I believe that BCH will defeat BTC. Eventually. So my short-term goal is to maximize the number of BCH I own by trading for profits.
But some other traders are less patient. They believe BCH market dominance is imminent. And they rationalize market behaviors going against this wish with complex, indefensible conspiracy theories. They also sell these theories on Yours, catering to an audience that seems to want analgesia.
That's what prompted me to write last week that I made a 50% profit by trading against those advice. The market has validated the piece since then:
  • It correctly predicted the continuing BTC uptrend and the non-occurrence of a BCH price surge.
  • It also correctly analyzed and concluded that there will be no short-selling in the futures markets.
  • My profit has grown further, yielding me about 30 more BCH.
Meanwhile, advice coming from some other traders remain completely wrong, as in the market acted the exact opposite as their conspiracy theories predicted. This is hardly surprising, because these theories are nothing more than a mixture of woeful regrets, unhelpful facts, and yearning for being vindicated at some point in the future.
Following these conspiracy theories is bad.
First, these theories cannot be true. Their creators are attempting to reconcile rallies in certain coins (last week IOTA, this week LTC), random corporate announcements, tweets of individuals and BTC, BCH price movements in grand, unifying theories by assuming either massive coordination among interest groups or the existence of a shadowy group of close-knit "whales." While this might have been the case years ago, the BTC market is now too big for this level of coordination to take place. So it is not just that these theories have guided their creators to give wrong advice. Much worse, they are fundamentally wrong in the way of understanding the cause and effects of market events and market participants' motives.
An example is how one of these posts characterizes the recent Litecoin rally as a "pump." It also predicts that the rally as measured by LTC / USDT will soon be neutralized in a "dump," a move that fits in a grand unifying conspiracy theory, one that involves intricate coordination and motive analysis. This theory is wrong:
  1. It is wrong to assume that the Litecoin rally is solely the efforts of coordinating "whales." What the creator of this theory consistently fails to see is that the current market, when conceptualized as a synthetic, hypothetical person, is comparable to a typical crypto-currency investor one year ago. That is the result of an influx of newcomers with superficial understanding but extreme confidence. To them, the line that "Bitcoin is gold and Litecoin is silver" works magic. This line sounds cliche to you and me, but sounds true and smart to them. So they are rushing to buy Litecoin while "it is still cheap." It is the same the mood swing in the crypto-currency market a year ago replayed at a larger scale with a new class of market participants.
  2. It is wrong to assume that the rise in LTC / USDT will soon be neutralized in a "dump." Corrections will come. But not a dump so hard that it wipes out the rally. There is no "whale" powerful and skillful and crazy enough to try to coordinate a chained, cross-coin sequence of "pump-and-dump-and-pump" as a move in a greater plan. The market will simply settle on a new LTC / BTC ratio when the "Bitcoin is gold and Litecoin is silver" line is fully absorbed.
  3. It is wrong to consider technical factors other than marketing catchphrases in the current market. Conspiracy theorists frequently reference factors like coin holding concentration, lighting network, atomic swaps, etc. None of these matter at the moment. Newcomers don't understand, and won't care.
Second, the conclusion of these conspiracy theories, that the market will "flippen" with BCH overtaking BTC, is not that helpful. Nor is it helpful to keep claiming that ongoing events remain "consistent" with an outcome where BCH will eventually win. Everyone knows BCH will eventually win! We don't need conspiracy theories to so conclude. If these theories cannot guide traders through the immediate future, they are close to useless. (The reality is far worse. They have proven to be negative indicators.)
So resist the temptation to indulge in conspiracy theories for numbing effects. It is too costly to do so when the market is full of opportunities. Beyond the paywall, you will find my personal trading opinion for the next few weeks based on the basic framework discussed in my last piece. The specific issues covered are:
  • Proprietary analysis on why a Tether-related black swan event is unlikely.
  • BTC and BCH Price Trends.
  • BCH Trading Advice.


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great post. refreshingly realistic
   3yr ago
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