After predicting a significant bull run for Bitcoin and calling it a “life raft,” Raoul Pal discussed several issues within sectors of the traditional financial world.
Former hedge fund manager and CEO of Real Vision, Raoul Pal, believes that the real impact of the COVID-19 pandemic is about to reach the financial markets. By outlining several upcoming cornerstones among traditional financial assets, he highlighted Bitcoin as the “life raft” in this situation.
Raoul Pal: Everything Has Changed
In a recent Twitter thread, the Wall Street veteran outlined the rapidly growing COVID-19 cases worldwide. The total number of infected has neared 45 million, while the death toll is almost 1,2 million.
Pal predicted that these rising numbers in Europe, the US, and Canada are about to “exert economic pressures and extinguish the Hope phase of reflation dreams.” He believes that the upcoming consequences will harm the economy even more than the early 2020 developments. A real economic recovery “will take more than a post-election stimulus in January.”
He continued by looking at several markets that have started to feel the adverse consequences and have fallen to long-term support levels. Those included the oil price, Spain’s benchmark stock market index – the IBEX 35, the EU Banks Index, the euro, the British pound, the US dollar, and more.
As such, he broached a few possible solutions – “you can buy bonds and dollars, or you can take the life raft – Bitcoin.”
“Or, to dampen the volatility of a risk-off event (we can and will see sharp BTC corrections), you can have all three for a near-perfect portfolio for this phase.” – Pal concluded.
The sale and promotion of derivatives of bitcoin and other cryptocurrencies to amateur investors is being banned in the UK by the financial regulator, the Financial Conduct Authority (FCA).
It is a further blow to the burgeoning cryptocurrency market, coming soon after the US authorities indicted the owners of leading crypto derivatives exchange BitMEX for operating without being US-registered and allegedly failing to follow anti-money-laundering rules.
In view of recent findings from the University of Cambridge that most firms involved in crypto investments are still operating without a license, other operators are potentially vulnerable to indictments too.
It all sounds like bad news for anyone hoping that more investors will put money into cryptocurrencies. But on a closer inspection, I’m not so sure.
Drops and oceans?
The FCA is preventing retail investors from buying and selling the likes of cryptocurrency futures and options, which people often use as a way of hedging their bets on an underlying asset. For example, you might buy an option to sell a certain number of bitcoin at today’s price if the price falls by 10%, giving you an insurance policy in case the market moves against you.
The FCA said it was introducing the ban from January 6 because amateur investors were at risk of “sudden and unexpected losses”. The reasoning is that these people often don’t understand the market, there is lots of “market abuse and financial crime” in the sector, cryptocurrencies are very volatile and they are hard to value.
To stress, the ban is not being extended to professional traders or institutional firms like hedge funds, which have typically been allowed access to riskier financial products than the general population. It is about protecting people who might have been drawn to bitcoin thinking “it may be the currency of the future”, having “heard sensational news coverage about the rise and fall”. There are any number of splashy trading sites offering them quick and easy entry into this world, and YouTube influencers who enthusiastically encourage them to try complex trading.
Some 1.9 million people – around 4% of the adult population – own cryptocurrencies in the UK. Three-quarters have holdings worth less than GBP 1,000 (USD 1,305) and would certainly qualify as retail investors. We don’t know what proportion of UK investors use crypto derivatives, but we do know that the worldwide trade in these financial products was nearly a fifth of the total crypto market in 2019 (and has been growing rapidly in 2020).
Yet retail investors are probably not the main users of derivatives. Trading site eToro said earlier this year that maybe only a tenth of their retail investor spend was on this segment. And with most of the UK contingent using non-UK based exchanges, it’s easy enough to avoid FCA jurisdiction. The FCA says the ban could reduce annual losses and fees to investors by between GBP 19m and GBP 101m.
The ban also doesn’t make much difference at a worldwide level. The UK crypto market is small beer compared to global cryptocurrency holdings, which are worth around USD 400bn. You would not, therefore, have expected the FCA ban to have a material detrimental impact on the price of bitcoin or leading alternative coins like ethereum, and sure enough, it didn’t. In fact, it was widely expected by industry observers and had arguably already been priced in.
The largest cryptocurrency by market cap continued its upward spiral
Bitcoin’s price today hit highs of $13,329, according to metrics site CoinMarketCap. That’s Bitcoin’s highest price since last summer.
Here’s the play-by-play: At 3:30 am UTC, Bitcoin’s price rose from $13,133 to hights of $13,329. The high lasted just two hours: at 5:44 am, Bitcoin’s price sunk like a stone to $12,996. Its current price is $12,961.
The last time Bitcoin’s price was this high was on June 26, 2019. Then, it peaked, ever so briefly, at $13,793, according to CoinMarketCap data.
Bitcoin maximalists’ victory today follows a particularly strong month for the largest cryptocurrency by market cap.
On October 6, Bitcoin’s price was around $10,600. But the price increased sharply this month to its peak today of $13,329. That’s an increase of about 25%.
Bitcoin’s price has thus more than tripled since that fateful day in the middle of March, when it momentarily crashed to just below $4,000 amid the market uncertainty caused by the coronavirus pandemic.
In 1987’s Black Monday stock market crash, Sam Walton, the world’s richest man, lost more than half a billion dollars in a few hours.
When reached for comment, Walton said, “It’s paper anyway. As far as I’m concerned we’re focusing totally on the company doing well and taking care of our customers.”
He didn’t care about dollars; he cared about his asset Wal-Mart, and he still owned that.
History of the #HODL
In bitcoin’s volatile and roller coaster past, “HODL” was the meme that bound the cryptocurrency community together. It stood for the proposition that we all believe in the future of bitcoin. It’s both funny and insightful.
Here is the original post by GameKyuubi on a Bitcoin Talk forum (spelling errors and profanity included):
I AM HODLING
I type d that tyitle twice because I knew it was wrong the first time. Still wrong. w/e. GF’s out at a lesbian bar, BTC crashing WHY AM I HOLDING? I’LL TELL YOU WHY. It’s because I’m a bad trader and I KNOW I’M A BAD TRADER. Yeah you good traders can spot the highs and the lows pit pat piffy wing wong wang just like that and make a millino bucks sure no problem bro. Likewise the weak hands are like OH NO IT’S GOING DOWN I’M GONNA SELL he he he and then they’re like OH GOD MY ASSHOLE when the SMART traders who KNOW WHAT THE FUCK THEY’RE DOING buy back in but you know what? I’m not part of that group. When the traders buy back in I’m already part of the market capital so GUESS WHO YOU’RE CHEATING day traders NOT ME~! Those taunt threads saying “OHH YOU SHOULD HAVE SOLD” YEAH NO SHIT. NO SHIT I SHOULD HAVE SOLD. I SHOULD HAVE SOLD MOMENTS BEFORE EVERY SELL AND BOUGHT MOMENTS BEFORE EVERY BUY BUT YOU KNOW WHAT NOT EVERYBODY IS AS COOL AS YOU. You only sell in a bear market if you are a good day trader or an illusioned noob. The people inbetween hold. In a zero-sum game such as this, traders can only take your money if you sell.
so i’ve had some whiskey
actually on the bottle it’s spelled whisky
(But only if it’s payable in BTC)
It was not about bitcoin versus bitcoin cash or 1,000 other cryptocurrencies. It was bitcoin vs. the world and we ALL embraced it.
It only took 11 minutes for this post to become a meme that became the rallying cry for the entire crypto world. We were all on the same rollercoaster ride and GameKyuubi, in the depths of his frustration, had (sort of) elegantly articulated both what it feels like and the best trading strategy for an asset this volatile.
So the doomsayers were right all along. Crypto was nothing but a bubble and it finally burst.
Maybe you’re surprised to hear that coming from me, someone who’s dedicated more than a few words to the power of crypto to change the world. Did I suddenly have a change of heart? Did I jump on the Paul Krugman bandwagon and finally realize that Bitcoin is evil? Did I join the naysayers who laugh with glee every time the price drops and arrogantly shout that Bitcoin is going to zero?
I say good because the circus has finally left town. The cameras have packed up and gone home. The reporters are losing interest. The story is finished.
And now the crypto community can get back to doing the hard work of building the future in peace and quiet.
I’ve always said the bubble would burst and in the long run it wouldn’t matter in the least. In retrospect I think Bitcoin getting to $20,000 so fast was the worst thing to ever happen to the community. For years, Bitcoin was nothing but Internet geek money and something to laugh at, but when Bitcoin’s price rocketed higher and higher, it suddenly became something else entirely:
Bitcoin’s furious rise scared the hell out of banks and governments everywhere. Banks saw their business models crumbling as programmable money took the world by storm and governments feared they might lose their iron-fisted control of the money supply. Authoritarian regimes raced to crush it. Regulators came out in force. The press unleashed a torrent of articles filled with fear, uncertainty and doubt.
But now as Bitcoin’s price recedes the frenzy of ignorance and fear will die with it and the community can get back to work.
Click on Create my first setup. For Setup Name I use the name of the exchange, also select the exchange in the Exchange dropdown. The pair of coins to trade is nearly always Bitcoin and another coin, both specified by their common abbreviation. I’m starting with Bitcoin trading against Ether, so I enter BTC-ETH. The strategy I choose is bb (‘Bollinger Band‘) because it’s the one I’m most experienced with – though I plan to try out others very soon.
Click Add pair. The new pair will appear as a tab in the lower window, with settings on the left and a Trading View window on the right. Repeat the process if you want to add more trading pairs.
Click Create. You’ll get a message “Setup created! Go to the dashboard to preview and run your setup.” Click on Go to dashboard.
Preview and Run
You are now in the preview screen – here you can check all the settings for the setup by clicking on the triangle marker next to each set. I’ll accept the defaults, however you may want to review how much Gunbot will spend on each trade – for this go to the particular strategy you selected under strategies and review TRADING_LIMIT (this is the amount in Bitcoin). The default is 0.002 (currently about £13).
Click Run Gunbot. A gunthy.exe command window will open (allow it if asked by Windows Firewall). The trading pair tab will now contain a and a trading view window and a window showing real-time output from gunthy.exe (the actual Gunbot bot).
That’s it – Gunbot is up and running and ready to trade when the conditions are right. We’ll go over the details of the trading in future posts.
I have previously described Gunbot and how it works, including how to prepare for using it. Here I cover installation and initial setup.
Download and unzip the most recent version of Gunbot from GitHub (obviously you will need to have paid for a license for it to work). I run the Windows version and have mine in a C:/Gunbot/Latest folder (and move older versions into other folders as they get replaced).
Double-click on gunthy-gui.exe to run the Gunbot user interface. If you get a message about needing to get something from the Windows store, cancel it. If you get a message from Windows Defender Firewall, Allow access.
You should have a Windows command window running that says “Gunthy GUI <version> running on http://localhost:5000″.
In a new brower tab (I recommend Chrome as the browser) type in the address “localhost:5000” and enter.
Gunbot User Interface
You should now see the Gunbot interface up and running – the first time it will take you to the Login screen.
If you don’t get that then you may need to open access to port 5000 through the Firewall – for more details see the official installation video.
Choose and enter a password, record it somewhere safe, then click on Create password. You are now in the main Gunbot dashboard.
Assuming you are a new user, and so don’t have an existing config file, select Start without import.
On the next screen, Settings/API Keys, enter the API Key and Secret for the exchange you want to use (I use Poloniex). I have previously covered the method to get an API key for the Bitfinex exchange, but it’s a very similar process on most exchanges.
With Master Key enabled, click Add. You should get the message “API Key sucessfully added!” and it should be shown in the table at the bottom of the screen.
Gunbot is an automated bot (robotic software) for trading cryptocurrencies, primarily trading Bitcoin with other crypto coins (‘altcoins’). It was coded by Gunthar De Niro (‘Gunthy‘) with support from the Bitcointalk community.
The theory for trading with Gunbot is relatively straightforward:
You deposit some Bitcoin on a trading exchange.
You request remote access to your account via an API Key and give the Key details to the bot.
You setup the bot, using particular settings to specify how you want it to trade (e.g. what level of risk/reward, etc.).
You start the bot. It runs 24/7 and when the trading conditions are right it buys and sells coins on your behalf using the Bitcoin in your account.
The intention is that it will buy an altcoin at a low price, determined by its trading history, and hold on to it until its price goes above a certain threshold (allowing for trading fees) when it will sell it.
In most cases this works well and makes a profit, and the bot is then ready to make the next trade.
In a small proportion of cases the altcoin price goes down steadily and cannot be sold (this is known as ‘holding a bag’). At that point you need to step in and, in some cases, sell the altcoin at a loss.
With good settings, and regular monitoring, in my experience trading with Gunbot will make more money than it loses and can produce a significant income over time.
Preparing to Use Gunbot
Before you use Gunbot for the first time it is worthwhile to learn about how it operates and what its features and limitations are.
Spend some time in the Gunbot Wiki to get familiar with the bot, how it runs, what strategies it uses, etc.
Read at least the last dozen or so pages of the Gunbot thread on BitcoinTalk to learn about recent changes, and any issues or bugs found. Join BitcoinTalk if you aren’t already a member.
When most people think about earning money in crypto, they think of two common activities: investing and mining. Both can be costly and time consuming endeavours. But growing your cryptocurrency stash doesn’t have to be either of these things.
There are several less explored pathways to crypto-gains. In this article we’ll cover:
1. How your coins can work for you with Proof of Stake
2. How applications in this ecosystem can help you earn money
Let’s get started.
Getting started with Proof-of-Stake
Proof of stake is an alternative to cryptocurrency mining that doesn’t require hardware or crazy amounts of electricity. Instead investors who hold coins are gradually rewarded with more coins.
Think of it like interest in a bank account, but with cryptocurrency. All you need to get started is a proof-of-stake cryptocurrency and a computer
Major coins like NEO, LISK, and Stellar Lumens are built on proof of stake models. And other major coins like Ethereum have announced their intention to adopt it.
How can I use PoS to start making money?
You can use PoS today with nothing more than your laptop and a stable internet connection. Although, you’re going to have to let it run 24/7 so you might want to use an old laptop.
Once my mining PC (‘The Beast’) had arrived it unfortunately sat around for a while as I was busy on other things (particularly getting my tax return done). Once more time became available the first thing I did was to check out The Beast’s performance.
Having paid out for a high end system I was hoping for great things. I ran two particular suites of tests: 3D Mark and PassMark.
The 3D Mark software is used for evaluating specific 3D graphics card performance – the most crucial element in cryptocurrency mining.
3D Mark works primarily by running the latest version of the Time Spy benchmark at high resolution and with a range of graphical features enabled to determine how well the graphic card(s) can keep up. The benchmark is impressive to watch run with highly complex and challenging scenes running through at an impressive speed.
I’m pleased to say the Beast showed itself off well, with an overall 3D Mark score of 11,589.
Comparing this to all the PCs logged against 3D Mark shows The Beast’s score to be better than 97% of all results.
The PerformanceTest9 benchmark by PassMark, in contrast, is for bench-marking general PC performance, including CPU, disk and memory speed – although it does also include some graphical tests.
Again The Beast acquitted itself well with 5/5 scores for CPU, 3D Graphics, Memory and Disk (though only 4.5/5 for 2D Graphics).
It achieved an overall score of 6736:
And individual results putting it in the 99th Percentile, against other PCs testing with the same benchmark, for CPU, 3D Graphics, Memory and Disk (though only 90th Percentile for 2D Graphics):
Overall I was very pleased with the core performance of The Beast, particularly its raw 3D performance which is the key to cryptocurrency mining.