Long on BTC

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arbusers
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Long on BTC
« on: April 06, 2020, 05:38:37 PM »
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These last weeks I had a deeper look on BTC. I would like to remind of our analysis here: https://arbusers.com/index.php?topic=7144.msg75690#msg75690

Now I m coming back with a bold analysis.

Long on BTC.

The Coronavirus crisis will trigger global inflation. This will be global because all economies of the planet are affected by the crisis and central banks will have to print like no tomorrow.

They already printed the following.

1. The Fed is printed 2.2 trillion USD.
2. The ECB is printed 0.75 trillion EUR.

In addition, they will print the following:

1. The Fed will print 2 trillion USD for the infrastructure program already announced from Trump administration.
2. The Fed will print an unknown amount of USD for the small business relief program. We still don’t have the exact figures, but this should be something between 4 and 8 trillion USD.
3. The Fed will print an unknown amount of USD for families relief plan that will be stretched to the maximum extent because of the elections in the US later this year. Again, no figures are announced but they should be around 4 trillion USD.
4. All Eurozone countries will print money through the Emergency Liquidity Assistance (ELA).
5. The Eurozone is planning a Marshal plan. No figures are announced.

If we add all these we come up with an amount of 20 trillion Euros only for the Eurozone and the USA. If we add up other economies, it is logical to assume some 40 trillion Euros are about to be printed.

You can imagine the tsunami of inflation these 40 trillion Euros will bring on the planet.

At this point, we all need to protect our wealth from this tsunami. Of course, equities are one choice. BTC is another. I would suggest that we keep 8-10% of our investment portfolio in BTC. I m selecting BTC as safe heaven because the number of BTC in circulation are dictated by Satoshi’s logic, putting a roof to the number of available BTC.
What a coincidence? In mid-May 2020 we have halving. Of course, I am not saying this is a reason for the price to go up, but it is an indication that inflation will not damage BTC. The practice has shown that some months after halving the price is going up. This is still a highly speculated market and there is no guarantee that history will repeat itself, but the odds for an uptrend are better than odds for a downtrend.

In this position, there is no time horizon. BTC bought now should be held for a number of years. As we mentioned in the link above history is teaching that false breaks are usually reconfirmed after some time. In the long term, the support line might be tested and most probably will be broken downwards, but if our horizons are indeed long, the possibilities to profit are really good.

Information is not intended to be and does not constitute financial advice or any other advice. Information is general in nature and is not specific to you. You should not make any decision, financial or otherwise, based on any of the Information without undertaking your own due diligence.
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VFAhub
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Re: Long on BTC
« Reply #1 on: April 06, 2020, 06:48:19 PM »
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Two points Arbuser !

1) Money printing and inflation is a condition, not a rule. Strictly speaking over the last years, FED and ECB failed by all means to create inflation. Just look at money printing from 2009 to 2019 and the value of commodities.

2) The relationship between BTC and inflation is not a condition but hokus pokous at the sphere of philosophical discussions between crypto enthusiasts.

Currently, what is certain is not the inflation, but negative rates which will most probably dive to more negative territory. In such environment what will appreciate are asset classes that sweat, aka yielding.

BTC is - a wanna be actually - value preserver and it can only yield through DAI or other risky mechanisms.

These are comments from a purely financial perspective and not against the investment which could go extremely well in the following years, but for other reasons such as technology, usability, financial-anarchy movement, eastern world etc.

Another question is why BTC and not ETH ?
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nahcarts
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Re: Long on BTC
« Reply #2 on: April 06, 2020, 07:50:23 PM »
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Quote
Another question is why BTC and not ETH ?

and why gold as money, but not alluminium, iron or zinc ?
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arbusers
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Re: Long on BTC
« Reply #3 on: April 06, 2020, 09:32:14 PM »
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My analysis of BTC is also based on its scarcity. I might surprise you here as most people believe that BTC is thin air. Actually it is not. It is scarce like silver, gold and all other commodities. BTC has unforgeable costliness because it costs a lot of electricity to produce new bitcoins.
It is difficult to switch your mind that already understands traditional scarcity and make it understand digital scarcity. To understand the value of digital scarcity, it worths using as a ‘’mean’’ the stock-to-flow ratio.
Stock is the size of the existing stockpiles or reserves. Flow is the yearly production.
The high stock-to-flow ratio of gold makes it the commodity with the lowest price elasticity of supply. In addition, gold has a well-kept secret that hides in the periodic table of Dimitri Mendeleev. Usually, this is taught somewhere in high school depending on the country of your origin. Unfortunately, our teachers and even professors in the university had their minds focusing on the academic side of the table (or the chart) and not on the financial.
The existing stockpiles of BTC in 2017 were more or less 25 times larger than the new coins produced in 2017. In very simple words, BTC’s inflation was 4% flat. That means that no president could order anyone cut BTC and no Central Bank would simply press a button. This is still less than half of the ratio for gold, but around the year 2022, BTC’s stock-to-flow ratio will overtake that of gold because of halving.
Gold has the highest stock to flow ratio, around 62, meaning it takes 62 years of production to get current gold stock. Silver is second with 22. It is their stock to flow ratio, combined with Mendeleev’s periodic chart that makes them safe heavens.
BTC has a stock of 17.5m coins and a supply of 0.7m/yr = stock to flow ratio 25. The supply will be reduced after the 11th of May 2020 due to halving. That means that the stock to flow ration will be 50 and will get very close to gold (62).
Of course, there is market fluctuation and I don’t expect to calculate the exact prices of BTC at any point in time, but the unprecedented rhythm of cutting fiat money will accelerate the price of BTC upwards. We also have the paradigm of 2012 halving that compelled BTC’s price to increase by 10X. I am not saying the price will 10x during May 2020, simply because BTC is more mature now than 2012. All I am saying is that we have some very good value odds to make money.
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arbusers
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Re: Long on BTC
« Reply #4 on: April 09, 2020, 07:39:47 PM »
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I would like to speak some more about halving.
I m not sure about the exact date but it should take place between 11th and 13th of May 2020. So an obvious question would be, how do we expect halving to influence BTC's price?
Halving decreases the number of new bitcoins generated per block. This means the supply of new bitcoins will be lower.
A lower supply with steady demand usually leads to higher prices. Since the halving reduces the supply of new bitcoins, it is the demand that remains as an X factor in order to identify potential price targets. So far, we have seen the 2012 and 2016 halvings preceding some of Bitcoin's largest runs.
Take a look at the following logarithmic chart. I m highlighting the word logarithmic so you understand the dimensions:

BTC.png

So we are noticing that BTC's price was already in a positive trend both times when halving took place. After halving the price jumped significantly. 1 year after 2012's halving, the price was higher 8000%. 1 year after 2016's halving price was higher 284%. The difference should be justified if seen through the prism of maturity.
Today, we have a big difference, because the trend is showing consolidation seen on a logarithmic scale. This should not be taken as a no go flag, quite the contrary.
So what should we expect after halving? As previously explained our positions should be long. This is not a short investment, it is an investment for a long hold. We do not expect anything to happen right after having, but we do expect to have a positive outcome in the macro-economics sphere. Also, 4 digits price move will not happen at this time because of the maturity of the market.
Already, today we had the announcement of an additional 2.3 trillion USD relief program, that adds up to the inflationary environment of the day after and confirms the general idea of our position.



* BTC.png (310.57 kB, 2038x1098 - viewed 815 times.)
« Last Edit: April 09, 2020, 07:47:15 PM by arbusers » Logged
arbusers
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Re: Long on BTC
« Reply #5 on: April 21, 2020, 09:15:39 AM »
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I am coming back to BTC analysis with some of my latest thoughts.
Halving event seems to be dominating the cryptocurrencies spheres. It became the most popular discussion topic among all crypto enthusiasts, dragging traffic from other fields as well. As a result, there is a big possibility that many speculators are positioning themselves for the event. The 2012 and 2016 halvings were followed by rapid upward movements. These speculators might try to sell the news, so I can say it is possible to see a sharp move down as we are nearing, or right after the halving event. This move might create a unique buying opportunity. As this is a market of extremely high volatility, I am trying to figure out what the criteria of a buyer should be. These criteria should combine short term analogies, with long term investment horizons, as our long position in BTC is indeed long term planned.
IMO, these criteria should be 2. Technical analysis for the short term analogies, and the Relative Strenght Index (RSI) for the long term.

For the technical analysis, this should be something like this: https://arbusers.com/index.php?topic=7144.0 I will come back again with a new graph, that would make the situation more clear.

For the RSI, I believe we should select a credible time frame, one that was proved to be correct in the short story of BTC. I will come back again with a new graph soon, that will help us visualize the situation.
« Last Edit: April 21, 2020, 12:35:34 PM by arbusers » Logged
arbusers
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Re: Long on BTC
« Reply #6 on: April 21, 2020, 12:48:39 PM »
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The following graph shows 2 technical criteria based mostly on macros.

The well-known trendline as it is identified in my recent posts.
The Relative Strength Index.

BTC trend line and RSI.png

So, the logic behind this graph, is that it would be a great buying opportunity if the trendline is touched or even broken, in combination with an RSI price near, or under 30. Both of these criteria seem to be working very well together, they are tested and confirmed in the past.
In a future post, I will be speaking about potential targets for BTC. For now, what we have said about inflation and paper money is confirmed by reality.


* BTC trend line and RSI.png (424.06 kB, 2366x1438 - viewed 737 times.)
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arbusers
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Re: Long on BTC
« Reply #7 on: April 22, 2020, 08:30:37 AM »
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Millions of tax-paying Americans received their $1,200 tax-free checks from the U.S. government. Much of this money went to food, rent, mortgage payments, medicine, and other essentials. But some of this cash was driven to BTC.
Brian Armstrong, the CEO of Coinbase, noted on his Twitter account, that his company processed exponentially more $1,200 purchases of cryptocurrency the day before yesterday that it does normally, with the % of buys or deposits that are exactly $1,200 growing from an average of ~0.08% to 0.375%.

EVwczf4UYAA3EFZ.jpeg

This is approximately X5 of the average volumes of that amount. Yes, it could be a coincidence, but also it may not be.
This could be stimulus inflation money to buy scarce BTC in tandem.


* EVwczf4UYAA3EFZ.jpeg (45.68 kB, 1200x589 - viewed 701 times.)
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arbusers
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Re: Long on BTC
« Reply #8 on: April 24, 2020, 12:32:42 PM »
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My current thesis on Bitcoin is based on 2 pillars, inflation and scarcity.

In this post, I would like to speak some more about its scarcity. Bitcoin’s scarcity is depending primarily on its stock to flow ratio and the will of people to use it as a medium of exchange that can also be used as a store-hold of wealth. If High-Net-Worth Individuals (HNWIs) are using Bitcoin as a store-hold of wealth, they create a paradigm while at the same it becomes even more scarce. I decided to investigate through open sources to find out to what extend HNWIs are using collecting Bitcoins. Unfortunately, I can’t use more sophisticated sources of information as it is difficult to back them with links and references. However, my findings are very interesting.
Before continuing, please notice that there will be 21.000.000 Bitcoins in circulation when building ends.

Some 4.000.000 Bitcoins are reported to be lost, equal to almost 19% of all Bitcoins in circulation. The number will be even bigger in the future as indeed people continue to lose more Bitcoins. Discarded devices, forgotten private keys, and passwords, owner’s death are some of the reasons why Bitcoins are lost.
Satoshi Nakamoto is estimated to own 5% of all Bitcoins, which is some 980.000, amassed from mining the cryptocurrency in its early days. The stash has remained untouched for years. No-one knows if Nakamoto is a he, a she, or they. Obviously who-ever he is, he would prefer to stay anonymous as a number of governments would love to break his legs, or even film a similar to Gadaffi’s death video. In today’s prices, Nakamoto’s net worth is more than $7BN.
A number of investors keeping 1% of the Bitcoin business. The list includes the Winklevoss brothers, Barry Silbert, Roger Ver, Charlie Shrem, Michael Novogratz, Blythe Masters, and of course Chamath Palihapitiya who once kept 5% of all Bitcoins in circulation. All these individuals account for more or less 7% of the Bitcoins in circulation. Did you notice that 3 of them had a very close relationship with Facebook’s Zuckerberg? Do you think this is a coincidence?


The possibility to recover some of this lost Bitcoin is close to 0%. The possibility for Nakamoto to spend his own Bitcoins recklessly is also close to 0%. That means that at least 24% of Bitcoins will never return to circulation again.

At this point, I will make a very bold guess. I believe it is time that a very big institutional investor or a symbolic magnate will enter the Bitcoin spheres one way or another. It could be Bezos, Buffet, Zuckerberg, or anyone at the same caliber, as an individual or under a corporate cover (Amazon, Berkshire, etc). It is evident that some of these investors detest the idea, for example, Oaktree’s Howard Marks believes there is no liquidity in cryptocurrencies for investment funds, but the one that will take a position first will be grossly benefitted as he will be indeed the new paradigm forcing the rest to follow.

Only time will tell. I am about to come back with my estimations of the Bitcoin price for the years to come.
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neopas
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Re: Long on BTC
« Reply #9 on: April 29, 2020, 09:52:29 AM »
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Congratulations once again boss. I made an additional 1100 on top of the previous 1000.
Many many thanks.
What should we do now? Sell and pocket the profits? Or maybe wait some more?
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Niklaus
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Re: Long on BTC
« Reply #10 on: April 29, 2020, 10:15:02 AM »
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He has already explained the strategy.
Even the topic name says it. “Long on BTC”
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arbusers
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Re: Long on BTC
« Reply #11 on: April 29, 2020, 11:29:09 AM »
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@neopas, I can't advise on short term trades, and also as Niklaus said, this is a long term strategy to hold.

However, if you are willing to play with the market, I believe there will be a gamble when the price gets to the upper side of our triangle. You should take into account a number of things:
1. Halving. We explained in previous posts.
2. Sell the news. There is a possibility that some investors will try to sell the news as we are nearing, or right after the halving event. This might offer a good entry-level.
3. If the upper side of the triangle is broken, then the price will sky-rocket. There might be a retest, but a broken line will send to everyone a buy signal.

4. The Relative Strength Index goes to overbought levels.

BTC latest.png

Again, we cant advise on the short term, as trading in this extremely volatile environment is difficult.




* BTC latest.png (749.61 kB, 2850x1526 - viewed 651 times.)
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arbusers
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Re: Long on BTC
« Reply #12 on: April 30, 2020, 05:54:12 PM »
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Look how perfectly our triangle is working.
The price went up to 9400 plus and then bounced back after a wave of selling. To break out of the triangle upwards, some much bigger volumes will be needed. When/if the triangle breaks with a nice retest, then the sky will be the limit.
For now, we can just observe our triangle working as it does.

BTC triangle.png


* BTC triangle.png (421.89 kB, 2260x1522 - viewed 592 times.)
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ilovethisforum
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Re: Long on BTC
« Reply #13 on: May 03, 2020, 08:24:42 AM »
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Hello, i would like to add the following information about the crypto currencies market structure. Before 12 March Bitmex was the biggest futures exchange in the world with market share close to 45%. In this exchange you can deposit only btc in order to go long or short,so the collateral of your account is in btc, but the value of the contacts is being measured in usd. This is creates the following dynamics. When you go long 100K contacts (1 contact worth 1 usd) the risk to get a margin call is much bigger than if you go short 100K contacts with the same btc deposited. This means that the longs will get margin call more often than the shorts (this exaggerates a downside move on the btc price). After the March crash, Bitmex lost 50% of it's customer. Most of them immigrate to Binance futures market. In Binance you can deposit only USDT which means that the market structure has the opposite effects. It is much more easier to get margin call when you are short than when you are long. This exaggerates upside moves on the btc price. Right now Binance has 8% market share but it is growing fast. When it's market share is more than 20%, the odds are much more favorable for a short squeeze. Future markets are very important in crypto currencies market because they offer extreme leverage, which exaggerates a spike move either way.
« Last Edit: May 03, 2020, 09:06:54 AM by ilovethisforum » Logged
neopas
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Re: Long on BTC
« Reply #14 on: May 07, 2020, 08:05:54 PM »
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Running like a crazy horse.
Congrats boss.
The triangle must be broken by now, and new chart?
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