Bitcoin (BTC) Price Prediction for 2020-2040 – Changelly

DDDD - The Rise of “Buy the Dip” Retail Investors and Why Another Crash Is Imminent

DDDD - The Rise of “Buy the Dip” Retail Investors and Why Another Crash Is Imminent
In this week's edition of DDDD (Data-driven DD), I'll be going over the real reason why we have been seeing a rally for the past few weeks, defying all logic and fundamentals - retail investors. We'll look into several data sets to see how retail interest in stock markets have reached record levels in the past few weeks, how this affected stock prices, and why we've most likely seen the top at this point, unless we see one of the "positive catalysts" that I mentioned in my previous post, which is unlikely (except for more news about Remdesivir).
Disclaimer - This is not financial advice, and a lot of the content below is my personal opinion. In fact, the numbers, facts, or explanations presented below could be wrong and be made up. Don't buy random options because some person on the internet says so; look at what happened to all the SPY 220p 4/17 bag holders. Do your own research and come to your own conclusions on what you should do with your own money, and how levered you want to be based on your personal risk tolerance.
Inspiration
Most people who know me personally know that I spend an unhealthy amount of my free time in finance and trading as a hobby, even competing in paper options trading competitions when I was in high school. A few weeks ago, I had a friend ask if he could call me because he just installed Robinhood and wanted to buy SPY puts after seeing everyone on wallstreetbets post gains posts from all the tendies they’ve made from their SPY puts. The problem was, he actually didn’t understand how options worked at all, and needed a thorough explanation about how options are priced, what strike prices and expiration dates mean, and what the right strategy to buying options are. That’s how I knew we were at the euphoria stage of buying SPY puts - it’s when dumb money starts to pour in, and people start buying securities because they see everyone else making money and they want in, even if they have no idea what they’re buying, and price becomes dislocated from fundementals. Sure enough, less than a week later, we started the bull rally that we are currently in. Bubbles are formed when people buy something not because of logic or even gut feeling, but when people who previously weren’t involved see their dumb neighbors make tons of money from it, and they don’t want to miss out.
A few days ago, I started getting questions from other friends about what stocks they should buy and if I thought something was a good investment. That inspired me to dig a bit deeper to see how many other people are thinking the same thing.
Data
Ever since March, we’ve seen an unprecedented amount of money pour into the stock market from retail investors.
Google Search Trends
\"what stock should I buy\" Google Trends 2004 - 2020
\"what stock should I buy\" Google Trends 12 months
\"stocks\" Google Trends 2004 - 2020
\"stocks\" Google Trends 12 months
Brokerage data
Robinhood SPY holders
\"Robinhood\" Google Trends 12 months
wallstreetbets' favorite broker Google Trends 12 months
Excerpt from E*Trade earnings statement
Excerpt from Schwab earnings statement
TD Ameritrade Excerpt
Media
cnbc.com Alexa rank
CNBC viewership & rankings
wallstreetbets comments / day

investing comments / day
Analysis
What we can see from Reddit numbers, Google Trends, and CNBC stats is that in between the first week of March and first week of April, we see a massive inflow of retail interest in the stock market. Not only that, but this inflow of interest is coming from all age cohorts, from internet-using Zoomers to TV-watching Boomers. Robinhood SPY holdings and earnings reports from E*Trade, TD Ameritrade, and Schwab have also all confirmed record numbers of new clients, number of trades, and assets. There’s something interesting going on if you look closer at the numbers. The numbers growth in brokers for designed for “less sophisticated” investors (i.e. Robinhood and E*Trade) are much larger than for real brokers (i.e. Schwab and Ameritrade). This implies that the record number of new users and trade volume is coming from dumb money. The numbers shown here only really apply to the US and Canada, but there’s also data to suggest that there’s also record numbers of foreign investors pouring money into the US stock market as well.
However, after the third week of March, we see the interest start to slowly decline and plateau, indicating that we probably have seen most of those new investors who wanted to have a long position in the market do so.
SPX daily
Rationale
Pretty much everything past this point is purely speculation, and isn’t really backed up by any solid data so take whatever I say here with a cup of salt. We could see from the graph that new investor interest started with the first bull trap we saw in the initial decline from early March, and peaking right after the end of the crash in March. So it would be fair to guess that we’re seeing a record amount of interest in the stock market from a “buy the dip” mentality, especially from Robinhood-using Millennials. Here’s a few points on my rationalization of this behavior, based on very weak anecdotal evidence
  • They missed out of their chance of getting in the stock market at the start of the bull market that happened at the end of 2009
  • They’ve all seen the stock market make record gains throughout their adult lives, but believing that the market might be overheated, they were waiting for a crash
  • Most of them have gotten towards the stage of their lives where they actually have some savings and can finally put some money aside for investments
  • This stock market crash seems like their once-in-a-decade opportunity that they’ve been waiting for, so everyone jumped in
  • Everyone’s stuck at their homes with vast amounts of unexpected free time on their hands
Most of these new investors got their first taste in the market near the bottom, and probably made some nice returns. Of course, since they didn’t know what they were doing, they probably put a very small amount of money at first, but after seeing a 10% return over one week, validating that maybe they do know something, they decide to slowly pour in more and more of their life savings. That’s what’s been fueling this bull market.
Sentiment & Magic Crayons
As I mentioned previously, this bull rally will keep going until enough bears convert to bulls. Markets go up when the amount of new bullish positions outnumber the amount of new bearish positions, and vice versa. Record amounts of new investors, who previously never held a position in the market before, fueled the bullish side of this equation, despite all the negative data that has come out and dislocating the price from fundamentals. All the smart money that was shorting the markets saw this happening, and flipped to become bulls because you don’t fight the trend, even if the trend doesn’t reflect reality.
From the data shown above, we can see new investor interest growth has started declining since mid March and started stagnating in early April. The declining volume in SPY since mid-March confirms this. That means, once the sentiment of the new retail investors starts to turn bearish, and everyone figures out how much the stocks they’re holding are really worth, another sell-off will begin. I’ve seen something very similar to this a few years ago with Bitcoin. Near the end of 2017, Bitcoin started to become mainstream and saw a flood of retail investors suddenly signing up for Coinbase (i.e. Robinhood) accounts and buying Bitcoin without actually understanding what it is and how it works. Suddenly everyone, from co-workers to grandparents, starts talking about Bitcoin and might have thrown a few thousand dollars into it. This appears to be a very similar parallel to what’s going on right now. Of course there’s differences here in that equities have an intrinsic value, although many of them have gone way above what they should be intrinsically worth, and the vast majority of retail investors don’t understand how to value companies. Then, during December, when people started thinking that the market was getting a bit overheated, some started taking their profits, and that’s when the prices crashed violently. This flip in sentiment now look like it has started with equities.
SPY daily
Technical Analysis, or magic crayons, is a discipline in finance that uses statistical analysis to predict market trends based on market sentiment. Of course, a lot of this is hand-wavy and is very subjective; two people doing TA on the same price history can end up getting opposite results, so TA should always be taken with a grain of salt and ideally be backed with underlying justification and not be blindly followed. In fact, I’ve since corrected the ascending wedge I had on SPY since my last post since this new wedge is a better fit for the new trading data.
There’s a few things going on in this chart. The entire bull rally we’ve had since the lows can be modelled using a rising wedge. This is a pattern where there is a convergence of a rising support and resistance trendline, along with falling volume. This indicates a slow decline in net bullish sentiment with investors, with smaller and smaller upside after each bounce off the support until it hits a resistance. The smaller the bounces, the less bullish investors are. When the bearish sentiment takes over across investors, the price breaks below this wedge - a breakdown, and indicates a start of another downtrend.
This happened when the wedge hit resistance at around 293, which is around the same price as the 200 day moving average, the 62% retracement (considered to be the upper bound of a bull trap), and a price level that acted as a support and resistance throughout 2019. The fact that it gapped down to break this wedge is also a strong signal, indicating a sudden swing in investor sentiment overnight. The volume of the break down also broke the downwards trend of volume we’ve had since the beginning of the bull rally, indicating a sudden surge of people selling their shares. This doesn’t necessarily mean that we will go straight from here, and I personally think that we will see the completion of a heads-and-shoulders pattern complete before SPY goes below 274, which in itself is a strong support level. In other words, SPY might go from 282 -> 274 -> 284 -> 274 before breaking the 274 support level.
VIX Daily
Doing TA is already sketchy, and doing TA on something like VIX is even more sketchy, but I found this interesting so I’ll mention it. Since the start of the bull rally, we’ve had VIX inside a descending channel. With the breakdown we had in SPY yesterday, VIX has also gapped up to have a breakout from this channel, indicating that we may see future volatility in the next week or so.
Putting Everything Together
Finally, we get to my thesis. This entire bull rally has been fueled by new retail investors buying the dip, bringing the stock price to euphoric levels. Over the past few weeks, we’ve been seeing the people waiting at the sidelines for years to get into the stock market slowly FOMO into the rally in smaller and smaller volumes, while the smart money have been locking in their profits at an even slower rate - hence an ascending wedge. As the amount of new retail interest in the stock market started slowed down, the amount of new bulls started to decline. It looks like Friday might have been the start of the bearish sentiment taking over, meaning it’s likely that 293 was the top, unless any significant bullish events happen in the next two weeks like a fourth round of stimulus, in which case we might see 300. This doesn’t mean we’ll instantly go back to circuit breakers on Monday, and we might see 282 -> 274 -> 284 -> 274 happen before panic, this time by the first-time investors, eventually bringing us down towards SPY 180.
tldr; we've reached the top
EDIT - I'll keep a my live thoughts here as we move throughout this week in case anyone's still reading this and interested.
5/4 8PM - /ES was red last night but steadily climbed, which was expected since 1h RSI was borderline oversold, leaving us to a slightly green day. /ES looks like it has momentum going up, but is approaching towards overbought territory now. Expecting it to go towards 284 (possibly where we'll open tomorrow) and bouncing back down from that price level
5/5 Market Open - Well there goes my price target. I guess at this point it might go up to 293 again, but will need a lot of momentum to push back there to 300. Seems like this is being driven by oil prices skyrocketing.
5/5 3:50PM - Volume for the upwards price action had very little volume behind it. Seeing a selloff EOD today, could go either way although I have a bearish bias. Going to hold cash until it goes towards one end of the 274-293 channel (see last week's thesis). Still believe that we will see it drop below 274 next week, but we might be moving sideways in the channel this week and a bit of next week before that happens. Plan for tomorrow is buy short dated puts if open < 285. Otherwise, wait till it goes to 293 before buying those puts
5/5 6PM - What we saw today could be a false breakout above 284. Need tomorrow to open below 285 for that to be confirmed. If so, my original thesis of it going back down to 274 before bouncing back up will still be in play.
5/6 EOD - Wasn't a false breakout. Looks like it's still forming the head-and-shoulders pattern mentioned before, but 288 instead of 284 as the level. Still not sure yet so I'm personally going to be holding cash and waiting this out for the next few days. Will enter into short positions if we either go near 293 again or drop below 270. Might look into VIX calls if VIX goes down near 30.
5/7 Market Open - Still waiting. If we break 289 we're probably heading to 293. I'll make my entry to short positions when we hit that a second time. There's very little bullish momentum left (see MACD 1D), so if we hit 293 and then drop back down, we'll have a MACD crossover event which many traders and algos use as a sell signal. Oil is doing some weird shit.
5/7 Noon - Looks like we're headed to 293. Picked up VIX 32.5c 5/27 since VIX is near 30.
5/7 11PM - /ES is hovering right above 2910, with 4h and 1h charts are bullish from MACD and 1h is almost overbought in RSI. Unless something dramatic happens we'll probably hit near 293 tomorrow, which is where I'll get some SPY puts. We might drop down before ever touching it, or go all the way to 295 (like last time) during the day, but expecting it to close at or below 293. After that I'm expecting a gap down Monday as we start the final leg down next week towards 274. Expecting 1D MACD to crossover in the final leg down, which will be a signal for bears to take over and institutions / day traders will start selling again
5/8 Market Open - Plan is to wait till a good entry today, either when technicals looks good or we hit 293, and then buy some SPY June 285p and July 275p
5/8 Noon - Everything still going according to plan. Most likely going to slowly inch towards 293 by EOD. Will probably pick up SPY puts and more VIX calls at power hour (3 - 4PM). Monday will probably gap down, although there's a small chance of one more green / sideways day before that happens if we have bullish catalysts on the weekend.
5/8 3:55PM - SPY at 292.60. This is probably going to be the closest we get to 293. Bought SPY 290-260 6/19 debit spreads and 292-272 5/15 debit spreads, as well as doubling down on VIX calls from yesterday, decreasing my cost basis. Still looks like there's room for one more green day on Monday, so I left some money on the side to double down if that's the case, although it's more likely than not we won't get there.
5/8 EOD - Looks like we barely touched 293 exactly AH before rebounding down. Too bad you can't buy options AH, but more convinced we'll see a gap down on Monday. Going to work on another post over the weekend and do my updates there. Have a great weekend everyone!
submitted by ASoftEngStudent to wallstreetbets [link] [comments]

PSA: Mojang made an unannounced change to the Commercial Usage Guidelines / EULA

Note: while I am a lawyer, I am not your lawyer, and none of this is legal advice that you may rely on. Please consult competent counsel in your jurisdiction before making any decisions that affect your rights, as whether or not any particular server's for-sale offerings comply with the EULA is a fact-specific inquiry and your results may vary. Additionally, Mojang may update the Guidelines or issue a statement contradicting this information at any time, and you should regularly review the Guidelines for any updates or changes that may affect your rights.

On April 11, Mojang published a new help site article stating that:
Hard currency is real money or anything that can be converted into real money, including, but not limited to, Bitcoins. Soft currency is available in-game only and has no real-world value. You may not sell soft currency for hard currency, neither separately or along with ranks as a single or recurring payout. This is regardless of what you can use the soft currency for.
That article, despite being linked to elsewhere on live help site pages, now results in a 404.
Until May 20th, the Commercial Usage Guidelines read as follows:
YOU MAY:
...
use in-game currencies IF (i) they are “soft currencies,” i.e., a currency earned and expended only through gameplay that has no real world value and that cannot be cashed out, used, or transferred across free or paid servers, or into any other currency with real-world value; (ii) you don’t give the impression that it comes from or is associated with Mojang, and (iii) they don’t look like or have similar names to Minecoins or any other official virtual currency.
As of May 20th, the Commercial Usage Guidelines now read:
use and sell in-game virtual currencies IF (i) they have no real-world value and that cannot be cashed out, used, or transferred across free or paid servers, or into any other currency with real-world value; (ii) you don't give the impression that it comes from or is associated with Mojang, (iii) they don't look like or have similar names to Minecoins or any other official virtual currency, and (iv) anything you sell with the currency follows our monetization guidelines.
This is a major unannounced change and I was unable to find any other posts on this subreddit (or anywhere) explaining or noting it.
This change allows the sale of soft currency (coins, gold, etc) so long as the use of that currency is compliant with the rest of the EULA/Guidelines. For example, it appears that the Guidelines now allow the sale of cosmetic-only currency. In addition, in combination with the new "provided they do not give a competitive gameplay advantage" exception, the sale of soft currency that affects gameplay is allowed (again, subject to that exception and the rest of the EULA).
I don't work for Mojang and I can't predict whether this change will be reverted or accompanied by additional changes, and I didn't review the other terms to see if anything else had changed. I just wanted to write this post as a PSA.
I've previously authored an extended write-up of EULA compliance on my Substack and am writing a "version 2.0" that includes both a history of the recent changes and explanations that incorporate them.
Thank you to Mergu from the Denizen Discord server for (inadvertently) making me aware of this change.
submitted by SummaCrossroads to admincraft [link] [comments]

My stock study watchlist. would appreciate criticisms or red flags

Core
- FB ecosystem
This is the stock that i believe is invested in the right places and has a path forward in the global market. I work as a React developer in fintech and I greatly enjoy their technology. The reason I stopped using snapchat was because I couldn't use it on low connection in Mexico, but Instagram worked marvelously. I use Whatsapp to stay in touch with my family in mexico and Facebook to stay in touch with my mom. There's something extremely powerful about that in my opinion.
They're conservative with their push and development of camera and VR technology which is wise in my opinion give the many opportunities that exist in that space. They're pushing along with fintech in India, again with small business through Whatsapp. And they provide a suite of customer services for small business and entrepeneurs.

- Microsoft
I think they will have a great run during the cloud era of software development. Their acquiring of Github AND NPM goes to show how in touch they are with developer servicing.

- Paypal
Paypal has a marvelous history and is a battle tested pioneer in the fintech space. I see them repeating their previous successes by acquiring Honey. I work with Honey in the fintech space and now I'm understanding that Paypal has an auto coupon scraper on my Amazon purchases while my Visa ones don't. This is the forward thinking I love from Paypal despite not being as flashy as Square.

- Disney
Disney is quintessential american entertainment. I believe their deep roots in American culture and the entertainment industry will provide a solid bedrock for them for the generations to come.

- Waste Management
Sanitation and environmental, like internet connection technology, are about the same when it comes to market penetration. It is a scarcity. Sanitation is a critical part of any society's development and wellbeing. I think WM will be there to benefit from increased urbanization and industriousness from technology and wealth growth.

- Kansas City Southern
I'm Mexican and my family are avocado farmers. I believe in the future prospects of Mexico and its relationship with its neighbors. Mexico is a bustling nation and many youth are international students that carry degrees. This is a far cry from having military policing streets in rural neighborhoods decades ago. Kansas city southern is part of the supply chain that connects Mexico to main industrious Mexican states like Monterrey, Jalisco, and Michaocan. I like rail in this regard because it's a lot of weight in one operation of heavy materials. So Canadians that use Mexican mining will also benefit from this railroad.
- Nintendo
I believe in the future of gaming as a market and if I were to take a shot at who would be the most stable, I would vote for Nintendo. Like Facebook, they approach the family unit and grow generationally. I love their curveball approach to gaming and I think that creativity, along with it's customers trust, will be something I can hold onto for a long time versus companies that have a history of developing games like Call of Duty or World of Warcraft. Nintendo can take different forms: in the living room, at sweaty tournaments, online, mobile, on your phone, on a TV, in the movies, etc.

Closely watching
- United Health or Cigna
This is only going to grow and wont change due to American politics for 8 years at a minimum.
- Cisco
Same as Microsoft but for IT.
- Impossible Foods IPO
I've been vegetarian for 10 years and Impossible Burgers has been one of the most mindblowing experiences of my life. The product is phenomenal and on a league of its owned compared to Beyond Meat. IMHO Beyond taste like cheap school lunchroom burgers and Impossible tastes like something I would be excited to feed my family. If their pork products are great then I am ALL in because Chicken products are by far the easiest thing to replicate. I'm extremely excited about this product.
- Visa
They make a ton of money on transactions. I saw them hiring for blockchain development so it leads me to believe that they're adapting.
- Square
I work in the fintech space and I like their modest approach to financial services. Their acquiring of a bank charter is actually incredibly important due to all the procurement and legal processes that go behind being a fintech company (abiding by federal security laws, etc). The one reason I like Chase banking is because I enjoy their app. I see Square as a competitor to Chase, surprisingly.
- Apple
Apple designs its products with customer service in mind. I think the future of education technology will likely go to Apple because of this. Their screens and cameras are wonderful and I can see them pioneering computer vision products because of this. They are THE American Tech company.
- TMobile
Aggressive as hell and grew to be a large player through savvy moves across time. Their customer service is a highlight for me.
- JPM
Customer service for banking is unmatched IMO. If any legacy banker will make it across changes, I believe Chase is doing what it takes to adapt and think forward.
- Planet Fitness
$10 gyms, clean, and casual enough for the general population. You can't beat $10 gym membership when you're broke as fuck. I've been a heavy lifter before and still used Planet fitness in my transitions across states and whatnot. I need to look at their numbers more closely.
- Volkwagen
I trust Europe and Japan to take EVs more seriously. I don't know who will seriously come close to competing with Tesla in the long run but they'll have to.
- Panasonic
Panasonic, much like AMD, did not immediately reflect the value of what they have produced. AMD did not explode inline with bitcoin or cheaper GPU consumption, in the same way Panasonic did not reflect a massive spike in price after speculation in Tesla grew. They're an important arm to the EV market that spreads across many players ranging from Tesla to Toyota to big tech.

- Lyft
I think Lyft's focus on customer service and regional clientele will pay off against Uber, who is growing too quickly and spreading thin. Lyft will benefit from the development of computer vision and Big tech's interest in automanufacturing.

- Crypto (Bitcoin or XRP)
I like crypto as a technology as a software engineer. I see the value in a faster process for procuring and exchanging legal tender that does not have to go through the bottleneck of the ACH process or through legal issues like the PATRIOT ACT or the Bank Secrecy Act. It still fundamentally respects those laws without the frustrations of banking service bottlenecks. I think the halvening protocol has an interesting affect on Bitcoin and supply and the market that it's trying to generate.







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submitted by codingprofessor to investing [link] [comments]

Testing the Tide | Monthly FIRE Portfolio Update - June 2020

We would rather be ruined than changed.
-W H Auden, The Age of Anxiety
This is my forty-third portfolio update. I complete this update monthly to check my progress against my goal.
Portfolio goal
My objective is to reach a portfolio of $2 180 000 by 1 July 2021. This would produce a real annual income of about $87 000 (in 2020 dollars).
This portfolio objective is based on an expected average real return of 3.99 per cent, or a nominal return of 6.49 per cent.
Portfolio summary
Vanguard Lifestrategy High Growth Fund – $726 306
Vanguard Lifestrategy Growth Fund – $42 118
Vanguard Lifestrategy Balanced Fund – $78 730
Vanguard Diversified Bonds Fund – $111 691
Vanguard Australian Shares ETF (VAS) – $201 745
Vanguard International Shares ETF (VGS) – $39 357
Betashares Australia 200 ETF (A200) – $231 269
Telstra shares (TLS) – $1 668
Insurance Australia Group shares (IAG) – $7 310
NIB Holdings shares (NHF) – $5 532
Gold ETF (GOLD.ASX) – $117 757
Secured physical gold – $18 913
Ratesetter (P2P lending) – $10 479
Bitcoin – $148 990
Raiz app (Aggressive portfolio) – $16 841
Spaceship Voyager app (Index portfolio) – $2 553
BrickX (P2P rental real estate) – $4 484
Total portfolio value: $1 765 743 (+$8 485 or 0.5%)
Asset allocation
Australian shares – 42.2% (2.8% under)
Global shares – 22.0%
Emerging markets shares – 2.3%
International small companies