Topic: rpietila Wall Observer - the Quality TA Thread ;) - page 139. (Read 907212 times)

I also think this is interesting! Keep us posted when you think the time has come!

I see it, although I've been intrigued with this particular pattern for a long time.  A simpler way to look at it is a pennant continuation with a dip at the end. There's usually a 50-60% initial correction from the top, a final bull run that ultimately fails, then a long drawn out bear market with final capitulation. And of course the longer the timescale the more volume involved and the more weight the analysis carries. I mean we could rocket up tomorrow but I'd watch for a bottom to form in the 6h/4h charts first. At this time I'm not convinced.

Ah, finally some quality analysis around here again, in between castle and cigar talk (Not that I don't like a good castle talk)
I think you may be correct. Although I'm having difficulties to see a clear structure of the small bubble you're talking about. I think the pattern isn't that clear.

Interest in bitcoin almost forces you to become a "crazy" saver. Apart from regular spending and regular retirement account, I started to save almost 100% "savable" extra in bitcoin because between RE, fiat retirement funds and soc security, i figured that I am OK with non-bitcoin savings, but need to increase bitcoin holdings as fast as I can, so a relatively large proportion of my earnings is currently going to btc in one way or another. I decided not to sell fiat stock holdings for bitcoin so far.

Have a look at the 12h/1d chart, from June's runup ($680 top) to now.

It resembles a smaller version of bitcoin's larger "bubble" cycle, which is repeated all over in digital currency land and in varying sizes if you look, and of course represents repeated actions of market participants in response to external events and their own psychology. It's really more of a drawn-out correction cycle as the value is always overshot by excited buyers, then corrects in waves as the market seeks a fair price.

With that in mind there is definitely room for more downside (550-560) as we are in final capitulation of this cycle, a heavy distribution (selling) phase where morale is lowest. Then the cycle repeats again with a large accumulation (buying) phase. When that will happen I'm not sure, early/mid August is a pretty good guess.

The trust is going to hold bitcoin equal to the value of the ETF securities it issues, less expenses.  

The way the trust will do this is there will be "Authorized Participants" who will interact with the trust.  The trust will offer ETF securities to the Authorized participants in exchange for bitcoin.  The minimum transaction is a "basket" equal to 10,000 bitcoin and 50,000 ETF shares.  So each ETF share will be worth .2 bitcoin.

There will be "Seed Baskets" whereby one or more Authorized Participants will commit to exchanging bitcoin for ETF shares at a certain amount.  This is essentially the "IPO" of the ETF.  The Authorized Participants will then make those ETF shares available for trading on the Nasdaq.  

Pursuant to the Agreement, the bitcoin the trust receives may only be: "(1) held by the Trust, (2) transferred to Authorized Participants in connection with the redemption of Baskets; (3) transferred to pay the Sponsor’s Fee; or (4) transferred as needed to pay the Trust’s expenses not assumed by the Sponsor."  http://www.sec.gov/Archives/edgar/data/1579346/000119312514257706/d721187ds1a.htm

So other than expenses, and (2) above, the trust will hold the bitcoin.

What is (2) above?  (2) is a reference to another way the Authorized Participants are different than retail investors in the ETF.  In addition to "creating" new ETF shares by tendering bitcoin, they may tender ETF shares (again, with same minimum basket size) to the fund in exchange for bitcoin.  

The ability of Authorized Participants to create and redeem ETF shares, in exchange for bitcoin is what manages the supply and demand of shares after the initial transaction.  The goal is that the ETF share price is relatively close to the Net Asset Value ("NAV") per share of ETF (equal to the the value of bitcoin held less expenses).  If the ETF price is above the NAV, then Authorized Participants will sell more bitcoin to the trust, and more ETF shares will be issued, which will increase the supply and push the price back close to the NAV.  And vice versa if NAV is above the ETF.  Or at least that is the goal.

This is the same process for many ETFs that are backed by an asset, including gold.  However, not all asset-based ETFs are backed by the asset, others may be based on derivatives designed to track gold prices.  And then, of course, there are many other derivative transactions related to gold or other assets that may or may not be backed by gold.  This is why the total notional value of gold ETFs and other securities may exceed the total value of gold in existence.

TLDR: Winklevoss fund will be backed by bitcoin.  Many asset based ETF, including gold ones, are also back by the asset.  Others aren't, which is why the total notional "paper" amount of gold that is traded may exceed the amount of physical gold in existence.

What people need to see is that most millionaires make their money by NOT SPENDING.  Risto demonstrates this mentality throughout his post.  Saving all your money gives you money to invest when opportunities come around.

Risto, would you be willing to say whether this was related to Bitcoin transactions?

I'm sure we all fear the possibility of taking profits from our Bitcoin (or Monero) investments, only to trigger a SAR and have our fiat accounts frozen while the authorities investigate the transaction...

I'm scrupulous about record keeping so that I can prove that everything is above board should the need arise, but that doesn't stop the huge inconvenience that results from investigations like this....

roy

Thank you, I have been smoking Montecristo's lately, they are my favourite!

Country: cigars are either Cuban or non-Cuban. Cuban largest brands are Cohiba (best), Montecristo, Partagas, Romeo & Juliet, plus many others.

Thickness: 50-60 gauge is the most enjoyable, about 40 is the daytime cigar, 30 is a small one and 20 is cigarette thickness.

Length: does not matter as much as thickness, so Robusto (short but thick) is generally good.

For a special occasion, Cohiba Robustos/Siglo VI or even Cohiba Behike works perfectly. For guests, you can give cheaper R&J Wide Churchills that really pack a punch

Someone correct me if I'm wrong but I beleive that they are only able to offer as much as they own. This is why I made the point about how they aren't going to be putting up their own coins so all etf coins will have to be bought from the general market.

Thanks for the advice, she hates the smell, but doesn't mind the taste on my lips. What cigars would you recommend I smoke and give to close friends and relatives?

You wife will probably not like the smell of cigar in your mouth, so I recommend wiping your tongue with toothpaste several times before the night.

Rpietila, you have not posted any cigar suggestions in a while. I am getting married next year, what would you recommend for the occasion?

Never smoked before I was a millionaire, not even once (except in the army when I once got two free cigs).

...but NOW my phone contract is 50€+ and 500-1000€/month go to cigars, plus the car is 1000€+ and then the castle expenses

I think it all boils down to the understanding of cash flow and exponential function.

A crucial part to success, which part is your favorite?

yes you can find thousands of articles on the subject published in the latest years. But it's actually a tricky subject because the *actual* world's gold stock is supposedly greater of order of magnitudes than the *official* world's gold stock. This is because in every war since the beginning of history gold tends to magically disappear, often forever (cfr. 'Yamashita's gold')

Will it work with BTC? You can easily take BTC out and put it in your pocket so to speak, but it's quite complicated with gold/etc.

It comes basically down to the question if they're only selling Bitcoin they actually do have. Is that even allowed to sell more Bitcoin than they actually own in this case?

Ah really? Well that's a bummer then. But do they really are 2 orders of magnitude above the actual reserves of gold??
Basically, they're running a fractional reserve then??!