Smaller, new tokens are explicitly manipulated and the lack of shorting leads to exponential price moves.
1/ Some things *I think* I’ve learned messing around in crypto for the last 12 months.
Smaller, new tokens are explicitly manipulated and the lack of shorting leads to exponential price moves.
More liquidity plus shorting pressure invites greater efficiency, which is the killer of exponential moves.
Unless you have good reason to believe you’re early, assume you’re late.
(And, therefore, the exit liquidity.)
For stuff I expect to go exponential, I find selling in line with logarithmic moves a useful framework.
There’s a ton of leverage in crypto and cross-CEX / DEX margin management is non-trivial.
Keep your eyes on open interest and funding rates to understand liquidation risk.
The markets tend to move in seasons.
L1 season. Altcoin season. NFT season.
You succeed by either front-running the next season or ignoring them entirely.
There’s no need to get cute during a sentiment frenzy.
(But don’t let yourself get caught up either.)
If the “vampire attack” fails to attract sticky liquidity, the protocol does too.
But it’s probably safe to assume most farming rewards are going to zero.
If one of the legs has a risk of going to zero, your whole bag can go to zero.
(Uniswap v3 model complicates this)
This is usually true where APRs are the highest (“duh”). Again, position sizing is key. (Or buy insurance.)
And if you’re going to interact with a potentially shady contract, use a hot wallet.
If you're trading, understand that markets can move against you violently when you're sleeping.
It can be information overload.
Finding trusted curators can be key to separating signal from noise.
Understand who owns the token you're buying and when their lockup period ends.
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So the cryptocurrency industry has basically two products, one which is relatively benign and doesn't have product market fit, and one which is malignant and does. The industry has a weird superposition of understanding this fact and (strategically?) not understanding it.
The benign product is sovereign programmable money, which is historically a niche interest of folks with a relatively clustered set of beliefs about the state, the literary merit of Snow Crash, and the utility of gold to the modern economy.
This product has narrow appeal and, accordingly, is worth about as much as everything else on a 486 sitting in someone's basement is worth.
The other product is investment scams, which have approximately the best product market fit of anything produced by humans. In no age, in no country, in no city, at no level of sophistication do people consistently say "Actually I would prefer not to get money for nothing."
This product needs the exchanges like they need oxygen, because the value of it is directly tied to having payment rails to move real currency into the ecosystem and some jurisdictional and regulatory legerdemain to stay one step ahead of the banhammer.
If everyone was holding bitcoin on the old x86 in their parents basement, we would be finding a price bottom. The problem is the risk is all pooled at a few brokerages and a network of rotten exchanges with counter party risk that makes AIG circa 2008 look like a good credit.
— Greg Wester (@gwestr) November 25, 2018
The benign product is sovereign programmable money, which is historically a niche interest of folks with a relatively clustered set of beliefs about the state, the literary merit of Snow Crash, and the utility of gold to the modern economy.
This product has narrow appeal and, accordingly, is worth about as much as everything else on a 486 sitting in someone's basement is worth.
The other product is investment scams, which have approximately the best product market fit of anything produced by humans. In no age, in no country, in no city, at no level of sophistication do people consistently say "Actually I would prefer not to get money for nothing."
This product needs the exchanges like they need oxygen, because the value of it is directly tied to having payment rails to move real currency into the ecosystem and some jurisdictional and regulatory legerdemain to stay one step ahead of the banhammer.
