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Bitcoin is an IQ Test

There is a lot to unpack in this post. Let’s begin with addressing a few world events and a brief discussion of money.

There are volumes of books about monetary theory. For this conversation I am going to sum money up as “the product of any one person’s work”. You may store that work product (accumulate money) or use that stored work product to purchase other products (spend it). In essence, money is the result of your work product, or the value you provide in the world.

So what happens when the Government prints money and gives it to banks, companies and individuals? After all, aren’t they issuing money to people without them working for it?

The answer is the Government is counterfeiting your work product. You work for your money but the Government prints it for free. When the money presses go BRRRRR they are counterfeiting work product. Think about it. GDP stands for Gross Domestic Product. As a Nation our GDP is based on the product we produce. It’s that simple.

The value the Government claims for free by increasing the money supply without a link to production occurs in the devaluation of the dollars you earn. They have counterfeited your work product.

In ancient Rome the Roman emperors would clip edges off of coins as a way to collect taxes. Then they would take those clipping and melt new coins. This was not taxation, this was monetary manipulation. This was the original counterfeiting! They took your stored labor and used it to counterfeit new money without a link to production. In the digital age we have replaced coin clippings with quantitative easing.

This fundamental issue of money is underlying the public unrest. People understand they are stuck in place or backsliding in quality of life but it’s been difficult to pinpoint why. Wages are stagnant, consumer prices are up but the markets are doing great! Something stinks, but we didn’t know exactly what it was. That dead fish smell is the deepening money pit we are falling into as a nation. The Government has been counterfeiting your work product for decades. It’s worse than that though. Since the USD is the world’s reserve currency the Fed has counterfeited the entire planet’s money supply. For every laborer that digs a hole the government prints the equivalent money and disburses it to those in power directly or via subtle means. Except now in this late stage game it’s becoming less subtle!

You may have recently heard of the Cantillion Effect. This simple rule states that when new money enters a system it is not evenly distributed. Those who touch the money first gain the greatest benefit. The average Joe Citizen suffers as the benefits of the counterfeited labor (new money) the Government created is redistributed unevenly. Your earned dollars are paying for the counterfeited dollars the Government gives to banks, corporations and slush funds.

Your work harder for less in return. Meanwhile, those nearest the Cantillion effect build wealth at a pace that matches the counterfeiting. Given the recent 6 trillions stimulus these must be good times for those banks, corporations and funds nearest the Government printing presses!

As a friend of mine once said, “If I had your money I could burn mine”. That about sums it up. Your tax dollars and earnings, your entire stored wealth, is a mirage. It’s all tied to and controlled by the Government who use your life’s work to steal value for themselves and their cronies. You are nothing but coin clippings to be melted into new gold bars for the elite.

OK, that was bit over dramatic, but you get the idea. The issue is that money is not tied to work. Without this correlation those who can print money can control the world. This is human nature and why empires eventually collapse. An empire may start out on a solid foundation but eventually enough entropy enters the system that the system falls apart. Given our iterations of money over the centuries an the repeated rise and fall of empires we have not been able to separate money from human nature.

We don’t have an honest system to reward one for the value provided that is not also subject to the booms, busts and cycles of human nature.

Till now….

Many people consider Bitcoin to be an Internet meme or the latest Internet ponzi. I was a Bitcoin skeptic for years. I followed Bitcoin for a few years but only as a technological curiosity before buying. I was blinded by the mockery of this new Magic Internet Money and it prevented me from doing the due diligence to understand Bitcoin for myself until years later.

Once I began studying Bitcoin I fell down a very deep rabbit hole and have been there ever since.

The information available on Bitcoin is biased depending on source, including my own blog posts.

Do your own research. Bitcoin is an IQ test.

Meanwhile, here’s your theme song for stocks in 2020.

 

 

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BTC transaction fees hit $1,000

On May 14th several BTC users paid transactions fees over $1,000. Let’s dig in on how this is happening.

Here’s a random screenshot taken at 1215PM EST on 05/15/2020 from this website: https://blockchair.com/bitcoin/transactions

click for bigger version

Notice the columns in red. Inputs and fees are correlated. BTC users are paying ~$2 per input used in a BTC transaction.

BTC is a shared ledger. Every BTC transaction has a number of inputs and a number of outputs. If you want to spend BTC your inputs are sent as outputs and the fees (currently) are ~$2 per input spent. The more inputs used to spend your BTC the more space your transaction takes on the BTC blockchain and the higher the fee.

Think about it as you have a wallet with three $20 bills. Each $20 bill is an input in your wallet waiting to be spent. If you want to spend those three $20 bills (three inputs) it will cost you ~$2 in BTC fees per bill (input) spent. Let’s say you want to buy an item for $50. You give the cashier three $20 bills (three inputs) and there are two outputs, the $50 you paid and the $10 in change you receive. Using BTC, this would result in ~$6 in fees to spend $50. This is not sustainable.

BTC proponents like to point out when millions of USD are moved on BTC for a transaction fee of $2 but they never mention when someone pays $6 to move $50, or $1,000+ for a single transaction that consolidates a large number of inputs.

This is a very expensive fee to use a very small amount of data on the BTC blockchain.

Why does this happen? Because BTC has a 1MB blocksize. This means BTC can only process ~1MB in data roughly every 10 minutes. The cap creates a fee market where users compete to pay for the privilege of using the 1MB BTC blocksize. This fee market makes BTC expensive to use in majority of cases and completely broken in times of heavy usage.

You’ll hear that BTC is a “Store of Value” and “digital gold”. Many talking heads in BTC claim these fees are good for the network. But look behind the people promoting this narrative. Their companies (or themselves) are financially tied to BTC operating in a limited fashion with high fees. Blockstream, the main company responsible for BTC’s direction the past several years, is based on selling products that take advantage of these expensive BTC fees.

Read the Blockstream whitepaper for yourself: https://blockstream.com/sidechains.pdf

What did Blockstream say when BTC fees last exceeded $100?

Personally, I'm pulling out the champaign that market behaviour is
indeed producing activity levels that can pay for security without
inflation, and also producing fee paying backlogs needed to stabilize
consensus progress as the subsidy declines. - Greg Maxwell, Blockstream CTO

Translation: high fees justify limiting BTC to create a marketplace for Blockstream products.

Here are your Blockstream products:

If what I’m saying is true, why does BTC continue to appreciate in price? I don’t know, but I have a hunch it has something to do with this Tether chart.

Don’t trust anyone, including me. Fact check what I’m saying.

Summary: the investment thesis of BTC is that this artificially limited and expensive to use network will be adopted globally because BTC is a Store of Value and/or digital gold. Please ignore that BTC cannot scale without third party products that financially reward those in direct control of BTC development.

Let’s compare BTC to BSV. First, here’s a comparison of BTC fees vs BSV from coin.dance

BSV fees are generally under 1 cent vs BTC fees of ~$2 per input spent.

But how can BSV operate with such low fees? BSV is scaling to millions of transactions per 10 minutes. The goal is exceed Visa volumes in the near future. At scale anyone can spend BSV, includuing making micropayments on the Internet, for nearly zero fees. At scale BSV will survive off fees as the Bitcon block reward continues to halve every four years. BSV is scaling for the world to use, no third party products needed.

This makes BSV a stable and inexpensive platform for commerce and application development.

Let’s look at transactions (algorithmic chart). BSV in red. BTC in yellow.

BSV can handle orders of magnitude more transactions than BTC at orders of magnitude lower fees.

Summary: BSV is positioning for high volume and low fees. BTC is positioning for high fees and low volume.

One of these approaches has a future and one does not. Let’s see who wins.

This post first appeared on Coinspeak.io

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The Information Renaissance

Mankind is shifting into a new era I am calling The Information Renaissance.

The Renaissance was the period in Europe between the 14th and 17th centuries when there was a surge of interest in and production of art and literature. … In Old French renaissance means “rebirth.”

vocabulary.com

You can see the need for a rebirth of information all around us. Misinformatoin has been a weapon of armies, politicians and elites for hundreds of years. Propaganda flyers dumped from planes are now Twitter bots manipulating Twitter trending topics. News organizations are no longer impartial. Newspapers and networks are a means to spin the political agendas of their billionaire owners. Deep fake videos are now very difficult to spot and increasingly easy to create.

Information is power. Enron was able to fake the books, even as a public company, because they could manipulate information. Madoff kept investors in the dark for years while running a billion dollar ponzi scheme. Epstein was able to pretend to be a savvy investor while doing little more than buying index funds. The most powerful organization in the world, The Federal Reserve, operates in an information black hole. No one knows who owns the Federal Reserve!

Today, there is much debate about the veracity of the Corona Virus numbers in China and other countries. In all the cases above there is no way to verify the truth due to manipulation, censorship and misinformation. This misinformation is costing untold billions of dollars and many lives.

Those who control the information wars control the story. As they say, “history is written by the victors.”

How does society cope with this explosion of information both real and fake? If we can no longer trust what we see with our own eyes how do we operate safely and free from control?

What’s been missing is a single source of truth for humanity. A source that records the time information is created as well as the author. A global immutable ledger of transactions and events. Could bad actors still record false information? Yes, but it would not be profitable long term. Today, entire companies exist to spread misinformation because it is profitable. This is a worsening problem that must be stopped.

This single source of information is possible on Bitcoin SV. BSV is a truth machine. Here’s how this works.

How did Enron get away with so much fraud given they must disclose immutable financial records? Easy, they kept two copies and auditors only saw what Enron wanted them to see. According to financial regulations Enron’s financial records were permanently burned onto a CD that cannot be altered but there was no way to audit what they provided was true. Enron controlled the information from start to finish. It was trivial to manipulate.

This is the problem of double entry accounting. I can not verify that the information you provided is true.

As the fable Ring of Gyges illustrates absolute power corrupts absolutely. In this fable a man discovers a ring that grants invisibility and then succumbs to temptation eventually killing his King and marrying the Queen.

…asks whether any man can be so virtuous that he could resist the temptation of killing, robbing, raping or generally doing injustice to whomever he pleased if he could do so without having to fear detection.

wikipedia

In today’s world having power over information is a ring of invisibility. If a person can act immorally, illegally or unethically with no consequences then eventually they will abuse that power. The key to that power is control of information.

Enter BSV and the triple entry accounting ledger.

Triple-entry accounting can be thought of as a way of agreeing on objective economic reality…placed side by side, the bookkeeping entries of both parties to a given transaction are congruent. The third entry in the system, entered into the blockchain, is both a receipt and a transaction. It’s proof that something happened between two parties, which goes beyond the receipts that each party holds in double entry.

https://systemsinnovation.io/triple-entry-accounting-articles/

Think about all the scandals you hear about Government waste. If triple entry accounting were available for tax money the Government would be accountable for every penny they spend in real time. Imagine this for the Federal Reserve. Open books where Fed funding facilities could be audited at a moment’s notice. Where is 6.6 trillion in stimulus (tax dollars) going? We will likely never know.

If information is power then those who hold the information are powerful. In a triple entry accounting system the power is distributed. The “truth machine” cannot be fooled.

Now, here’s where things get really interesting. Google, Facebook, Apple and others are mass collectors of information. So much information they call it Big Data. I’m going to simplify this example for brevity’s sake.

An Artificial Intelligence is built on data. Processing speeds are so fast now that several months to you and me are a millisecond to a computer in computational power. Processors are not the bottleneck. What Google et al need to build an AI is data. Lots and lots of data. And we are giving it to them, for free.

Now imagine one of these companies has a breakthrough in AI. Overnight they could be the most powerful company that has ever existed. A functioning AI grants mind boggling power over information. Google protects their data so they can use it as a competitive advantage to build AI.

This is the next frontier in technological development. How do we counter a company from gaining AI capabilities and using it to further their own gains? The first company to develop a working AI would have the Ring of Gyges.

To counter this, we use an independent source of truth. We use Bitcoin SV. The blockchain as a single source of truth in a triple entry system that is immutable and uncensorable. The data it not owned by any company. It’s public.

All of the examples of fraud and abuse of power above cannot happen if BSV is used as a global ledger.

Truth wins and the Information Renaissance begins.

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BSV is Dunking on Fools

It’s been a very busy couple of days so I will keep it light.

BSV is screaming to the upside as Craig Wright has confirmed online he has received the bonded courier information to access 1.1M BTC. Further, the court sanctions in his lawsuit were mostly overturned.

There is currently a battle at $330 for who will retain #4 on the coin market cap list between BSV and BCH.

This is all going according to what I’ve posted here in the past.

Here’s a few recent tweets to catch you up since my last posts:

I’ll be attending the BSV CG conference in London late February. I expect volatility and ridiculous upside ahead.

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I Love It When a Plan Comes Together

I’ll be brief in this update. Don’t listen to the FUD about Bitcoin SV. Crypto news is mostly poor reporting and hyped rumors for manipulation. Moderate your BSV bags to your own comfort level and ignore the noise.

I’ve been seeing this as a recurring theme.

Even the 4chan trolls are starting to get it. You don’t have to like Craig Wright to get the message his original design of Bitcoin is the only one that works.

To that point we have another record block on the BSV test network:

This test network result shows what’s possible with the original Bitcoin software and destroys competitive narratives that Bitcoin can’t scale.  As transaction volume increases miners will be incentivized to upgrade their network to remain competitive. This is how Bitcoin takes over the world.

Then we have the countdown to the Tulip Trust.

We are nearing a turning point. Have you been paying attention?

If you’re in the U.S. you can buy BSV on bittrex.com

 

 

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BSV Analysis

Caveats: This is not financial advice. Risk management is key to long term success.

BSV has begun to decouple from BTC but has not broken free yet. The BSV chart is less than a year old and therefore using TA can be difficult and unreliable given volatility and limited history. Technicals have not fully digested fundamentals yet. However, the technical view is beginning to gain clarity.

Trigger warning for BTC fans: fundamentally, BSV is superior to BTC in every way. The market is slowly catching on. Look for the charts to reflect this over the next year.

For fundamentals look at bitcoinblocks.live and coin.dance. Both sites tell the story of BSV growing in transactions and the current disparity in price.

Taking the data from coin.dance and using it to calculate the Fair Market Value price of BTC, BCH and BSV we come up this custom price model:

In the model above I am using hash, transactions and blocksize as three key metrics for arriving at Fair Market Value.

During the past 30 days BSV has been in the 40-50% range in percent of overall transactions and block size measured against BTC and BCH yet has a very small percent of overall hash . If we adjust the market prices to reflect the data from coin.dance we have new FMV prices.

If we accept this premise, given today’s metrics BSV is undervalued by 25x! This represent the investment opportunity at hand in BSV.

As transaction and blocksize metrics continue to tip more in BSV’s favor, which is likely as more data is being stored on BSV via apps like WeatherSV, Preev and a new Air Quality tool, the miners will be forced to move hash to BSV to be competitive. This movement of hash will be the confirmation of a massive shift from BTC to BSV. The setup for this shift in hash is in motion and gaining steam but is not yet fully recognized by the market.

Being ahead of this move in BSV may be the investment of the decade.

Below is a link to this content posted on the BSV blockchain. The same content above is free. There is a $1 moneybutton paywall to get the TA section via the link below.

https://www.bitpaste.app/tx/6e4faac241225343f2f516e4fe19aad8f8e69ae536a360c386bc42d4dd99595d

I am paywalling some info on BSV not to make money but to show the power of BSV and encourage anyone on the fence to start using BSV instead of reading about it. Skin in the game.

A position is not an opinion. An opinion is not a position.
-Jesse Livermore

If you really want to read the TA let me know in comments. I may make it available here for free after a week has passed.

 

 

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Crypto is 99% Noise

Learn to be indifferent to what makes no difference.
-Marcus Aurelius

In this post we will take a look at how to identify noise vs signal in Crypto.

A signal has credibility while noise begs for attention. Signals whisper to the tribe while noise promotes itself. A signal will cause you to take initiatives while noise will want you to join the cause.

An easy way to identify signal vs noise is signal requires you to think. Signal has substance. Signal is challenging. Signal isn’t easy.

Noise is like junk food. Noise is designed to trigger a dopamine response. Noise is emotional. Noise is simple. Noise is repetitive.

Crypto is noise. BSV is signal.

Put another way….

In 2009 there was only Bitcoin. Since then over 2,000 coins were released and Crypto peaked at a market cap just under 1 Trillion dollars. Today the market cap for all of Crypto is less than 250B. The classic market bubble and correction.

After a bubble pops the only survivors are those that prove themselves economically viable.

Keep your eye on what emerges over the next year. Noise will kill your portfolio. Sometimes popular well known personalities show they built their following broadcasting noise. Here is an example this week:

Tone Vays charges $2,400 an hour. Ok, fair play if you can get it. But then he says:

Tone Vays charges $2,400/hour and then states “I honestly don’t know ANY facts because I never bothered”. This is a noise maker in an echo chamber. He has 193,000 followers on Twitter and is teaching others how to invest.

Here’s a LITERAL noise maker. A Craig Wright heckler from this week’s CC Forum.

This screeching attack is an example of the current conversation in BSV/BTC. I am exhausted engaging with the anti-BSV crowd. It’s no longer a debate it’s wrestling a pig. You both get dirty but the pig likes it.

Enter the Hopium Dealers

There is no shortage of hopium dealers dishing out forecasts of six figure BTC. Many of these “analysts” have 50k+ followers on Twitter. Take a moment to see if these Nostradamus wannabes ever address the fundamentals behind their charts. You’ll see it’s speculation based on new money entering or the halvening causing a doubling of their HODL stash. It’s noise and many fall for it.

Meanwhile, the signal is that BTC has been a zombie coin for over a year. You wouldn’t know this from the talking heads on CNBC but you have to remember, CNBC makes money by amplifying noise.

Also be wary of BSV noisemakers. There are many of them.

The most valuable thing I learned in Crypto is I don’t know anything. Early in my Bitcoin journey I believed that Nick Szabo was the father of Bitcoin. It was only once I realized I knew nothing I could research for truth. It wasn’t easy letting go of what I “knew”.

“In the beginner’s mind there are many possibilities, in the expert’s mind there are few.”
-Shunryu Suzuki

Most self identified crypto traders are stuck in their Szabo/Lightning/altcoin phase. They stop learning. They dig in. They identify with a camp and relentlessly attack anyone who disagrees. It’s primal tribalism via the Internet broadcast on Twitter 24/7.

If you aren’t with us, you’re against us.

The majority of Crypto investors are disconnected from reality. Scaling matters. Economics matter. Business matters. Law matters. Governments matter. The Bitcoin Whitepaper matters. This is signal.

Twitter polls don’t matter. This is noise.

In the past year I’ve learned more about Bitcoin than I had in the previous five years. It is crucial that you filter noise. If you can’t filter noise then you’ll start believing noise IS signal. You’ll stop learning just like Tone Vays. You’ll fall behind. You’ll get rekt.

What you know can be dangerous if it keeps you from learning. I’m not ashamed that I had it wrong regarding Szabo. I hadn’t learned to filter noise. What’s shameful is to shut down your brain and live for attacking people that disagree with your view. Seek and value truth above all else, including your ego.

The noise will eventually fade in crypto and only signal will be left. That signal is BSV.

What I consider to be truth now may change in the future. That’s OK. It’s called learning.

I will endeavor to have my future content focus on signal.

 

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IN MY GREAT AND UNMATCHED WISDOM

As Q4 gains steam I looked back at my 2019 predictions. In hindsight, I could have been more specific with my targets but overall I’d grade myself a B-. S&P can still correct, real estate is getting soft, Gold pumped then retraced, Mueller was a nothing burger, Crypto is a still a mess.

The BSV CG conference last week in S Korea provided a lot of information to digest. There was over 14 hours of video to watch. Here are the links to the videos:

 

Day 1 content is aimed at developers. There is a table of contents in the vid description. I recommend watching Dr Craig Wright at the 6:37 mark. Dr Wright speaks about Payment Channels which is tech that can be applied to markets everywhere. Think decentralized, secure and publicly auditable NASDAQs and commodity markets with honest brokers. Schwab has commission free trading. BSV will have commission free everything.

Day 2 has more accessible content for the layman. Threshold signatures and the identity service by Pixel Wallet look VERY promising for providing unique and valuable use cases. Again, recommend watching Dr Wright’s keynote to close out day 2.

Something to note, a week after the conference, the day 2 video has less than 4,400 views. It’s still very early in Bitcoin.

As I noted in “Assessing my Next Move“:

BSV is under the $130 level I pointed to as important to watch. BSV is a buy here, but don’t shit your pantaloons if the downward trend accelerates and BSV sits at $80 for a few weeks. Crypto trading is a bad idea. You probably shouldn’t do it.

BSV visited the low 80’s as the market swooned. If you’re not in BSV now, I’d look for the $100 roll to enter on a trade. This one day pump above $90 could be wiped out quickly. If you are setting yourself up for a position before the fireworks in 2020 then any entry before January is likely good.

The entire crypto market cap is ~230 billion. BSV market cap is 1.5B. BSV is less than 1% of the total market cap. I have never seen a more lopsided investment opportunity. The market is extremely irrational but starting to wake up. Only one coins is addressing scaling in a way that provides a path for mass adoption. Scale or die.

Here’s a simple example on scaling, an application called WeatherSV began posting weather data onchain to BSV a few months ago. WeatherSV was roundly dismissed as a gimmick to support a dying chain. Fast forward to today and Preev is now posting market data onchain. The result is BSV is reliably producing larger blocks with more transactions than BTC from two real world applications. What will the doubters say when there are dozens, hundreds or even thousands of apps storing data on BSV?

Given this oversimplified chart I created:

Bitcoin is an economic system. High transaction volume and low fees equal secure and antifragile money with high utility.

Meanwhile in BTC, the Blockstream CSO was interviewed:

Blockstream is going full steam ahead betting the future of BTC on Lightning Network as they debate making the blocksize smaller and potentially inflating supply to pay the developers. You can’t make this stuff up.

While I leave open the possibility I could be wrong as each day passes it looks like BTC digs their hole deeper and deeper.

The debate rages on in Crypto. Frankly, I’m very tired of it. What is happening in reality is BSV is scaling while the others delay. Let the Twitter wars rage, I am looking at what matters.

Looking forward, the 30 day extension in the Kleiman v Wright court case to negotiate a settlement should be expiring soon. This could be a big event. And, in January 2020 allegedly Dr Wright will come into possession of up to 800,000 BTC which he has previously stated would be exchanged for BSV. Even if both of these events are a bust BSV continues to scale on chain.

Scaling is what matters. BSV is scaling.

BSV is an incredible (but not risk free) opportunity.

 

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What I’m Watching

A few things I’m watching for Bitcoin this week and for Q4 2019.

Today, Sept 30, is BSV Stress Test Day. Several services and purpose built tools will be used to flood the BSV network with traffic. The goal is to test the limits of the network in number of transactions and block size hoping to exceed the last stress test which produced 210MB blocks. The test starts at 12:00 UTC and can be followed at https://testbitcoin.live/ and https://bitcoinblocks.live/.

October 1st is Day 1 of the BSV CG conference in Seoul, South Korea. Highlights from this article CoinGeek Seoul about to kick off with major announcements expected include nChain Technical Director Steve Shadders discussing progress towards BSV genesis (the restoration of BSV to original Bitcoin code), a fireside chat with Craig Wright and Jimmy Nguyen and another Hackathon. This conference has been a bullish event for BSV price in the past.

The 30 day extension in the Kleiman v. Wright court case should expire around mid October. Could this case be settled in October? This would remove a lot of market uncertainty and setup a potential movement of the Satoshi coins. I wrote more about this court case in Bitcoin Court Case Settlement.

According to statements made in the court case Craig Wright will have full access to a trust containing ~800k Bitcoins on January 1st. If true, Craig Wright has stated several different outcomes. Early in 2019 he stated he would create rolling iceberg orders to sell BTC while simultaneously shorting. More recently he’s pulled back from that and stated he would give the fortune to charity. Either way, the BTC coins could hit the market via court case settlement, Wright’s sell orders or charities selling gifted BTC for fiat. More important than the supply shock may be what this confirms for the market, the Tulip trust is real and Craig Wright had those Satoshi coins all along.

On the technical side we have another stunning project release from anonymous BSV developer _unwriter called Overpool.

Overpool enables a lot of functionality on BSV, including the ability to do a very high number of transactions between two parties then broadcast the end result to BSV blockchain. In many ways this is a simpler and superior solution compared to BTC’s Lightning Network. Overpool was also released for use on BTC and BCH which is a clever dig as these dev teams likely won’t won’t utilize this powerful tool because it signals issues with their currently selected development paths. Kudos _unwriter on the great work.

I am also keeping an eye on the BTC Lightning Network. In early September a bug was discovered but wasn’t disclosed until this week. The recent news for LN is not looking good. While BSV is stress testing and striving for unlimited scale the BTC scaling plan seems to be sputtering.

First, LN is a fragile centralized system.

Second, LN operators keep coins at risk for loss for VERY minimal gains.

Lastly I’m watching the charts. As I wrote about in Bitcoin Trading Signals the Mayer Multiple indicator on BSV is flashing a buy signal six days in a row (including today) ahead of the stress test and CG conference.

If you’ve been following this blog for a while you may see that many of the things I’ve been writing about are coming together in Q4 and Q1 2020. However, there are many obstacles remaining. BTC still dominates the market and a continued downward slide may pull BSV with it. Can BSV get out from under the shadow of BTC?

While BSV traffic has steadily increased BSV transactions need a hockey stick chart to be ready for the halvening in mid 2020. Also, governments continue to look at Bitcoin from a legal perspective. Any attempts to outlaw Bitcoin, while likely detrimental to the legislating country, will also hurt adoption short term during a time when rate of adoption is key. BSV is designed to work within the law but it may not matter if a country outlaws all cryptocurrency.

The next six months in BSV should be the most memorable yet. From a portfolio perspective, I remain irresponsibly allocated.

 

 

 

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Bitcoin Trading Signals

I use several Technical Analysis indicators including Ichimoku Cloud, Renko charts, MA crosses, trendlines etc.

One indicator many people reference specifically in trading BTC is called the Mayer Multiple. The Mayer Multiple is explained here.

Here is a chart of the Mayer Multiple for Bitcoin SV compiled from daily closing price on coinmarketcap.com. MM in blue, 21MA of the MM in red, Price in yellow.

 

(caveat: plot points before June contain less than 200 days of historical data)

We are looking for extreme deviations from the mean for trading signals.

There have been 9 days in 2019 the MM was below .7 with prices in the low $50 range. When MM approaches .7 in the future this would indicate time to buy as price is severely depressed compared to the past 200 days.

With the overnight swoon in crypto prices BSV Mayer Multiple is now at .67 which is a BUY signal.

There have been 8 days the MM was above 2.6 with prices above $200. A Mayer Multiple this high is a sell signal. Those sales would have been very near the recent top when correlating with price.

Compare these MM numbers against stocks and you’ll note stocks are rarely below .9 or above 1.3. Crypto is volatile. By charting the magnitude of deviation from a slow moving long term average we are able to evaluate objective data about when is a good time to buy or sell.

Hindsight being 20/20 we wouldn’t have known looking at a price chart these were the bottoms and tops at that time. Looking at price can stir emotions and we know emotions are the death of good trading. However, looking at Mayer Multiple it’s clear that the MM was very far from the mean and should be treated as a trading signal.

The current MM is ~.67. The past 200 days the MM has been higher 80% of the time. Keep in mind the Mayer Multiple is not a fast moving signal and as always balance any trading signals with your own research and fundamentals.

On a personal note, I’m back in Thailand till late October. Here’s a song remix from Thailand’s most popular Reggae band.

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