Bitcoin to Ether: Welcome to the Vomitorium

Vince Lanci's picture

Volatility is Not Risk....

is a true statement if you manage your bankroll properly.

via Soren K. Group and Marketslant

Volatility is mitigated by bankroll management (VaR). If a security is very volatile, then investors lessen the dollar amount invested as compared to other investments. If someone is speculating or trading, they either lower  trading volume, widen stops, or do some combination of the 2 to mitigate Volatility. This is in part to insulate other positions in the portfolio,in part to mitigate exit liquidity risk, and paramount to managing VaR.

Crypto Prices

Bitcoin to Ether: Welcome to the Vomitorium

  • Wednesday: 255 > 318 = 24% low to high
  • Thursday: 318 > 276 = 13% High to Low
  • Friday: 278 > 302 = 8.6% low to high

The last week of Ethereum trading as made more than a few people want to wretch we feel. ? So, how does that compare to its big brother  Bitcoin?

BitCoin Volatility Index

Bitcoin Volatility annualized is only 98% today. This is down from a high of 147% about 2 weeks ago according to bitmex

BVOL Index (Annualized Bitcoin Volatility)

  • 6/30/2017 .BVOL = 98.74% 
  • 6/17/2017 .BVOL = 147.44%

BVOL above uses a 30 day moving average to create their annualized Bitcoin volatility index. They do not have an Ether equivalent index. So we did our own.

Comparing BTC Vol to ETH

Using similar methodology that BVOL does we did our own rough calculations on both cryptos for an electron-to-electron comparison:

1- Ether's vol as measured using a daily chart annualized with a 30 day rolling average is already higher than Bitcoin's.

We see Bitcoin's annualized volatility at around 99% down from a peak 2 weeks ago of 110%.  By comparison, using the same exact method we see Ether's historical volatility as 130%, down from 166% on the day it Bungee jumped to 10 cents.

2- Ether's Vol using a 10 day rolling average has exploded relative to Bitcoin's

If one were to shorten the period form 30 days to 10 the difference and trends would be notable

  • BTCUSD = 61% down from 137% 2 weeks ago
  • ETHUSD = 137% down from 145% 2 weeks ago

What does it mean? It could mean that Ether is now entering "the show" where it will be more susceptible to comparisons to BTC. 

Via Fintek

 As we referenced a few weeks ago, there is a battle between Bitcoin (BTC) and Ethereum (ETC) for cryptocurrency supremacy.  With that, the ETC followers are now finding out what bitcoin found out a long while ago; VOLATILITY.  The one digital currency with more acceptance (deeper market) will be the survivor.

We do not subscribe to the "there will only be one" concept, but the point that ETH is now on the varsity does invite comparisons and more knee-jerk reactions.

Separately, the huge drop in  BTC Vol is worth noting for investors  and traders alike. 

BitCoin at a Crossroads?

One thing is on our radar. While much of ETH recent volatility above BTH's has been specific to ETH the product itself, the precipitous drop in BTC vol is notable. To predict direction using volatility is something we do not do. But to handicap the potential effects in either direction we do attempt.

BTC Bullcase

BTC's Vol slide can be viewed as bullish because more institutional  investors will be permitted by virtue  oftheir by laws to put money into it based on volatility and liquidity. so if volumes go up while volatility drops,  you havea recipe for  institutional acceptance and another run  higher. 

BTC Bear Case

Conversely, and this is especially true in markets that are mature, a drop in volatility after a run up in an asset's price is frequently seen as a pause before a puke. This is because MOMO short term traders  lose patience with the shrinking daily ranges and puke. Silver traders understand this when they say "Sideways is bearish in Silver". 

There are many other ways to handicap future  directional drivers using volatility as the "tell". But these are the ones we subscribe to most. Combined with Option skewness and Implied volatility we can handicap whether or not we should get out of the way of the next move, surf the wave, or trade counter it.  And sometimes we are even right!  

But it could just be nothing to trade off of at this stage of the product's life cycle. We are not playing here. Just watching and seeing if traditional volatility yardsticks are applicable yet.

Read more by Soren K.Group

 

Blockchain Daily News

via Blockchain Daily

Deals, Investments & M&As

Pantera Capital to Raise $100 Million In Investment For ICO Hedge Fund

Pete Rizzo - CoinDesk

The $600m market for initial coin offerings may soon be set to expand.

Investment firm Pantera Capital is launching a new hedge fund focused on investments solely in tokens that power public blockchain protocols.

FAO: Pantera was founded by its CEO, Dan Morehead, a former CFO and head of macro trading at Tiger Management, a hedge fund.

Cryptocurrencies

Burger King To Accept Bitcoin In Russia This Summer

William Suberg - The Coin Telegraph

Russian Burger King restaurants are due to start accepting Bitcoin as a payment method this summer, reports state on Wednesday.

DNT: A few days ago we covered a story about what we can buy with Bitcoin.. Maybe even sandwiches? Yes. And the list that Florin provided is growing...Great! Problem solved.  We can buy a sandwich with Bitcoin. And not only in one place.

Exchanges & Trading Venues

Sell Side Forges Ahead With Ambitions For Live Blockchain

John Brazier - Waters Techology

This week it was the turn of both R3 and the Digital Trade Chain Consortium (DTC) to announce new developments regarding their respective efforts to get DLT live in the capital markets as soon as possible.

FAO: More details about R3’s announcement can be checked in our yesterday’s edition.

Harbour, An Ethereum-based DAO For Managing Token Assets Announces Launch And Releases Technical Specifications

PR Web

Harbour introduces a democratic, community-governed framework to the blockchain ecosystem for managing and holding token assets by harnessing the wisdom of the crowd.

Circle, Blockchain And The Birth Of Social Payments In The UK

Madhvi Mavadya - Forbes

Last month, social payments app Circle made it into the top 20 UK iPhone App Store chart after a period of viral social growth and many young people have started to use the service in a social setting, in the same way Venmo is used in the US.

Vendors

SAP's Chief Strategy Officer Thinks Blockchain Is Not A Zero-Sum Game

Saheli Roy Choudhury, Geoff Cutmore - CNBC

SAP's chief strategy officer: Blockchain is not a zero-sum game and its implementation across various sectors is going to be an overall positive for businesses.

BitPeople

Bitcoin Exchange Operator Tied To Hacks Gets Five-And-A-Half Years U.S. prison

Jonathan Stempel - Reuters

A Florida man was sentenced on Tuesday to 5-1/2 years in prison after pleading guilty to operating an illegal bitcoin exchange suspected of laundering money for hackers and linked to a data breach at JPMorgan Chase & Co.

FAO: Anthony Murgio and his co-conspirators faced accusations of processing millions of dollars into bitcoin through the unlicensed exchange Coin.mx.

Regulation

CFTC Chief Asks Congress For More Money To Oversee Blockchain

Stan Higgins - CoinDesk

The US Commodity Futures Trading Commission (CFTC) has cited the advance of technologies like blockchain in a request to obtain additional funding for oversight activities.
FAO: Seems fair. I remember last year they asked for more funds to watch the activity of HFT (high frequency trading) firms on US exchanges.

SEC Is Still Eyeing To Regulate The ICO Market

Anthony Coggine - The Coin Telegraph

US Securities and Exchange Commission is still eyeing to enforce regulations to Blockchain companies engaged in ICO.
FAO: Interesting to watch this further. I bet they won’t be able to do it in the next 5 years. What do you think? Send me your thoughts.

Japan Looks To Blockchains For More Secure E-government Systems

Nikkei Asian Review

Japan wants to use the data storage technology behind bitcoin and similar virtual currencies to update how individuals and companies interact electronically with government, aiming to bolster information security while cutting administrative costs.
FAO: Read the first two headlines of this section. Now read the headline above. Am I the only one thinking about the growing discrepancy between western and eastern governments when it comes to blockchain?

Startups, Accelerators & Hubs

Blockchain Developer ChromaWay Launches Postchain 'The First Consortium Database'

Ian Allison - International Business Times

Blockchain developer ChromaWay has released Postchain – "the first consortium database" – to combine the power and flexibility of mature, productised databases with blockchain database design.

Associations & Federations

World Economic Forum Publishes Blockchain Governance Taxonomy

Michael del Castillo - CoinDesk

The World Economic Forum has published a detailed white paper arguing that blockchain stakeholders should organize in a way that would dwarf even the largest consortia.

Press release here - via MondoVisione.

FAO: Today’s top story, but added in the proper section...

Analysis

Ethereum Explodes Above $300

Jonathan Garber - Business Insider

Ethereum is exploding higher Wednesday, trading up by 32% at $299.70. It hit a high of $308 earlier in the session.
FAO: Bulls take charge.

Volatile And Interesting Months Ahead For Bitcoin: Charles Hayter On Bitmain's Hard Fork

Sidhartha Shukla - Money Control

Speaking to Moneycontrol Charles Hayter, co-founder and CEO of cryptocurrency data platform CryptoCompare, sheds light on the what Bitmain's proposed hard fork is and what it means for bitcoin, as a technology and on its price.

Other news

Blockchain: Initial Coin Offerings Pull In Millions, But At What Cost?

Joseph N. DiStefano - PhillyDeals

Innovators who want to raise capital in a hurry, for projects based on blockchain electronic record systems and electronic currency platforms, are bypassing initial public stock offerings (IPOs) to pitch quick-buck initial coin offerings (ICOs).

Fanciful Bitcoin Banknotes Show How Digital Currency Might Look In The Real World

NBC

“In some way, the project is a loose data visualization, but I mainly wanted to make the bills be interesting on their own as artworks,” says Matthias Dörfelt, the Los Angeles-based artist who made the notes.

FAO: Florin Adrian Oprea, Editor-in-chief Blockchain Daily News

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King of Ruperts Land's picture

BTC is the tried and true gold standard. ETH is the science project.

OCnStiggs's picture

Herein lies the fallacy of the virtual currency: While only a few people know how to create one specific cryptocurrency, there is NO END to how many cryptocurrencies may pop up. The market is clearly oversupplied for the current demand of gullible buyers. I predict this will not end well for investors. Manias never do.

Gold is a historical measure of wealth simply because no one has figured out how to make more of the stuff. That keeps the concept of wealth protection pure and honest. Not so if tomorrow 47 other Cryptos show up for sale. And, they will as long as there are people willing to invest blindly in an idea that has this insurmountble flaw.

Just sayin'

CPL's picture

Slow and steady wins the race, plus Etherum is a scam being run by the same guys that ran the other crypto scams.

kc_kilo's picture

Any traders on here actually trading it or just philosophical arguments about what money is? For those that care, ETH is at 270 resistance for like 3 days. Could be a buy in soon. Last one was buying in at 220-230 and waiting for a bump (which was the WE Forum report) selling at 315. That is worth watching. BTC is 2450 that might be worth seeing and LTC diverging from ETH which it has not. I go here for specific crypto news  and the true believers trade. here: https://www.cryptocompare.com/coins/eth/forum/USD

 

Benjamin123's picture

Bitcoin isnt cryptocurrency. You pay for it with recorded bank transfers or in back alley exchanges with undercover cops and hidden cameras.

If secrecy is what you are after, do your exchanges by burying cash and or/goods and sending encrypted e-mails with the physical location. To move cash overseas, get a speedboat.

King of Ruperts Land's picture

There are ways to protect oneself from robbers. It is a mans duty to use deadly force on robbers without hesitation, the moment they are detected. Any man who does not fight robbers is an ally of the robbers.

Fireman's picture

Two bit tales from the electronic corral of the banksters and their bitcoin blips of bullshit with about the same credibility as Elon Musk's burning Teslas and Mars voyage. Fed Coin...coming to a ponzi virtual reality near you soon.

 

"Dear G,

Bitcoin is a virtual game that is being made look better than gold or silver, to sell the concept of a world wide virtual currency.

It should change its name to “Nintendo Virtual Foolishness,” as it’s purpose is to win the hearts and minds of a public.

After that to construct a “Dollar Index Bit Coin” backed by tickets to Mars from Space Inc. with a picture of Elon Musk.

There is no computer game that cannot be hacked, and there never will be.

Regards,

Jim Sinclair"

 

Au

Ag 

Pb

King of Ruperts Land's picture

You forgot:

Fe for steel
Cr Va Mo Ni for alloys
Cu Zn for shell casings
H C N O for propellants
U Pu for those extra special things
S Ca Na Cl for Cement, salts, acids, bases
oh hell give me all Gods elements and I shall wage war on Satan's forces.

-----------------------------

I don't buy the gold silver vs cryptos competition arguments.

They are similar and different. Cryoptos are new and have unique characteristics. Those who ignore them are as foolish as those who pay no respect to Gold, Silver.

Silver Savior's picture

What if all the money in Bitcoin went to Ether? They said Bitcoin is getting slower. Ethereum is not the same as Bitcoin but the speculating money could go to Ethereum and leave Bitcoin as is. Still don't know what to think of Litecoin but I own a few. Probably should buy the crap out of it if I knew what was good for me.

kc_kilo's picture

Silver, check out this forum for getitng the trading vibe for crypto, great free charting tools there:

looking to get in again at/under 250

https://www.cryptocompare.com/coins/eth/forum/USD

 

ebworthen's picture

Nothing on the Inernets is safe, NOTHING.

King of Ruperts Land's picture

Securing Bitcoin - How the King does it - I would agree. A secure bitcoin vault should be designed so that it is isolated from the internet. It should be constructed in a "clean room" that is also isolated from the internet. All the software code and hardware components used to construct the bitcoin vault should be subject to a quality assurance procedure to ensure nothing malicious gets into the clean room, and that all software codes are vetted (including tools such as compilers and linkers, and libraries). Everything including tools should be built from vetted source code. High physical security procedures should be used in the "clean room" so that no information leakage can occur in or out.

The bitcoin vault once constructed must thereafter remain under high physical security to ensure that it is not compromised. It should also include spacial redundancy, for instance multiple secure backup locations.

GreatUncle's picture

No connection to the internet is safe.

mosfet's picture

MOAR volatility please!  I can't get enough of Ether highs & lows as of late.  You can make 1/2 coin most day's with an easy limit sell & buy.  Bitcoin has been a complete snoozefest.  Who wants a crypto that just sits on it's ass all day.  The lack of buying/selling in BTC is a very bad sign if you ask me.

Mustafa Kemal's picture

    Thirty Eight Minutes a Millionaire

 

Beginning in mid 2016 I started stacking cryptocurrencies. I began with bitcoin and later moved to ether at $14, then litecoin.  Sometime early in 2017, the news of the Ethereum Alliance struck me as a buy signal so I traded a few bitcoin for ether. Then later, when I learned about ripple, I traded a few bitcoin for ripple. 

 

As anyone knows who has been watching cryptocurrencies,  beginning around April 2017 prices started to surge.  Not just for bitcoin, but for most of the major altcoins also. It was fun to check in every day to watch the value of my portfolio grow.   Then in May we began a vacation in Arizona. But then the surge started to increase dramatically. Every evening I would check to see how things were going and my wife would say “ how much money did we make today?”  The answer generally was substantial. I told her that we were making money while we slept.

 

Then, at 9:16 PM on May 23 I checked the value of ether on coingecko. To my shock, I observed that the price of ether had gone from around $170 to $130,002.08. I couldnt believe my eyes. So I closed my browser and reopened

it and went to coingecko and the result was the same. I made a copy of the page and called my wife over to see and she confirmed that I was not insane. My first thought, of course, was computer error. We monitored for a few minutes and the price was stable around this level. At about the 20 minute mark it was still at this level, so I started get this feeling that this was real. I thought, maybe the banksters went whole hog and simply bought up all the ether. My wife brought her calculator over and discovered that our ether was worth

about $21M. I permitted my self a few extra beers at that time. We had just won the lottery. We started talking about changes that would be made. Stucco on the house, a new roof, check that, a new house.I came inside and announced. Honey, I am now retired. 

 

Unfortunately, my ether wallet was left at home, and I felt the need to turn say $10M into bitcoin before the price falls. So, we made plans: if this was still real in the morning, we would begin the 10 hour drive home to turn half of this into bitcoin. 

 

Still not completely convinced of the reality of this, I kept checking. At the 38 minute point all was well, but a minute or two later…… and its gone. Back to around $170.

 

We were not completely surprised, but more than a little dissapointed as you might imagine. 

However, there is one positive thing to come of this. Both my wife and I know what it is like to be informed that we won the lottery. 

 

 

Now we just have to suffer with the ether price at $350.

koan's picture

"Ether's volatility has exploded while Bitcoin's has been cut in half. What gives?"

Or how to generate a rubes interest in Ether, maintain a volatility froth.

kc_kilo's picture

Its been at 270 resistance for 3 days

cosmyccowboy's picture

   i looked on the chart and it looks like last fridays flash crash where thousands of coins were bought for pennies never happened, who would thunk it!?

Arnold's picture

Let me throw this out with Bitcoin.

It is my impression that the initial developers still have 50% of the 'issue'.
Miners have taken about 45% more, and the last 5% is still expensively able to be mined.

To raise the price of Bitcoin there must be trading, fungible to digital.

Scarcity raises prices, allows transaction profit and opens doors to speculation.

No one remembers Mount Gox anymore, so it's pedal to the metal.
Gox was very unsophisticated, under capitalized, under funded and a leading edge that needed to be broken as an example..

When is my point coming?
Now.
To move money around, it is a good platform, except on each fungible end. It has not kept up with the blockchain 'forward', for good or evil.

As a store of wealth, well that has been argued much, and I choose to bypass it.

It was leadership, and now obsolete.

De Wilde Weldoener's picture
Bitcoin is trying to be digital sound money, Etherium is trying to be a distributed computing platform, you can stop comparing the two like they are the same thing.
kc_kilo's picture

You can call it whatever but they are moving in conjunction with each other from a trading point of view. Until they actually di-verge your contrasting between the 2 doesnt matter

WhosJohnGalt's picture

And there we have it -- the threatened Bitcoin maximalist unveils himself.

And to boot, he can't even spell the thing he fears most (Ethereum), correctly.  /derp!!

tmosley's picture

Seems like he noted that the two are different, not that one is better than the other.

Sound money is good. So are platforms. I'd buy both. And have.

aloha_snakbar's picture

Barky Soweeto's new crypto...*ButtCoin*...

dearth vader's picture

Volatility in Titcoin must be something to watch!

El Oregonian's picture

You've got a point there...er, two points.

silverer's picture

I know how to solve the problem. Advertise Titcoin. Not enough people know about it. Then introduce Welfarecoin, Usedcoin, Fishingcoin, Artistcoin, Rainbowcoin, Unicoin, and the next 100 on the list. This will work. Honest to crap! It will!

GreatUncle's picture

Still echanging into FIAT currencies.

In fact anything exchanging into FIAT currencies is itself made FIAT and the volatilitiy is how much FIAT you can throw at it.

Notice how 50 sardines does not become 49 or 51, the FIAT changes.

quadraspleen's picture

Welfarecoin already exists. It's called EBT

GodSpeed_00's picture

Don't know about titcoin but there is a TittieCoin

Mustafa Kemal's picture

"Fishingcoin"

Now that'll get some of us on board!

Cutthroat Troutcoin

El Oregonian's picture

Never risk more than you are willing to lose. That said, just getting out of bed each morning has its inherent risks.

It is all relative.

38BWD22's picture

 

 

Mark Cuban is investing into something new. (UnikoinGold  ??):

http://fortune.com/2017/06/30/cryptocurrency-mark-cuban-ethereum-bitcoin/

Ahh, sounds like it's not for me...

 

koan's picture

Mark Cuban is a scum bag and certainly not above lending his name to a scam currency then cashing out before it collapses.

Silver Savior's picture

Mark Cuban is a bitch. 

USisCorrupt's picture

All I see is that the US Dollar is going in the TRASH BIN FASTER than any Currency on the PLANET !

Silver Savior's picture

Me too. Yay, the wicked witch is dead!

Arnold's picture

Someday soon, I will do some Yuan calcs for you and me and get some confirmation bias exercise.

Abe does the Yen calcs for you. Gov debt is something over 300% of their GDP now.

Rothchilds say, worry about your own ass, leave our sorry assed Euro alone.

I don't know what to think about the pound, lately.

virgule's picture

This guy is mixing up everything. You cannot mitigate risk - unless you engineer it out of the equation by changing your process/design. All you can do is mitigate the consequences of risk. Very big difference. 

His conclusions on Etherum/Bitcoin are pure speculation. They are 2 different things, in a virtual universe that is unchartered and that has overall little bearing with the real world. He's doing roughly the same thing as comparing two virtual currencies in two diffrent online games. Useless