Psychology of the 1000x

  1. What do you classify as an ‘ordinary’ rich list?

  2. Rich Lists are one of, if not -the- most useful metric by which to judge potential long entries on bottomed out alts. Simply put, if there are large wallets, there are large holders of the coin, and potential for a dump at some point, and yes, BTC is not exempt from this, but at a far larger cap, the dumps are not as drastic as they are in a coin with a much lower cap, the swings will be much more severe.

  3. I never said it did?

Why not? If we’re heading to a multi trillion dollar market cap for crypto then I don’t see why there won’t be many projects worth in the tens of billions.

Why not? Because it would take appox. 35b injected into the project to achieve, within the span on 1-2yrs. Yea, it could happen, but like I said, unlikely. ICON at its peak achieved around about 4-5b cap? It is possible for Harmony to reach 8 times that, but my personal feeling is that the majority of these Binance IEOs are over-priced. You are not going to acheive a 1000x on anything over a 5m cap, in anything but the most extreme edge cases within the next 1-2yrs summation of this cycle.

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I like the project, but didn’t like the richlist, just seemed like the smart money already accumulated on this one

I’m just curious what this means in regards to Amoveo’s gains. If it’s richlist doesn’t affect it’s chance to do a x1000 then what was your point in mentioning it?

Because it would take appox. 35b injected into the project to achieve

Much more than that actually as the inflation for ONE is really high. But I think it’s fundamentals are strong enough that it’s possible.

ICON at its peak achieved around about 4-5b cap

Completely different project with different fundamentals. Why aren’t you comparing ONE to ETH’s market cap as they’re much more similar? Probably because it doesn’t support your argument.

You are not going to acheive a 1000x on anything over a 5m cap

This is very hard to say. We don’t know how high the total crypto market cap will reach in the coming years. If crypto is worth trillions of dollars then 35bn market cap doesn’t seem that big. Even a 100bn market cap doesn’t seem that out of reach for many projects

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If you are speaking about the dev fund tokens, that was recently addressed the other day - those tokens will only be unlocked as organic transaction volume permits.

What does that mean? The team will sell more coins as transactions increase? Sounds like a lot of dumping to me.

If 10x more coins are released in the next couple years, NYZO will need a 10,000x growth in market cap to get a x1000

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I will reiterate…

The most important tool outside of a chart for analyzing the workings of smart money is to read the Rich List. It is only a single factor, but IMO, it is the final factor I use on finalizing a decision of investing/not investing in a low cap alt.

It does not however preclude said alt from achieving a 1000x alone, it is a single contributing factor.

If you want to read more on the subject of reading and analyzing addresses on rich-lists, and interpreting the mindsets and actions of their holders, please do read page 115 of Nik Patels ‘An Altcoin Trader’s Handbook’… at the expense of writing a book in the form of a reply here at 3am, he really goes into more depth than I can in this post.

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don’t fancy buying a book. Can’t you sum up what he said? I literally cannot understand how VEO’s current richlist in any meaninful way affects it’s price growth.

I can however see how NYZO’s richlist does due to rapid inflation.

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Check DM’s, don’t want to turn thread into 1-on-1 discussion.

EDIT: Also just wanted to make it clear, just because I or someone else happens to have a preference for one project or another at a certain point in time, does not mean the other is without merit. Case in point w/ VEO above, I actually really like the project :+1:

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I forced myself to watch all 9 minutes.

The idea of going towards the crypto’s with the best network effect in the long-run: yes, this is the goal, ultimately, if you want to sit and hold something for decades. Adoption is good right?

But, this is not a logical market. Holding a crypto based on its network effect alone, unless the network is tied directly to its supply/demand token economics (I.e. real world utilization of token to fuel license agreements, or something similar), you will ultimately end up buying someone else’s bags, and hold them to the ground in the inevitable 90% downturn.

Speculation is what drives this market in the mean time, speculation leads into network effect, but speculation is the initial spark (the fuel that sets off the greed/fear), so following this logic instead, if you did the complete opposite of what Thomas suggests:

-Don’t follow the herd
-Don’t invest where money has already largely invested (gains made)
-Do be a contrarian (give and take)
-Don’t always hold long term (take profits that the market gives you)

You will be able to take advantage of the market valuation inefficiencies, make gains along the way…And by not holding through the 90%+ downturns, you can have your cake and eat it too by realizing profits.

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Out of my portfolio, I think something like a Nyzo or maybe a BITC probably could do it

Just the start? Lot of progress as of late

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This is the big problem with the network effects theory. Not to mention a few other issues as pointed out by investopedia:

Regardless of how disciplined, humans often trade with behavioral biases that cause them to act on emotion. This is the basis of behavioral finance, a relatively new field of study that combines psychological theory with conventional economics. Behavioral finance predicts trading behavior and is used as a basis for creating more efficient trading strategies. A University of California study found strong evidence that investors have behavior biases that often affect investing decisions more than empirical data. Here, we highlight four of those biases that are common among retail traders who trade within their individual brokerage accounts.

Overconfidence
Overconfidence has two components: overconfidence in the quality of your information, and your ability to act on said information at the right time for maximum gain. Studies show that overconfident traders trade more frequently and fail to appropriately diversify their portfolio.

One study analyzed trades from 10,000 clients at a certain discount brokerage firm. The study wanted to ascertain if frequent trading led to higher returns. After backing out tax loss trades and others to meet liquidity needs, the study found that the purchased stocks underperformed the sold stocks by 5% over one year and 8.6% over two years. In other words, the more active the retail investor, the less money they make. This study was repeated numerous times in multiple markets and the results were always the same. The authors concluded that traders are, "basically paying fees to lose money."

How to Avoid This Bias

Trade less and invest more. Understand that by entering into trading activities you’re trading against computers, institutional investors and others around the world with better data and more experience than you. The odds are overwhelmingly in their favor. By increasing your time frame, mirroring indexes and taking advantage of dividends, you will likely build wealth over time. Resist the urge to believe that your information and intuition is better than others in the market.

Reducing Regret
Admit it, you’ve done this at least once. You were confident that a certain stock was value priced and had very little downside potential. You put the trade on but it slowly worked against you. Still feeling like you were right, you didn’t sell when the loss was small. You let it go because no loss is a loss as long as you don’t sell the position. It continued to go against you but you didn’t sell until the stock lost a majority of its value.

How to Avoid This Bias
Set trading rules that never change. For example, if a stock trade loses 7% of its value, exit the position. If the stock rises above a certain level, set a [trailing stop](https://www.investopedia.com/terms/t/trailingstop.asp)that will lock in gains if the trade loses a certain amount of gains. Make these levels unbreakable rules and don’t trade on emotion.

Limited Attention Span

There are thousands of stocks to choose from but the individual investor has neither the time nor the desire to research each. Humans are constrained by what economist and psychologist Herbert Simon called, “bounded rationality.” This theory states that a human will make decisions based on the limited knowledge they can accumulate. Instead of making the most efficient decision, they’ll make the most satisfactory decision.

Because of these limitations, investors tend to consider only stocks that come to their attention through websites, financial media, friends and family, or other sources outside of their own research.

How to Avoid This Bias

Recognize that the media has an effect on your trading activities. Learning to research and evaluate stocks that are both well-known and “off the beaten path” might reveal lucrative trades that you would have never found if you waited for it to come to you. Don’t let media noise impact your decisions. Instead, use the media as one data point among many.

Chasing Trends

This is arguably the strongest trading bias. Researchers on behavioral finance found that 39% of all new money committed to mutual funds went into the 10% of funds with the best performance the prior year. Although financial products often include the disclaimer that “past performance is not indicative of future results,” retail traders still believe they can predict the future by studying the past.

How to Avoid This Bias

If you find a trend, it’s likely that the market identified and exploited it long before you. You run the risk of buying at the highs - a trade put on just in time to watch the stock retreat in value. If you want to exploit an inefficiency, take the Warren Buffett approach; buy when others are fearful and sell when they’re confident. Following the herd rarely produces large-scale gains.

Very good point,as a matter of fact,what market is logical? The Stock Market? If someone believes that please acquire and read Devil Take the Hindmost: A History of Financial Speculation

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Very interesting discussion. Thank you for sharing.

Generally the altcoins that make the biggest performances are POW altcoins. The accumulation time, the miners’ investments and the fair launch side created the elements for a future massive pump. For Raiblocks (Nano) or Antshares (Neo), this was not the case. Nano looks more like a Nyzo. And anshare was an ICO. Personally I think it is easier to detect X100 or x1000 in POW altcoins.

Today I am in the following projects for several reasons:

  • Sinovate
  • Nyzo
  • Veil
  • Snowblossom
  • Bitcash
  • Triton
  • Piratechain
  • Beam & Grin also but they are not lowcap for me.

I left today investing only on new lowcap. I sold all the old altcoins of 2016/2017. We are going to have a new market cycle so I change my entire portfolio. I only target x50, x100, maybe more.

Here is an article I wrote in French on my best lowcap. By cons I added two more lowcap: https://block-chain-invest.com/presentation-des-meilleurs-lowcap-2019-2020/

  • Piratechain: after analysis and even if I do not find that technological innovation is interesting (nothing new except for Zcash by default), when I analyze the cost of hashrate it is very high, a little less than Horizon and 10x more than Komodo. So there are big miners behind the project and therefore investors.

  • Veil: I’m not a fan of the project. They want to implement “Sonic” (improved version of Zcash) so it can be a hype to come. But above all it’s the creator of Pivx and we know their ability to sell dreams. Moreover, since the creation of Veil, the price of Pivx collapses which makes me say that the whales of Pivx are changing to go on the project Veil. Lately there have been several wall + 10 BTC for a project as low as Veil, it’s huge.

Anyway I think we have to go on new projects. They did not have any hype, rebrand, nor all the big exchanges, nor price history. It is in the new lowcap that the best performances will take place! that is my opinion!

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I’ve seen Nyzo pop up a few times lately, yet when I looked into it, I saw that over 80% of the coins are held by the team, who remain anonymous. I see the same questionable supply with other suggested coins such as RSR and CHR. Are you and @K_Godel not concerned about this?

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Look at this answer regarding development funds. It’s a brilliant technical answer as we rarely see it …

There is a lot of intelligence in this allocation of premine funds

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Accounting for inflationary pressures, a >5yr hold would more likely than not run-through (and subsequently overshoot) an entire market cycle; compounded with inflation, you would need multiples just to break even on fiat token price.

I guess the short answer would be: Either you don’t hold them long-term (bag hold) where inflationary pressures could be a factor, or you hold just long enough to take advantage of them in the context of a 1-2yr market cycle.

A good practice I like to apply is to take current circ. supply/cap * annualized inflation rate for the next year, add that amount back to get a feel for the total cap a year out along w/ a theoretical price target; helps get a feel if the coin would still be “worth it” to hold

Also an option is taking advantage of more established coins, which are passed their inflationary distribution periods (e.g. Nano). If you feel the next bull-market peak occurs sometime late 2020/early 2021, probably a non-issue for the former tbh.

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That’s exactly the reasoning I had with Grin. In the short term, between six months and a year and a half, I think the price can go up between $ 50 and $ 100. there will be between 40 and 54 million Grin, so it seems interesting to me to have some. By cons I will not keep my Grin no longer than that. While for the Beam, inflation is a little faster in the beginning but cons there is a maximum supply. And I think it’s much more interesting to have Beam on the long run. Even if in any case, it is better to sell during the next crazy race!

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To go back to your discussion, I am not sure which technology or fundamental analysis is sufficient to find the next x1000. It is rather the perception that people will have of the project.

For example Snowblossom, I really like the project, and I have a bag. However, I am not sure that this project will please people. Too technical, not enough makeup. But nevertheless snowblossom can please the afficionados of Bitcoin (like Grin). We feel that there are buyers. For something that you only buy on Qtrade, I’m amazed at the buyer volume and the perpetual purchase orders. and I think this may be a new market attraction but we will come back to it later …

After something that comes up often, it’s branding changes. Raiblocks (Nano), Antshares (Neo), dogecoindark (Verge), darknet (Pivx) … These are key moments that have contributed to the massive pump.

Price is also a key factor. Especially for Verge and Pivx. The undervalued side for crowds is important, especially in comparison to the projects they compete with. I think about Antshare / Neo, it was cheap compared to Ethereum. So for people the price of 0.4 dollars (and less), it was really ridiculous!

And finally last point, that of future hype / fomo and market appetite. In 2016 there was:

  • Zerocash and zerocoin technology (Zcash, Zclassic, Zencash, private Bitcoin, Zcoin, and many other forks, …)
  • Masternodes (Pivx, Smartcash, Zencash, …)
  • The next Ethereum (Neo, Ark, Qtum, Waves, Stratis, …)
  • the DPOS consensus (Neo, Ark, Cadano, Rise, …)
  • BTC fork (Bitcash, Bitcoin Gold, Bitcoin Diamond, Bitcoin private, …)
  • Integrated Tor (Verge, Kore, Deeponion, …)
  • Token exchange (BNB, Huobi token, Bibox, and many others,…)

The next hype / fomo could be:

  • Mimblewimble technology (Beam, Grin, Bitgrin, fork einsteinium to come also, …)
  • A new consensus (ex: Nyzo)
  • Non-collateralised Stablecoin (Haven protocol, Bitcash, Triton, RSR, …)
  • Full anonymity by default (Veil, Piratechain, …)
  • Security token
  • A simpler bitcoin, more refined (Cruzbit for example)
  • The resistant quantum altcoins (Snowblossom, Mochimo, …)
  • A new type of masternode (Sinovate)

Personally I search this. I am trying to identify the next hypes / fomo market cryptos …

The new exchanges also on which it was necessary to invest and find the future jewels:

  • Cryptopia, Bittrex, Novaexchange, Kucoin (later) … while everyone was investing in Poloniex and Kraken in 2016

Today the best exchanges to find lowcap are different (you must always migrate):

  • Tradeogre, Qtrade, Bitmesh, Stex, Idex (for ETH token)

That’s why I’m not a fan of Amoveo or Bittube, I think the hypes have already passed even though I can appreciate the projects at the fundamental level. These projects have qualities but I will not invest on them. I may be making a mistake. But I do not invest in projects because I like them or because I like fundamental analysis. I am investing because I think the project can be loved by as many people as possible and attracting hype. I’m looking for what the market can or will like!

Here I wanted to bring my stone to the building …

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Solid input thanks for sharing to the discussion.

I think a lot of folks underestimate the orderbook / manipulation side of the low cap crypto game tbh. If you have a somewhat passable ticker & idea, and at least available on an exchange or 2, with a cap of let’s say <10/20m, and a cir. supply ideally within the 100m range - you are fair game for manipulated books. The project becomes a tool at this point, no longer necessarily judged on its FA alone, but moreso on the “narrative”, manipulation potential, as well as viral capacity (i.e. does this project fit the mold of a 4chan hype, etc).

Just something to chew on. A lot of newcomers (esp. from traditional markets) try to fit crypto markets into a box, whereby it can be ‘measured’ and calculated, as if by using some sort of P/E metric. As it stands today, there is no such metric, and success is largely the same as startup tech companies (largely carved niche, profitability potential, organic demand & use, a lot to do with the backers/network, and a little luck).

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What is the symbol on this one? Can’t find on CMC

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Nyzo is the symbol. Try coingecko.

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Ok I see hardly any volume at all on this one. The exchanges many are listed on are unheard of (to me anyway),with all the exit scams these exchanges are pulling lately this makes going for these micros even more high risk than normal it seems.

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