sábado, 19 de octubre de 2013

Bitcoin revisited.

Six months have elapsed since the Bitcoin/Cyprus fever hit the wires and stoked interest in the currency called Bitcoin. Since then it has had a random walk all over from 266 to 70 and at 160-190 as of this writing it atands at the mean of extremes having moved somewhat dramatically since congress ended the kabuki theater of resisting Bernanke's Dollar Printer divisions from hell. Here's the graph in compressed form:

And it's link below to see in all it's 

If you erase the outlier mania from the month of april we are now again entering record territory. -"But why should we ignore that peak?" would be a legitimate question. -Just because... it was an event that has not yet found a good explanation although i have the conviction that it was price manipulation by a syndicate of deep bitcoin pockets. The price behaviour starting in october seems more organic and justified in the fact that we have at least 3 times more "wallets"; the other 'tell' would be the lack of hostility from national governments in Europe towards transactions in btc and its slow but natural growth in Germany. And finally, that the debt debate in congress has a naturally more difficult solution every time it comes to the floor of congress and that the outcome this time guarantees more turmoil in February... Add to all of the above the fact that the Chinese have kept a good pace of capitalization in btc and the recipe is complete for a nice run into early 2014 into the $500 range.  
For the time being, i'm thinking that the DEFCON chart that i drew in my last post might have to be modified in light of the USGOV's active hostility towards all matter BTC... they might be working on a compressed schedule where DEFCON 1 for them hovers around the 350,000 btc daily volume in transactions... i will work out the basic math that might justify their panic.

martes, 23 de abril de 2013



Having read at least 3,000 short stories and 500 SF (Science Fiction) novels, allow me to state with some authority that Bitcoin was not predicted in the corpus of XXth century literature. This is surprising since Computers, the internet, nuclear weapons, lasers, calculators, something very similar to Google, superconductors, drones Radar and a host of other things that populate our civilization today were posited by writers of the genre starting in the XIXth.

This gives me the conviction that BTC has the potential to become the proverbial black swan on a global scale; an algorithm that generates a rift in the matrix of vast proportions... As an aside, the people who generated the algorithm and set the BTC in motion already have my respect as the most interesting masterminds of subversion. The audacity of the concept has kept me in a state of shocked awe at the potential we primates have for initiating snowballs of unpredictable consequences.

Perhaps some kink will be found in this "currency"; perhaps the UN will jump in and with a unanimous vote declare BTC to be the tool of "terris A-narko insur Gents" and declare it the minion of the devil and culprit in gerbil warming, and that's that... That possibility will loom bigger and bigger as the capitalization of the coin increases and perhaps becomes a nuisance to central banks.

If you click the image above, or right here, a new tab will open with actualized market cap.

If i was a central banker i would be taking measures -extreme measures- now that the currency is in the bud. Philosophically speaking BTC and their ilk are the first credible existential threat to the monopoly of fiat creation that governments have traditionally held.

At the same time i presume -but by no means have certainty- that the monetary mass of BTC at $1.5 billion USD (as i write this) flies under the radar of worry of a BBernank, a Schauble or a Dijseelbloehm. Therefore i will posit for followup posts that the BTC experiment is a DEFCON_5 for world finance at the moment. An almost worrisome tidbit, a gnat to keep watch over.


For DEFCON_4 to be declared one of two conditions have to be met:

1. Monetary mass of $10 billion approx 1BTC=$900usd is reached.
2. Terris attack or black ops or druglord caught in the act of transferring funds through digital wallets

2. Being, of course a false flag psyop to give legitimacy for a full frontal Treasury DHS attack on bitcoins and therefore giving a sideways glance at the level of attention said currency is gathering by tptb.


For DEFCON_3 to be declared One of two conditions have to be met:

1. Monetary mass of $100 billion.
2. The common term to refer to the coin will be either "Satoshis" (cents of a bitcoin) or "mBTC" (Millibitcoins, thousandths of a bitcoin).

At this point, there will be a daily transaction volume of around 15 billion USD. That is no chump change... at the same time still no big deal in a forex market that transacts tens of trillions in a day


For DEFCON_2 to be declared, one of two conditions have to be met:

1. Monetary mass of $1 trillion.
2. G7 or G20 or UN making a statement outlawing BTC.


For DEFCON_1 to be declared, one of two conditions have to be met:

1. Monetary mass of $10 trillion.
2. National laws declaring possession of BTC a felony punishable with prison sentences.

As usual, we primates tend to be ignorant of the truly awesome power of the exponential function. We also are drawn to herd behaviour. Stampedes (whichever direction they happen to take) are a proven survival trait; financial bubbles in our XXIst century -which are sophisticated computerized hyperlinked and algo bot designed buy/sell storms- are a natural result and consequence of pure markets functioning unfettered by regulation. Self interest will keep inflating bubbles in markets. To expect otherwise is not supported by evidence...

As an example of an AlgoBot generated stampede i give you April's 23 2013 market action provoked by a tweet from the hacked AP Twitter account Where you see a minicrash after the fake White House Bombing Tweet.

So, to get back to our original bitcoin theme: All these defcon signposts seem very much the realm of Science Fiction right now, But then again... Who would have thought ten years ago that Bernanke could print 85billion USD a month with impunity...


Caveat emptor: Anybody that assumes (even in geosynchronous orbit) the text above is some sort of financial advice deserves a Darwin Award.