<DevTalks: /> August 2019 - LocalCoinSwap

A brief history of the 2013 market peak; why some alts really do die; and what would've happened if you'd given in to FOMO

This piece is a follow-up to my earlier piece, which looked at what would’ve happened if you’d purchased alt-coins shortly after the bottom of the 2013-2015 bear market. A lot of the constructive criticism that I received was that I was too bullish on alt-coins, and that the timing was too convenient. Although it’s fair to say that I am bullish on crypto in general and alt-coins in particular (with several major caveats for both), I agree that it’s important to not just focus on historical analyses where it’s fairly clear that you could have earned money. So, today’s research question is whether you’d still be underwater if you’d bought in to the market at or near the 2013 all-time high. All information cited herein comes from the historical charts available at CoinMarketCap.
TL;DR: This worst-case scenario analysis shows that $300 invested equally across 15 of the 40 coins in existence near the market’s peak in 2013 would be worth only $429.95 today—gains which are entirely attributable to Bitcoin, Litecoin, and Ripple. This is basic, but it can be dangerous to buy high. This is especially true of alt-coins, but even the top three coins in our sample saw fairly lackluster results when bought at the top of the market. Finally, nothing in this post should be taken as investment advice. This is only intended as historical analysis. Past performance does not guarantee future returns.
A Brief History of the 2013 Market Peak
According to CoinMarketCap, the 2013 bull market peaked on December 4, 2013, at ~$15.87 billion in market capitalization.* Thereafter, the market crashed dramatically not once, but twice. In the first crash, which occurred between December 5-8, 2013, overall market cap fell by ~39% to ~$9.66 billion. Then, after a brief recovery to ~$13.57 billion on December 10th, the market fell precipitously, to ~$5.7 billion on December 18, 2013. Thus, over the course of only two weeks, from December 4-18, 2013, the market lost ~64% of its value. Although this was by no means the end of the 2013-2015 bear market--which lasted for approximately 17 months and saw an additional decline of ~45% from the December 18, 2013 low--this was the end of the beginning.
What If I Bought Crypto Right as the 2013 Market Peaked?
Generally, the first rule of trading is** that you want to buy low and sell high. As a result of their fear of missing out (“FOMO”), however, many people find themselves accidentally buying high. Today, I’m going to look at what would have happened to someone who bought their crypto right as the market was peaking. Ideally, I would run this experiment from December 4, 2013, but due to the limited data available from CoinMarketCap, I’m forced to choose between November 24th, December 1st, December 8th, and December 15th. Of those dates, I have selected December 1, 2013, because it represents the worst possible scenario for which I have data. On that date, total crypto market cap, which had hit a new high of ~$15.4 billion the day before, swung wildly between a high of ~$14.83 billion and a low of ~$12.18 billion. Unfortunately, it’s unclear exactly when CoinMarketCap’s snapshot was taken. That said, it’s clear that our hypothetical FOMO trader is about to lose his shirt over the next few weeks, so let’s dive into the specifics.
On December 1, 2013, there were 40 coins listed on CoinMarketCap. I won’t list them all here, but of those 40, all but 11 are still listed as active on CoinMarketCap. The truly dead (or “inactive”) coins are BBQCoin (BQC; rank 16), Devcoin (DVC; rank 19), Tickets (TIX; rank 22), Copperlark (CLR; rank 24), StableCoin (SBC; rank 25), Luckycoin (LKY—ironic, I realize; rank 31), Franko (FRK; rank 34), Bytecoin (BTE; rank 35), Junkcoin (JKE—how apt; rank 36), CraftCoin (CRC; rank 39), and Colossuscoin (COL; rank 40).***
Now, since this post is already incredibly long, instead of testing all 40 coins, let’s take a decently-sized sample of five coins each from the top, middle, and bottom of the stack, and look at what happens. For the middle, although the temptation is to take decent alts, let’s fight that and take the group with the highest failure rate: ranks 21-25. So, here’s out pool:
Now, here are how our sample of coins has performed as of when I write this:****
So, if our hypothetical FOMO trader had invested $100 in our top-five sample near the 2013 peak, it would currently be worth $411.80 (the profitable coins) + $3.06 (PPC) + $4.27 (NMC) = $419.13—a 4.19x increase.
Now for the two coins in the middle five that didn’t completely die:
So, if our hypothetical FOMO trader had invested $100 in our middle-five sample near the 2013 peak, it would currently be worth ~$15.19—an ~84.8% loss.
Finally, here are the two coins from the bottom five that didn’t completely die:
So, excluding everything buy Argentum, if our hypothetical FOMO trader had invested $100 in our bottom-five sample near the 2013 peak, it would currently be worth ~$2.96—a ~97% loss. Putting it all together, $300 invested in this sample of 15 coins as close to the peak of the 2013 market as the data will let me get, would be worth $429.95—a disappointing, but not-unexpected ~30.2% increase over five years. That said, I’m honestly somewhat amazed our FOMO trader made anything at all on this basket of coins, considering how many of them failed. In any case, all of his gains came from the top-three coins from 2013: Bitcoin, Litecoin, and Ripple.
What’s the lesson here, what’s the takeaway?***** Most importantly, I think the above analysis shows that it can be very dangerous to buy alt-coins when the market is at or near an all-time high—a conclusion that appears to be true regardless of where the alt is positioned in the market. That said, there are a few caveats: (1) this sample was intentionally bad, in order to reflect a worst-case scenario; (2) even buying the top-three coins at the all-time high didn’t net our FOMO trader particularly large gains when compared to someone who bought these same coins after the crash. Therefore, I think that the most important lesson here is not to buy high in the first place. Investing solely because of FOMO will probably cause you to lose money, unless you have invested equally in a broad range of cryptocurrencies, like the trader in our hypothetical. Even then, however, our FOMO trader probably would have done better investing in an S&P Index fund over the same period.
*This is a correction to my earlier piece, in which I stated that the cryptocurrency market peaked on November 30, 2013, at a total market capitalization of ~$15.2 billion. I made this error due to having failed to narrow the date range of the chart so I could properly zoon in. That said, the exact details of the market peak don’t affect the conclusions from my last piece, which considered trades made after the market had bottomed out.
** …you do not talk about trading. Wait, that’s the wrong rulebook.
*** Since I already typed it out, here’s the list of remaining active coins, in descending order: Bitcoin (BTC), Litecoin (LTC), Ripple (XRP), Peercoin (PPC), Namecoin (NMC), Megacoin (MEC), Feathercoin (FTC), WorldCoin (WDC), Primecoin (XPM), Freicoin (FRC), Novacoin (NVC), Zetacoin (ZET), Infinitecoin (IFC), Terracoin (TRC), Crypto Bullion (CBX), Anoncoin (ANC), Digitalcoin (DGC), GoldCoin (GLD), Yacoin (YAC), Ixcoin (IXC), Fastcoin (FST), BitBar (BTB), Mincoin (MNC), Tagcoin (TAG), FlorinCoin (FLO), I0Coin (I0C), Phoenixcoin (PXC), Argentum (ARG), Elacoin (ELC)
**** I know that we could have sold them sooner, and probably for more money, but let’s just assume that our hypothetical FOMO trader was a founding member of the #hodlgang. ;-)
***** Don’t mess with Maui when he’s on a breakaway! You’re welcome. ;-)
Disclosures: I have previous held Litecoin, and currently hold approximately $140 of Ripple. I do not believe this influenced my analysis in any way. I have never bought or held any of the other coins discussed in this analysis.
Edits: Formatting, typos, minor clarifications.
submitted by ThaneduFife to CryptoCurrency [link] [comments]

Top Stories, Price Movements, Quotes and FUD of the Week

Top Stories, Price Movements, Quotes and FUD of the Week
Fractional Reserve Stablecoin Tether Only 74% Backed by Fiat Currency, Say Lawyers

According to documents released by USD stablecoin tether’s (USDT) lawyers, the company behind the stablecoin only has enough fiat reserves to back a little less than three-quarters of its existing supply — 74%. Tether executives had previously publicly promised that each tether was backed one-to-one to the USD, a claim that has been disproven by the lawyers’ document release. The need to release the figures comes from the recent claims by the U.S. attorney general in New York that cryptocurrency exchange Bitfinex, which shares its CEO with Tether, used reserves to plug holes left from a problematic outsourcing agreement earlier in 2018. The document notes that the funds are invested, and the arrangement mimics a fractional reserve system.

WSJ: Facebook Seeks Reported $1 Billion for FB Coin Amid Talks With Visa, MasterCard

According to a report from the Wall Street Journal this week, social media giant Facebook is seeking investments worth $1 billion for its rumored cryptocurrency stablecoin. Citing unnamed sources, the WSJ writes that Facebook is currently talking with payment networks Visa and MasterCard about potential support for the plan. The project, known as FB Coin, has already been rumored for about a year, with various options for its form, including an option for payments on a combination of WhatsApp, Facebook Messenger and Instagram. As Cointelegraph has previously reported, interest in a fiat-centric FB Coin has already reportedly come from within cryptocurrency circles, specifically in the form of VC investment mogul Tim Draper. The WSJ notes that a large fiat backing is necessary in order to avoid volatility.

Vitalik Buterin Tweets ETH Development Proposals After Elon Musk’s “Ethereum” Tweet Bait

Elon Musk, tech entrepreneur and Tesla CEO, and Ethereum’s co-founder Vitalik Buterin engaged in a relatively one-sided Twitter discussion this week after Musk tweeted one word: “Ethereum.” In response, Buterin extended an invitation for Musk to attend Ethereum’s DevCoin in October, with Musk parrying back with a question concerning future Ethereum network development. Buterin then laid out a five-point list of his top picks for the network’s development: the creation of a “globally accessible financial system, including payments, store of value [...] insurance,” as well as a disintermediated ETH-powered digital identity infrastructure. He also proposed the creation of registries and certificates that would be digitally signed, certified and even revoked on-chain.

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submitted by Bitcoin_Exchange7 to u/Bitcoin_Exchange7 [link] [comments]

Dogetipbot Gild Analysis: Jan 14, 2015

For the past couple of days, at least half of the gilds given were outside of the main Doge subreddits, which is great! Supporting the community through internal assistance and external “marketing” is what keeps us going. I’ve seen people talk about the downtrend in traffic to the /dogecoin, and my only response has been to look at the traffic to every cryptocurrency subreddit for comparison.
In fact, I looked at many, and here’s what I saw for unique visits:
Coin Chart 6 Months Ago Prior Month Increase (Decrease)
/Anoncoin no link
/Bitcoin link 767,207 690,898 -9.9%
/BitShares no link
/Blackcoin link 20,994 15,096 -28.1%
/counterparty_xcp no link
/CryptogenicBullion no link
/Devcoin no link
/digitalcoin link 413 230 - 44.3%
/Dogecoin link 261,311 142,398 -45.5%
/DRKCoin no link
/Einsteinium no link
/Feathercoin no link
/Flappycoin link 1,516 331 -78.2%
/FuelCoin no link
/Gridcoin no link
/Litecoin link 59,538 30,915 -48.1%
/Maidsafe link 1,396 1,277 -8.5%
/Maxcoin no link
/Mazacoin no link
/Megacoin no link
/Mintcoin no link
/Mooncoin no link
/Myriadcoin link 9,718 9,001 -7.4%
/Namecoin link 1,497 1,656 10.6%
/NobleCoin no link
/Nubits no link
/NXT no link
/Nyancoins no link
/PandacoinPND no link
/Paycoin no link
/Peercoin link 5,430 3,438 -36.7%
/Primecoin no link
/Quarkcoin link 4,599 1,957 -57.4%
/ReddCoin no link
/Ripplers no link
/Stealthcoin link 43 115 167.4%
/Stellar no link
/Tacocoin link 1,203 187 -84.5%
/Terracoin no link
/TopCoin no link
/Vertcoin link 40,404 19,009 -53.0%
/YBCoin no link
As you can see, just about every single subreddit that had stats and started with over 1,000 people 6 months ago lost a substantial portion of traffic. Also note: Dogecoin has the second largest active community, too! In just about every way, we’re here to stay, so don’t delay, and rock the day.
Also! Two members of our community made somebody else’s day a little brighter through a good ol’ fashioned gilding. Great job shibes! Here are the links to the comments given gold yesterday:
penguin-surgeon ->qzzn
mumzie -> lepaperbag
If you run across a comment that gives gold, let me know! Or if you give gold to somebody in a dogetipbot banned sub, send me the link so I can add it! When dogetipbot is banned from replying in non-doge subreddits, my counts are shaky.
Here’s the past week of activity broken out by the type of subreddit in which the gold was given:
Date (UTC) Total Gildings Doge subreddits Non-Doge subreddits
Jan 8 6 3 3
Jan 9 11 5 6
Jan 10 6 6 0
Jan 11 2 1 1
Jan 12 1 0 1
Jan 13 3-4 1 2-3
Jan 14 2-3 1 1-2
Also, the top givers of gold through dogetipbot (for all time up through yesterday) are:
Top Giving Shibes Number
mumzie 11
mohland 8
dvorwak 6
dogecoindripper 6
_lobster_ 6
brknthmb 5
Halio1984 5
pseudopseudonym 5
crundy 5
hammingen 4
Top Giving Shibes (Non-Doge subreddits) Number
crundy 5
mumzie 4
brknthmb 3
pseudopseudonym 3
_lobster_ 3
powerfunk 3
mohland 2
dogecoindripper 2
break_free 2
ThePumpThatWasAPoo 2
reifier 2
artfully_doges 2
For a graphical representation and more data, please check out the Google Docs spreadsheet.
submitted by break_free to dogecoin [link] [comments]

If you want to promote your altcoin or some altcoin freebies give Coinzen a try

If you are looking to promote your favorite altcoin or just get some altcoin freebies, you can do both at the Coinzen forum. There are currently several active altcoin giveaways going on so you can participate immediately.
If you represent a popular coin that needs a forum home, we should be able to work with you in our Cryptocurrenies section. It is now the official new home for Devcoin. The old home was an individual (and convoluted) thread on Bitcoin Talk.
Thanks for looking :)
submitted by Bittzy78 to altcoin [link] [comments]

Three new cryptocurrency technologies [show ideas]

There is lots of information out there on bitcoin now, but I don't hear too much about other cryptocurrencies. I'd specifically like to hear more about three other cryptocurrency technologies.
Chris Odom and the developers of Open Transactions claim to have built a system which offers truly anonymous digital cash transactions. This is something the bitcoin cannot do at the moment. In a recent Reddit link there was talk of using Open Transactions with BitMessage to start implementing a P2P currency exchange.
I have heard a lot of interesting use cases for Namecoin, which is essentially a "peer-to-peer generic name/value datastore system", from user authentication systems, issuing stocks, to a USD backed currency. A good interview on about the system might be Hiro White, if you can get in contact with him on IRC. I'd love to know what new systems are available to use which are based on namecoin or even a intro on how namecoins can be used to create your own .bit domain name.
Ripple is the system I know the least about. I have tried to trade for bitcoins with the system, but I feel like I'm using the system wrong, or it is not completed yet. I also wonder about whether ripple is a decentralized or uses a block chain. Is there a spokes person for the project that could explain the system?
I also enjoy hearing about any of the other alt blockchains as well including litecoin, ppcoin, devcoin, teracoin, etc..
Thanks! I look forward to more big shows!
submitted by dmp1ce to planbshow [link] [comments]

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Bitcoin Town: Shepherds

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