HOW A PERENNIAL BITCOIN BULL PLAYS WITH A BEAR . . .
OR HOW TO TURN 2 BITCOIN INTO 17+ BITCOIN IN LESS THAN 10 DAYS
Sorry I haven’t written in a while but we had the Baja 1000 here in Ensenada and that was followed by a scheduled football game between KC and LA in Mexico City which was subsequently move to LA due to poor field conditions . . . but we took the trip anyway so I write to you on Thanksgiving Day from Mexico City.
This first part of this article will be a recap of what my bitcoin posts are all about and can be a source of bitcoin education in one place. So if you like it, bookmark this link and forward it to friends and relatives that are asking about bitcoin over this holiday season
The second part will deal with the current bear market and demonstrate with hard results just how what I am teaching here works in real time.
I am a position trader . . . . I purchased my first bitcoin in August 2013 under $100 recognizing its long term potential . . . and was in the top ten notational traders on Bitmax in 2017.
I believe bitcoin is a store of value, that it retains properties superior to gold, and over time a global Bitcoin Standard will emerge off chain through the marketplace, much like the gold standard emerged in the last half of the 19th Century.
Bitcoin is superior to gold because it is unconfiscatable. Every other asset you own can be confiscated, including gold. So long as only you have the private key bitcoin cannot be confiscated. This is why bitcoin should be from 5% to 15% of your investment portfolio.
I AM SAYVVING
At a recent hearing CFTC Chairman J. Christopher Giancarlo famously attributed the bitcoin term “hodl” to be an an…
I do not see Bitcoin emerging with a primary use as cash. It can be used as cash but it is a poor quality cash, just as gold is a poor quality cash. That said, just as efficient cash emerged based on The Gold Standard, efficient cash will emerge on The Bitcoin Standard. Most likely a free service in a digital form through cell phones by bitcoin entrepreneurs acting as the new private bankers of the world.
Further, while a free market does not preclude competing standards, currency competition in a free market will develop on one primary standard. The fact that Bitcoin has a limited supply, is the longest chain, and is based on proof of work means that it is the standard of the digital age. Efforts to create a better standard are misplaced at best, total frauds at worst, and regardless, a complete waste of time, money and effort. Competition for the standard is “psuedo competition”, the real competition is on Hayek’s Standard, which is the Bitcoin Standard.
CURRENCY COMPETITION VS PSEUDO CURRENCY COMPETITION . . .
In the Crypto World of there is a concerted effort to paint Bitcoin Standard Bearers as opposing free markets and…
This is not to say a replacement may not come along. . . . it may . . . but there is no need to promote it or advertise it or pre-mine a stash before an ICO. . . just show us! It’s that simple.
The efforts to create competing standards is largely responsible for rampant speculation. Few are working on building a Bitcoin Standard when vast riches can be more easily acquired by new money creation that is marketed as “better than bitcoin” to the ill informed.
Fundamentally, The Crypto World has spent the past three years creating a Day of Reckoning, what I term THE EXTHIT (pronounced with a lisp and a weak wrist) which we are experiencing today.
Bitcoin should be regarded as a store of value and for the vast majority of my readers the current bear market is providing a wonderful opportunity to dollar cost average. If you are new to bitcoin there is little reason to be short term trading bitcoin. Follow the dollar cost average principles outlined in the link below and you will do just fine with a goal of maintaining from 5% to 15% of your net worth in bitcoin. This is how a long term bull successfully acquires bitcoin.
HOW TO ACHIEVE THE SAME RESULTS OF A PROFESSIONAL BITCOIN TRADER WITHOUT TAKING THE INHERENT RISKS
As a former gold bug and self taught economist I first heard about bitcoin when it traded par with the dollar and then…
For those who have already acquired bitcoin and trade bitcoin the following section on trading is for you. This is the first time since I started writing on Medium that I can demonstrate position trading and how small traders become large traders.
Remember many large traders become small traders, most small traders remain small traders, a few small traders become large traders and a wise large trader chooses to be a small trader again!
Do not be surprised if some large notable bitcoin traders go under during this long needed washout.
I am a formerly large trader who has chosen to become a small trader again.
Blowing Out At the Bottom With a Smile
First, let me say that I closed out all my speculative long bitcoin positions with Bitmex on the low of March 18th at…
Frankly, if I manage to break even in choppy markets I consider it a victory because, for a position trader, the account equity grows on playing a major move for all its worth.
In this case we had a rare situation where the fundamentals collided with technical indicators allowing the establishment of a position.
Establishing A Position . . . the Hardest Part of Hodling and Trading
Many large traders become small traders. The purpose of this series or articles is to teach you how a small trader can…
First, the basis went bearish at the end of October. Now basis is a lousy timing indicator . . . and it did not get me bearish. . . but what it did do was warn me not to buy the dip if we tested 6,000 again. On every other occasion I was a buyer because the basis was bullish.
Compare this on October 29, 2018 . . .
THE MARKET TURNED DOWN . . . Basis Went Bearish
This shorty is a loving KISS. . . . Keep Is Simple Stupid.
With this on July 11, 2018 . . .
Why I Am Not Bearish Bitcoin.
My good friend and great analyst Tone Vays remains very bearish bitcoin. . . and for good reason. Moreover, he is very…
The other fundamental tipoff came when BCH went into a huge backwardation in a sharply rising market. Something was wrong . . . and it took me a while to figure it out . . . but this sent out alarm bells. At the time I was lightly short ETH and BCH and long bitcoin. This was November 10, 2018.
THE BASIS ON BCASH . . . A FURKED BACKWARDATION
The sharp rally in BCash in anticipation of the November 15th hardfork was not troubling, but the fact that it went…
On November 12, 2018 I went lightly short bitcoin.
POPCORN TIME FOR CYRPTO-WORLD CLOWN SHOW
I took a break after the interview with Tone Vays. . . sorry the audio was so bad. . . entirely the fault on our side …
And on November 13, 2018 I announced there was a 95% chance the market would break down and added to my shorts because I saw very little risk with huge potential.
THE BCRASH CLOWN SHOW . . . Advent of CryptoWorld Collapse
This may appear to be a bold statement but my reading the bitcoin break to the downside is about 95%, up substantially…
Moreover, I continued to sell even after the first break down to 5500.
PLAYING AGAINST THE BOX . . .
Those who have followed me can now recognize the importance of basis. The backwardation prevented me from getting…
Further, due to the high exchange risk I keep my exchange deposit to a minimum. Hence, I started with just 2 bitcoin. With patience substantial returns can be made once you catch a major trend.
EXCHANGE RISK WARNING!
Just this note: For those who sold bitcoin it is time to move stops down. . . . the two week high was not broken. . . …
Hopefully a few of you caught a good chunk of this move. . . it is hard to stay with a winning trade, yet with discipline you can do it . . . and if you did not you can learn from this. You are not going to learn how to trade in day. Just as it requires discipline to dollar cost average and hodl bitcoin, it requires discipline to stay with a winning trade.
In my own case, my 2 BTC account now stands at 17+ BTC. I remain lightly short BTC, Eth, BCash and just recently lightly sold XRP (my only losing position).
I have been travelling, so it has limited my trading to my cell phone. And I hate trading on my cell phone. I fat fingered a bad trade and also had a large buy order at 4198 on March futures that I intended to be perp, so that cost substantially in profits . . . . nevertheless through trimming and low balling I managed great returns . . .
Finding the Groove. . .
In my last shorty I outlined the two kinds of successful traders: position traders and swing traders.
. . . but bear in mind that while I gained 15+BTC my total networth measured in dollars declined since I did not hedge my entire hodl. Nevertheless, I have increased my bitcoin hodl which the primary goal. . . it is important to begin to think in bitcoin rather than dollars.
Time to start over and be a small trader again!
Good question and deserves a thorough answer.
If you notice I am not 100% technician. . . . I do not consider basis a technical indicator but a fundamental…
Where is the market going from here?
If you are asking this question you still have not absorbed what I teach here. . . . no one knows. I haven’t a clue! Wrong question! Go back and start reading all the links provided in this article.
PS: There are many exciting things in works. . . the content will remain free . . . a website is coming soon as well as a lifetime subscription for .025 btc . . . my lifetime . . . not yours! But I am a healthy 69 years old so it will be a bargain . . . and will include the actual trades I made while traveling by cellphone the last ten days plus much more!
PPS: Look for me soon with Tyler Jenks and a casual chat with two old school geezers moderated by the beautiful Leah Wald. Need to get home and put on the goat suit!
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