Topic: nrd525 Market Tracker - page 4. (Read 82714 times)

I think some of my theories about bitcoin are about to potentially be disproved.  Notably we have very little interest on Google Search Trends (only 15% of the 2017/2018 peak) and yet bitcoin is currently at 16.8k.  So this could be very bearish if there isn't anything backing the rally, or it could be very bullish if the bull trend has only started.

Options are such a mind fuck, so I'm not sure if I'm thinking about this correctly, but I don't think you can tell by looking at the prices themselves. The price of options represent the premium a trader is willing to pay for time until expiry, which doesn't exactly tell us the odds of the event occurring.

Order book depth, or required margin, might give us an idea though. At a $20K strike price, sellers of call options need ~4x more margin than buyers, based on significantly more available bid liquidity than sell liquidity.

That implies that traders believe it's ~4x as likely the options expire above $20K. That's very bullish sentiment! Meanwhile, the Fear and Greed index is at 89, "extreme greed." https://alternative.me/crypto/fear-and-greed-index/

How can I tell based on these prices, the market estimate for what odds are that bitcoin will go to 20k by Dec 25, 2020?

https://www.deribit.com/main#/options?tab=BTC-25DEC20

I made a killing on the US election. But it is hard to say in retrospect whether the various models and people like me who thought the Dems had a 89% chance of winning were correct.  The polling is messy!

It's hilarious that you can still buy Biden to win the election at 90 cents on various sites.  There is a <0.1% chance that the election result will be overturned.

I bought around 1 btc at around 10.5k-11k before this upswing. 

Does anyone have an opinion on the security risks of betting money on Augur?  I'm getting heavy into betting on politics (Augur, Predictit, and Polymarket). Frankly, the Democrats to win the 2020 US presidential at 60-65 cents is a great deal - expected value of approximately 85 cents.

Beware, high borrowing rates for fiat assets can indicate greedy sentiment, which can indicate further downside.


Bearish if true.


After the bottom fell out as much as it did in Q2, a mega bounce in Q3 was almost guaranteed. Doesn't mean the economy has recovered to pre-pandemic levels, not even close.


I think we'll get another crack at the $9,000s but it's not guaranteed. And that's the problem with neglecting to buy the dip: you end up buying higher.

I like how Uniswap is worth 4 times the total market cap of the liqudity in it.
https://www.coindesk.com/uniswap-defi-buzz-uni-token-airdrop

On the upside, with all the hype and bull market sentiment, Celsius Network is paying 11.55% APR for USD stable coins (up from 8.6% a couple weeks ago).

Unrelated: I'm upgrading my odds for the Dems winning the 2020 US presidential election from 75% to 80% (Predictit is around 59% and 538 at 76%).

US Q3 GDP growth forecast at 32% (how can they do this when we are only two weeks in?).  Annual growth for 2020 is -3.8% (I thought it'd be worse).  Fed saying 0% could last through 2023. 

I'm thinking about getting back in to bitcoin.  But I really don't want to pay 10.9k!

I finally heard a good description of liquidity providing for DEFI.  It's for decentralized exchanges like Uniswap. The problem is low liquidity due to the time it takes for orders to be resolved. So your typical exchange market maker doesn't want to risk their funds as they might lose it during a price change. Also the fees for adding and removing orders are probably very high due to the ETH high gas cost.

So they use smart contracts as market makers.

The pro-side is that there is a legitimate use case.

The con is that you lose money due to volatility.  Market-making is dangerous.  If you are doing it with a smart contract, it doesn't need to have a bug, someone could read the code and devise a plan to overwhelm you and cause you to lose money (for instance they could attack price oracles or overwhelm you with buys or sells).

I'm skeptical about the legality of decentralized exchanges in the US and many other countries. If they avoid KYC/AML or are used by people to avoid paying taxes, the regulators are probably going to ban them.

https://www.youtube.com/watch?v=cizLhxSKrAc

Why not the US? The same use case (using loan over-collateralization as a way to avoid selling an asset) applies there too, doesn't it?

Coinbase is trying to capitalize on the DeFi craze too. You can lock up your BTC as collateral and borrow up to $20K against it now. https://www.coinbase.com/borrow

A good discussion on use cases for defi. In some countries (not the US) there are some tax advantages.
https://www.reddit.com/r/ethereum/comments/ce9qc0/is_defi_based_on_a_false_premise/

"Minimally viable monetary experiments." I like that.


It's just a game of greater fools. Or hot potato, if you prefer. The money is coming from altcoin whales pumping + dumping, and get-rich-quick pump chasers, not sustainable long term investment.

I think articles like this just scream "SCAM".  While confusing me.
https://www.coindesk.com/defi-degens-gaming-ethereum-money-legos

Where is the money coming from for the yield farming? Is it mostly pump and dump extracting money from the losing bag holders?

The guy who runs the Box Mining youtube channel (more credible than most, but seems to lack cautionary judgement) is into this.

This fool thinks that you can lend out at 100% without it being 1000 times riskier than a bank (I'd estimate it is 10k times more risky, at least in the US).  But otherwise the article is half-decent.
https://www.forbes.com/sites/leeorshimron/2020/06/22/defi-yield-farmers-and-crypto-investors-are-raking-in-100-annualized-yields/#599276d35eb5

It seems like people are just discovering a new version of what has been around since 2012 when Bitcoinica let you lend funds.  Decentralized finance might be appealing to new people because 1) the centralized rates for ETH (and BTC) were historically very low - often < 1% APR on Bitfinex (though more recently they've been pretty good), 2) some of these opportunities were unavailable to US residents when Bitfinex stopped supporting US customers, 3) the hoopla around smart contracts and remaking the financial system attracts the dumb money.

I can think of one reason: margin trading. You can use borrowed collateral on platforms like dYdX and get up to 5x leverage trading pairs like ETHDAI and ETHUSDC.

When sentiment gets really bullish on Bitmex, bulls pay insane interest rates on perpetual swaps. They were paying almost 0.08% every 8 hours on longs last week.

Anyway, that's just the lending aspect of DeFi, right? Isn't there other stuff being built, like prediction markets, synthetic assets, DEXs that are actually decentralized, and so on?

What's the real use case for DEFI?  As a lender high rates are attractive, but I cannot understand why anyone would borrow at extremely high rates.  I don't know if this is just true for Celsius Network and Blockfi (more centralized finance than DEFI - I'm not using DEFI), but the borrowing rate only seems low if you exclude the cost of collateral. If you include the cost of collateral, your "1%" loan that has a 50% loan to value ratio is actually costing you 8.6% * 2 + 1% = 18.2%.  Not to mention the risk that you might lose all of your collateral!

This seems like it is a great idea for another bubble (lots of hype, anti-bank sentiment, etc). But will do almost nothing to help the unbanked. People are unbanked because they are poor.  Micro-loans work. Getting poor people to buy ETH doesn't work.

Cryptocurrency users tend to be rich, or at least upper-middle class. They can get loans for 2-4% APR with their house, or probably 5%-10% from a personal line of credit. If the users need money why would they want to deposit $200 of collateral to get $100 in loans?  They won't have the collateral to do this.

Previously, crypto was going to take on the multi-billion dollar remittances market where people often pay a 10% transaction fee to send money back home.  This didn't happen.

The major use case I can see is that 18.2% APR works when you are borrowing money to go long on a bubble.  Whether that bubble is Bitcoin or a DEFI token.  But when the bubble bursts...  A secondary use case is people who want to put all their money into crypto-currency, but don't want to sell to avoid capital gains taxes and need short-term money.  I think most of the people would be better off cutting their expenses (or reducing their crypto purchases) and maintaining a financial cushion in fiat, or using a credit line.

If you are borrowing USD (ex. to go long BTC) on Blockfi, and using BTC as collateral - you are losing 6.4% (from not lending out your BTC - assuming you are over the 5 BTC threshold, otherwise this is 12%!) and paying an interest rate of 9.75% + 2% origination fee.  So if you borrow for one year this is a rate of 18.15%.

Have you finally given up your bearish bias then?

I was surprised you held onto it so long given your interest in DeFi. That market was awfully pumpy even before BTC broke out a couple days ago. In fact, I probably should have seen it as a sign of latent bullishness in the overall crypto market.

It is crazy crypto pump time. BTC at 11.3k and rising.

Looks like the slope of total infected is getting less steep.  We hit 400k/day and are dropping.
https://covid19-projections.com/#current-us-projections

How do you figure that? California and Florida just surpassed New York in case totals. Between those two and Texas, Dr. Birx says we've got 3 New York style outbreaks on our hands now. Given the exponential nature of these things, I'd say it's impossible to predict a peak, especially at the national level.


Following the stock market up. What else? It's hard to fight the Fed.


I wouldn't be surprised if it hit the negative 30s either.

It's probably already priced in either way, just like the April jobs data was when everyone was predicting doomsday back then.

Looks like Covid19 cases (testing positive) in the US might have just peaked on Friday. Or it will peak this next week.

Estimated cases > tested positive. Nationally the real peak was in March/April due to the 100k/day cases in NY.  At least so far.

Not sure what Bitcoin is doing at 9700. I'm still bearish. It'll be interesting to see the US Q2 GDP number on Friday. Probably -25% (quarter on quarter, annualized), but could be as little as -15%.  I recently saw The Economist Intelligence Unit only predicting -8% - which is very weird (unless they aren't annualizing it, aka multiplying it by four, but their FAQ says they do annualize it).

If Trump sends troops into major US cities, he will spark a wave of unrest that might even dwarf the George Floyd uprisings (though probably not - it'd also be a lot more concentrated in major cities, whereas the George Floyd / BLM protests reached thousands of US communities, including some very small towns). It could also shake up the election either in his favor or Biden. Hard to say.   Nixon benefited in 1968 from riots, but now it is white people rioting.

YFI offers a 600% APR and doesn't have a major use case. Providing liquidity?  That's what people thought Bitcoin Savings and Trust was doing!  At best it'd be worth a 20% APR.

What is the scam?
(Based on very little research it sure looks like one).

Sidenote: there is a bias towards the pro-scam/pro-ponzi arguments/people. As they have a lot of money to gain if they can get suckers to "invest".  But on the other hand there are very few incentives to take the opposing side as it is difficult to impossible to short the scams or to find people to take escrowed bets.  If you challenge a project for being a scam, you will be attacked much harder than the likely scammers.