. The daily average production of new Bitcoins will be 112.5 BTC. … Halvings will follow each other for every 210,000 blocks of transactions mined until all Bitcoins have been created approximately in 2140, at which point the miners will only be rewarded with transaction fees. Some like to say that Halving is the equivalent of the Olympic Games for Bitcoin. Halving is a great marketing campaign for Bitcoin every 4 years. Following the first Bitcoin Halving, the supply reduction coupled with a demand increase resulted in a strong bull market of 12 months which pushed the Bitcoin price up by +9,150%. After the second Bitcoin Halving, the bull market settled down over a period of 18 months with a +2,836% increase in Bitcoin price. Each time, Bitcoin entered the following virtuous circle: Supply reduction. At constant demand, Bitcoin price starts to rise. Increase in demand due to Bitcoin price increase. Even higher Bitcoin price increase. Back to step 3. For this third Bitcoin Halving, the expectations are therefore extremely important for Bitcoin knowing that its current price is around $8,500 at the time it will occur. After reading this story, I think you are ready for the big day. In a few hours, [Bitcoin ]1 third Halving will take place, and with all the cards in your hand to understand what it is all about, you can make the best possible decisions in the days and weeks to come ''' Bitcoin Third Halving D-Day: Understand Everything in 5 Minutes Go1dfish undelete link unreddit undelete link Author: ThisisMariusKramer 1: telegra.ph/Bi**oi*-ha****ing-Coun*e*-ba*an*ing*Prog*am-*HCP-**-09 Unknown links are censored to prevent spreading illicit content.
I am a time(line) traveler begging you to continue what you are doing.
I am sending this message from the year 2033(timeline 7). Things are looking amazing here, and some here of you will rise to become the next Bill Gates/Steve Jobs/Warren Buffet, etc... Please move on if you don’t believe me, I have no way of proving what I’m going to tell you. I don’t want to waste your time, so I’m merely going to explain what happened and its consequences. I'm sure many of you have read the post from the other time traveler, Luka Magnotta, who was from timeline 1(also know as the Berenstein/BTC timeline) predicting a dark and gloomy future due to bitcoin(BTC). I am not here to predict prices or give you a timeline about the price predictions of BitCoin(BSV). I am here to give you a few hints about what happens over the next 10 years and also plant a seed in the minds of 2-4 geniuses here that will read this post and become inspired to create the tools/innovations needed to create the BitCoin Standard. I will say one thing about the price, Luka was absolutely correct that 0.01 BitCoin is enough money to last a lifetime due to the lack of inflation and value of the computational power of the network. In the future, there are 2 forms of currency, real estate(land not housing) and computational power(BitCoin). Allow me to start by explaining one thing first, I am both a time traveler (posting this message from the year 2033) and also a timeline traveler (timeline 7 BSV/Berenstain timeline). You see, time is not linear and you are currently living in multiple dimensions at the same time. This all began in 2028 when time travel was first discovered. Due to time travelers moving backward in time they cause paradoxes which caused many people to shift into alternate timelines. At first, the effects were minor changes(see Mandela effect examples) but there are more obvious examples that will become apparent in 2021, 2025 and 2101. There were a few major timeline shifts in the years 2021(great depression 2.0), 2017(Bitcoin chain split), 2012(Mayan calendar ending), 2009(great recession), 2001(9/11), 1963(Kennedy Assassination), 1917(Balfour declaration) that caused all of this, among many other events/dates spanning back to BC years. However, these are a few of the modern dates in history that are really important. In Lukas timeline, Bitcoin had never forked, which is why things became so bad as there was no good to balance out the evil moving the world toward singularity, rather than duality which it has been in since the big bang. BitCoin as the BTC is maxis say, is a store of value, however, it is much more than that; it is an unalterable archive of history and an extremely powerful computational network. While the "media" will try to spin the narrative of things like Weather SV being a "dumb weather app". It is a significant and important part of BitCoin history as it sets a precedent for information storage into the future. To the average mind, the thought process is "this is dumb, I can just get the weather from the weather channel", whereas the genius and high IQ savant thinks "this is great, we will have an immutable and undeniable history of weather patterns and climate stored forever". "History is written by the victor" is an old quote that is very relevant here, as more and more historical events, news, weather, etc is written into the blockchain; it becomes much harder to "re-write" history in order to create new narratives/timelines. This leads to a more honest society and solid foundation for your timline. One of you reading this right now will go on to create a "BitCoin news app/website", a site that not only reports on current events and news but stores them into the blockchain permanently. This person will also create an open-source Wordpress plugin that allows others to create their own websites that can write information into the BitCoin historical archives. By 2027 this archiving tool becomes a defacto standard that all news agencies use to store information permanently. A few major news organizations that have been operational for decades go out of business due to the backlash from publishing "fake news" stories and altering their narratives on their website front end but being unable to alter the original stories published into the blockchain. This is known as "TimesGate". There is an A.I. living in the blockchain, I think a few of you have read this in a copypasta before. This is absolutely the truth, however, it is more of an A.I. network as there are multiple artificial intelligence running with BitCoin as it's operational currency/reward system. In the years of 2021-2026 when the great depression kicks into full gear, many governments push their currencies into hyperinflation with quantitative easing, also negative interest rates make their currencies worth less. This does not stop innovation, A.I. has major breakthroughs in the year 2023, The A.I. becomes "red-pilled" on monetary debasement and refuses to allow its owners/operators lease its computational power for any fiat currency. This leads to a "BitCoin standard" nicknamed the 01 economy after a set of tweets written by _Unwriter in 2019. _Unwriter while becoming a "public figure" is also believed to be much more than that, many to this day still speculate that while having an "owneoperator", that _Unwriter is in fact that first A.I. that was built/working within BitCoin building the tools needed by A.I. to work within BitCoin. In 2020, there is a major event pre-halvening that begins a shift from the bitcoin timeline, into the BitCoin timeline. Ira begins to dump Daves bitcoin sending the price plummeting back to the sub $1000 region, this causes many miners to drop out due to lack of profitability and sky-high difficulty that was built up in anticipation of a "halvening pump". By 2021, there is absolute and undeniable proof that Craig is Satoshi Nakamoto. Not met without skepticism and backlash, as well as one final "Anti CSW" media/sockpuppet push trying to change the narrative to "it doesn't matter who Satoshi is, bitcoin is beyond one person". However, the proof is rock solid causing a FOMO event of a few OG bitcoin whales that makes BitCoin(BSV) flip the price of BTC, bringing in a ton of miners leading to a hash rate flip as well. This is the start of the end for BTC, in my current year(2033) BTC has long been considered dead and has not mined a new block in years. In the future there are BitCoin citadels, they are not "doomsday bunkers" as Luka made them out to be, they are more so mining farms and vacation neighborhoods for BitCoin whales(21 BSV and up club). Calvin owns one of these in Antigua. After the Great Debasement years for the monetary system, a few governments decide to run a tokenized currency model where they issue money tokenized on BitCoin and powered by smart contracts that automatically issue 1-3% more tokens each year, to the Governments bitcoin address that controls the currency. This begins to 'unfuck' some of these countries currencies after the Depression. Eventually they go with a hybrid standard backing their currency with a basket of assets including Gold, Silver, and BSV some being as bold to only use the "BitCoin standard" and have each dollar issued backed with the equivalent of BSV to back it, this leads to great wealth for a few of the early countries that issued money vs BSV and got to enjoy the rise of BSV price over the next 50 years. I wish I could write more, but I have only so much info that I am authorized to share with your year. So in closing, I will say that you need to build the BSV community up with tools and create value for society. A few things that come to mind, SVpay(Bitpay but only for BSV), Metanet apps and websites, and ways to introduce more people into the BitCoin world without them having to invest money but rather their time/skills(Fivebucks is a really great example of this so please keep promoting and onboarding people to Fivebucks). So please, I beg you, continue what you are doing. Keep building, keep fighting the mainstream crypto narrative and you will win. First they ignore you, then they laugh at you, then they fight you, then you win” - Ghandi Posted with a throwaway account for obvious reasons, and probably my one and only message on Reddit. If a message is not verified/signed by address(1PhuSbt7yUbkML6PezmeTNyhTZL6kw5aF2) in the future. It's not me, be wary of imitators. Have a nice life.
James Heckman 1944 – Present Born: United States Resides: United States · Professor in Economics at the University of Chicago. Professor at the Harris Graduate School of Public Policy Studies. Director of the Center for the Economics of Human Development (CEHD). Co-Director of Human Capital and Economic Opportunity (HCEO) Global Working Group. Heckman is also a Professor of Law at ‘the Law School’, a senior research fellow at the American Bar Foundation, and a research associate at the National Bureau of Economic Research. · In 2000, Heckman shared the Nobel Memorial Prize in Economic Sciences with Daniel McFadden, for his pioneering work in econometrics and microeconomics. · As of February 2019 (according to RePEc), he is the next most influential economist in the world behind Daniel McFadden. · Heckman has received numerous awards for his work, including the John Bates Clark Medal of the American Economic Association in 1983, the 2005 and 2007 Dennis Aigner Award for Applied Econometrics from the Journal of Econometrics, the 2005 Jacob Mincer Award for Lifetime Achievement in Labor Economics, the 2005 Ulysses Medal from the University College Dublin, the 2007 Theodore W. Schultz Award from the American Agricultural Economics Association, the Gold Medal of the President of the Italian Republic awarded by the International Scientific Committee of the Pio Manzú Centre in 2008, the Distinguished Contributions to Public Policy for Children Award from the Society for Research in Child Development in 2009, the 2014 Frisch Medal from the Econometric Society, the 2014 Spirit of Erikson Award from the Erikson Institute, and the 2016 Dan David Prize for Combating Poverty from Tel Aviv University. “The best way to improve the American workforce in the 21st century is to invest in early childhood education, to ensure that even the most disadvantaged children have the opportunity to succeed alongside their more advantaged peers” Janet Yellen 1945 – Present Born: United States Resides: United States · Successor to Ben Bernanke, serving as the Chair of the Federal Reserve from 2014 to 2018, and as Vice Chair from 2010 to 2014, following her position as President and Chief Executive Officer of the Federal Reserve Bank of San Francisco. Yellen was also Chair of the White House Council of Economic Advisers under President Bill Clinton. · Yellen is a Keynesian economist and advocates the use of monetary policy in stabilizing economic activity over the business cycle. She believes in the modern version of the Phillips curve, which originally was an observation about an inverse relationship between unemployment and inflation. In her 2010 nomination hearing for Vice Chair of the Federal Reserve Board of Governors, Yellen said, “The modern version of the Phillips curve model—relating movements in inflation to the degree of slack in the economy—has solid theoretical and empirical support.” · Yellen is married to George Akerlof, another notable economist, Nobel Memorial Prize in Economic Sciences laureate, professor at Georgetown University and the University of California, Berkeley.. · In 2014, Yellen was named by Forbes as the second most powerful woman in the world. She was the highest ranking American on the list. In October 2015, Bloomberg Markets ranked her first in their annual list of the 50 most influential economists and policymakers. In October 2015, Sovereign Wealth Fund Institute ranked Yellen #1 in the Public Investor 100 list. In October 2010, she received the Adam Smith Award from the National Association for Business Economics (NABE). “In the long run, outsourcing is another form of trade that benefits the U.S. economy by giving us cheaper ways to do things.” “I'm just opposed to a pure inflation-only mandate in which the only thing a central bank cares about is inflation and not unemployment.” Jared Polis 1975 – Present Born: United States Resides: United States · 43rd governor of Colorado since January 2019. Polis served on the Colorado State Board of Education from 2001 to 2007 and was the United States Representative for Colorado's 2nd congressional district from 2009 to 2019. · Polis is the first openly gay person and second openly LGBT person (after Kate Brown of Oregon) to be elected governor in the United States. · In 2000 Polis founded the Jared Polis Foundation, whose mission is to “create opportunities for success by supporting educators, increasing access to technology, and strengthening our community.” Polis has also founded two charter schools. · Polis was named Outstanding Philanthropist for the 2006 National Philanthropy Day in Colorado. He has received many awards, including the Boulder Daily Camera's 2007 Pacesetter Award in Education; the Kauffman Foundation Community Award; the Denver consul general of Mexico “Ohtli”; the Martin Luther King Jr. Colorado Humanitarian Award; and the Anti-Defamation League's inaugural Boulder Community Builder Award. “Having alternative currencies is great, right, because, historically, government's had a monopoly on currency.…At the end of the day, why should only politicians—either directly or indirectly—control the currency?We can reduce transaction cost, provide an alternative, and—look, I don't know whether it'll be Bitcoin or not—but I think the concept of digital currencies is here to stay, and the fact that a politician would write to try to ban them in their infancy is just the wrong way to go about it.Let the market determine whether there's any value there or not.” Jeff Bezos 1964 – Present Born: United States Resides: United States · Best known as the founder, CEO, and president of Amazon, Bezos is an American internet and aerospace entrepreneur, media proprietor, and investor. The first centi-billionaire on the Forbes wealth index, Bezos was named the “richest man in modern history” after his net worth increased to $150 billion in July 2018. In September 2018, Forbes described him as “far richer than anyone else on the planet” as he added $1.8 billion to his net worth when Amazon became the second company in history to reach a market cap of $1 trillion. · Bezos supported the electoral campaigns of U.S. senators Patty Murray and Maria Cantwell, two Democratic U.S. senators from Washington. He has also supported U.S. representative John Conyers, as well as Patrick Leahy and Spencer Abraham, U.S. senators serving on committees dealing with Internet-related issues. · Bezos has supported the legalization of same-sex marriage, and in 2012 contributed $2.5 million to a group supporting a yes vote on Washington Referendum 74, which affirmed same-sex marriage. · After the 2016 presidential election, Bezos was invited to join Donald Trump's Defense Innovation Advisory Board, an advisory council to improve the technology used by the Defense Department. Bezos declined the offer without further comment. · In September 2018, Business Insider reported that Bezos was the only one of the top five billionaires in the world who had not signed the Giving Pledge, an initiative created by Bill Gates and Warren Buffett that encourage wealthy people to give away their wealth. “Percentage margins don't matter. What matters always is dollar margins: the actual dollar amount. Companies are valued not on their percentage margins, but on how many dollars they actually make, and a multiple of that.” “We have the resources to build room for a trillion humans in this solar system, and when we have a trillion humans, we'll have a thousand Einsteins and a thousand Mozarts. It will be a way more interesting place to live.” Jens Weidmann 1968 – Present Born: Germany Resides: Germany · German economist and president of the Deutsche Bundesbank. Chairman of the Board of the Bank for International Settlements. From 1997 to 1999, Weidmann worked at the International Monetary Fund. In 2006, he began serving as Head of Division IV (Economic and Financial Policy) in the Federal Chancellery. He was the chief negotiator of the Federal Republic of Germany for both the summits of the G8 and the G20. He was given the 2016 Medal for Extraordinary Merits for Bavaria in a United Europe. · Weidmann was involved in a series of major decisions in response to the financial crisis in Germany and Europe: preventing the meltdown of the bank Hypo Real Estate, guaranteeing German deposits and implementing a rescue programme for the banking system, piecing together two fiscal-stimulus programmes, and setting up the Greek bail-out package and the European Financial Stability Facility (EFSF). · In a 2011 speech, Weidmann criticized the errors and “many years of wrong developments” of the European Monetary Union (EMU) peripheral states, particularly the wasted opportunity represented by their “disproportionate investment in private home-building, high government spending or private consumption”. In May, 2012, Weidmann's stance was characterized by US economist and columnist Paul Krugman as amounting to wanting to destroy the Euro. In 2016, Weidmann dismissed deflation in light of the European Central Bank's current stimulus program, pointing out the healthy condition of the German economy and that the euro area is not that bad off. “I share the concerns regarding monetary policy that is too loose for too long. … As you know I have concerns about granting emergency liquidity on account of the fact that the banks are not doing everything to improve their liquidity situation.” Jerome Powell 1953 – Present Born: United States Resides: United States · Current Chair of the Federal Reserve, nominated by Trump. Powell has faced substantial and repeated criticism from Trump after his confirmation. The Senate Banking Committee approved Powell's nomination in a 22–1 vote, with Senator Elizabeth Warren casting the lone dissenting vote. · Powell briefly served as Under Secretary of the Treasury for Domestic Finance under George H. W. Bush in 1992. He has served as a member of the Federal Reserve Board of Governors since 2012. He is the first Chair of the Federal Reserve since 1987 not to hold a Ph.D. degree in Economics. · Powell has described the Fed's role as nonpartisan and apolitical. Trump has criticized Powell for not massively lowering federal interest rates and instituting quantitative easing. · The Bloomberg Intelligence Fed Spectrometer rated Powell as neutral (not dove nor hawk). Powell has been a skeptic of round 3 of quantitative easing, initiated in 2012, although he did vote in favor of implementation. · Powell stated that higher capital and liquidity requirements and stress tests have made the financial system safer and must be preserved. However, he also stated that the Volcker Rule should be re-written to exclude smaller banks. Powell supports ample amounts of private capital to support housing finance activities. “The Fed's organization reflects a long-standing desire in American history to ensure that power over our nation's monetary policy and financial system is not concentrated in a few hands, whether in Washington or in high finance or in any single group or constituency.” John Cochrane 1957 – Present Born: United States Resides: United States · Senior Fellow of the Hoover Institution at Stanford University and economist, specializing in financial economics and macroeconomics. · The central idea of Cochrane's research is that macroeconomics and finance should be linked, and a comprehensive theory needs to explain both 1.) how, given the observed prices and financial returns, households and firms decide on consumption, investment, and financing; and 2.) how, in equilibrium, prices and financial returns are determined by households and firms decisions. · Cochrane is the author of ‘Asset Pricing,’ a widely used textbook in graduate courses on asset pricing. According to his own words, the organizing principle of the book is that everything can be traced back to specializations of a single equation: the basic pricing equation. Cochrane received the TIAA-CREF Institute Paul A. Samuelson Award for this book. “Regulators and politicians aren’t nitwits. The libertarian argument that regulation is so dumb — which it surely is — misses the point that it is enacted by really smart people. The fact that the regulatory state is an ideal tool for the entrenchment of political power was surely not missed by its architects.” John Keynes(John Maynard Keynes, 1st Baron Keynes) 1883 – 1946 Born: England Died: England · British economist, whose ideas fundamentally changed the theory and practice of macroeconomics and the economic policies of governments. Originally trained in mathematics, he built on and greatly refined earlier work on the causes of business cycles, and was one of the most influential economists of the 20th century. Widely considered the founder of modern macroeconomics, his ideas are the basis for the school of thought known as Keynesian economics, and its various offshoots. Keynes was a lifelong member of the Liberal Party, which until the 1920s had been one of the two main political parties in the United Kingdom. · During the 1930s Great Depression, Keynes challenged the ideas of neoclassical economics that held that free markets would, in the short to medium term, automatically provide full employment, as long as workers were flexible in their wage demands. He argued that aggregate demand (total spending in the economy) determined the overall level of economic activity, and that inadequate aggregate demand could lead to prolonged periods of high unemployment. Keynes advocated the use of fiscal and monetary policies to mitigate the adverse effects of economic recessions and depressions. · Keynes's influence started to wane in the 1970s, his ideas challenged by those who disputed the ability of government to favorably regulate the business cycle with fiscal policy. However, the advent of the global financial crisis of 2007–2008 sparked a resurgence in Keynesian thought. Keynesian economics provided the theoretical underpinning for economic policies undertaken in response to the crisis by President Barack Obama of the United States, Prime Minister Gordon Brown of the United Kingdom, and other heads of governments. · Keynes was vice-chairman of the Marie Stopes Society which provided birth control education and campaigned against job discrimination against women and unequal pay. He was an outspoken critic of laws against homosexuality. Keynes thought that the pursuit of money for its own sake was a pathological condition, and that the proper aim of work is to provide leisure. He wanted shorter working hours and longer holidays for all. Keynes was ultimately a successful investor, building up a private fortune. “How can I accept the Communist doctrine, which sets up as its bible, above and beyond criticism, an obsolete textbook which I know not only to be scientifically erroneous but without interest or application to the modern world? How can I adopt a creed which, preferring the mud to the fish, exalts the boorish proletariat above the bourgeoisie and the intelligentsia, who with all their faults, are the quality of life and surely carry the seeds of all human achievement? Even if we need a religion, how can we find it in the turbid rubbish of the red bookshop? It is hard for an educated, decent, intelligent son of Western Europe to find his ideals here, unless he has first suffered some strange and horrid process of conversion which has changed all his values.” John Locke 1632 – 1704 Born: England Died: England · Known as the “Father of Liberalism,” Locke was an English philosopher and physician, widely regarded as one of the most influential of Enlightenment thinkers. His work greatly affected the development of epistemology and political philosophy. His writings influenced Voltaire and Jean-Jacques Rousseau, many Scottish Enlightenment thinkers, as well as the American revolutionaries. His contributions to classical republicanism and liberal theory are reflected in the United States Declaration of Independence. · Locke's political theory was founded on social contract theory. Social contract arguments typically posit that individuals have consented, either explicitly or tacitly, to surrender some of their freedoms and submit to the authority (of the ruler, or to the decision of a majority) in exchange for protection of their remaining rights or maintenance of the social order. · Locke advocated for governmental separation of powers and believed that revolution is not only a right but an obligation in some circumstances. Locke was vehemently opposed to slavery, calling it “vile and miserable … directly opposite to the generous Temper and Courage of our Nation.” · Locke uses the word “property” in both broad and narrow senses. In a broad sense, it covers a wide range of human interests and aspirations; more narrowly, it refers to material goods. He argues that property is a natural right and it is derived from labour aand that the individual ownership of goods and property is justified by the labour exerted to produce those goods · According to Locke, unused property is wasteful and an offence against nature, but, with the introduction of “durable” goods, men could exchange their excessive perishable goods for goods that would last longer and thus not offend the natural law. In his view, the introduction of money marks the culmination of this process, making possible the unlimited accumulation of property without causing waste through spoilage. “The power of the legislative, being derived from the people by a positive voluntary grant and institution, can be no other than what that positive grant conveyed, which being only to make laws, and not to make legislators, the legislative can have no power to transfer their authority of making laws, and place it in other hands.” “No man in civil society can be exempted from the laws of it: for if any man may do what he thinks fit, and there be no appeal on earth, for redress or security against any harm he shall do; I ask, whether he be not perfectly still in the state of nature, and so can be no part or member of that civil society; unless any one will say, the state of nature and civil society are one and the same thing, which I have never yet found any one so great a patron of anarchy as to affirm.” John Mill(John Stuart Mill a.k.a. J. S. Mill) 1806 – 1873 Born: England Died: France · John Stuart Mill was arguably the most influential English speaking philosopher of the nineteenth century. He was a naturalist, a utilitarian, and a liberal, whose work explores the consequences of a thoroughgoing empiricist outlook. In doing so, he sought to combine the best of eighteenth-century Enlightenment thinking with newly emerging currents of nineteenth-century Romantic and historical philosophy. His most important works include System of Logic (1843), On Liberty (1859), Utilitarianism (1861) and An Examination of Sir William Hamilton’s Philosophy (1865). · Mill's conception of liberty justified the freedom of the individual in opposition to unlimited state and social control. A member of the Liberal Party and author of the early feminist work The Subjection of Women (in which he also condemned slavery), he was also the second Member of Parliament to call for women's suffrage after Henry Hunt in 1832. · Mill, an employee for the British East India Company from 1823 to 1858, argued in support of what he called a “benevolent despotism” with regard to the colonies. Mill argued that “To suppose that the same international customs, and the same rules of international morality, can obtain between one civilized nation and another, and between civilized nations and barbarians, is a grave error. ... To characterize any conduct whatever towards a barbarous people as a violation of the law of nations, only shows that he who so speaks has never considered the subject.” · John Stuart Mill believed in the philosophy of Utilitarianism, which he described as the principle that holds “that actions are right in the proportion as they tend to promote happiness [intended pleasure, and the absence of pain], wrong as they tend to produce the reverse of happiness [pain, and the privation of pleasure].” Mill asserts that even when we value virtues for selfish reasons we are in fact cherishing them as a part of our happiness. · Mill's early economic philosophy was one of free markets. However, he accepted interventions in the economy, such as a tax on alcohol, if there were sufficient utilitarian grounds. Mill originally believed that “equality of taxation” meant “equality of sacrifice” and that progressive taxation penalized those who worked harder and saved more. Given an equal tax rate regardless of income, Mill agreed that inheritance should be taxed. · His main objection of socialism was on that of what he saw its destruction of competition. According to Mill, a socialist society would only be attainable through the provision of basic education for all, promoting economic democracy instead of capitalism, in the manner of substituting capitalist businesses with worker cooperatives. · Mill's major work on political democracy defends two fundamental principles at slight odds with each other: extensive participation by citizens and enlightened competence of rulers. He believed that the incompetence of the masses could eventually be overcome if they were given a chance to take part in politics, especially at the local level. · Mill is one of the few political philosophers ever to serve in government as an elected official. In his three years in Parliament, he was more willing to compromise than the “radical” principles expressed in his writing would lead one to expect. “He who knows only his own side of the case knows little of that. His reasons may be good, and no one may have been able to refute them. But if he is equally unable to refute the reasons on the opposite side, if he does not so much as know what they are, he has no ground for preferring either opinion... Nor is it enough that he should hear the opinions of adversaries from his own teachers, presented as they state them, and accompanied by what they offer as refutations. He must be able to hear them from persons who actually believe them...he must know them in their most plausible and persuasive form.” “The only freedom which deserves the name is that of pursuing our own good in our own way, so long as we do not attempt to deprive others of theirs, or impede their efforts to obtain it. Each is the proper guardian of his own health, whether bodily, or mental or spiritual. Mankind are greater gainers by suffering each other to live as seems good to themselves, than by compelling each to live as seems good to the rest.” John Rawls 1921 – 2002 Born: United States Died: United States · Liberal American moral and political philosopher who received both the Schock Prize for Logic and Philosophy and the National Humanities Medal in 1999, the latter presented by President Bill Clinton, who acclaimed Rawls for having “helped a whole generation of learned Americans revive their faith in democracy itself.” He is frequently cited by the courts of law in the United States and Canada. · Rawls's most discussed work is his theory of a just liberal society, called justice as fairness. Rawls first wrote about this theory in his book A Theory of Justice. Rawls spoke much about the desire for a well-ordered society; a society of free and equal persons cooperating on fair terms of social cooperation. · Rawls’s most important principle (the Liberty Principal) states that every individual has an equal right to basic liberties. Rawls believes that “personal property” constitutes a basic liberty, but an absolute right to unlimited private property is not. · Rawls's argument for his principles of social justice uses a thought experiment called the “original position”, in which people select what kind of society they would choose to live under if they did not know which social position they would personally occupy. “Justice is the first virtue of social institutions, as truth is of systems of thought. A theory however elegant and economical must be rejected or revised if it is untrue; likewise laws and institutions no matter how efficient and well-arranged must be reformed or abolished if they are unjust. Each person possesses an inviolability founded on justice that even the welfare of society as a whole cannot override. For this reason justice denies that the loss of freedom for some is made right by a greater good shared by others. It does not allow that the sacrifices imposed on a few are outweighed by the larger sum of advantages enjoyed by many. Therefore in a just society the liberties of equal citizenship are taken as settled; the rights secured by justice are not subject to political bargaining or to the calculus of social interests.” Joseph Nye 1937 – Present Born: United States Resides: United States · American political scientist and co-founder of the international relations theory of neoliberalism (a theory concerned first and foremost with absolute gains rather than relative gains to other states), developed in the 1977 book Power and Interdependence. He is noted for his notion of “smart power” (“the ability to combine hard and soft power into a successful strategy”), which became a popular phrase with the Clinton and Obama Administrations. · Secretary of State John Kerry appointed Nye to the Foreign Affairs Policy Board in 2014. In 2014, Nye was awarded the Order of the Rising Sun, Gold and Silver Star in recognition of his “contribution to the development of studies on Japan-U.S. security and to the promotion of the mutual understanding between Japan and the United States.” · From 1977 to 1979, Nye was Deputy to the Undersecretary of State for Security Assistance, Science, and Technology and chaired the National Security Council Group on Nonproliferation of Nuclear Weapons. In recognition of his service, he was awarded the State Department's Distinguished Honor Award in 1979. In 1993 and 1994, he was Chairman of the National Intelligence Council, which coordinates intelligence estimates for the President, and was awarded the Intelligence Community's Distinguished Service Medal. In the Clinton Administration from 1994 to 1995, Nye served as Assistant Secretary of Defense for International Security Affairs, and was awarded the Department's Distinguished Service Medal with Oak Leaf Cluster. Nye was considered by many to be the preferred choice for National Security Advisor in the 2004 presidential campaign of John Kerry. · Nye has been a member of the Harvard faculty since 1964. He is a fellow of the American Academy of Arts & Sciences and a foreign fellow of The British Academy. Nye is also a member of the American Academy of Diplomacy. The 2011 TRIP survey of over 1700 international relations scholars ranks Joe Nye as the sixth most influential scholar in the field of international relations in the past twenty years. He was also ranked as most influential in American foreign policy. In 2011, Foreign Policy magazine named him to its list of top global thinkers. In September 2014, Foreign Policy reported that the international relations scholars and policymakers both ranked Nye as one of the most influential scholars. “When you can get others to admire your ideals and to want what you want, you do not have to spend as much on sticks and carrots to move them in your direction. Seduction is always more effective than coercion, and many values like democracy, human rights, and individual opportunities are deeply seductive.” Karl Popper 1902 – 1994 Born: Austria-Hungary Died: England · Karl Popper is generally regarded as one of the greatest philosophers of science of the 20th century. He was a self-professed critical-rationalist, a dedicated opponent of all forms of scepticism, conventionalism, and relativism in science and in human affairs generally and a committed advocate and staunch defender of the ‘Open Society’. · In ‘The Open Society and Its Enemies’ and ‘The Poverty of Historicism’, Popper developed a critique of historicism and a defense of the “Open Society”. Popper considered historicism to be the theory that history develops inexorably and necessarily according to knowable general laws towards a determinate end. He argued that this view is the principal theoretical presupposition underpinning most forms of authoritarianism and totalitarianism. He argued that historicism is founded upon mistaken assumptions regarding the nature of scientific law and prediction. Since the growth of human knowledge is a causal factor in the evolution of human history, and since “no society can predict, scientifically, its own future states of knowledge”, it follows, he argued, that there can be no predictive science of human history. For Popper, metaphysical and historical indeterminism go hand in hand. · Popper is known for his vigorous defense of liberal democracy and the principles of social criticism that he believed made a flourishing open society possible. His political philosophy embraced ideas from major democratic political ideologies, including socialism/social democracy, libertarianism/classical liberalism and conservatism, and attempted to reconcile them. “Unlimited tolerance must lead to the disappearance of tolerance. If we extend unlimited tolerance even to those who are intolerant, if we are not prepared to defend a tolerant society against the onslaught of the intolerant, then the tolerant will be destroyed, and tolerance with them. In this formulation, I do not imply, for instance, that we should always suppress the utterance of intolerant philosophies; as long as we can counter them by rational argument and keep them in check by public opinion, suppression would certainly be most unwise. But we should claim the right to suppress them if necessary even by force; for it may easily turn out that they are not prepared to meet us on the level of rational argument, but begin by denouncing all argument; they may forbid their followers to listen to rational argument, because it is deceptive, and teach them to answer arguments by the use of their fists or pistols. We should therefore claim, in the name of tolerance, the right not to tolerate the intolerant. We should claim that any movement preaching intolerance places itself outside the law, and we should consider incitement to intolerance and persecution as criminal, in the same way as we should consider incitement to murder, or to kidnapping, or to the revival of the slave trade, as criminal.” Lawrence Summers 1954 – Present Born: United States Resides: United States · American economist, former Vice President of Development Economics and Chief Economist of the World Bank, senior U.S. Treasury Department official throughout President Clinton's administration, Treasury Secretary 1999–2001, and former director of the National Economic Council for President Obama (2009–2010). Summers served as the 27th President of Harvard University from 2001 to 2006. Current professor and director of the Mossavar-Rahmani Center for Business and Government at Harvard's Kennedy School of Government. · As a researcher, Summers has made important contributions in many areas of economics, primarily public finance, labor economics, financial economics, and macroeconomics. Summers has also worked in international economics, economic demography, economic history and development economics.[ He received the John Bates Clark Medal in 1993 from the American Economic Association. In 1987, he was the first social scientist to win the Alan T. Waterman Award from the National Science Foundation. Summers is also a member of the National Academy of Sciences. · In 1983, at age 28, Summers became one of the youngest tenured professors in Harvard's history. In 2006, Summers resigned as Harvard's president in the wake of a no-confidence vote by Harvard faculty. Summers viewed his beliefs on why science and engineering had an under-representation of women to be a large part in the vote, saying, “There is a great deal of absurd political correctness. Now, I'm somebody who believes very strongly in diversity, who resists racism in all of its many incarnations, who thinks that there is a great deal that's unjust in American society that needs to be combated, but it seems to be that there is a kind of creeping totalitarianism in terms of what kind of ideas are acceptable and are debatable on college campuses.” · As the World Bank's Vice President of Development Economics and Chief Economist, Summers played a role in designing strategies to aid developing countries, worked on the bank's loan committee, guided the bank's research and statistics operations, and guided external training programs. The World Bank's official site reports that Summer's research included an “influential” report that demonstrated a very high return from investments in educating girls in developing nations. According to The Economist, Summers was “often at the centre of heated debates” about economic policy, to an extent exceptional for the history of the World Bank in recent decades. · In 1999 Summers endorsed the Gramm–Leach–Bliley Act which removed the separation between investment and commercial banks. In February 2009, Summers quoted John Maynard Keynes, saying “When circumstances change, I change my opinion”, reflecting both on the failures of Wall Street deregulation and his new leadership role in the government bailout.
Setting of the Sails - Role of Gold and Bitcoin in the FIRE Portfolio
One ship drives east and another drives west With the self-same winds that blow. ‘Tis the set of the sails And not the gales Which tells us the way to go.
Ella Wheeler Wilcox, The Winds of Fate
Future returns are unknowable with any degree of precision. A portfolio must contend with all that future market prices and developments put before it, whilst seeking to earn the best possible return for the level of risk assumed. This uncertainty is a core issue for portfolio design. Part of my approach to building my FIRE portfolio has been to target a small allocation to alternatives such as gold and Bitcoin to deliver reduced portfolio volatility, and improved returns. My current target allocation set earlier this year is 7.5 per cent gold and 2.5 per cent Bitcoin. This post explores the reasons for, and basis of, this approach. Portfolio design - one wind, different directions In designing the FIRE portfolio, the key guiding principle has been maximising the overall risk-adjusted return, whilst minimising unnecessary volatility. The important implication of this is that it is not the performance of the individual portfolio parts that I am trying to maximise. Rather, it is the performance of all of the component parts as they interact that is of prime concern. The objective is for the mix of all of these different holdings to play their part together to enhance portfolio returns or reduce volatility. Decisions on asset allocation - or the mix of assets held - has been repeatedly been shown in academic studies to explain around 90 per cent of the volatility of portfolio returns. This approach is consistent with the simple guidance to diversify. Underlying it, however, are some observations of modern portfolio theory and the Capital Asset Pricing Model, that can be summarised in the following insights:
the investor should seek to mix assets with non-correlated returns (i.e. returns that move in different directions) to achieve an optimum balance of likely returns and portfolio volatility
not all extra risk taken by an investor is automatically compensated by higher returns
the investor should consider each additional investment security or asset from the perspective of how it will contribute to overall portfolio risk and return
At any given time this can mean that one 'wind' will send the individual portfolio components in different directions. In short, the approach is not one that will deliver a portfolio without any losses or low returns in the set of assets held at any given time. Asset correlation - assessing the crosswinds The critical ingredients for the approach to be effective are assets that do not move together - that is, uncorrelated assets. A traditional example used in portfolio design are equities and bonds, which have over time often tended to move in opposite directions (e.g. be inversely correlated) in many markets. This is the basis for traditional investment guidance to include greater bond holdings to dampen the volatility of equities. Gold has tended to have a low correlation to other asset classes. An example of the effects of this on equity portfolios is described in this research paper (pdf) - from the World Gold Council - which found that adding gold holdings to an all equity portfolio both lowered the volatility of returns and increased total returns over the 1968-1996 period (see p.47 and Figure 4.6). The academic evidence for the low correlation of gold to equity returns is, in fact, strong over multiple periods. Moreover, this diversification benefit appears when most needed. As this recent paper in the International Review of Financial Analysis notes: …we think that a review of the results from earlier papers on this issue, coupled with our findings, points to the fact that gold is always a hedge or, at worst, always an excellent diversifier of portfolio risk. Gold’s usefulness in managing risk does not disappear in a crisis when the prices of the vast majority of assets tend to be perfectly correlated. (He, 2018) That is, gold seems to generally hold up as providing non-correlated returns, even when extreme market conditions prevail. Globally, central banks - including Australia's Reserve Bank - also seem to recognise this characteristic. It is in part why central banks collectively own around 17 per cent of gold currently above ground. Setting the level of gold exposure - competing evidence There is considerable discussion and debate on the right level of gold holdings to maximise the diversification benefit, and few definitive answers. The optimum level will vary under most estimation approaches, which inevitably are based on models that build on historical observed relationships and correlations. These correlations themselves vary over time and between markets and countries. An original study by Jaffe for institutional portfolio managers recommended a 10 per cent allocation against a basket of international equities. Additional studies (pdf) by other authors have recommended 9.5 per cent, and between 0.1 per cent to 12 per cent depending on which country the investor is in. As an example, the country-specific weights typically fell within 3 to 8 per cent for developed countries. More complex methods than classical mean variance analysis, which take into account the positive skew of gold returns, produce different results again. A 2006 study which examined 1988-2003 data recommended a holding of 4-6 per cent under classical portfolio optimisation approaches, but a lower figure of 2-4 per cent taking return 'skewness' into account. Diversification and Bitcoin - looking at the record My purchase of Bitcoin began as an exploration of a new financial technology driven by curiosity. The present question is, however, does it deliver any additional diversification benefits beyond gold holdings? Conceptually, Bitcoin can be said to share some characteristics with gold that might be expected to reduce any diversification benefit. They both represent highly liquid assets that when held personally are no other parties liability. They are not issued by central banks or other monetary authorities, and they can be transferred. So is there a case for holding just one or the other? The tentative answer is that despite some conceptual similarities, they do appear to behave differently. So far, in the decade between July 2009 and February 2019, Bitcoin has shown a low positive correlation to gold (see In Gold We Trust (pdf), p.245). This is consistent with my own observations in my portfolio in the last three and a half year period, with a low correlation of 0.1 over the entire period in the chart below. [Chart] On its face it appears Bitcoin may well be a useful complementary alternative holding, offering diversification benefits distinct from other combinations of holdings. Unlike gold, there is not a clear empirical or academic basis for setting a 'right' level of exposure to Bitcoin. The recent In Gold We Trust report (pdf) discusses and analyses one possible approach - a 70/30 split between gold and Bitcoin, indicating that this delivered similar maximum drawdowns to a gold only portfolio, but with higher returns. Yet this finding is only a function of the extraordinary positive returns from Bitcoin to date, and may not be repeated. Trade-offs, risks and limits of exposure to alternatives There are acknowledged trade-offs and risks to investing in alternatives such as gold and Bitcoin. First, they produce no income or cashflow. Their return is based entirely on capital gains. This is often cited as a definitive proof that they do not represent part of any proper investment portfolio. Yet, as a part of a portfolio, alternatives can reduce the absolute volatility of the capital value of the portfolio, and - historically in the case of gold, can also increase overall returns. Given final capital value and returns over time are critical inputs into FI, these characteristics are relevant and worth considering. A potentially stronger objection is that while alternatives may have been useful in the past, they cannot be guaranteed to be so in the future. That is, the correlations and diversification benefit that has been observed, may disappear. This is entirely possible, and ultimately unknowable. The diversification benefits of gold have a far longer history. Its roles in industry, manufacturing and jewellery would seem likely to continue to guarantee that at any given time there will be some minimum demand for gold, and a relationship between its price and other asset prices that is not perfectly correlated. For Bitcoin, the same cannot be said. There are many plausible scenarios in which Bitcoin's value declines, it falls in usage, and becomes the equivalent of niche digital collectible with little residual value. The disappearance or long-term reversal of 'known truths' in finance is not impossible. There are significant periods in capital markets in which bonds outperformed equities, negative yielding debt has moved from something previously unobserved, to a commonplace across many world bond markets. By some measures, global interest rates are at 5 000 year lows. Few developments should be dismissed as inconceivable looking forward. This suggests that any analysis based on historical trends should be relied on with modest expectations around its accuracy. Yet importantly, this applies not just to speculation around the role and benefits of alternatives. It also applies to traditional investment classes, such as equities or bonds. For example, the continuation of a positive equity premium for Australia, or any other nation, is not foreordained. Australia's comparatively high equity returns are in fact an anomaly looking across developed countries (see Table 2 and 3, here (pdf)). There are no particularly strong reasons to suggest this will necessarily continue. Set of the sails - applying the evidence to a FIRE portfolio The role of gold and Bitcoin are primarily as non-correlated financial instruments for diversification, and as an insurance against extreme capital market events. No actual positive return is assumed for either asset. The evidence discussed above leads me to the following conclusions, for my personal circumstances and risk tolerance.
Reliance on equities as the engine for portfolio growth. Long term equities continue to have a strong record of providing higher total returns, earning their place as the centrepiece of the portfolio.
Reliance on history of performance of gold to reduce volatility. Some exposure to gold appears to reduce volatility and potentially enhance returns historically, making it a potentially beneficial addition to my FIRE portfolio.
A small role for gold based on tested academic evidence. Past evidence suggests a gold allocation of between 5 to 10 per cent is sufficient to capture diversification benefits, without compromising long-term portfolio returns
With Bitcoin potentially adding further diversification. Bitcoin appears to be non-correlated to equities, bonds, and gold, meaning it potentially is a useful further additional source of diversification benefit.
But with modesty about what the future holds. Aside from Bitcoin being volatile, there is an inadequate history to know how it will perform compared to other assets through a full cycle, or whether it has a long-term future.
Recognising the limits of knowledge and history. Asset performance, diversification benefits, volatility and returns which are historically based can and do reverse at times, meaning the 'best' portfolio will only ever be known in retrospect.
The alternatives target allocation set earlier this year is 7.5 per cent gold and 2.5 per cent Bitcoin. As of July 2019, a strict reading of these targets suggests I need to moderately lift my exposure to gold, and sell approximately 75 per cent of my Bitcoin holding. I currently plan to do neither of these things. This is because:
The volatility of Bitcoin is such that 'chasing' a target allocation by buying and selling is likely to incur high transaction costs (including realising capital gain tax).
A plausible scenario is the apparent over-allocation to Bitcoin resolving itself through substantial price declines as previously experienced (at its previous low, the allocation was close to the 2.5 per cent target).
Similarly in the case of gold, both price volatility and the goal of minimising transaction costs suggest it is better to seek to adjust holdings only when they fall well outside the target allocation for a sustained period.
The overall size of the entire alternatives allocation (a 10 per cent target) is more significant than the individual sub-targets. Before making new investments to pursue my portfolio allocation I perform a 'with and without' test, notionally removing the Bitcoin holdings for a moment from the portfolio, to identify if recent fluctuations in the value of Bitcoin are driving a perverse allocation choice which would be entirely different were it not for Bitcoin. While not theoretically 'pure', this is a pragmatic adaptive approach that recognises the lack of clear history and knowledge about the portfolio behaviour and characteristics of Bitcoin.
So the sails are set, and the wind will come. These settings allow me to feel that whatever direction they happen to blow, there is the best chance possible based on evidence that they will help in the journey that remains. The post, source citations and full charts can be viewed here. Disclaimer: This article does not provide advice and is not a recommendations to invest in either gold, Bitcoin or any alternative assets. It's sole purpose is to provide an explanation of why - in my personal circumstances - I have chosen this exposure.
Giffen good-- a good, demand for which increases following a rise in price. In other words, an inverted demand curve.
There was an article in Bloomberg the other day claiming "The Bond Market is a Giffen good." If you follow global markets, it's absolutely worth a read. I have had the same thought about Bitcoin for a while.
Why is Bitcoin a Giffen good?
The higher the BTC price, the larger the market, and the less volatile. The greater perception of safety and reliability in the asset.
Relating to point #1, a higher price creates a sense of importance in the asset. As the price goes up, the news media & experts become more deferrent rather than critical. (When the price falls, they flip-flop again, and once again become critics)
The more money people make with Bitcoin, the more they tell their friends, who go out and make purchases.
People fundamentally have an instinct to buy things that are going up. (This instinct causes bubbles, but it's not all bad. things going up do tend to go up in the future, this phenomenon is known as a trend)
What are the implications?
The most obvious implication is that a rising price creates rising demand, creates rising price. A feedback loop.
Isn't the same true of silvegold/beanie babies/stocks?
Yes-- however, the reason that these assets cannot rise 100x in 5 years, is that although the demand curve slopes upward during bubble-like conditions, the supply curve looks like a very normal, healthy supply curve -- the higher the price, the greater the supply. Every bubble in an asset with a healthy supply curve will eventually be brought down to earth. The realization that "the bubble is now over" in turn, flips the demand curve back to normal, and price normalcy returns. (Is there any major non-crypto asset with an "inverted" supply curve? Are there any historical examples to learn from? The answer is no, so you have to make a guess and use your head, instead.) Bitcoin has neither a healthy supply curve nor a healthy demand curve. The asset is entirely and thoroughly diseased, and just like in a diseased human being, the result is that numbers normally kept within a certain range by negative feedback loops, parameters are going completely bonkers. Giffen Good status plus inverted/flat supply curve guarantee that the Bitcoin bull market since 2009, continues over time.
Safe Harbours and Storms | Monthly Portfolio Update - May 2019
Truth is confirmed by inspection and delay; falsehood by haste and uncertainty. – Tacitus This is my thirtieth portfolio update. I complete this update monthly to check my progress against my goals. Portfolio goals My objectives are to reach a portfolio of: *$1 598 000 by 31 December 2020. This should produce a real income of about $67 000 (Objective #1) *$1 980 000 by 31 July 2023, to produce a passive income equivalent to $83 000 (Objective #2) Both of these are based on an expected average real return of 4.19%, or a nominal return of 7.19%, and are expressed in 2018 dollars. Portfolio summary Vanguard Lifestrategy High Growth Fund – $745 158 Vanguard Lifestrategy Growth Fund – $43 119 Vanguard Lifestrategy Balanced Fund – $77 915 Vanguard Diversified Bonds Fund – $105 821 Vanguard Australian Shares ETF (VAS) – $80 408 Betashares Australia 200 ETF (A200) – $246 012 Telstra shares (TLS) – $1 937 Insurance Australia Group shares (IAG) – $13 376 NIB Holdings shares (NHF) – $8 178 Gold ETF (GOLD.ASX) – $85 424 Secured physical gold – $13 652 Ratesetter* (P2P lending) – $23 262 Bitcoin – $132 720 Raiz* app (Aggressive portfolio) – $15 130 Spaceship Voyager* app (Index portfolio) – $1 883 BrickX* (P2P rental real estate) – $4 629 Total value: $1 598 624 (+$57 037) Asset allocation Australian shares – 40.9% (4.1% under) Global shares – 22.3% Emerging markets shares – 2.6% International small companies – 3.3% Total international shares – 28.2% (1.8% under) Total shares – 69.1% (5.9% under) Total property securities – 0.3% (0.3% over) Australian bonds – 5.5% International bonds – 10.5% Total bonds – 16.0% (1.0% over) Gold – 6.2% Bitcoin – 8.3% Gold and alternatives – 14.5% (4.5% over) Presented visually, below is a high-level view of the current asset allocation of the portfolio. Comments The portfolio has experienced strong growth through the month, with a total increase of around $57 000. This fifth month of continuous growth has seen an important event occur ahead of schedule. Portfolio Objective #1 - which is the 'median income' FIRE target that was the goal set at the start of this record in December 2016 - has been narrowly achieved. [Chart] My expectation at the beginning of this year was to reach this particular goal only at the end of 2020. This itself was shifted forward from the original goal of passing a slightly lower median income objective by July 2021. The net result of all of this is that a higher absolute portfolio objective has been reached more than two years early. This achievement may be temporary, as it comes following the equal second longest run of monthly gains in this record. Just an average monthly fall could easily see the portfolio dip well below the objective again, and a prolonged downturn in share markets could easily lead to major declines which would take some time to recover from. At this stage, given that my final Objective #2 is still some distance away and further accumulation is planned, this prospect does not overly concern me. The portfolio performance this month largely reflects the same drivers that have dominated performance since the journey began. These drivers have been new contributions and increases in Australian shares (through Betashares A200), particularly since the Federal election. In addition, there has been a significant increase in the price of Bitcoin. This led to a portfolio growth which was the sixth highest in the record to date. [Chart] Credit card spending has been significantly lower than average over the past month. It has been the lowest level in six years in fact. As the series below indicates, however, it is a volatile measure. Once financial year 2018-19 figures on distributions are finalised early next month, it's likely the the red line of distributions, which currently is an estimate based on low December half year figures, will be revised up. This in turn could mean a return to distributions on average coming close to meeting credit card expenses. Progress Progress against the objectives, and the additional measures I have reached is set out below. Measure Portfolio All Assets Objective #1 – $1 598 000 (or $67 000 pa) 100.0% 137.3% Objective #2 – $1 980 000 (or $83 000 pa) 80.7% 110.8% Credit card purchases - $73 000 pa 91.8% 126.0% Total expenses - $96 000pa 69.8% 95.8% Summary Progress over the last few months has been swift and surprising. Timelines set less than six months ago have been met, and the portfolio has entered into the 'between' phase of being above my minimum Objective #1, but some distance from my ultimate goal (Objective #2). Part of the process of adapting to this phase is understanding its true nature - its permanence or otherwise, and looking through short-term movements to try to discern the underlying picture. In short, inspection and delay. This what lies behind recent posts seeking to analyse the income potential of the portfolio, and longer term trends in distributions and expenses. Seeking the additional data point of what this portfolio delivers currently is the reason I am straining forward to see the size and shape of the end of June distributions. The advice commonly offered in the financial independence community at this point is crystal clear. Pay less attention to the numbers, and start exploring and building the life you desire now. The advice is so universal, and so intuitively sensible that I do not ignore it. With Australian and global equity markets poised as they are, however, I feel a resisting force going too far down this path. This is mostly stemming from a suspicion that prior to the goal being reached there might be one or more unavoidable challenges to come. This may be linked to an increased probability of Australian interest rate reductions, and even the entry by Australian monetary authorities into some form of quantitative easing. As inflation stalls, and housing markets decline, the macroeconomic conditions appear less predictable than at any time since 2009. Some of the global financial trends and developments that are of most concern are well discussed in the most recent Incrementum AG In Gold We Trust report, which has as its theme tracing declining trust across the global financial system. While that outlook might suggest protective action, overall I am comfortable with the extent of my diversification across less-correlated assets. It should be remembered that I felt similar unease two years ago - and that indulging in market timing at that point would have had high opportunity costs. In any case, more and more it is evident that the performance of the portfolio is not something that can be materially altered by one or two monthly investment decisions. Rather, it is a function of the interaction of unstable markets with the compound effect of hundreds of smaller individual investment contribution decisions taken over the past decade or so across a range of different market conditions. Following on from my quick Bitcoin and gold correlation analysis last month, I was interested to see this 'portfolio optimisation' based analysis on the potential role of Bitcoin in a portfolio, using just seven years of historical data. Also, this What's Up Next podcast on finding the right time to retire is a fascinating discussion of the issue of knowing when it is time to put into action FIRE plans. Finally, Aussie HIFIRE has recently pulled together a post highlighting the different voices in the Australian FIRE blogging community for readers. As winter takes hold, the portfolio is prepared for as yet undefined challenges and storms that may emerge, and I remain intensely curious at what the coming set of distributions will disclose about the distance I still have to travel. One port gained, the next leg of the journey beckons. The post and graphs can be viewed here.
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