比特币教学
Time is everything
A lot of people see a Bitcoin pullback, a drop or a red candle as a negative thing. Clearly this is lack of experience, lack of understanding and only ever seeing re-assurance of the one bias they can comprehend.
Many people believe my posts to be negative or anti Bitcoin - you could not be more wrong, as a very early holder, I simply don't care - up down or sideways. It's been kind to me and I will say it was more luck than judgement. Right place, right time.
But as a professional trader, money manager and tech investor - I have seen my fair share of market trends, hype, realism and shocks in the market to know. Time is all it takes.
You can go back over SPX for example and If you buy and hold the trend has only been up. Obvious its one of indices designed to go up. This does not make it a "get rich quick scheme"
For me the problem lies in the cult esq mentality and the desire to get rich quick.
When you have, or manage a larger fund - time is always less of an issue, when a Limited partner of a fund told me the company hold period was 15-20 years on average, it took a while to let that sink in. 1% of a lot of money is a lot of money, 1% of a $10,000 pushes you to want more - hence jumping on the up only bandwagon.
You need to remember;
Last year I posted two options for Bitcoin; I said my preferred route put us in early stage accumulation.
The second option went back even further than that, it's the Evil move I said I would hope Composite Man would not be as cruel.
Unfortunately with the move from 32k to 48k region, it's clear now the second play has in-fact been the one playing out.
---------------------------------------------------------------------------
So here's some rational logic - the medicine most DO NOT WANT to swallow.
People seem to throw the same argument - ETF & Halving - They have very little else to contribute. So let's look at what an ETF is and does.
An Exchange-Traded Fund (ETF) itself doesn't inherently stabilize an asset. However, the structure and mechanics of an ETF can have certain features that may contribute to perceived stability or liquidity in the underlying assets it represents. Here's how:
Diversification: ETFs often hold a diversified portfolio of assets. By pooling together various assets like stocks, bonds, or commodities, they spread risk. This diversification can help mitigate the impact of poor performance in a single asset on the overall value of the ETF.
Arbitrage Mechanism: ETFs have a unique creation and redemption mechanism. Authorized Participants (usually large financial institutions) can create or redeem ETF shares in large blocks, usually known as creation units. This process involves exchanging a basket of assets for ETF shares or vice versa. This helps to keep the market price of the ETF close to the Net Asset Value (NAV) of its underlying assets, promoting stability.
Liquidity: ETFs are traded on stock exchanges, providing investors with liquidity. The ability to buy or sell shares throughout the trading day at market prices contributes to the perception of stability. The underlying assets might not be as easily tradable, but the ETF itself can be bought or sold like a stock.
Market Makers: In the secondary market, market makers play a crucial role in providing liquidity. They continuously quote buy and sell prices for the ETF shares, helping to ensure that there is a smooth and efficient market. This can reduce the impact of large buy or sell orders on the market price.
Now for some extra therapy, we also need to look at the realistic timeframes these large players operate at.
Blackrock's most popular ETF is their SPX (S&P500) fund. with it's inception around 2001 I believe.
354BN.
Now if we look at Bitcoin's market cap - we dropped from $1.3 Trillion at the 69k High down to around 300Billion at the 15k low region.
So working out market cap is simple current price of Bitcoin x coins in circulation. (just over 19m).
This is just highlighting the obvious; Blackrock is not going to empty the SPX fund and stick 350Billion in a newly established fund. Again time, they have enough money to not need to force or risk anything on a large scale.
But what is interesting is the point above about market makers.
In Wall Street terms, a market maker is a financial institution or individual that facilitates the buying and selling of financial instruments in a market. Market makers play a crucial role in ensuring liquidity and maintaining orderly trading in financial markets, including stock exchanges.
Here are key aspects of what market makers do:
Liquidity Providers: Market makers stand ready to buy or sell a financial instrument (such as stocks, bonds, or options) at publicly quoted prices. This activity provides liquidity to the market, allowing investors to execute trades quickly and efficiently.
Bid and Ask Prices: Market makers quote bid and ask prices for a security. The bid price is the price at which they are willing to buy, and the ask price is the price at which they are willing to sell. The difference between these prices is known as the bid-ask spread.
Order Execution: When an investor places a market order to buy or sell a security, the market maker ensures that the trade is executed promptly by matching it with their own inventory or finding a counterparty in the market.
Risk Management: Market makers take on some level of risk by holding an inventory of securities. To manage this risk, they continuously adjust their bid and ask prices based on market conditions and changes in the supply and demand for the securities.
Arbitrage Opportunities: Market makers may engage in arbitrage, exploiting price differences between related financial instruments or markets. This helps ensure that the prices of the same or similar securities are consistent across different trading venues.
Maintaining Orderly Markets: Market makers contribute to the overall stability and efficiency of financial markets by preventing excessive volatility and ensuring a continuous flow of trading.
It's important to note that market makers profit from the bid-ask spread and trading volumes. While they facilitate trading and provide liquidity, they also manage their own risks. Market makers can be institutions like investment banks or specialized firms with expertise in particular markets. They play a crucial role in the smooth functioning of financial markets by facilitating the buying and selling of securities.
=============================================
Market makers have been referred to another type of Composite Man. The term "Composite Man" is associated with the Wyckoff Method, a technical analysis approach to understanding the stock market. The Wyckoff Method was developed by Richard D. Wyckoff, a stock market trader and educator from the early to mid-20th century. According to this method, the Composite Man represents a hypothetical market manipulator or a group of large market participants who have the power to influence the market.
In Wyckoff's view, the Composite Man is an entity that accumulates or distributes stocks in a way that leaves footprints on the price and volume charts. The actions of the Composite Man are believed to be observable through the analysis of price and volume patterns, helping traders and investors anticipate potential future price movements.
Here are the key ideas associated with the Composite Man in the Wyckoff Method:
Accumulation and Distribution: The Composite Man is thought to go through phases of accumulating or distributing a particular stock or market. During accumulation, the Composite Man is buying, and during distribution, they are selling.
Wyckoff Price Cycle: The Wyckoff Method outlines a price cycle that includes phases such as Accumulation, Markup, Distribution, and Markdown. Traders using this method attempt to identify these phases on price charts to make more informed decisions.
Smart Money: The Composite Man is sometimes referred to as the "smart money" because it is assumed to have more information and resources than individual retail traders. Monitoring the actions of the smart money is believed to provide insights into potential market trends.
When I posted posts like this from the 65k high, it was due to these footprints being visible from space.
As the price moved up from the 28k region to the current ATH. Similar thing.
I am not here trying to drag it or you down, I am here trying to help see logic in the charts. As the move moved up, we had a fake ETF release, in essence thus pricing in the actual ETF.
This is why for me, this scenario is the most likely in the current environment.
Composite Man/Market makers are happy to use the fear and greed index, which is currently tilting heavy towards the greed side. Against retail traders who see ONLY UP as the only scenario available.
The space is becoming more like a cult and it's feel more and more like the simple definition of a pyramid scheme. Again, I am not saying that's what it is - I am in at the bottom my cards are on the table.
The space has become "if your friends join, they also need to invite more people, and the cycle continues. The person at the top gets money from everyone below, and the people at the bottom hope to make money by bringing in more people."
The problem is, there's no real product or service being sold. The only way people make money is by getting others to join. Eventually, it becomes harder for everyone to find new people, and those at the bottom end up losing money because there aren't enough new members to support the structure. This kind of scheme is not fair or sustainable and can cause a lot of people to lose their money. Especially when the big boys get involved with very little regulation covering the people at the bottom.
Just remember everyone was saying "anti banks, anti institutional yet celebrating the ETF's like a win" the issue here is it's likely to stabilise the asset, slowing the phases and cycles down to a more mellow growth curve over the next 20 years.
In the grand scheme of things, it's great for the industry, but we can expect more manipulation prior to regulation, post regulation the percentage gains will narrow.
Keep all of this in mind and remember it's what the majority wanted. Stay safe! have fun and see you on the next post.
Hate comments always welcome - just please back them up with some logic and show you have more than 3 brain cells. 😉
Disclaimer
This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.
Many people believe my posts to be negative or anti Bitcoin - you could not be more wrong, as a very early holder, I simply don't care - up down or sideways. It's been kind to me and I will say it was more luck than judgement. Right place, right time.
But as a professional trader, money manager and tech investor - I have seen my fair share of market trends, hype, realism and shocks in the market to know. Time is all it takes.
You can go back over SPX for example and If you buy and hold the trend has only been up. Obvious its one of indices designed to go up. This does not make it a "get rich quick scheme"
For me the problem lies in the cult esq mentality and the desire to get rich quick.
When you have, or manage a larger fund - time is always less of an issue, when a Limited partner of a fund told me the company hold period was 15-20 years on average, it took a while to let that sink in. 1% of a lot of money is a lot of money, 1% of a $10,000 pushes you to want more - hence jumping on the up only bandwagon.
You need to remember;
Last year I posted two options for Bitcoin; I said my preferred route put us in early stage accumulation.
The second option went back even further than that, it's the Evil move I said I would hope Composite Man would not be as cruel.
Unfortunately with the move from 32k to 48k region, it's clear now the second play has in-fact been the one playing out.
---------------------------------------------------------------------------
So here's some rational logic - the medicine most DO NOT WANT to swallow.
People seem to throw the same argument - ETF & Halving - They have very little else to contribute. So let's look at what an ETF is and does.
An Exchange-Traded Fund (ETF) itself doesn't inherently stabilize an asset. However, the structure and mechanics of an ETF can have certain features that may contribute to perceived stability or liquidity in the underlying assets it represents. Here's how:
Diversification: ETFs often hold a diversified portfolio of assets. By pooling together various assets like stocks, bonds, or commodities, they spread risk. This diversification can help mitigate the impact of poor performance in a single asset on the overall value of the ETF.
Arbitrage Mechanism: ETFs have a unique creation and redemption mechanism. Authorized Participants (usually large financial institutions) can create or redeem ETF shares in large blocks, usually known as creation units. This process involves exchanging a basket of assets for ETF shares or vice versa. This helps to keep the market price of the ETF close to the Net Asset Value (NAV) of its underlying assets, promoting stability.
Liquidity: ETFs are traded on stock exchanges, providing investors with liquidity. The ability to buy or sell shares throughout the trading day at market prices contributes to the perception of stability. The underlying assets might not be as easily tradable, but the ETF itself can be bought or sold like a stock.
Market Makers: In the secondary market, market makers play a crucial role in providing liquidity. They continuously quote buy and sell prices for the ETF shares, helping to ensure that there is a smooth and efficient market. This can reduce the impact of large buy or sell orders on the market price.
Now for some extra therapy, we also need to look at the realistic timeframes these large players operate at.
Blackrock's most popular ETF is their SPX (S&P500) fund. with it's inception around 2001 I believe.
354BN.
Now if we look at Bitcoin's market cap - we dropped from $1.3 Trillion at the 69k High down to around 300Billion at the 15k low region.
So working out market cap is simple current price of Bitcoin x coins in circulation. (just over 19m).
This is just highlighting the obvious; Blackrock is not going to empty the SPX fund and stick 350Billion in a newly established fund. Again time, they have enough money to not need to force or risk anything on a large scale.
But what is interesting is the point above about market makers.
In Wall Street terms, a market maker is a financial institution or individual that facilitates the buying and selling of financial instruments in a market. Market makers play a crucial role in ensuring liquidity and maintaining orderly trading in financial markets, including stock exchanges.
Here are key aspects of what market makers do:
Liquidity Providers: Market makers stand ready to buy or sell a financial instrument (such as stocks, bonds, or options) at publicly quoted prices. This activity provides liquidity to the market, allowing investors to execute trades quickly and efficiently.
Bid and Ask Prices: Market makers quote bid and ask prices for a security. The bid price is the price at which they are willing to buy, and the ask price is the price at which they are willing to sell. The difference between these prices is known as the bid-ask spread.
Order Execution: When an investor places a market order to buy or sell a security, the market maker ensures that the trade is executed promptly by matching it with their own inventory or finding a counterparty in the market.
Risk Management: Market makers take on some level of risk by holding an inventory of securities. To manage this risk, they continuously adjust their bid and ask prices based on market conditions and changes in the supply and demand for the securities.
Arbitrage Opportunities: Market makers may engage in arbitrage, exploiting price differences between related financial instruments or markets. This helps ensure that the prices of the same or similar securities are consistent across different trading venues.
Maintaining Orderly Markets: Market makers contribute to the overall stability and efficiency of financial markets by preventing excessive volatility and ensuring a continuous flow of trading.
It's important to note that market makers profit from the bid-ask spread and trading volumes. While they facilitate trading and provide liquidity, they also manage their own risks. Market makers can be institutions like investment banks or specialized firms with expertise in particular markets. They play a crucial role in the smooth functioning of financial markets by facilitating the buying and selling of securities.
=============================================
Market makers have been referred to another type of Composite Man. The term "Composite Man" is associated with the Wyckoff Method, a technical analysis approach to understanding the stock market. The Wyckoff Method was developed by Richard D. Wyckoff, a stock market trader and educator from the early to mid-20th century. According to this method, the Composite Man represents a hypothetical market manipulator or a group of large market participants who have the power to influence the market.
In Wyckoff's view, the Composite Man is an entity that accumulates or distributes stocks in a way that leaves footprints on the price and volume charts. The actions of the Composite Man are believed to be observable through the analysis of price and volume patterns, helping traders and investors anticipate potential future price movements.
Here are the key ideas associated with the Composite Man in the Wyckoff Method:
Accumulation and Distribution: The Composite Man is thought to go through phases of accumulating or distributing a particular stock or market. During accumulation, the Composite Man is buying, and during distribution, they are selling.
Wyckoff Price Cycle: The Wyckoff Method outlines a price cycle that includes phases such as Accumulation, Markup, Distribution, and Markdown. Traders using this method attempt to identify these phases on price charts to make more informed decisions.
Smart Money: The Composite Man is sometimes referred to as the "smart money" because it is assumed to have more information and resources than individual retail traders. Monitoring the actions of the smart money is believed to provide insights into potential market trends.
When I posted posts like this from the 65k high, it was due to these footprints being visible from space.
As the price moved up from the 28k region to the current ATH. Similar thing.
I am not here trying to drag it or you down, I am here trying to help see logic in the charts. As the move moved up, we had a fake ETF release, in essence thus pricing in the actual ETF.
This is why for me, this scenario is the most likely in the current environment.
Composite Man/Market makers are happy to use the fear and greed index, which is currently tilting heavy towards the greed side. Against retail traders who see ONLY UP as the only scenario available.
The space is becoming more like a cult and it's feel more and more like the simple definition of a pyramid scheme. Again, I am not saying that's what it is - I am in at the bottom my cards are on the table.
The space has become "if your friends join, they also need to invite more people, and the cycle continues. The person at the top gets money from everyone below, and the people at the bottom hope to make money by bringing in more people."
The problem is, there's no real product or service being sold. The only way people make money is by getting others to join. Eventually, it becomes harder for everyone to find new people, and those at the bottom end up losing money because there aren't enough new members to support the structure. This kind of scheme is not fair or sustainable and can cause a lot of people to lose their money. Especially when the big boys get involved with very little regulation covering the people at the bottom.
Just remember everyone was saying "anti banks, anti institutional yet celebrating the ETF's like a win" the issue here is it's likely to stabilise the asset, slowing the phases and cycles down to a more mellow growth curve over the next 20 years.
In the grand scheme of things, it's great for the industry, but we can expect more manipulation prior to regulation, post regulation the percentage gains will narrow.
Keep all of this in mind and remember it's what the majority wanted. Stay safe! have fun and see you on the next post.
Hate comments always welcome - just please back them up with some logic and show you have more than 3 brain cells. 😉
Disclaimer
This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.
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