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Novogratz's Crypto Trading Desk Lost $136M in Nine Months

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Re: Novogratz's Crypto Trading Desk Lost $136M in Nine Months

#121

Post by gammateam »

JohnJamesRambo wrote: post #91
gammateam wrote: post #15

Earlier quoted context omitted.

> "Huge gains in production from Texas, California, and Oklahoma quickly eliminated the regional shortages of 1920 and induced a downward trend in bitcoin prices over the next decade, with bitcoin prices falling 40% between 1920 and 1926. The decline in demand associated with advent of the Great Depression in 1929 magnified the price impact of phenomenal new discoveries such as the gigantic East Texas field which beg…

I keep rereading this comment, trying to understand what you are trying to say.

Commodities are volatile and seasonal

Bitcoin is a commodity steered by the same level of supply and demand pressures but held to a higher fictional standard by people that trade and evaluate it like a different asset class (equities)

Re: Novogratz's Crypto Trading Desk Lost $136M in Nine Months

#122

Post by oblib »

_hardwaregeek wrote: post #104
wpietri wrote: post #53

Earlier quoted context omitted.

"Felt like". That's beautiful. The dude had a feel and lost the equivalent of 2300 years of labor (at the US median income). There's this bit in Taleb's first book, "Fooled by Randomness". This was before he made a shit-ton of money. He pointed out that a lot of the nominally successful traders he worked around would declare a strategy, make a few bets, make a lot of money, and then act like geniuses for thinking up…

Honestly the schadenfreude is real. What part of the crypto graph made him believe he could make assumptions about, well, anything?

I hate to admit I agree, but I have to be honest too. That is spot on.

Re: Novogratz's Crypto Trading Desk Lost $136M in Nine Months

#123

Post by JoachimSchipper »

nostrademons wrote: post #96
elhudy wrote: post #94

Earlier quoted context omitted.

Ok, but the whole idea behind fundamental analysis is that you generate a specific value of worth based on your analysis. So what formula are you using to calculate a price point for Eth based on "adoption and projects using it"? Are you tracking all projects using it, and assigning it a dollar value based on a per project usage and cross-checking that against the number of ways you can use it? Or are you just guessi…

I actually am, to most of those points. I'm indexing every forum & blog on the web, then cross-referencing it with a big long list of crypto projects, then using that to infer which projects have an active, involved, growing community and which are scams or dead. Sentiment, activity, and viral mentions aren't a perfect proxy for adoption, but it's pretty close, and a lot more robust data source than technical analysi…

That is very interesting, but it does sound like you’re measuring engagement (or, less charitably, the effectiveness of the self-organizing distributed boiler room of patio11 fame) rather than, say, assets and earnings.

I’d call the latter “fundamentals”, if only because I don’t see why engagement would provide a price floor at e.g. 1000 $/BTC rather than at 10k $/BTC or 100 $/BTC?

Re: Novogratz's Crypto Trading Desk Lost $136M in Nine Months

#124

Post by nostrademons »

blackstrips wrote: post #108
nostrademons wrote: post #96

Earlier quoted context omitted.

I actually am, to most of those points. I'm indexing every forum & blog on the web, then cross-referencing it with a big long list of crypto projects, then using that to infer which projects have an active, involved, growing community and which are scams or dead. Sentiment, activity, and viral mentions aren't a perfect proxy for adoption, but it's pretty close, and a lot more robust data source than technical analysi…

What are the chances those projects will generate income and pay for ETH? Can those projects work without a blockchain? Would it be cheaper to just handle stuff with (digital) signatures and old fashion contracts?

My investing thesis for crypto is this:

The cryptocurrency projects that will survive and thrive will be those that let people do things that are insane, and yet they want to do anyway. It'll be new markets where currently no economic activity is taking place, because the participants cannot trust each other (or make use of the legal system to trust each other) enough for any rational actor to consider transacting. Cryptocurrencies, of course, alter that rational calculus by letting you put trust in an anonymous network of worldwide miners to secure your transactions.

Think of some of the biggest companies created in Web 2.0. Facebook - who in their right mind would give Mark Zuckerburg all of their personal data so they could hook up with that hot girl in the dorm across campus? AirBnB - people actually invite strangers into their homes to stay with them? Even the founder and first investor call that "The worst idea that actually worked." Uber - you're going to get in a car with a complete stranger and pay them to drive you places?

(Interestingly, all of these are markets that are well-positioned to be disrupted by cryptocurrencies. The key elements of an EBay/AirBnB/Uber-type marketplace are 1.) ability to connect latent demand for a service with people who can supply that demand 2.) ability to receive payment and 3.) a reputation system to ensure that the service was performed reliably. Right now, the UI & scalability properties of crypto are not good enough to let them replace these centralized marketplaces, but all of the information involved could easily be stored on a blockchain rather than a database, and with current Ethereum transaction costs at 0.07c and most of these tech companies taking a 20% cut, at some point the economic incentives to replicate them will become huge.)

We've actually had a couple of these killer apps for cryptocurrencies - buying drugs off the Internet, and ICOs. In both cases, any normal, rational person looking at the behavior is going to be like "What? Are you crazy?" In both cases, people do it anyway, presumably because they really really want to buy drugs without having to meet in person, and because they really really want to invest in startups but otherwise can't.

If you can service a market with databases, digital signatures, and old fashion contracts, you should service it that way. Blockchain is useless for anything that people are doing now, because if they're doing it now, there's already a way to accomplish it.

Re: Novogratz's Crypto Trading Desk Lost $136M in Nine Months

#126

Post by tim333 »

JoachimSchipper wrote: post #123
nostrademons wrote: post #96

Earlier quoted context omitted.

I actually am, to most of those points. I'm indexing every forum & blog on the web, then cross-referencing it with a big long list of crypto projects, then using that to infer which projects have an active, involved, growing community and which are scams or dead. Sentiment, activity, and viral mentions aren't a perfect proxy for adoption, but it's pretty close, and a lot more robust data source than technical analysi…

That is very interesting, but it does sound like you’re measuring engagement (or, less charitably, the effectiveness of the self-organizing distributed boiler room of patio11 fame) rather than, say, assets and earnings. I’d call the latter “fundamentals”, if only because I don’t see why engagement would provide a price floor at e.g. 1000 $/BTC rather than at 10k $/BTC or 100 $/BTC?

While engagement as in just tweeting doesn't provide a price you can do an estimate by (number of fans) x (amount they'd like to have invested) / (number of coins) = (estimated price)

eg 20 million BTC investors want to have $10k in BTC, 20 mil coins available => the price should be $10k

obviously some guess work in there

Re: Novogratz's Crypto Trading Desk Lost $136M in Nine Months

#127

Post by tim333 »

nostrademons wrote: post #124
blackstrips wrote: post #108

Earlier quoted context omitted.

What are the chances those projects will generate income and pay for ETH? Can those projects work without a blockchain? Would it be cheaper to just handle stuff with (digital) signatures and old fashion contracts?

My investing thesis for crypto is this: The cryptocurrency projects that will survive and thrive will be those that let people do things that are insane , and yet they want to do anyway. It'll be new markets where currently no economic activity is taking place, because the participants cannot trust each other (or make use of the legal system to trust each other) enough for any rational actor to consider transacting.…

Not sure I buy the insane bit. Airbnb, Facebook, Uber, drugs on the net and ICOs were proceeded by traditional B&Bs[0], showing holiday snaps, taxis, traditional drug dealing and traditional iffy investments. It's just new tech either did things better or allowed skirting of regulations, licences and the like.

I think there may be a future in security token offerings, a more regulated less scammy version of ICOs, kind of like traditional stock listings but cheaper and less Sarbanes–Oxleyed.

[0] https://www.streetdirectory.com/travel_guide/212726/travel_a...

Re: Novogratz's Crypto Trading Desk Lost $136M in Nine Months

#128

Post by tim333 »

gammateam wrote: post #121
JohnJamesRambo wrote: post #91

Earlier quoted context omitted.

I keep rereading this comment, trying to understand what you are trying to say.

Commodities are volatile and seasonal Bitcoin is a commodity steered by the same level of supply and demand pressures but held to a higher fictional standard by people that trade and evaluate it like a different asset class (equities)

It's not really a commodity like oil. I feel The Onion was closer in calling it "crazy imaginary internet money" https://www.theonion.com/bitcoin-plunge-reveals-possible-vul...

Re: Novogratz's Crypto Trading Desk Lost $136M in Nine Months

#129

Post by tim333 »

kilo_bravo_3 wrote: post #13

I like how cryptocurrencies were launched as an alternative to central banking, wresting control of money away from the government and big banks. An open and level playing field that would democratize how people transact financially with each other. And then the first thing the early adopters did was recreate the flawed financial institutions that surround "real" money so that they could pretend to be Gordon Gekko an…

It depends how you view things - is buying ICO tokens compensating the founders for their ideas and thoughts?

Apparently Silk Road had sales of $1.2bn which gives you an idea of the amount of drugs traded and the turnover of Bitcoin on exchanges was about $2000 bn over the last year. So sales of goods as a percent of speculative transactions are probably <1%. Not that that means that much - FX speculation is larger than real trade for fiat also.

Re: Novogratz's Crypto Trading Desk Lost $136M in Nine Months

#130

Post by tim333 »

owenversteeg wrote: post #11

“Remember, bubbles happen around things that fundamentally change the way we live,” he said. Ah yes, I remember how beanie babies changed the way we all lived. And tulips, of course. And rhodium? Hmm.

Tulips changed they way some of the Dutch live. They still have 11,000 hectares planted and grow 4.3 billion bulbs per year, 381 years after the so called bubble. I wonder if ETH and TRON will be about in 381 years.
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