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Like my spoof poster? I’m just adding some light humour to the brewing Bitcoin Unlimited vs Core war that’s threatening to split Bitcoin into two. Vinny Lingham does a good job describing the macro environment of such an event.Leave a Comment
I wrote previously that Google Trends on the search term “BTC USD” is a great way to track the growth of active Bitcoin users. The search “BTC USD” is a proxy for the engagement of active Bitcoin users as they check the daily price.
In the chart above, the baseline denotes the exponential growth of active users while height above the line denote their engagement levels.
When engagement levels get high, Bitcoiners are in party mode, checking the price daily of of their precious coin. If engagement levels are too high, that’s when we are in a price bubble, and it’s a good time to sell.Leave a Comment
Google Trends is my friend. It’s a great tool for reporting search trends over time, and I’ve seen many people publish Trend’s charts of the search term “Buy Bitcoin”, to track Bitcoin’s interest by the public over time.
I thought I’d use this tool to investigate the growth of active users of Bitcoin. For this I used the search term “BTC USD”.
If you’re an active Bitcoin user, it’s likely you’ll be checking the price periodically. A proportion of users just type “BTC USD” into Google to get the reported price, thus we can use it as a proxy to the growth and engagement of active Bitcoin users over time.
It’s no secret from the chart above Bitcoin user base is in exponential growth. As with all things exponential, we can measure them on a log chart, so let’s give it a whirl and see what we get…Leave a Comment
This infographic of Bitcoin’s price is something I’ve been pondering today. It tells Bitcoin’s often dramatic price story in fundamental trend lines on top of which lives some serious doses of speculative activity. There’s a lot in this chart so lets break it down.
- In late 2015 through to May 2016 we saw a three cats and a moon consolidation pattern play out over 6 months after an MMM pyramid scheme took Bitcoin price action through some exciting times.
- By early June 2016 we saw a speculative bubble (marked in green above) as the market speculated on the upcoming block reward halving event. This was to be the second halving event, slashing payout and therefore the supply of new bitcoins from 25BTC every 10 minutes to… well, exactly half to 12.5BTC.
- Leading up to this many people we afraid the miners would exit their protective hashing power, the block processing caught between network adjustments could slow to a crawl and the price could crash. This did not happen. What happened was simply the markets saw less selling pressure from miners who had less newly minted coins to sell. The blue trend shows the steeper rate of price appreciation this had on the markets.
- Finally what we may be seeing is the Q4 of 2016 to present is the market undergoing a much larger and longer speculative phase for the upcoming Bitcoin ETF decision. If approved hundreds of millions at a minimum are expected to be poured into Bitcoin. Understandably the blue shaded area in our infographic would map to the drawn out and much delayed ETF decision which will finalise on March 11th, 2017.
If this story is fundamentally correct, the picture it paints is quite useful. In fact, we can deduce the impact of what a controlled reduction of coin supply from the markets will have to the price, furthermore we can gauge the amount of capital that the markets expect to be injected.Leave a Comment
Here at Woobull Labs we take data driven analysis very seriously. Today, I’m pleased to present the culmination of 4 years of data gathering and analysis on Bitcoin trader psychology.
The sketch above depicts the basic rig we used for our epic research. The dataset includes readings over 4 years at 10 minute intervals (210,240 readings per subject). In total we collected the psychological brainwave pattern of 100,000 of Bitcoin traders – a staggering 210,240,000,000 data points in total as they tapped away on their keyboards.
Yes very epic.Leave a Comment
Today Chinese exchanges report 98% of global volume. This shows huge dominance by Chinese markets. Unfortunately we know that most of this volume is fake.
Why is it fake?
Unlike the rest of the world, Chinese exchanges are unique in that they do not charge fees on trades. Instead they make their money via withdrawal charges out of the exchange. These fees reduce as your trading volume increase, so this incentivises traders to rack up their trade volume via buying and selling from themselves at zero cost.
There’s a ocean of data coming from the markets, and they hold hidden secrets. In this study, I’ll peer into the data and attempt, as far as I know, the first estimate of true Chinese volumes using data driven methods. I’ll define “true volume” as what the volumes would have been, had their markets actually charged at trading fee.
Prior estimates, really just educated guesses, have put Chinese volumes at 50% of the global market, let’s see how well this compares with the data.Leave a Comment
2016 has been a bull year for privacy coins. Earlier this year we saw mooning of Monero which saw subsequent pumps in other dark-coins including ShadowCash and Navcoin. Then we witnessed a mega-hyped launch of ZCash which peaked at an astounding $5.3k per coin.
All of these coins are Payment Coins competing in the battle win the war to be General Money. Let me explain. While most alt-coins tend to be forging into market specific app-coin territory, what makes payment coins unique is the shear size of the potential win, while app-coins can capture a market segment which effectively puts a cap on their valuation, payment coins being a kind of generalised money can capture “M2 money supply” as a ceiling, i.e. trillions.
When I look at payment coins I see very strong economic network effects are in play. I covered earlier with my Commerce Index that liquidity and low volatility are very important for a coin to be useful for general trade. Both of these qualities are crucial to make it compelling for end consumers to charge their wallet with a payment token to spend. With high volatility there’s too much risk holding funds and with insufficient liquidity wallet recharge and merchant fees will be high.
When looking at the combined qualities of liquidity and price stability together as a Commerce Index, we could see other coins catching up with Bitcoin. In this study I will be doing a deeper dive into these two qualities individually.
For the sake of this study, I will be looking at the leading coins by market cap, namely Bitcoin, Monero, Dash, ZCash and ShadowCash. All of these coins are well above $5m market cap, NavCoin and others at less than $3m have been excluded.Leave a Comment