r0achanomics: What someone who has never lost money trading BTC see's right now

[r0ach]

I consider data before this time period to be useless for TA due to Gox bots and the overall bubble atmosphere.  Now let me explain the significance of each line.  The top line is set at points where BTC was able to maintain a somewhat stable price averaged over 6 months.  The bottom line is the bargain basement prices during that time period. 

Some people will claim I'm ignoring the upshoot early on in the chart, but it was just a pump that caused a long, perpetual downslide, so I don't think it should be given much credence.  If you look only at these two lines, you would see a downtrend, but a fair current day price of BTC.

The trend obviously does not continue to infinity until it's below negative.  Commodity value is highly influenced by cost of production, so eventually the downtrend, or general market sentiment, collides with the production cost, a large portion of market fundamentals.

How does that help you make money?  It doesn't.  The current TA BTC price is exactly where it should be.  You have to apply fundamentals to go any further.  TA is completely useless to predict anything past that point.

All it comes down to is, for short term, anything is possible, but for long term, do you think BTC will exist in the 3rd quarter of 2016 with equal or greater validity than now and won't experience a huge crash in the meanwhile?  The numbers say it should likely not fall below previous ATH of $260, so when the next halving comes, that means most likely anywhere from a 50% to 100% increase.

A poor case scenario would be $260 x 1.5 = $390.  That's 11.4% interest for buying today at $350 and holding for 2 years even with a semi-bad case short term scenario.

This tells me that anyone sitting on tons of fiat for some reason would be kinda foolish to not diversify a small amount into BTC.  For people with little spare income, hodling for those kind of numbers might not be very attractive, but that was just a stagnant BTC estimate and not one of exponential growth.  This was mostly an analysis for people who want to buy and hold for a couple years and are looking at what they can get out of it without exponential growth occurring while the market remains relatively stagnant.

If this post has helped in some way, feel free to donate to my 15 children with ebola:  1EaEmyexoUFJYdHSgJ9aqAUmTD8pE34H38

[Bulletin]

Very interesting point of view, thanks.

[Nrcewker]

Can i replicate this strategy for success?

[Thylacine]

holding such "huge risky" bitcoin for TWO YEARS and only get 11.4% interest? you must be kidding

It's all about risk appetite. I'm young. I have a job. I've dropped a couple grand into BTC since mid 2013, and will probably buy a few more coins at some point - or splash on some of the publicly traded cryptocurrency stocks that are starting to trickle in.

Would I love to make money? Sure.

Do I care if I lose all my money in a known-risky emerging technology? Not really.

Is there a > 0 chance that bitcoin and the crypto-space grows exponentially in the mid to long term future? Sure.

[r0ach]

holding such "huge risky" bitcoin for TWO YEARS and only get 11.4% interest? you must be kidding

I tried to give a pessimistic, low ball upside estimate to keep things in a rational perspective.  In a worst case scenario, Bitcoin, just like fiat, can go to zero, but I see that as very unlikely in the 2-3 year time period I was speaking about.  If Bitcoin exists at all, the price is also very unlikely to return to 125ish levels due to halvings, increased infrastructure, and cost of production.  This is why I said a little above the previous ATH of 260 is really the most likely worst case scenario for the near future.

The upside potential is obviously a lot higher than 11.4%.  The main purpose for the examples was to show the likelihood of Bitcoin functioning as a store of value in the midterm, an area usually seen as a weakness for BTC.  In other words, the potential downside for buying and holding for a few years is not that bad right now, since my likely downside estimate I gave was "only" gaining 11.4%.  

I'm not going to give any upsides built on hopes and prayers of $10,000 - $100,000 coins.  Those numbers actually are possible, but some of them would probably involve martial law with them.  Nothing is predictable under such an event.  You might have a $10,000-100,000 Bitcoin and be completely unable to use it in your country of origin for years.  Under such a scenario, the world could enter a new dark age.

[adaseb]

Its an interestin theory but it doesn't mean it will come true.

Right now its very hard to predict what will happen. Especially at these price levels.

[EatonABooger]

Hmmmm,  you have given me a lot to think about.  Interesting perspective, thanks for the noodle foder.

I was about to donate to your ebola fund, but then realized in a few weeks the need will be gone. (actually, I hope you were kidding about the kids)

[rokkyroad]

OP makes a lot of sense. Thanks for sharing this.

[grappa_barricata]

You can actually earn 10% every fucking day by day-trading at margin, if you are good at it. Even if on average you manage to earn 3.3% per-day, you are still able to double your capital every month. Sure, this may work only if you are a small fish, and you can lose everything in a moment, but hell why not. If you are going to risk, make it worth it.

[r0ach]

You can actually earn 10% every fucking day by day-trading at margin, if you are good at it. Even if on average you manage to earn 3.3% per-day, you are still able to double your capital every month. Sure, this may work only if you are a small fish, and you can lose everything in a moment, but hell why not. If you are going to risk, make it worth it.

It wasn't supposed to be a get rich quick scheme.  It's more of advice for people who have money in the bank that don't know if they should or shouldn't put a single cent into Bitcoin to diversify funds in the long term.  If "just go margin trading dude" was the answer to all problems, then everyone on earth would be rich.  One method is investing in a casino to try and reap rewards off price discovery, the other method is investing in a technological innovation or idea.

[inca]

You can actually earn 10% every fucking day by day-trading at margin, if you are good at it. Even if on average you manage to earn 3.3% per-day, you are still able to double your capital every month. Sure, this may work only if you are a small fish, and you can lose everything in a moment, but hell why not. If you are going to risk, make it worth it.

Come back and tell us how much you still have in your trading account in a year. Holding bitcoin is a pretty wild speculative punt even now.

[criptix]

roulette without zero people, 50/50 and doubling your money in a matter of seconds 

[piramida]

You can actually earn 10% every fucking day by day-trading at margin, if you are good at it.

Why days? Seconds! You can make 10% in seconds. Does not mean you should really extrapolate that much further than seconds, because it just shows that you have no idea It is the same game as a casino, i.e. you just lose, period, mathematical probabilities >> you.

As for OP, even though these two lines make absolutely no sense whatsoever, still thanks for sharing your sentiment

[r0ach]

As for OP, even though these two lines make absolutely no sense whatsoever, still thanks for sharing your sentiment

I don't chart based on the actions of a single market mover.  Charting is supposed to be a representative average of many individuals, otherwise you would spend your time better trying to wiretap the whale's phone.  You might have to deviate from that strategy if some guy like Bill Gates stepped into the scene with a significant amount of money, but there was no real, serious market maker involved in the chart I posted.  The actions he, or the small group of individuals put forth to try and increase the price very quickly dissipated into meaningless static.