^ Yes and no. He makes it sound like it's some nefarious force, but what he calls "parasites" are simply a larger number of better traders that took full advantage of the ability to short on the highest volume exchanges, something that didn't exist until 2014. As a result, the market landscape changed substantially. He's right in that sense, imo.

"Date Registered: May 24, 2011,"

Somehow I doubt he went bonkers from "money loss". Loss of unrealized profits, at most.

Disagree. Sometime over the last year, I started enjoying billy's posts. Sure, he's a bit of a rambling old guy, borderline misogynist borderline anti-semite (cue Billy: "Like hell I am, borderline. I'm complete, on both counts!"), but for one, he's clearly a smart guy, and his prose is a pleasure to read.

It's probably a combination of things, really:

(1) Cyclical nature of markets. Biggest bull market ever -> pretty spectacular bear market only to be expected.

(2) Price outran fundamentals means that, eventually, price will be brought back to earth. Maybe too much even, so now fundamentals are starting to catch up with price, and eventually will probably outrun the price.

(3) Professionalization of the entire market: both trading and mining.

(3.1) Professionalization of trading mainly means: the ability to short, to scale, which wasn't really possible until this year.

(3.2) Professionalization of mining means, competing industrial scale actors taking easy profits by selling newly mined coins at a small reliable profit, as opposed to the classical miner who held in anticipation of a less sure but higher profit. Race to the (profit) bottom started as a result: once enough miners sell, it becomes rational for the other, previously "hodling" miners as well to sell.

(4) Growth of network is solid, but possibly not as strong as previously thought. Had enough discussions with Jorge Stolfi about this topic in the wall observer thread, so I don't really feel like arguing why I believe there is significant adoption slash network growth happening. However, I also do believe we saw a "dip" of sorts on several metrics (no. of tx, tx volume, to name two). Network is still growing, but at least over the last 1 and a half years, the rate of growth is arguably lower than in the previous 2 or so years.

(5) OTC transactions distorting price discovery / hiding buying pressure from the public market. This one is more speculative, but it's a point I have been making for now more than a year: there is (maybe by now: was) this naive notion that "big money" would buy into BTC large scale, as a way to secure their wealth in the coming crypto world. The problem is: even if that would be happening (I'll remain agnostic about this going or not), there was never any chance big money would "buy in" on the exchanges in a straight forward way. It would have been always preferable to bind large mining operation's output to you contractually, possibly even sell a portion of the acquired coins to depress market price. NB please: I'm not saying that "big money is buying OTC". I'm just pointing out that if this happens, it will present as lower buying pressure than if it would happen on-exchange.

(6) Mtgox. Enough said.

(7) Various stuff I forget now... ETF still not listed. Looming bear market in general. Correlation with gold price, which isn't doing so hot either lately.


If I only had to pick the three biggest reasons, I would say: market cycle + large scale shorting + professional short term profit mining.

Should probably clarify:

I'm not beating myself up over misleading you guys... I wrote several times saying "it's an experiment". Plus, this board is full of wrong predictions presented with a lot more confidence, so I don't feel guilty in that sense

I am however pissed off at myself because, against my better knowledge, I somehow thought I can get away with the low number of trades over the history, and I plain ignored that I didn't manage to find a way to scale up the frequency like Ryn asked for right in the beginning. Big warning sign.

So, apologies for presenting sloppy methodology and being stubborn about it. That's the point I was trying to make.


EDIT: At its core, the mid-term momentum signal might even hold up. The problem is that the rest of the algorithm treats each of those signals as "new (mini) bubble incoming", based on nothing more than the 6 or so trade pairs it is trained on over gox+stamp's history, so instead of using the reversal of that time scale's momentum as a sell signal, the overall parameters are set to wait for the end of sustained rally that never happened.

Honestly, I regret ever posting this, especially in such a grandiose way ... "Wouldn't it be nice to trade like a whale? Why, now you can!" /Home Shopping Network.

I regret it, not so much because of the (possibly, likely) unprofitable signal it might yield, but because I've been reading up a bit on trading algorithms (nod to r/forex, some excellent posters in there), and it started to dawn on me how incredibly naive I was in writing up this method - first and foremost, for thinking I could avoid the problem that results from a low number of signals produced by the algorithm, and hence low confidence in the algorithm's results, by some handwavy 'independent reasons' that made me confident it is not overfitted.

I'll update, like I said I would, but more out of obligation and to give you guys a chance to make fun of it, like I mentioned on page 1.

Fun thought: The Ripple market now is like the Bitcoin market before shorting was possible on a substantial scale.

Yes, I mean that as: Ripple is in bubble mode and the burst will be spectacular, but I'm sure you can also derive the other implication

Eh, I'll be the first to admit, tzupy got his bearish victory in any case, unless we only go up from here, which is looking less and less likely tbh. Case in point for EW I guess.

Like I said, nothing factually incorrect about what you say usually (except for the Beanie Babies thing of course), just the tone changes drastically from one week to another.... it's funny cause you're one the few "swing trolls" in here, in analogy to a swing trader :P

I know :/

I failed you and the others. But mainly, you.


Only one honorable thing left to do. Commence Seppuku in 3... 2... 1...



...

Didn't work. Damn you, layer of belly fat.

Moar like "Hodlers be like" ...




Not really, but any excuse to post Balthus works for me ^_^

Bear troll mode on again, huh?

Not that I disagree with what you say, but I do notice a change of tone between above and below...

Interesting idea. One question: the higher the "fixed" volume, the less it actually seems to be fixed. For example, on the 100k chart, the first candles are ~30k volume, and only the last few candles get close to 100k. Or maybe I'm missing something?

Nope, no signal change, and resolution is faster than daily. It's just a lagging method, both up and down.

But, yes, starting to look like a bad signal (i.e. sell at a loss). Will update if/when it happens, but looks like those who said not to trust parameters based on such a low number of trades were right.

More or less correct. "Xbox game points" sounds like you can only get game-related content though, which is afaik not correct. Here's the MS quote:

Oh, I just meant the bolded parts, about an unwillingness of the market to go in either direction.

How to trade this stagnant situation is a different beast altogether.

Great summary. Story of pretty much the entire second half of 2014, maybe even continuing into 2015 (though I see it as a positive indication that overall volume is going up again).

We're starting to go in circles...



USD tx is "flat" only from a very shallow analysis. Looking at it in more detail, we see it drastically fell from a peak value in December last year, with one intermediate spike in March, to a low point in May, and has been rising since then despite falling price.

USD tx going up since May despite falling price means one thing and one thing only: usage is going up since then.

Sorry if that doesn't fit your narrative, but it's about as close to a fact as you can get, given our imperfect ways to observe the economic network size.



Bitpay went from 5 million USD per month to 30 million per month from mid 2013 to mid 2014, and you're "not seeing any clear signs adoption is increasing". That's really pretty funny... Let me try to drive home my point that you're cherry picking now:

Is there a climatology department at your university? Maybe go over there in a year when the latest climate data does not show an increase in average temperate or some other metric that is used in the global climate models, and tell them that it looks like climate change/global warming is over, since their latest data point doesn't show a continuation of the trend. See how they'll laugh as they you show you the door.

I'm being a bit facetious here, the Bitcoin market trend is less established (and less researched) than climate trends, but the principle is the same:

If there has been a strong, clear trend of about 5 years, you cannot conclude from a weaker subtrend of a few months that the larger trend has reversed.

You can be "skeptical" perhaps based on the latest data points, but the global assessment still has to be driven by the global trend, not the local one.


I'll summarize:

Fact: Adoption is way up from 2010 (when the network went live on a global scale).

Fact: The latest available data that is indisputably in favor of growing adoption is from mid 2013 to mid 2014 (e.g. Bitpay).

Fact: The intra-2014 data is less conclusive, showing both signs of falling trends and rising trends.

Conclusion: If in one or two years from now, the numbers (like USD tx, Bitpay/Coinbase volume) are stagnant compared to now, we could perhaps conclude adoption halted. But as of December 2014, it is a safe conclusion, given the data, that adoption has been growing.

Yes, but there's also nothing wrong with that. I'll happily admit that at $350, there's still plenty of speculative valuation included. But how could it be any different? As long as there's a single person on an exchange having some faint hope that fundamentals will continue to grow and eventually price will reflect that, it's perfectly reasonable for him or her to buy a coin above the "pure" non-speculative value. And I'm pretty sure there's more than one person holding that belief

There's one simple counter to that, and I'm not the first one to make that observation:

Sometimes price runs ahead of adoption (and will eventually get back to reality). Sometimes adoption runs ahead of price (and it'll take a while before price reacts to that).

Last time that happened was late 2012/early 2013, when about 1.5 years of very impressive network growth explosively made themselves known to the market.

EDIT: But if your point is that from growing adoption we can't conclude that we're going to see rising price now-ish, then I agree of course.