nrd525 Market Tracker

[nrd525]

I finally heard a good description of liquidity providing for DEFI.  It's for decentralized exchanges like Uniswap. The problem is low liquidity due to the time it takes for orders to be resolved. So your typical exchange market maker doesn't want to risk their funds as they might lose it during a price change. Also the fees for adding and removing orders are probably very high due to the ETH high gas cost.

So they use smart contracts as market makers.

The pro-side is that there is a legitimate use case.

The con is that you lose money due to volatility.  Market-making is dangerous.  If you are doing it with a smart contract, it doesn't need to have a bug, someone could read the code and devise a plan to overwhelm you and cause you to lose money (for instance they could attack price oracles or overwhelm you with buys or sells).

I'm skeptical about the legality of decentralized exchanges in the US and many other countries. If they avoid KYC/AML or are used by people to avoid paying taxes, the regulators are probably going to ban them.

https://www.youtube.com/watch?v=cizLhxSKrAc

[nrd525]

I like how Uniswap is worth 4 times the total market cap of the liqudity in it.
https://www.coindesk.com/uniswap-defi-buzz-uni-token-airdrop

On the upside, with all the hype and bull market sentiment, Celsius Network is paying 11.55% APR for USD stable coins (up from 8.6% a couple weeks ago).

Unrelated: I'm upgrading my odds for the Dems winning the 2020 US presidential election from 75% to 80% (Predictit is around 59% and 538 at 76%).

US Q3 GDP growth forecast at 32% (how can they do this when we are only two weeks in?).  Annual growth for 2020 is -3.8% (I thought it'd be worse).  Fed saying 0% could last through 2023. 

I'm thinking about getting back in to bitcoin.  But I really don't want to pay 10.9k!

[exstasie]

On the upside, with all the hype and bull market sentiment, Celsius Network is paying 11.55% APR for USD stable coins (up from 8.6% a couple weeks ago).

Beware, high borrowing rates for fiat assets can indicate greedy sentiment, which can indicate further downside.

Unrelated: I'm upgrading my odds for the Dems winning the 2020 US presidential election from 75% to 80% (Predictit is around 59% and 538 at 76%).

Bearish if true.

US Q3 GDP growth forecast at 32% (how can they do this when we are only two weeks in?).  Annual growth for 2020 is -3.8% (I thought it'd be worse).  Fed saying 0% could last through 2023.

After the bottom fell out as much as it did in Q2, a mega bounce in Q3 was almost guaranteed. Doesn't mean the economy has recovered to pre-pandemic levels, not even close.

I'm thinking about getting back in to bitcoin.  But I really don't want to pay 10.9k!

I think we'll get another crack at the $9,000s but it's not guaranteed. And that's the problem with neglecting to buy the dip: you end up buying higher.

[nrd525]

I bought around 1 btc at around 10.5k-11k before this upswing. 

Does anyone have an opinion on the security risks of betting money on Augur?  I'm getting heavy into betting on politics (Augur, Predictit, and Polymarket). Frankly, the Democrats to win the 2020 US presidential at 60-65 cents is a great deal - expected value of approximately 85 cents.

[nrd525]

I made a killing on the US election. But it is hard to say in retrospect whether the various models and people like me who thought the Dems had a 89% chance of winning were correct.  The polling is messy!

It's hilarious that you can still buy Biden to win the election at 90 cents on various sites.  There is a <0.1% chance that the election result will be overturned.

[nrd525]

How can I tell based on these prices, the market estimate for what odds are that bitcoin will go to 20k by Dec 25, 2020?

https://www.deribit.com/main#/options?tab=BTC-25DEC20

[exstasie]

How can I tell based on these prices, the market estimate for what odds are that bitcoin will go to 20k by Dec 25, 2020?

https://www.deribit.com/main#/options?tab=BTC-25DEC20

Options are such a mind fuck, so I'm not sure if I'm thinking about this correctly, but I don't think you can tell by looking at the prices themselves. The price of options represent the premium a trader is willing to pay for time until expiry, which doesn't exactly tell us the odds of the event occurring.

Order book depth, or required margin, might give us an idea though. At a $20K strike price, sellers of call options need ~4x more margin than buyers, based on significantly more available bid liquidity than sell liquidity.

That implies that traders believe it's ~4x as likely the options expire above $20K. That's very bullish sentiment! Meanwhile, the Fear and Greed index is at 89, "extreme greed." https://alternative.me/crypto/fear-and-greed-index/

[nrd525]

I think some of my theories about bitcoin are about to potentially be disproved.  Notably we have very little interest on Google Search Trends (only 15% of the 2017/2018 peak) and yet bitcoin is currently at 16.8k.  So this could be very bearish if there isn't anything backing the rally, or it could be very bullish if the bull trend has only started.

[nrd525]

Fortunately I bought that 1 btc at around 10k, and then even more fortunately that I bet it on Biden winning and doubled it.  Nobody should be surprised if we crash to 13k or go to 30k (or do both) in the next month.

It's interesting that the ATH is providing some resistance.  I guess we had to have resistance at some point. I think we'll eventually blow through it.  Right now the price is hanging out at 19400, just a couple hundred dollars shy of the ATH.  On some exchanges (maybe 1/4?) we've already broken it, though not on Bitfinex or Coinbase.

I'm working on not being so bearish =)

[nrd525]

Very suprised that the price has kind of stabilized in the 18k-19k range.

Also did research into buying crypto with a credit card in the US.  I was liking mercuryo.io with the lowest fee (4%), but they didn't like my ID.

It's interesting that some places claim to only have a 5% fee, but they tack on another 2%-3% on to the exchange price.

[nrd525]

26.5k!
The slope of the bull market (log scale) is less steep than the run up in 2017 from $1000 to $2800.  Level of hype and mainstream media coverage is relatively low. Hmm, what is a good way of measuring media coverage?  Is there any way to search for mentions of "bitcoin" in say the New York Times?

It kind of looks like we could hit 100k-200k in 2021. Which is crazy.

...

On Dec 22, some crazy person bet 0.2 BTC at 50% odds on Trump being president on March 1, 2020.  They intentionally created this market so they could do the bet.  And then managed to pay about 5 times the market price for their bet.  This is pretty much the stupidest bet I've ever seen.  Even if you think Trump is going to win, you could get the bet at 10% odds (or lower if you are willing to do a little work).
https://fairlay.com/market/president-of-the-us-on-march-1st-2020/?referral=011cd9eb-20b0-4de0-a519-ecf70a6a8cc0

Unfortunately Fairlay doesn't let you sell out of your bet positions. So you have to hold until resolution.

...

Augur is having its first US presidential market In Reporting.  So far it was initially staked as Biden, briefly as invalid, and then now with 32 Rep it is staked for Biden.  This is very little money ($400) compared to the volume of the market (50k?). I find it a bit concerning that the Rep token holders aren't smart enough to do Early Large stakes on the correct side of the questions.  Early Large stakes would increase trader confidence in Augur and deter attackers.  It's going to be easy to compete against Augur if they take weeks to resolve markets.  There is 4 days left to Dispute the current tentative winner.  So it will be fascinating to see if anyone does that.

https://bafybeiebluevb7w6qmwp5vnhwgzloyxg44vqbuzfoq4wcqyomco6oslxu4.ipfs.dweb.link/#!/markets

I've come up with a very strange scenario where it is actually profitable to fork Augur.  Trump supporters would put a ton of money into buying Rep tokens (and quite possibly many of them already own a lot of Rep).  This would boost the price of Rep.  They would also boost the price of the yTrump Rep fork using futures.  They would feel like they have 1) proven with an unbiased method that Trump won the election and 2) actually be in profit as their forked coin would be worth more than nTrump Rep.

This is similar to how ponzis and pump-and-dumps work. 

Trump punters have already thrown away potentially millions of dollars betting on Trump AFTER the election results were 99.9% finalized (and donors have donated millions to the Trump campaign after he lost).  Crypto users also have a history of spending hundreds of millions (or more?) on ponzis and scams (see HEX).  We saw the power of hype and marketing in Bitcoin Cash's early success.  It increased in value early on (hit 40%? of BTC price?).  It is only three years later that is has died down to a relatively insignificant altcoin.

Under this scenario, with a succesfull attack, punters like me would stay far away from Augur.  We wouldn't trust the yTrump side of it because the attack could be repeated.  yTrump token would fall by a lot.  nTrump would maintain a level of hype and take longer to fall in value.

The problem is that Augur relies upon people being rational, and the security is based on people trading on the rational side of a fork (and that side being valued more, and the other side losing their money).  This assumption might be false.

I don't think this scenario is likely, but it an interesting disturbing possibility.

[figmentofmyass]

26.5k!
The slope of the bull market (log scale) is less steep than the run up in 2017 from $1000 to $2800.  Level of hype and mainstream media coverage is relatively low. Hmm, what is a good way of measuring media coverage?  Is there any way to search for mentions of "bitcoin" in say the New York Times?

it should be simple to write a script that parses news or twitter feeds for mentions of bitcoin.

anecdotally, media coverage and hype can't be that low. i've had 4 friends and family members call or text me asking about bitcoin and how to buy it recently. retail FOMO is picking up.

you follow defi stuff right? any promising projects you're focused on?

[nrd525]

I'm skeptical of almost all defi except the slightly more centralized ones.  I kind of like Celsius (though am skeptical about the token) and Blockfi.  I haven't done much research.  It is mostly useful for things like Uniswap to provide liquidity for what would otherwise be low-liquidity tokens?  Is it useful because people are too lazy to place orders on order books?   I like order books as you can generally get a much better price and pay very low fees.  So just like I've not ever tried to buy bitcoin using a credit card (because the fees are 5%-10%), up until now (when I can get a 10% return within a month betting on the election), I've ignored defi.

That said, I'm going to do some test liquidity providing on polymarket to see if that is profitable.  It seems like you want to provide liquidity where the volume / available liquidity ratio is high and where the volatility is low.   For instance, the "Will Trump be elected president" markets are relatively stable - with Trump probably still in a slow decline (as he's alreadly lost the election).  Providing liquidity for some of the betting markets that have quick binary outcomes would be very dangerous (Ex. will bitcoin hit 25k by March 1, 2021).  The day or two before the election I was making 1%+ APR/day on liquidity providing (and the price of the outcome didn't move as the election polls were very stable).

I suppose Uniswap might also be profitable?  Is the mix of stable vs unstable currencies enough to make it relatively stable, or can all the cryptos go up against the USD and you'll get seriously screwed?

Impermanent loss = Permanent Loss.  Especially if you are doing liquidity providing on polymarket in a market with a binary outcome (they occasionally have scalar outcomes).  It's very misleading to claim otherwise!  If my bitcoins fell to $0.01, I'd say I lost x$, not that I was at the risk of losing it if I cashed out or some other silly conditions.

[nrd525]

Are financial bubbles more likely to peak in December?  Nikkei 225 peaked on Dec 29, 1989.

2018 Bitcoin bubble Dec
2013 Bitcoin bubble Dec
2011 Bitcoin bubble June

2000 communications/tech bubble peaked March 1(ish)

Tulip Bubble peaked Feb 1637

[figmentofmyass]

Are financial bubbles more likely to peak in December?  Nikkei 225 peaked on Dec 29, 1989.

20187 Bitcoin bubble Dec
2013 Bitcoin bubble Dec
2011 Bitcoin bubble June

given where the 2013 and 2017 bubbles ended, you're not the first to propose this theory.

in fact, this is probably why bitcoin rocketed higher all through december---too many people sold expecting a december selloff. now they keep panic buying back in.

there is probably something to the june/december thing. june is typically fiscal year end, the start of summer, "sell in may and go away". december = holiday lull times, plus it's typically tax selling season. https://www.investopedia.com/terms/t/tax_selling.asp

i wouldn't consider it a major factor. as we saw this year, when bull markets are really powerful, nothing can stop them.

[nrd525]

Is there any research into repeating digits in the bitcoin price and significant levels?  Coinbase Pro just bounced off 33300 (and Bitfinex was 4 dollars short).  I was thinking about 33333 as possible resistance a week or so ago.

I think I remember 444 being significant, and maybe also 666.

Apparently it's institutional money that started this rally, as search trends and retail hype are lower than in 2017.  Though I'd expect that retail is kicking in as we soared past 30k with only about 1-2 minutes of resistance.

[exstasie]

Is there any research into repeating digits in the bitcoin price and significant levels?  Coinbase Pro just bounced off 33300 (and Bitfinex was 4 dollars short).  I was thinking about 33333 as possible resistance a week or so ago.

I think I remember 444 being significant, and maybe also 666.

I don't remember $444 at all, but I do remember bouncing off $666 a lot in 2015. That was right around the May 2015 bull trap top, so it was pretty significant S/R for quite a while.

I wouldn't bank too much on theories like this. In a bubble atmosphere, there are no reliable resistances at all. Not even $20K offered much. It's much more reliable to speculate on where support lies during dips.

Apparently it's institutional money that started this rally, as search trends and retail hype are lower than in 2017.  Though I'd expect that retail is kicking in as we soared past 30k with only about 1-2 minutes of resistance.

Always the same story. Institutions accumulate low, price gets marked up, retail buys high.

Doesn't mean the market can't go higher though. It will.

[nrd525]

Next resistance is 44444 (plus or minus 4).

[nrd525]

We bounced of 33333 on Coinbase Pro =)

[nrd525]

Ok so hard to break that 420 (00) resistance! 

I bought 0.7 BTC at around $31500.  Now let's see if it dumps to 20k...