Sunday, January 31, 2021

Updating my last week's post: "Nice to see that despite the massive FUD from the last week we saw a solid hodler-floor of 30k that this time couldn´t be breached. (Yes, technically it went slightly below 30k several times, but quickly recovered).

So, the FUD list grew with more massive negative news last week, but the 30k floor still hedl, again. I don't think we will ever go below it, taking into account the GME mass-awakening (see below "Endgame: The Unraveling") and this week's epic MicroStrategy event (see event info at the bottom).

Nice to see that despite the massive FUD from the last week we saw a solid hodler-floor of 30k that this time couldn´t be breached.

The massive combined campaign included the FUD regarding:

Double-spend

Yellen

Lagarde

Tether

Negative articles

Faketoshi/White Paper

Regulation

'Futures' expiring

Russian 'ban'

Blankfein

Bank of England

People selling to buy GME

Hedge Funds shorting Bitcoin by billions

F2Pool pushing price down

If you are OOTL with any of those FUD's, just google for example "Blankfein + Bitcoin"

This guy described it well last week:

https://old.reddit.com/r/Bitcoin/comments/l2iw6k/ignore_all_the_orchestrated_fud_buy_the_dip/

Did you buy the dip this time? or still waiting for the "next" one to go on the 20's.

Be honest, if that happens, you would be panic-selling, not buying the dip. That's the nature of people "waiting for the dips forever".

Just do Dollar Cost Averaging and Hodl long-term

https://www.investopedia.com/investing/dollar-cost-averaging-pays/

Stop trying to 'time the market', that's a losing strategy.

Remember, Bitcoin always does this.

"Endgame: The Unraveling".

https://medium.com/@fatherdoctorbitcoiner/endgame-the-unraveling-ccbbb5cd567b

The piece is mind-blowing in many ways, describes the situation that lead to this moment and the few possible scenarios, and have this clear: Any final scenario will be historic.

Bitcoin addressed here:

To prop up the market and prevent the entire financial system from melting down, the Fed will have no choice but to do QE infinity and continue to prop up asset prices and now with Janet Yellen in the Treasury, the debt will be directly monetized in the form of direct payments. This will finally cause the inflation, even hyperinflation that Lacy Hunt has warned about if the Fed were to directly monetize the treasury’s debt. Once inflation starts, like a horse out of a barn, it will be nearly impossible to rein it in without turning into Scenario #1. It will spiral out of control and cause incredible amount of pain to EVERYONE, globally, as every Central Bank will have to do the same if the US Fed monetizes the national debt. Once this happens, people will end up owning bitcoin not out of any moral justification or idealism that maximalists espouse, but because it will be the only thing that people will accept for payment for goods and services as the USD is destroyed as a store of value. This is Scenario #2. It will make Scenario #1 look like the Garden of Eden.

Also, regarding Bitcoin, one of the many ways this is relevant to Bitcoin users is this one:

Robbing Hood is going down, one way or another, next week or next month. There are hundreds of thousands or maybe millions of users holding what they may believe is "Bitcoin" there, it is not, but just an IOU. You can't even withdraw or transfer Bitcoin from there, you have to "sell" it for fiat first.

If you have "Bitcoin" there: DO SO NOW, get out whatever you have in Robbing Hood, in any way, before it blows up. You can continue holding and supporting GME, AMC, etc. on more trusted platforms and Hodling Bitcoin on your own hard wallet ("Not your keys, not your coins") or on decentralized exchanges:

https://defiprime.com/exchanges

Let's warn as many people as we can, it would be a shame we have another Mt.Gox where thousands lose all their life savings due to another centralized massive failure.

Feel free to post this on r/WSB, I was banned a way back for mentioning the word 'Bitcoin' there, I hope that with this mess they start warming up to this decentralized option.

This event will be huge for Bitcoin.

Watch Mr. Saylor describing the event on CNBC.

From another comment:

A couple of interesting bits from that interview:

1) The Microstrategy conference "Bitcoin for corporations" already has "thousands of officers, executives, and directors" going to show up.

2) They are going to publish their "playbook": "all our accounting guidance, legal guidance, all the work we did over the course of months [...] we're going to open-source it".

https://old.reddit.com/r/Bitcoin/comments/l2w9g8/michael_chad_saylor_on_cnbc_buys_the_dip_says/gk93bgh/

An observation

So hear me out (whoever the 5 people that read this are lol)

There is a HUUUUUUUUGE hole in the crypto market rn, there are absolutely no mid level coins, just shit coin, kinda okay coin, and then Bitcoin, A Huge hole in there for a few good coins, worth probably $7k-$14k (kinda arbitrary but realistically Bitcoin will probably always be an outlier) and more than one can move up, I see no reason why doge can’t be one of them, along with other coins like xrp and eth or literally any other coin It seems likely doge’s actual value will probably go up along with its meme value, ie. It gets funnier the more doge is worth, and if we can get it accepted by some Major companies, it will just continue to go up. It probably won’t be immediately at all (in fact almost certainly) becauseThat’s just unrealistic, but at some point in the next year doge could actually have a shot to end up as one of these mid level currencies as the crypto space continues to catch further fire. The huge gap between Bitcoin and everything else won’t last, something will level in the middle Best strat would be to put $20 in multiple currencies but this is not financial advice

Another observation:

The hedge funds have until Thursday feb 4 to pay out their short sale contracts for $GME, and they didn’t even come close to filling them on Friday, four days of pumping money into $GME, with Thursday being the likely high, with lots of capitol flooding back onto the market due to all the people who hold $GME going off and selling it because the short squeeze will effectively be over

Additionally, Wednesday the 3rd or Thursday the 4th are the likely days that anyone who put money into Robinhood to buy doge, will have their funds settled, and then in turn buy doge. Furthermore, as more people hear about doge, they’ll probably try and buy on Robinhood because it’s the most well known, leading to kinda probable exponential growth as the 5 day mark continues to hit into Friday and onward, for money what transferred into Robinhood on succeeding days such as yesterday, today or tomorrow and so on.

If we can continue to hold the line and keep spreading the memes, we could easily see a pop on Thursday, not just to the moon but to Mars, Jupiter and out of the whole fkn solar system

I’m no expert and I could just be pointing out the obvious but keep those diamond hands steady y’all, we could be on the verge of a huge wealth transfer where millions of everyday people make a substantial amount of money, and then, and this is just my hope in humanity or whatever, but we’ll actually do some good with it unlike the people who literally just hoard all the fkn money currently and fraudulently trade all of the time yet get mad when the general people legitimately outsmart them and start to take their money. This has the makings, in conjunction with the $GME events, to be an absurdly historic time

Plus, what could be more hilarious than GAMESTOP making all the people at the top who gambled with the stock market like a game to lose, while fkn DOGE COIN rises in the background like a tsunami to even the playing field

Again, This could end up as the biggest shitpost of all time, or I’m actually onto something, or any possibly in between the two, who fkn knows

I don’t 😛

Also don’t be fkn stupid and put all your money in doge, it could just fall back down and do nothing as easily as it could go up and become the next high value crypto currency, buy doge responsibly and we’ll all be millionaires together

♾❤️🍄

[Altcoin Discussion] - Monday, February 01, 2021

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HBAR economics - specifically about whether HBARS will increase in value for investors buying now

So I wanted to make a post about the economics of hbars SPECIFICALLY on whether the price will go up or down from its current price of about 0.08 USD on Jan 31st, 2021 and discuss what the value is and how it is defined and calculated.

So I was thinking about this long and hard and I don't think it's an easy subject to wrap our heads around if you really think about it because you will have to understand how currencies work in general and how they get their value, especially with a new currency and moreover a crypto currency to top that off.

But before I start talking about hbars, I wanted to establish a consensus of understanding of how familiar currencies work. So let's take the USD. USD is pretty stable (as of now at least) because we know how much a dollar is worth. We know that $5 buys us a hamburger or a starbucks coffee. We agree with this value as we work for this $5 to buy this product or that product or any other service. So we have at least a frame of reference that $1 USD is worth this much in our heads because we've experienced earning it and we have bills paid in it and we trust it (for now) that it will continue to have this same value in the near future.

So with Hedera, services are paid in USD and not hbars. This was intentional because Hedera wanted users to pay and get paid in a relatively stable currency (currently at least). This now brings up interesting dynamics. For example, if I as a service charge 0.08 USD (worth in hbars) for a file storage or file transaction, that means I get 1 hbar if the current price of hbar is 8 cents for that 1 transaction. So I service say 1000 of these transactions today to get 1000 hbars in transaction fees. I keep this for 30 days and the price goes up to 0.16 USD per hbar. I can now sell it to the market at twice as much in USD. This is great for me but it incentivizes me to hold hbars for the future to speculate that it may keep going up and up. Furthermore, when price goes up too fast, it also attracts speculators to also buy and hold and sell at a higher price one day. So it could be an event where a bubble forms like what we see bitcoin doing now. This is bad for Hedera and heads of Hedera and council members will not like this as it creates instability in the ecosystem of servicers and users of the platform/network. It's as if the USD goes up double in a month and then by half the following month. No American would like this instability since it creates confusion, fear, greed, etc. to enter the minds of users which is not what the function of currencies should be (at least if you're not a speculator, which most shouldn't be if they are just using the Hedera services as is and not trying to profit from a rising hbar currency).

I'm trying to understand what Hedera's heads' and council members' intent is for the price of hbar. I would bet that they want it to be stable so everything is fair. They could care less if speculators make money in an increasing hbar coin price. Their role for the Hedera network is to keep the trust in developers and users and that means a stable price for the coin. I would bet that if they see the price jump too much, they will meet and agree to release more hbars into circulation to try to stablize the price and to dampen any speculators from blowing the bubble even more. The scenario of what bitcoin is going through will be a nightmare for Hedera to deal with, even if their fees are in USD, because as I explained above, it gets paid out inversely proportional in hbars so a provider or user could see huge swings in how much hbars they are earning and it may not be fair for them. For example, if hbar price (in USD) goes up double in month of Feb and I as a provider got paid 10,000 transactions in hbars in Feb but didn't cash that out into USD until March where the price in USD got cut in half back to original, then I basically got half payment in USD. This forces me to constantly convert to USD if I don't want to speculate what the price will be in the future. Inversely, I would keep my hbars for a long period of time if the price keeps going up and up in a big way (say more than 30% per year).

So I have a strong feeling Hedera really wants to stabilize hbars and basically peg it to the USD for now at least (USD will not be the reserve currency and hbar will have to be pegged to some other currency in the future but that's for a different discussion.) I mean a small increase in price is not too bad as long as it's steady, maybe 20% per year is fine as well. The only scenario where I think Hedera won't be able to keep the price from increasing too fast is if a massive amount of users start using Hedera which will force demand for more hbars which will increase the price due to supply/demand even if they try to release more supply of hbars into circulation. If that's the case, I think it would be great for all anyways since anyone holding hbars can sell at a later time for more USD, as long as the price doesn't drop like a bubble.

An aside note: Hedera board members and founders don't lose or gain anything from releasing hbars into circulation to bring down the price proportionately (keeping total market cap the same) since market cap is market cap, and their goal is keeping the coin price the same even if they have to release more coins into circulation - they would have more coins in circulation while having a stable price than to have a rising coin price with the same amount of coins in circulation, each scenario totals a higher market cap as the Hedera network grows in uses, which is Ok for them. Of course increasing in both is also OK as long as price doesn't go back down too much or if price is too volatile in either direction.

I think speculators would not gain too much from this coin because Hedera's best interest is to keep the price relatively stable for their users of the platform. It's not like bitcoin where no one controls it and no one has an objective of where the value of that currency goes to - only the speculators who want to buy it just to sell it at a higher price to someone else. Now I hope that I'm wrong in my analysis and that we will see huge adoption rates far more than what we've seen so far pushing the price anyways.

The thing is, I wouldn't know how to even calculate what "too much" demand for hbars is to the point where it has to increase the price (without speculators pushing it) currently even with more release of hbars in circulation. Hell, I don't even know if this current 8 cent will hold up. I really can't calculate what this 8 cents per hbar really means because there's no frame of reference from long-enough past usages. How do you really get to know the intrinsic value of a currency? If there was history of the currency, then yes we can see where its headed. For example, 6.4 RMB = 1 USD currently so if the Chinese economy does well compared to USA then less RMB will be needed to convert to 1 USD, but the number of 6.4 has already been established for decades. It could of easily been 1 RMB = 1 USD to start off and from there it goes up/down from that point, just like 1 EURO is whatever it is and 1 GBP is what it is now and goes up and down from there. So the question still remains, is 8 cents for 1 hbars a fair value? What if the fair value is actually 1 cent currently, and from there it goes up or down given supply/demand. What if everyone is way off? Similarly what if it's supposed to be $10 now and from there it goes up/down from supply/demand forces. There's no history to have a frame of reference. I don't know if we can use market cap to calculate because hbar is not a business, it's a currency. We can't use market caps of other coins because who's to say they aren't in a bubble and are massively overvalued. I mean alot of US stocks have a bloated market cap because they are in a bubble like Tesla so supply of currency inflates that market cap so it's all so confusing when trying to value anything against anything else in a time like this. Take Apple's market cap of $1 tril. If Hedera will be 10% of that, that would mean $2 USD per hbar but again Apple is trading at a multiple of 35 p/e or whatever. Who's to say cryptos should even have a multiple p/e ratio at all. They are currencies.

I wanted to know what your thoughts are and hopefully shed some light into how to really calculate the current value of hbars in USD. There might be basic calculations one can do to measure all this like supply (release in circulation) and demand (services paid in hbars from transactions) but the question that is very difficult to answer I think is whether the current 0.08 USD per hbar is overvalued or undervalued, and no I don't think just because Hedera will do great in the future means it's undervalued because what if 0.02 USD should be the price and 0.08 price is just the projected value in 3 years from now.

I truly want to know this as I potentially am putting a sizable portion of my portfolio into HBARS so hopefully I will get objective answers more than speculative answers.

Two upcoming events you should know about that could push the market higher

There are two events coming up in February that could have a positive effect on bitcoin and the crypto market as a whole:

Coinbase is doing a direct listing of their stock in Feb or early March. This will be seen as bringing legitimacy to the biggest US crypto company and it's already being touted at a $50 to $75 billion valuation. With how other IPO's have been exploding in the market like door dash and air bnb and the recent GME/short squeeze craze, this could drive alot more institutional investment and hype to crypto.

Link: https://blog.coinbase.com/coinbase-announces-proposed-direct-listing-3a52c4298ccc

Michael Saylor's Microstrategy Bitcoin conference on Feb 3. During this event, Microstrategy will outline why bitcoin is the best asset to buy going into the digital age to other companies at the conference. Although this will likely not immdediately up the price, it will bring awareness to other companies interested in investing into bitcoin and have a positive effect in the long term. Stone Ridge which is another investment firm that got into bitcoin last year is also co hosting the event with Microstrategy.

Link: https://www.microstrategy.com/en/resources/events/world-2021/bitcoin-summit

All in all, I'm excited for next month.

For investors who got burned with Doge, here's some advice from someone who lost 3 BTC on a scamcoin in 2017.

So I recently got back into reddit after taking a break from crypto in general. I started investing in cryptocurrency around 2017 while I was still in university as i was fortunate enough to be making money while studying.

I initially only invested 1 btc and after scouring the forums and reddit, I decided to invest in this coin called Confido. TBH, i cant remember now what the coin was about as I've actively suppressed my memory of that event ever since it turned out to be a scam and I cant seem to make myself go into my telegram or google to remember it again.

This was when I just entered the space and judging from what everyone who invested in the coin was saying, it was going to be the next big thing. As a clueless and young investor (I was 20 at that time), i decided to buy another 1 btc and bought more confido tokens. My interest in crypto was increasing by the day as I started to research more into other coins and learned how blockchain worked. Ethereum intrigued me, as it seemed to have more real world usage than bitcoin, and more importantly, a lot of ICO seemed to be running on that. As interesting as crypto was, my main goal was to make money and ICO seemed to have really good returns, and for that I needed ethereum. So I bought another 1.5 btc this time and 0.5 btc was put into ETH and the rest was put in confido (typing this part hurts as it always makes me remember the grief I experienced when that coin crashed as I watched it on my laptop in my empty dorm). I think I was one of the top 10 holders of this coin after that point.

Anyways, with a good chunk of ethereum, and with better knowledge about this space, I began to research more into blockchain technology rather than just coins and started to figure out which coins would have actualy usage. Got into a few ICO and was lucky to be in the pool for the intial investment. It was at this point, i knew I shud diversify my portfolio so I only spent 1 ETH on all the ICOs I liked.

Just as I was getting into all of this, the Confido coin I had invested 3 btc in turned out to be a scam and there were posts about it all over reddit. It was a frenzy in telegram as everyone started to panic sell. I decided to keep holding as I thought there was some mistake and its not a scamcoin. I was simply in shock watching my thousands of dollars investment plunge into nothing.

I dont think I've ever been this emotionally struck by anything in my life (maybe my first rejection from a girl in 6th grade would come a close second haha). I sat there in my dorm as I wondered why this happened. I was angry at the people who shilled it, I was angry at the ppl who made the coin, and I was angry at the community managers of this coin in telegram. However, I was most angry with myself with how naive and careless I was with money. I was hoping to save that money to buy a house for my parents in future and watching all of that disappear, I would never wish for anyone to go through that.

At the end of the day, it was my fault. I put money into something not understanding how it worked and how investing in general worked as well. "Always invest what you can afford to lose" I wish i went with that mindset when I started.

I tried everything to get something out of that coin but it was too late to sell as it was worthless. I had other coins as well as I was starting to diversify my portfolio but it was too late as majority of my investment was in that stupid coin. I tried to see if my ICO coins would help me recoup my losses but the market had entered a bearish run. I gave up and left everything related to crypto and decided to focus on my degree and job. I lost more than I could afford at the time, but i decided it was better to learn at this stage than later when I have a family to support. I have become a smarter investor after that incident and I learned how to better manage my finances.

Here's my advice to ppl who got burned by Doge coin. Take it as a learning opportunity of how the crypto space works. Yes, money is lost and the feeling of pain and regret is overwhelming especially if you put a lot of money in, but know that time heals. A costly mistake always prevents you from making a similar one in future. As much as ppl like to roast others who are getting burned from the Doge PnD, sometimes its hard to know what's going through the other person's mind when they bought the coin. Maybe they were just stupid and wanted to make money for a better life, but didnt have any information. Telegrams and reddits of shitcoins are usually an echochamber of people convincing you that the coin will raise in value. For someone who is new to the space, they dont have the info as the people who have been here for years have.

Seeing so many Doge memes roasting the people who bought at the peak made me recall the time I went through and I have sympathy for them. Some of them are delusional, yes, but that doesnt mean they're bad people, just lacking in information and crypto experience. Although I do have to admit, some of those Doge memes made me crack up, only because the face of the coin is an adorable chubby shiba.

So, don't dwell on the loses and just take it as a learning experience. Crypto space is wonderful once you are familiar with it and there are so many people here willing to help others out.

On the bright side, I came to see that some of my ICO coins are doing fantastic, especially Kyber Network and REN :)