Bitcoin Forum

I have spent the past year and a half researching bitcoin fundamentals, and I have the pleasure of telling you all that YES bitcoin has fundamentals. I have the data to prove it.

Not only that you can use bitcoin's fundamentals to identify RISK in your investment. Here is my in-depth research on why bitcoin didn't go below $3300 during the "crypto winter".

https://www.amsinger.org/howitworks (https://www.amsinger.org/howitworks)

An investment in bitcoin on feb 7 had virtually no risk. That was a day to go deep in.

Fundamental analysis is an important tool for all traders and holders to have. It is important to know the bounds of bitcoin. Technical analysis on Feb 7 would have said bitcoin was in a "descending channel" or "ready to capitulate". Fundamental analysis said no way.

Fundamental analysis is understanding the natural cash flow and asset expenditure of world wide miners based on the hash rate. It is what is necessary to understand what you are investing in in bitcoin or any crypto. It is the only way to gauge how much speculation is in the market.

My clients get current and realtime data. They have the true edge.

I hope you guys like the research!

Aaron

There is no investment that has no risk. It is easy to say that looking at the past.

Ofc it was a good money to buy in, as the price was low, but nobody knew it couldn´t go even further below.

I hope you do not tell your clients bitcoin is risk zero.

I didn't say zero risk, I said virtually no risk. At that price and hash rate they were able to make bitcoins for ~$3100 the price was ~$3300 that is 6% risk from the price floor. That is virtually no risk for crypto. I knew this when it was happening because I grab data every 5 min. since Jan 15 2019. You can ask the people in my building I lived in in Rotterdam. I was screaming for people to buy ;)

I did know, because the numbers told me. I don't invest with emotion, FOMO, or "where I think it will go" I have lost too much money dreaming. Now I follow risk levels and awareness exclusively.

I am trying to share my research and discoveries with my fellow traders. Trading crypto is not hard when you understand how its cash flow works. How could you invest in a stock without knowing its cash flow and asset balances?

I will post my personal bitcoin history tomorrow to let people know just how much I could have saved with knowledge of the price floor and speculation levels. It is a gross amount of money :( lol

Thanks for your view,

Aaron

I think I am learning a thing or two with your post here. I am interested to know more on bitcoin fundamentals as it can be a good guide in investing with bitcoin. Now, looking at the current price of bitcoin, do you think it can still safe to enter the bitcoin mania or not anymore?

I don't think there's such thing of safe entry point or not. As long as you know the simple trading rule which is, buy low sell high, and you are in profit even small amount. Then, I believe you are doing good with your investments.

Indeed, crypto trading is easy if you have fully understand the cash flow and how it works because you'll be able to know the decision to make at a specific time. It is very important that a trader knows the fundamentals of trading for them to be able to be successful.

I agree with this.If you believe on entry point and other stuffs which only being said by those who releases "TA's" then youre not a trader.Any entry point is a risk,theres no safe or critical entry point.As long as you get profit whatever price you enter you're a good trader.

Seriously? You must be a millionaire if you feel that crypto trading is easy. Everyone in the crypto community know how difficult it is to trade in this extremely volatile market which is why you need to do more research before making such wild statements.

This does not mean that TA analysis does not help. In fact, it actually gives you a better idea of what to expect in certain situations. I don't usually depend on such tools myself, but they are helpful nonetheless.

It is always funny how professional traders want to measure risk and debate the "speculative" aspect of Bitcoin and also to determine trends based on historic data and most of the time, they fail.

We are not dealing with something that are being traded in a 100% regulated environment, where statistics are 100% measurable.  ;D These people are searching for a edge that would give them more profits and Bitcoin could care less about profits and margins and all that nonsense.

We are invested in the "freedom" that it gives us and the currency value it offers us, not the investment value.  ;)

Will you buy 1 Bitcoin at $4000 ? That is the fundamentals. It is all about the money. That is the reason Bitcoin fell from $20,000 to $3000 and there is a 8000 Bitcoins seller in bitcointalk.org.

Interesting analysis. Although mining is only one factor which you should take into consideration when figuring out trend changes.
When price is too low to be profitable miners quit, close their businesses and dificulty falls making it easier and cheaper to mine. This is the main fundamental. So this has to do mostly with adoption. Miners think they dictate the prices but they can't be more wrong. Price is about supply/demand. Supply is finite with Bitcoin. We can only have 21m and this is a critical factor that makes it's price rise astronomically. The other factor is adoption (demand). Seeing how there is no massive adoption, as it was happening at the same month 2 years ago, I can only see price going down for the time being.

I have to agree. In fact, all kinds of investments have risks and so as Bitcoin. It's explain everything to your clients because they might think that investing in Bitcoin is 100% safe. The market is volatile and anything could happen in an instance so new investors must be aware of this.

All I really did when it comes to investment is to buy at low and sell in high but now I am now having interests in this post and these fundamentals. I think studying this thing will help correct my investments and lessen the risks. Low and bulls are never expected to when it will happen but this is a lot of help.

Yesterday Bitcoin got banned in India. Now if people in India are holding Bitcoins , or selling them or even buying them , they could be jailed for almost 10 years.

In my opinion, it is still a big YES for me. Why? Simply because btc is not yet skyrocketing to the moon. As we look on the lates update on btc's price, it is now currently heading to $8k mark. It is not even the half of the ATH that we reached last year. But still, depends on your perspective and gut feel. If you now feel threatened then much better for you to back out as soon as possible.

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There are only two fundamentals that I always apply:
1) Invest what you can afford to lose, and
2) Buy low, sell high.

By doing this two, I already feel safe and relieved :).

Risk tolerance is different from person to person, which also depends on age. I however wouldn't ever consider an investment (doesn't matter what it is) risk free. I am a Bitcoin maximalist myself, but we have to take into consideration that our risk tolerance is completely different from those who aren't as maximalist.

Fundamentals are a bitch in terms of crypto pricing. It only required one or two frustrated large holders on an exchange as Bitstamp or Coinbase to dump it below $3000 and the market might have looked completely different right now. Only in hindsight we can confirm bottoms and thus what the best entry point was. Don't ever assume the bottom is in because the price looks very low fundamentally.

There is a saying that markets can stay irrational longer than you can stay solvent, and it's true.

Bitcoin is not a stock so there's no mathematical formula that allow you to calculate very accurate values of potential profits - Bitcoin is a commodity, and it's most closely relate to gold, as both are forms of decentralized money. Basically, Bitcoin's fundamentals consist of fiat money inflation, demand for decentralized and private money, and how well Bitcoin works as that form of money. Volatility is an interesting factor here - it hurts Bitcoin's usability as a currency and store of value, but it's beneficial for traders because it creates opportunity for making profit.

0% risk doesn't exist when it comes to investment world even on our simply decisions in life do have always that corresponding risk.
I don't know why there are people who do keep telling about zero risk yet these are impossible things to happen.
If they do tell it into their clients then they are doing bullshit business.

i may be wrong about him in particular but usually when i see someone is saying trading cryptocurrencies is an easy task they are saying it because they tried trading and they got lucky with an altcoin pump or two so their whole conclusion is based on that. in long term everyone eventually realizes how hard it is to consistantly make profit specially when there is manipulation involved.

You're right. I also tend to believe that if some kind of analysis and works in this market, it is only fundamental. Still, some cryptocurrencies have a certain cyclicity and some moments can be predicted by studying their price chart.

almost everyone has a special view of bitcoin, not only you fella. everyone has a special way to research bitcoin like what. it can be called prediction or analysis, I have a special view for bitcoin, bitcoin will not be replaced, even bitcoin will continue to be emulated, bitcoin is like a superstar among cryptocurrency.

Regardless of whether you have guessed right based on real data or you have just played with the numbers in order to make us believe that you are a genius of analysis, I do not think that things work so easy in an open market, because if predicting a price would be like that of simple, we could all amass large amounts of money in an extremely easy and fast way, and you would not have to sell your predictions for $19.99 per month.  ;D

Your'e right.Bitcoin have fundamentals.Biggest fundamental news coming for bitcoin is from US.Look closely when Federal Reserve Bank's news come in you can those news effect on bitcoin.See how bitcoin prize moving up and down when the decision comes for rate hike or low rate.Thats the time for go little hunting in trading world.Don't panic when trading.Keep doing your research. Great work buddy.

I totally agree with this points. It is important to add that bears most likely tried to pull the price even below 3000 but it was nearly impossible. Those who did not sell below that price are probably whales who find bitcoin too valuable and couldn't  imagine selling most of their holdings at any amount.

Sorry for the late reply, I have been making updates to my site and information all week.

I think you answered your own question right there by using the word "mania". In any investment it is not profitable to invest in anything you would describe as a mania. That being said, I have written a new article demonstrating this very concept:

https://www.amsinger.org/price-floor-in-action (https://www.amsinger.org/price-floor-in-action)

It demonstrates the difference in risk levels on May 2 vs May 27. There are many opportunities that pop up for investing Feb 7 was simply the most optimal one. As the btc market matures these opportunities will become more common. Only my clients know current and accurate data.

Aaron

How do you know what is high or low without an understanding of the fundamentals? $3000 would be EXCEPTIONALLY high 4 years ago, now $3000 would signify a breakdown in the bitcoin infrastructure ;)

Aaron

Very true, that is why I publish this information. Some people can go full trade analysis and find the tiny inconsistencies, or people can go simple and buy at the right time. I am trying to help spread this information so that people won't get screwed like I was in Nov 2018. ;)

You may not believe me when I say this, but I agree wholeheartedly. I call "TA's" ANALists lol.

I am simply trying to make it easier to understand what is happening in bitcoin. I am basically trying to make a P/E ratio for crypto. Investing in stocks without knowing the P/E ratio is nonsensical. We in crypto have not had any metrics or true analysis ever in our history.

Aaron

If you are a millionaire investing in crypto it is MUCH harder because any move you make will "move the chains" if you will. Order books are thin compared to other markets. All the "volume" that is published is completely false. At most 95% of all the volume is actual AT MOST.

TA might be helpful after the fact. Most TA's were screaming "capitulation" on Feb 7. They have no understanding of how bitcoin works or the actual cash flow behind it.

I publish fundamentals and RISK analysis that is not really arguable. No one argues over P/E ratios ;)

https://www.amsinger.org/price-floor-in-action (https://www.amsinger.org/price-floor-in-action)

If you can take your "freedom" to the bank and cash it in be my guest. Bitcoin is a market. Markets follow basic rules. Watching the money flow is never a bad idea when trying to find the actual value.

P.S. I am not a "professional" trader. I am an entrepreneur and financial analyst.

1800 bitcoin (roughly) are made each day. Compared to the big miners some guy with 8000 BTC is a medium sized fish ;)

The reason it fell from 20K was because there was no infrastructure or business capacity to support that price. It fell for the same reason stocks fall, it was incredibly over valued. I'm here telling people why it doesn't go to zero, which is because of the fundamental price floor (the major price support).

Mining is the MAIN factor to consider with bitcoin pricing (I never said exclusive factor). If the miners were random guys with CPU's yes if the price falls too low then they can just quit, but with the invention of the bitcoin ASIC it now requires and forward investment.

Very few mining businesses (in any industry) after they have bought all their equipment and are functional, simply give up. They use their weight to influence the market and preserve their FUTURE investment.

I show the general level of speculation which includes all other factors you are talking about, HODLers, institutions, traders, business people using btc, lost btc (which is significant), etc. The FBI is one of the largest holders of BTC in the world. It is locked in an evidence locker ;)

My business is to demonstrate that bitcoin is only RELATIVELY safe SOMETIMES. I let my clients know when it is relatively safe. I never said zero risk, I said ALMOST zero risk. I have made another analysis to demonstrate the risk levels over time:

https://www.amsinger.org/price-floor-in-action (https://www.amsinger.org/price-floor-in-action)

Aaron

Thank you very much for saying that. That is my goal in all this to prevent people the pain I felt when I was "over-risked" and lost half my value last November.

I made my site to help people like you and me.

Risk is king in investing, truly king. A low risk portfolio is a happy portfolio in my humble opinion. My last post has a link demonstrating how risk can change very quickly in crypto, it is right above this one.

Aaron

Without understanding a company's financials how can you know what is low or high? 4 years ago $3000 was exceptionally high now $3000 is a great deal.

Personally I don't think risk tolerance changes with age. I think the things we value change with age.

If someone dumps BTC to below $3000 then I will be mortgaging my friends houses to buy that ;) I know that because I am aware of the fundamentals. Sunk cost is a real thing, there are billions of dollars invested in bitcoin infrastructure and the like, and those people have large pockets with which to buy $3000 BTC.

The beauty of my fundamentals are I can see bottoms as they happen. I can't confirm a bottom or tell you it will pump tomorrow, but I can let you know where the actual money invested will start buying.

My analytics serve as a flashlight in the dark, use them how you wish.

A good trader doesn't get into situations where they can't stand their ground. I learned that when I was in school in Texas and I was trading with my rent money. Sprint doubled 2 months after I sold to pay rent lol

I don't give trading advice to my clients I tell them the facts. The fact is on Feb 7 the risk was very low. The fact is on May 2 the risk was very low. The fact is on May 27 the risk was very high.

If you were trying to find the appropriate price to invest in industrial gold wouldn't you want to know how much it cost to mine an ounce of gold? Doesn't that factor into how anyone prices anything how much it costs to make?

Personally I don't care what people are buying BTC for. I care about whether or not I will make profit.

Virtually does not mean actually. Virtually zero does not mean zero.

I don't see a reason to cuss on this, so please don't use cuss words.

I publish information on risk, so I am aware that every action has a risk involved. Thanks.

If you are looking at a price chart exclusively you are flying blind. Pilots use altimeters, they don't "study the ground".

If you operate with this view I wish you well.

This is not my "view" of bitcoin. This is the reality of how the market and the system works. An altimeter is not an engineer's view of how high you are, it measures the REALITY of how high you are.

Bitcoin is the original and it has the most amount of physical investment. That is why it is a "superstar" as you put it. There is very little that is magical about crypto or business, all you have to do is follow the money.

Aaron

Yet again it is not predictions it is algorithmic financial analysis.

There is a very common phrase where I come from and that is: "you get what you pay for"

;)

"Fundamental analysis said no way" very funny of you. Well I can't say why the bitcoin didn't go below your $3,300 mark, I do know that people will prefer to hold their bitcoin than selling for such ridiculous price. I think the major fall of bitcoin in 2018 and early 2019, may not have been far from some manipulation and fear.

Of course smart people that were not squeezed out of the market would not of sold at $3300, but markets are made of dumb people too bro lol

Many TA's were saying "capitulation to 2K" (magicpoopcannon with 20,000 views btw). Big crypto people were saying it was going to $3000.

My analytics measure speculation in the markets so that my clients can measure their real time risk. This is a sample of how crypto risk analysis works:

https://www.amsinger.org/price-floor-in-action (https://www.amsinger.org/price-floor-in-action)

Aaron

The fundamentals of bitcoin are important to know.

https://www.amsinger.org/howitworks

Comments appreciated!

Aaron