12 May 2018

Bitcoin in the News : 2018-04 More++

On top of the reports flagged in the previous post, Bitcoin in the News : 2018-04 Price, what other cryptocurrency stories appeared last month. First, let's go back to the March summary, Bitcoin in the News : 2018-03 More++ (April 2018), where I signed off with,
I'm tempted to start my own index: the 'Bitcoin Badnews Ratio' [BBR], a contrarian signal. Let's see what happens in April. If the price trend is up, the BBR might actually have some merit.

I qualified the April trend in the '2018-04 Price' post as 'steady upward'. Since the March stories were overwhelmingly negative, the BBR's first test was in its favor. One sample does not confirm a theory and I'll come back to the idea later in this post.

The subject of gender equality is a hot topic these days, so it's no surprise that it has come up in the crypto world. Consider these two stories:-

  • 2018-03-31: Bitcoin's Biggest Winners -- or Losers -- Are Likely to Be Men (theatlantic.com) • 'Simply put, many more men are buying crypto than women. The combined market capitalization of all the currencies appears to exceed 300 billion dollars. And due to their greater participation in this extremely volatile and thus highly risky realm, men will likely wind up squandering hundreds of billions of dollars more than women -- or else, perhaps, enjoying hundreds of billions in additional wealth.'
  • 2018-04-27: Bitcoin: Women Could Send Bitcoin Price to the Moon (fortune.com) • 'One analysis of Google searches found that 95% of people Googling "Bitcoin" were male, while only 5% were female. The trend seems to carry across to other cryptocurrencies such as Ethereum: According to another recent survey, just 4% of Ethereum traders are women.'

The subject of taxes is always a hot topic in April, at least in the U.S. I counted as many stories in April as in the three previous months combined. For example:-

Back to the BBR, if you took this title at face value, you would say the story was negative:-

  • 2018-04-24: Let’s destroy Bitcoin (technologyreview.com; MIT) • 'Three ways Bitcoin could be brought down, co-opted, or made irrelevant.'

The three ways are not imminent; they are hypothetical:-

'Option one: Government takeover'
'Option two: Facebook sneak attack' ['If Facebook could persuade a large enough fraction of Bitcoin users and miners to run its own proprietary version of the Bitcoin software, the company would thereafter control the rules.']
'Option three: Go forth and multiply' ['The trend among blockchain startups is to build services that function only with the use of a native cryptocurrency, one specifically designed for the application.']

That story was one in an issue of the 'MIT Technology Review' focused on the underlying technology: The blockchain issue (ditto; May/June 2018). I've bookmarked it for future review.

Looking at other stories for April, I saw a mixture of positive and negative angles. How to determine the trend? Let's compare the most positive of the positive stories against the most negative of the negative.

I hope it's obvious that those were the positive stories. Here are the negative stories.

For me, the positive stories are less compelling than the negative. Of the other ~20 stories on my short list, only a half-dozen were positive or neutral, while the others were clearly negative. Here's one that would have made the 'most negative' list if I didn't want to go a little deeper:-

The four key reasons are:-

'The Group Mentality Risk'
'Regulatory Risk'
'Slower Speed' ['Each person left 'holding the bag' is looking for a chance to dump the product.']
'Not the Only Game in Town'

All in all, the consensus sentiment in April was negative. If the BBR has any merit, May should be a good month. Since I'm writing this mid-month, I can already observe that it's not looking like a good month at all.

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05 May 2018

Bitcoin in the News : 2018-04 Price

In last month's post, Bitcoin in the News : 2018-03 Price, I noted,
The month of March saw a resumption of that 'steady downward trend'.

The month of April looked more like a typical month in 2017, a 'steady upward trend'.


Bitcoin (BTC) Price Index

In posts up to and including last month, I've been trying to understand the price movements using Cointelegraph's 'Bitcoin Price Analysis (BPA)'. The URL hasn't changed, but the Cointelegraph page is now titled Cryptocurrency and Company Analysis (I'll call it CCA), with the further explanation:-

Latest analysis of cryptocurrencies, ICOs, companies and technologies by experts from Cointelegraph.

The April CCA had 23 stories, of which 14 were non-routine. I discovered that I could classify the 'non-routine' stories into a number of broad themes or dimensions. Here are the themes that I determined for April.

Geographic: Cryptocurrencies are a global phenomenon. Asia was the dominant area for stories in April, but this was probably just a coincidence.

Regulatory: Although this is related to the 'Geographic' angle, the issues cut across (e.g.) national boundaries.

Predictive: It's almost a cliché that 'Past Performance Is No Guarantee Of Future Results', but what else is there to use as a guide?

Specific: With the exception of bitcoin, I'm not particularly interested in following the trials and triumphs of particular coins. This is nevertheless an important dimension.

Technological: April saw only stories about the blockchain, but I imagine that mining also belongs here.

That makes a total of five dimensions for classifying cryptocurrency discussions. I'll see how this holds up in May. As for the 'routine' Cointelegraph stories, I'll pick one from from mid-month for a brief analysis, just like I did for the '2018-03 Price' post.

The title lists the same nine cryptocoins I saw in March and the article has the same sort of technical analysis. Looking at the discussion of specific coins, I saw heavy reliance on the '50-day simple moving average (SMA)' along with identification of resistance and support levels. Is that the focus of cryptocoin technical analysis?

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