1. The Cypherpunk Dream Got Absorbed, and the Believers Cashed Out

Bitcoin was born out of a specific fury. The whitepaper dropped in October 2008, weeks after Lehman Brothers collapsed, and it wasn’t an accident. Satoshi’s whitepaper was a manifesto in disguise. The whole point was to build money outside the reach of banks and governments. Peer-to-peer. Trustless. Ours.

Fast forward to 2025, and Bitcoin has a spot ETF on Wall Street. Pension funds are allocating. BlackRock has a ticker for it. The very institutions Bitcoin was designed to circumvent are now its biggest champions, because they figured out that if you can’t beat it, you package it into a product with a 0.25% management fee and sell it to retirees.

Is this a betrayal? Philosophically, yes. The cypherpunk ideal of financial sovereignty, the separation of money and state, has been quietly absorbed into the same system it was meant to replace. Bitcoin didn’t kill the bank. The bank bought Bitcoin.

Devil’s advocate: But maybe this is exactly what mass adoption was always going to look like. The internet was also born in counterculture and academia, and it too got swallowed by corporations, and yet billions of people use it daily. Some would argue institutional adoption is the ultimate vindication, not defeat.

Then there’s the regulatory wildcard, and this one is genuinely underappreciated.

For years, the assumed enemy of Bitcoin was governments pushing CBDCs, programmable, surveilled, state-controlled digital money that would make every transaction visible and potentially censorable. China’s digital yuan already has expiry dates baked into certain distributions, meaning the government can literally force you to spend money by a deadline.

But something unexpected happened in the US. Trump signed an executive order in early 2025 explicitly prohibiting federal agencies from establishing or promoting a US CBDC. Congress followed up with the Anti-CBDC Surveillance State Act, which passed the House 219-210, largely on party lines, and would require explicit congressional approval before the Fed could issue any direct-to-consumer digital dollar. Then came the GENIUS Act, signed into law, which instead gave regulatory clarity and support to private dollar-backed stablecoins. Washington essentially picked a side: private innovation over public digital money, at least for now.

Leading US lawmakers have publicly argued that expanded stablecoin adoption would help extend the dollar’s reserve currency status globally, with Federal Reserve officials now openly supporting stablecoins as likely to propagate the dollar’s international role.

This is where it gets complicated for Bitcoin specifically. Stablecoins are no longer the scrappy alternative asset they once were. With over $200 billion in circulation and stablecoin issuers now ranking among the largest buyers of US Treasury bills, ahead of many sovereign nations, they have become a pillar of dollar dominance strategy. The US government has, in a strange turn of events, become a cheerleader for private crypto infrastructure, as long as that infrastructure is dollar-denominated and plays by Washington’s rules.

So where does Bitcoin fit in this new landscape? The picture is geopolitically split. As of mid-2025, a record 49 governments have launched formal CBDC pilots, with the EU pushing a digital euro and China scaling its digital yuan across hundreds of millions of users. These are not neutral payment experiments. They are sovereignty plays, each government trying to ensure its currency survives the digital transition without ceding ground to US dollar stablecoins. Bitcoin sits outside all of these camps, and that statelessness is both its greatest strength and its greatest vulnerability. If a future administration reverses course on CBDCs, or if a global push for financial surveillance gains momentum, crypto as an asset class could get caught in the crossfire, even if it isn’t the primary target. The battlefield has changed. And Bitcoin, which was built to fight one war, finds itself in the middle of a very different one.

Devil’s advocate: The US regulatory pivot toward stablecoins could actually be a rising tide that lifts Bitcoin too. Regulatory clarity tends to reduce uncertainty premiums across an entire asset class. And Bitcoin, precisely because it is stateless and not dollar-denominated, could become more attractive to non-US holders who don’t want exposure to US monetary policy, even in stablecoin form. Being outside every camp has historically been Bitcoin’s strongest value proposition for a significant portion of global wealth.

2. Store of Value Is Dead. Bitcoin Behaves Like a Risk-On Asset. Accept It.

This one still makes people angry, but I’ve believed it for a while, and the metals rally of the past year has, in my view, nailed the coffin on the Store of Value narrative for good.

The thesis was elegant: Bitcoin as digital gold. Scarce, decentralized, immune to monetary debasement. A hedge against inflation and systemic risk. The problem is that Bitcoin doesn’t behave like that. When risk-off hits, when rates spike, when credit tightens, when macro uncertainty peaks, Bitcoin is one of the first things to get dumped. Gold, meanwhile, just quietly did what it was always supposed to do. It rallied during uncertainty. Bitcoin didn’t follow.

Devil’s advocate: Bitcoin is still a young asset class relative to gold’s five-thousand-year track record. Correlation patterns shift as the holder base matures. If pension funds and sovereign wealth funds become the dominant holders, buying and never selling, the reflexive risk-off dumping could diminish significantly over time. The asset’s behavior is partly a function of who holds it. Change the holder base, change the behavior.

There’s another problem with the digital gold narrative that rarely gets discussed openly, and I think it’s one of the most important structural realities of where Bitcoin sits today.

The “21 million coins” story is true on-chain. In the real blockchain, there will only ever be 21 million Bitcoin. But that framing misses what has happened to Bitcoin as a financial instrument. Think of it this way: one actual Bitcoin, sitting in a wallet, can simultaneously be the reference asset for a cash-settled ETF share (which never requires the coin to move), the collateral backing a leveraged futures position, the underlying for an options contract, and the basis of a perpetual swap traded by someone with no intention of ever touching the actual coin. Each of those financial products creates real, tradeable exposure to Bitcoin’s price, without requiring one satoshi to change hands.

The result is that the total market exposure to Bitcoin, the sum of all the ways you can gain or lose money based on its price, is a large multiple of the 21 million underlying coins. Paper Bitcoin dwarfs actual Bitcoin, just as paper gold contracts have long exceeded the physical gold that exists in vaults. The scarcity narrative holds on the base layer. In the broader financial ecosystem, synthetic exposure to Bitcoin is effectively uncapped, and grows every time a new derivative product gets listed. This doesn’t mean the price must fall. But it does mean the “fixed supply” argument, as a standalone justification for price appreciation, is considerably weaker than the brochure implies.

And here’s another pressure Bitcoin didn’t face in its early years: competition for the retail gambling dollar has never been fiercer. Robinhood, zero-day-to-expiration options, prediction markets like Polymarket, memecoins, microcap altcoins — the entire infrastructure for chasing oversized returns has been democratized and gamified. In 2017, Bitcoin was the lottery ticket. In 2026, it is one of dozens. For retail users dreaming of escaping the rat race, there are flashier, more volatile, more narrative-driven alternatives just a tap away.

3. Price-Agnostic Buyers Will Create a Floor, And Also Compress the Ceiling

Here’s where it gets genuinely interesting, and where I think the bull and bear cases converge into something more nuanced than either side wants to admit.

Because of institutional absorption, Bitcoin now has a new class of buyer that didn’t meaningfully exist before: price-agnostic, long-duration holders. A pension fund running a 60/40 portfolio that adds a 1-2% Bitcoin allocation doesn’t care if it’s at $80k or $120k. They’re rebalancing quarterly and holding for a decade. Sovereign wealth funds, university endowments, corporate treasuries following the MicroStrategy playbook, these are buyers who are structurally committed regardless of short-term price action.

This is genuinely good news for a rising floor. If the worst macro scenario hits and Bitcoin drops 60%, these buyers don’t panic sell. They rebalance and add. That’s a different dynamic than 2018 or 2022, when the capitulation was nearly total and the only buyers left were the most committed ideologues.

Devil’s advocate: A rising floor and a rising ceiling are not the same thing. In fact, the same institutional buyers that create the floor may suppress the upside. Pension funds don’t 10x their allocation because an asset goes up. They trim. They rebalance. They sell into strength to maintain target weights. The very stability that makes Bitcoin more respectable also makes it less explosive, and the explosive upside was the whole point for most retail participants.

And that’s the real tension in the five-year picture. $250,000 Bitcoin? Maybe. Probably, even, if you believe in the cycle extending with a higher floor each time. But a 20x or 50x from here in a single cycle? That era looks like it’s behind us. This cycle already showed the shape of what’s coming: real returns, but compressed. A 10x is not nothing: in any other asset class it would be generational wealth. But for a community that cut its teeth on stories of 1000x returns and $100 turning into a house, “Bitcoin as a moderate outperformer in a diversified portfolio” is going to feel like a profound cultural letdown.

There’s a generational dimension here too. Two brutal cycles, 2018 and 2022, burned a large share of retail participants. The survivors are either permanently jaded or have been absorbed into the degenerate casino of memecoins and perpetuals. The curious newcomer who buys Bitcoin and holds patiently may increasingly find that the returns don’t justify the volatility, especially when traditional markets have become so accessible and the financial media ecosystem produces a new shiny object every few weeks.

So Where Does That Leave Us?

My honest read: Bitcoin at $250k in five years is plausible. The structural case, institutional adoption, price-agnostic buyers, a fixed on-chain supply, points toward a higher floor and a continued slow grind upward.

But crypto as a cultural phenomenon for retail? That may be in steeper trouble. Bitcoin could win the long game and lose the retail crowd at the same time. It gets the pension fund allocation. It loses the kid with $500 and a dream.

And if that kid, burned twice in a decade, looks at Bitcoin and sees an asset that now offers mid-single-digit annualized returns with BlackRock’s name on the wrapper, he’s going to log into Robinhood and buy a 0dte call on something he saw on a Reddit thread. The casino is more accessible and more aggressive than it has ever been. Bitcoin, in becoming respectable, may have lost the one thing that made it electrifying.

Whether that’s a tragedy or a maturation depends entirely on what you thought Bitcoin was for in the first place.

These are personal opinions, not financial advice. I’ve been wrong before and I’ll be wrong again. The only honest thing I can tell you about crypto is that certainty is always the most dangerous position to hold.

This tweet has resonated with me ever since I read it, and this article is especially dedicated to those with a small portfolio tying to make it rich in a short time.

Often, when just starting out in trading, and more-so in crypto, people expect immediate explosive results, they want to “win the lottery” they don’t want to slowly and linearly stack gains. The most common direct consequence of this is that new traders tend to gravitate towards perpetual futures, where they see leverage as a tool to speed up and multiply gains, as opposite to spot trading, which they judge inadequate to their small portfolio, and they tend to “zoom in”, that is they gravitate towards trading on low time frame (1H and lower charts).

There’s still a few OGs on CT, that post charts and thoughts, and they usually start from monthly and weekly charts. Many dismiss them, thinking “what good is the monthly chart to me if I’m in and out of the trade in 2 hours?” and they keep trading and trading and trading, often with alternating results or straight up losses over time.

One such OG poster is @DonAlt. on November 1st and 2nd he posted ETH charts saying his trade was done and things looked bearish so to have caution.

$ETH was at $3,900,

$BTC around $110K.

As a (new) low time frame trader, usually with a small margin/portfolio, it is easy to dismiss stuff like this and think: “oh well, Donalt is a multimillionaire by now, he can afford to simply sit on his hands since November, but I must make money quick, I can’t waste time”. Ok, but now I want you to make an honest assessment of yourself.

ETH is pretty much down 50% since November 1st,

BTC is down to 76$K, effectively erasing all gains since Trump took presidency.

Can you, today, buy more 2x more ETH or BTC than you could on Nov 1st with the funds you kept trading with?

In other words, did you “outperform” sitting on your hands for 3 months? Because if you cannot, you need to ask yourself what was the point of grinding all those insane hours in front of the hourly charts? And maybe rethink your strategy, if you even have one. Realize that sitting on your hands waiting for a trade to materialize for you, or simply waiting better conditions (than a slow controlled bleed), or macro or geopolitical scenario, maybe that’s a skill worth cultivating and developing.

Maybe your impatience makes you lose yourself into “noise” of low time frame and makes you miss the big picture (dry liquidity, clear downtrend, loss of momentum on rallies, etc).

Maybe, “The speed at which you try to make it, is the speed at which you lose it”.

In this post, I will try to get two points across at once.
1. Most people don’t work hard enough for what they want;
2. Most people don’t really know what they want, thus their efforts are misdirected.

The man in the picture was Sergio Marchionne (1952–2018). He was an Italian-Canadian businessman best known for turning around Fiat and leading the merger that created Fiat Chrysler Automobiles (FCA). At his peak, his estimated net worth was around $600 million. He died at age 66.

He had children and left them relatively young, who barely knew him, as stated in several interviews to people close to him:
“You can ... say he is a bad father, as he never spends time with his kids, but you cannot ever question his leadership as a manager.”
Another piece describes Marchionne as “always busy (Saturdays, Sundays and evenings) and would neglect his family” . He was known for working 12 hours days.
In an interview he himself said:
“It has a severe impact on your private life because you’re always with them when you’re there.”

Probably you never heard of Sergio Marchionne. Maybe you heard of someone else called Elon Musk.
I won’t report everything here, I’ll just attach a screenshot:

Of course none of us is the CEO of one of the 100 biggest companies in the world, but many of you (of us) in crypto have quite ambitious goals in terms of monetary success and other achievements, let alone the speed of it.
Ask the average Joe on the street if making $1M in a year is doable, or retire with $10M before 30 etc.

And yet, I’ve been in this space for years and cycle after cycle I see so many people simply waiting for success to fall in their laps. Doing the bare minimum or less, hoping some influencer or big whale account will simply magic them into being billionaires, give them the secret sauce or the next coins to reach trillions of valuation.

Much like a guy sitting all day on the sofa munching chips, and wondering when he’s gonna looks jacked and with a 6 pack.

You guys are not putting effort. You spend 10 hours a day on twitter or discord or telegram, but don’t spend the hours on the charts, building those pattern recognition skills and muscle memory. You don’t take enough (small) trades to build up automatism, to learn yourself, learn how you behave under stress, underwater, close to stop loss, you don’t learn how to control euphoria when you’re up 3x and you don’t wanna move your stop in profit etc.
You don’t log your trades, you don’t analyze your performance to see what must be changed or can be improved, you don’t make a sunday plan for next trading week, you don’t do recaps, and so on.
You simply wait for your heroes to tell you entry stop tp and maybe scroll your john when you’re done pissing.

You must put the hours in.

The second point I want to get across today is more nuanced, but not less important.
Many people in this space have arbitrary monetary goals, instead of asking themselves what they really wanna reach in life.

Money unlocks many freedoms, so you can think its the key to everything so make a lot of money and figure out the rest later, but it’s not that simple.
First of all, having a clearer picture of why you want that money, what you want in life, make it easier to focus and motivate yourself on how to achieve it, and in addition, you may end up realizing what you want doesn’t even cost as much as you thought, or worse, it’s so unfeasable that it’s not worth the grind.

There is many people in crypto that are worth over $1M and they feel miserable, they lead miserable lives and spend their days grinding to make more money because they need to reach $10M or whatever, and they never stop and ask themselves:
1. what I wanted to achieve by making a lot of money in the first place?
2. do i need to reach [ goal number ] before I start enjoying myself?
Maybe you wanted to travel the world without budget, visit all the continents at your leisure, maybe you’re a foodie and wanted to enjoy high level restaurants at every meal, maybe you wanted to retire your parents etc. and instead you’re day after day in your dark room clicking buttons and ordering doordash mediocre food and not taking care of your body and mind.

Maybe you realize you can have that trip to Japan in 5 stars hotel before even being a millionaire, and come back home satisfied and motivated to continue, or to pursue a new passion, and so on.

Maybe you just don’t want to have a boss telling you what to do, or need to ask for vacation or sick days, and you’re fine taking the amount of trading necessary to have the same income as your 9-5 but leaving you many more hours free during the day, to spend with your family or your hobby.

An easy (unless you resist the truth) way to find out what you really want is to keep asking yourself WHY? Why are you doing this? Because you want $1M? Why? Because you hate waking yourself up at 7am and want to be free? So why are you instead waking up at 3am because your long is close to liquidation? Maybe you can adjust your system to trade less or have larger invalidations, make less but sleep better? Maybe you wanted to learn how to cook? So why are you ordering delivery garbage to keep babysitting trades?
You wanna provide a better future for your children? So why are you 12h a day at the screen instead of enjoying time with them while they grow up?

How bad do you want it? And Why?

Once upon a time

In prehistory, purpose was inseparable from survival. Early humans didn’t need to ask what they were meant to do: if you didn’t hunt, you didn’t eat. If you failed to gather, build shelter, or protect others, the result was simply fatal. Every action carried meaning because it directly sustained life. There was no gap between doing and mattering; existence itself was the justification for effort.

When humanity began to farm and form villages, for the first time, humans could specialize. You started seeing professions emerge, like the baker, the butcher, the blacksmith, and so on. In small communities, a person’s work was visible and essential. A blacksmith saw their tools used, a baker knew his bread loaves would be on people’s tables. Purpose began to take on a social dimension, in the form of tangible contribution to society. Work and identity were intertwined.

Even the earliest moral traditions reflect this shift. In The Bible’s Genesis book, after the fall from Eden, God tells Adam that “by the sweat of your brow you shall eat bread.” Work becomes not just a means of survival but the defining condition of human life, both burden and purpose. Labor is framed as the price of knowledge, and in the agrarian societies that followed, that idea took root in daily life. To work the soil was not only to live, but to justify one’s place within creation and the community.

The Industrial Revolution disrupted that relationship. As labor became mechanized, the link between effort and outcome started to dissolve. A factory worker might tighten the same bolt ten thousand times without ever seeing the finished machine. Later, the office worker performed tasks on paper or screens whose relevance was even less tangible. The economy grew vast and abstract, and most individuals could no longer trace how their labor benefited anyone in particular. Over time, the idea “I make this, therefore I matter” slowly gave way to something narrower: “I work, therefore I survive.” The sense of purpose that once came from creation and contribution was replaced by a quieter logic of necessity. Labor remained central to life, but its meaning had changed. What once affirmed a person’s place in the order of things now merely preserved it. Purpose was not anymore pride, craft, and belonging, it became something closer to transaction, a means of keeping life going rather than giving it shape. In that shift, work began to lose its inner resonance with purpose.

The digital void

In the digital era, that abstraction has reached an almost existential level. The modern economy now rewards actions detached from any material or communal value. People can make fortunes trading derivatives, flipping tokens, or speculating on cryptocurrencies, all profitable activities that often produce nothing tangible or socially constructive.

In many cases, these are zero-sum games: one person’s gain is another’s loss. To win, you must implicitly hope someone else loses: someone less skilled, less informed, or simply less lucky. There is a quiet awareness that the profits come from taking, not creating.

It’s a strange kind of victory, one that fattens the wallet but impoverishes the spirit, and undermines the foundation of purpose. Humans are wired to contribute, to see their actions ripple outward in visible, beneficial ways. When your labor exists only as a number on a screen, maybe at another’s expense, purpose becomes difficult to justify, even to yourself.

Goals versus purpose

This crisis is often mistaken for laziness or burnout. In truth, it’s a confusion between goals and purpose. The two can look identical from the outside, yet they move in opposite directions. A goal is something you move toward; a purpose is something that moves through you.

Goals are finite, measurable, and self-contained. They have clear conditions of success: a target profit, a promotion, a finished project. Purpose, by contrast, has no endpoint. It’s directional, not destination-based. It tells you why to act, not just what to achieve.

A sense of purpose tells you why to act, not just what to achieve.

Modern life teaches us to think in goals because they’re easy to count and reward. School, work, and finance all depend on measurable outputs. We learn early to chase metrics like grades, money, followers, and we start to believe that accumulation equals meaning. But the math never works. The moment one goal is reached, the satisfaction fades, and a new target appears. The process keeps you busy, but not fulfilled.

Purpose is different. It’s not about progress so much as coherence. It links your actions across time and gives them continuity, so what you do one day still matters the next. A life built only on goals can succeed brilliantly in fragments while failing as a whole. You can meet every objective and still have no idea what those victories belong to.

You can see the difference in people whose work, however simple, feels rooted. A religious person might bake bread or fix cars with a quiet conviction that their labor serves something sacred: they firmly believe that every act of creation, however small, honors the order or grace of the world, or fits into God(s)’s design. Their purpose doesn’t depend on income or recognition; it’s anchored in something larger and older than themselves.

A secular example looks similar in spirit if not in faith. Think of someone who works long hours not for prestige but to support a family, to build a home, to make life easier for those they love. Their days might look ordinary from the outside, but there’s a line connecting them all: the knowledge that their work has a face, a name, a consequence. That kind of purpose doesn’t come from a belief in transcendence, but it is rooted in a sense of belonging and building for those one loves.

Sartre and the weight of freedom

The philosopher Jean-Paul Sartre wrote about this in his works. He argued that “existence precedes essence”, meaning that humans aren’t born with a fixed purpose but must define it through choice and action. In premodern societies, survival provided the script. In modern life, the script has vanished.

Sartre saw this freedom as both liberation and burden. Without an external structure to dictate purpose, individuals face what he called anguish: the anxiety of realizing that meaning depends entirely on what we create. In a world where work and value have become detached, that anguish only deepens. We are free, but we feel empty.

How to rebuild a sense of purpose

If you’re still with me, we saw how the erosion of purpose is a direct consequence of the design of modern work and the values embedded within it. So where do we go from here, about regaining a sense of purpose? If survival no longer requires contribution, purpose must be built deliberately rather than inherited.

Some people rebuild it through mentorship, helping others navigate the same confusion they once faced. Others through creation: art, writing, design, or small crafts that reconnect abstract effort with tangible results. For those in professions that produce nothing concrete, service can restore equilibrium: donating time, knowledge, or resources to communities that still depend on visible, grounded work.

Maybe the point isn’t to quit trading or to chase some dramatic reinvention, but to find a way back to substance. The numbers themselves aren’t the problem; it’s what they’ve replaced. Profit was meant to measure value, not become it. Somewhere along the way, that feedback loop broke. The numbers on the screen kept moving even when nothing was changing in the world outside it.

Profit was meant to measure value, not become it. Somewhere along the way, that feedback loop broke.

If your work no longer leaves a trace, make one by choice. Build something that will exist when you log off. For example, teach someone what you know. Not because it’s profitable, but because it will give you a sense of contributing to the (online) community you live in, and can also gives you a sense of belonging. Moreover, you will see with your eyes the fruits of your teaching, when people write you back to say how much you helped them etc.

The market rewards speed, reaction, and self-interest. Purpose rewards the opposite, it is about persistence, reflection, connection. Rebuilding it doesn’t mean rejecting the modern world, only refusing to let it flatten everything into numbers.

You can still trade, still play the game.
Just remember that no system can measure meaning.
The charts can show you how to win.
Only you can decide why it matters.

One guy in particular gave a wise suggestion, that days later made me make a parallel to the challenges of trading, which is why I am writing this article. This guy said something along the lines of:

“If you can’t figure out a boss attack patterns or you think too much is going on at the same time on the screen etc. try and go into the fight with the single objective of avoiding getting hit. Try to simply move to evade attacks and dodge, with zero intention to attack or punish, you will soon realize several things: 1. the “tells” the boss shows before starting a specific attack 2. the timing and spacing to avoid attacks, both important 3. if you focus on waiting for the boss moves, you won’t move like a spaz, so you’ll notice that some moves are neither random nor unavoidable 4. less unnecessary movement = less noise on screen, better reaction from you 5. by not moving around unnecessarily, you won’t get “trapped” in a corner or near a wall at a bad time when the boss is about to attack etc. Basically just enter the fight with the objective to survive, until you can read the boss well and you can start punishing with your own attacks”

I took the liberty to summarize several posts in a single one, for the sake of the article. First of all, this definitely improved my game and sped up my progress through Silksong. But now, after some days passed, it dawned on me how much of this can be applied 1:1 to trading the market.

stay still and read for tells/opening from the boss

First of all, many traders can’t simply sit on their hands simply reading the market and waiting for the conditions of a good trade to manifest to them. This impatience (often stemming from gambling addiction) not only leads to taking subpar trades, but also make you miss the good ones because you’re too busy with garbage.

moving around unnecessarily adds noise and unpredictability

Constantly getting in and out of positions, changing bias 50 times a day based on single candles, getting distracted by noise on CT or unrelated news etc. it all adds up a layer of “noise” and difficulty to read the market that we could simply avoid by staying still until we spot a good trade.

don’t get trapped in a corner or against a wall by doing stupid moves

How many times a coin we were bullish on finally moved, but we couldn’t join the pump because our margin or money was trapped in a different (losing) position? That feels like getting caught with your pants down, like you know you should not be there and your money should be free to deploy on the good trade you wanted, but now you’re trapped. Same thing.

And then, the most important one for last:

Focus on survival, not gain

Too many traders, and not only new ones, focus too much on fantasies of gains, potential pnl of trades etc. and not enough or not at all on the long term survival rate of their strategy: you can have a winrate of 80 or 90% but if you risk your whole capital every time, or don’t know how much you risk, eventually probability will catch up to you and you will go bust. CT is full of examples of people raking up 6 figures a month and then blowing up in weeks or months and losing 7-8 figures in a series of bad plays. Crypto is (still!) a land of endless opportunities, in the form of new coins, new primitives, new narratives, hell even airdrops, all you need to do is survive and be there (with some capital) to profit from these opportunities. Play to survive, and the money results will take care of themselves.

This game was an incredible success and attracted millions of people to the Dark Souls games franchise, for many it was the first experience with such brutal game and combat design.

FromSoftware games are known to be "hard but fair", there is little to no room for errors when fighting a boss, but even when players die 100 times to beat a single boss, they (mostly) never feel cheated by the game, they ackowledge the game mechanics as being fair, albeit brutal, and it all resides in the skill of the player to read the boss moves, move accordingly, and punish when there's an opening. Of course the game has some "rpg mechanics" where you can upgrade your character and your gear, or get different items to help you in combat, but ultimately, ask anyone and their answer will be the same:

"keep playing until you get good at it".

And, many swear, the ultimate satisfaction you feel when beating such bosses after so many tries, is something you can only appreciate after pouring hours of sweat and curses on it.

Now, imagine if every time you wanted to challenge Elden Ring bosses, you had to pay a $100 fee, or $1000 fee, but if you got good enough, every time you beat a boss you could earn $10,000 or something like that. Even expert players can't consistently beat the boss every single time, and most good players would probably average between 50 and 80% win rate.

In such a scenario, I could imagine a very lucrative market of people selling books and video courses on how to become good at Elden Ring, to make money. How to better level your characters, what items to pick, what stats to grow, etc. Many would pay eagerly for a $50 book or $200 course that was promising them how to learn to make $10,000 a pop beating bosses!

But you know the truth, don't you? In the end, no matter how many hours of courses, youtube videos, or pages and books you would consume and absorb, at some point, you'd have to take the controller in your hands and play. Do you think you could be ready? Do you think your hands and reflexes would be able to beat the boss? The truth is, nothing could substitute you pouring the hours in, clicking clicking clicking, rolling dodging parrying stabbing healing, dying and doing it all over again. Ten times, one hundred times, and then again for the new bosses.

There is no course that would really replace the training your eyes brain and hands need to "get good" at fighting in Elden Ring.

But for some reason, (spoiler: the reason is the allure of making big money), people are not ready to admit the same for trading and the markets. Yes, you should learn the basics, you should learn risk management, but then you must go out there and click click click. In the markets you will lose money, not just time, while the market keeps hammering lessons at you about how it works and most importantly how YOU work, your emotions, your arrogance, your insecurity, your doubts, your convinction, and so on. No book will ever teach you what you will feel when you have a $100,000 position and you are underwater $6,000 and last month all you had to your name was $3,600. You need to go out there and learn for yourself. You gotta be clicking clicking clicking.

Good luck.

I am here to campaign for a different attitude, if you want to be successful. A diametrically opposed approach.

Total Ego Death.

You see, ego is a bitch. We're social creatures, after all we were monkeys just some ancestors ago, and we crave the respect (or the fear) of our peers, we like to think or being told "we're the man". We all have an ego. And look, ego has a reason to be there, evolutionary speaking.

The thing is, we did not evolve to trade markets. More generally, we did not evolve to deal with events that have probabilistic outcomes. When hunting a prey, you could hit with your spear and you'd eat that day, or you would miss, and starve. Maybe your throw had a 70% hitrate, but you were not doing the math, and the throw was something you could train your skills on, or craft better tools etc.

When you take a trade, it has a % of chance to to against you. Note that this probability is not found in a textbook, it is not known to you, and most importantly, whatever the outcome, still does not tell you what were the odds at the time of taking the trade, just how it went. The trade outcome is largely out of your control, there's forces at play, and big money, and exogenous causes that move the charts, that you have no control and often no visibility on.

But your ego, that little monkey brain vestige, wants you to be right. Because if you're right you get respect, you get status, maybe you wet your dick in some pussy from the tribe. Your ego does not know that the probabilities of the trade are out of your control, and is gonna fuck you - and your confidence - if the trades goes "wrong".

So, if you want to be a successful trader, you must learn to separate yourself and your reputation and your ego, from the probabilistic nature of trading. It's hard, but necessary if you want to survive, or better, succeed.

What you can work on, what you can get better at, is what you can control:

• the reason you're taking a trade now

• your risk management, how much are you risking per trade/day/etc

• the expected level where you think the reason for your trade is finished (take profit level)

• very important: the expected level where you think the trade is a loss and you close.

Pay attention to the last one. Invalidation is often referred to "the level you're wrong" but that's a very personal judgment on your trade. A trade can be a good trade even if you close at a loss, as long as it respected all the reasons you had for taking it, and you risked what you were willing to risk on it. Bad trades are bad trades when you take them, because you take them for the wrong reasons or at bad times or with wrong size. Never judge a trade, or yourself, by the outcome of a single trade.

ps. Suggested readings: Mark Douglas books, TraderDante youtube videos

Or, it's more of a "The Emperor is naked" moment, and a veil has been lifted that cannot be patched back.

Let's list some of the important highlights:

1. Most "memecoins" big launches happen only after private deals take place, in which part or most of supply is bought/given to KOLs and other entities at a lower mcap than whatever it launches at

2. As everything involving a large number of people with different agendas and belonging, early knowledge of such tokens/deals has a way to "leak" early to other parties, even not in on the deal

3. From the mouth of Hayden Davis himself, "how else you make money then?", that is, all these entities believe firmly that the only way to make the big bucks is to be insiders of a rigged game, there is no fairness and no meal for those left out.

4. Partly because of .2 (info leak) but also unavoidably once the token is effectively deployed on the public blockchain and a CA exist, there is a large problem of sophisticate snipers that have the tech and especially the capital (in millions of $) to secure a good chunk of supply in the first seconds of life of the token, and having no affiliations with the "team" they have no qualms destroying the chart dumping their tokens

5. So far, the "teams" answer to problem .4 has been to perform sniping themselves (on commission, I believe), so as to "limit" the amount of supply that other snipers can scoop and dump. Surprisingly, this is not seen as immoral by them, or rigged, but "protective" towards retail and the chart.

6. There's a grey area where Hayden says that such supply/liquidity (obtained also by "pulling" partially from liquidity pools on meteora etc) is considered "treasury" to be used to sustain the chart in the medium long term, but also the chest from where the team picks their profits. It seems there is a large commingling here and "retail" is left in the darkness as to the true use of such funds.

7. The only "organic" memecoins are mostly either dead, or dead and then CTO'd (often by the same kind of teams of .1)

8. Groups that manage these big hyped launches hope to see the coin live for months and "hopefully 1-2 years" but the reality is that coins struggle to last more than a few days. They blame it mostly on .4 (snipers)

9. There's a widespread and agreed upon cynicism among these insiders that crypto, all of crypto, is mostly devoid of any utility or use case, is a zero sum game to find the greater fool to hold a hot potato, and is simply a game of max extracting value. According to Hayden, this is "all the way to the top, even including Bitcoin".

10. There is a bit of a twisted moral view, that as far as traditional capital markets (stocks etc.) are seen as "rigged and corrupted" despite all the regulations and laws, it's hypocritical to single out the crypto rigged games. The notion that crypto could be a new ground to try and establish a fairer playground is dismissed as childish and naive.

As I wrote above, despite the admission of widespread crime in the interview, some of these points are in my opinion largely unaddressed in the public crypto discourse, and as far as I see "solutions" offered seem to be scarce, utopian, or the problems themselves are hand-waved as non-issues.

First of all, the public and transparent nature of blockchains make it so that the second a CA (contract address) for a coin is established, sniping the listing is a "solved game" by several participants with both the tech know-how and the close to unlimited amount of capital at their disposal. Basically, the chances for retail to buy a coin at a low market cap are essentially zero, unless it's a "dead" coin that you have the luck of someone CTO'ing at a later date (and usually gets scooped up by insiders first anyway).

This is a largely unaddressed issue for any coin that even in good faith want to launch directly to market, i.e. not go through rounds of private investing, (but even those may be sniped at TGE). There's possible patchworks and workarounds, that I personally haven't seen tested yet, like for example mass deploying 50 tokens on pumpfun and then keeping the real CA unknown until after bonding and sufficient market cap is achieved. This would make snipers have to either spread and dilute their capital, or pray the luck out on the right CA, thus limiting the damage for retail but not solving the problem at the root. Also is subject to the information leaks by insiders of the real CA (maybe sold to snipers for money, etc)

Another large one is the cynicism. This probably deserves a whole separate article (and more!), but basically the motif of this cycle so far ha been disillusionment: it appears to me that most participants, and especially newcomers, are not at all optimistic relative to the promises of crypto to establish DeFi, that is, Decentralized Finance where people are sovereign holders of their funds and perform their operations without the need of third party intermediaries, and are not subject to national borders limitations and fees, etc. Crypto is mostly seen now as a wild west casino where no coin is seen as innocent of being simply a speculative asset with zero backing or utility, everything is seen as a zero sum game where for me to make a dollar you have to lose one, and we're all playing the greater fool game until the music stops. It is difficult to blame them, I will add, because even if we take Ethereum as the first mature step towards the "world computer" and "DeFi" with its smart contracts, that tech and this industry is now close to 15 years old, and while there are several respectable protocols that satisfy the needs of thousand of users for DeFi, 15 years is a long time in tech and finance and I believe we can say that it has "mostly not delivered" on its promises.

But I see so much attention and yaps wasted on the crimes and the lost money and the lack of morals etc. and not enough words spent on the fact that we're now "old enough" to ask ourselves, are we really building something here? Are we really offering an alternative, or building one, to the shackles of traditional finance and banks and institutions? Or are we really left with Bitcoin becoming largely a tradfi asset and the rest of the space a wasteland of bandits trying to squeeze money out of desperate individuals with no clue?

Crypto attracts people because of the possibility of fast and easy money.

Now, most people that come to crypto have modest capital, and pretty much zero understanding of markets and finance (a sizeable number of people even struggle with percentages math).

They come to crypto, and they mainly see two types of "very successful" accounts:

1. People who trade with big size on exchanges and boast $$$ in PNL

2. People who buy coins on-chain and boast +3348u2% returns in PNL

Timmy knows he's late to expect 50-100x returns on coins like BTC or ETH or SOL, so he feels he needs to gamble in a way to get the biggest returns possible in the shortest time (because in your 20s, 10 years sounds like a life sentence, of course it sounds like a lot, it's 50% of your past life).

When deciding what are his best chances to allocate his little money, our little new investor Timmy now faces a dilemma:

• on one hand, buying shitcoins early on-chain seems related to huge luck or insider info, cabals, etc, or large capital (so you can spray 1000 coins and win on the few that pump)

• on the other hand, trading (perpetuals) sounds hard but also more skill based, predictable, something that can be learned, and there's plenty OGs offering courses and mentoring

Of course little Timmy has also wrong ideas about leverage, so he thinks he can magically multiply his trading size (and returns) by using leverage. That is not a topic for today.

Overall, the above may skew his perception in favor of learning how to trade, tempted by the idea of a more "repeatable" setup/skill to generate money, as opposed to find the lucky lottery ticket in the trenches.

My advice, having spent more than a cycle in both camps (and more, last cycle NFTs were a thing, now you should simply stay away), is that learning to trade is not for everyone, in fact it's not for most, and should be avoided as a way to quickly grow one's account.

Trading is good in environments like traditional finance and forex, where you get charts that respect most of technical analysis "memes", and especially don't move much on higher time frame so it's profitable to just catch small moves (with leverage), rinse and repeat on new setups, etc.

But this is counterproductive in crypto. In a space where coins, even billion dollar coins, can move 20-30x in a year, it's dowright silly if not dangerous to try and play for 10% moves on lower timeframes. First of all, the right setup may not present, leaving you without entry, second of all you may miss the forest for the tree, trying to scalp 10% moves instead of buying once and riding the multiple Xs on the way up.

Third, and this is quite underrated among newcomers, is volatility. Especially with leverage, volatility can "shake you out" of a trade before eventually going the right direction and to your target. Coins may go up and down 20% multiple times in a week before eventually ripping 2-3x and leaving you poor and frustrated.

So what do I suggest?

The best way to quickly scale up your small portfolio is to compound on the power of 2-3x multiples on buying spot bags of single coins, which is entirely doable every cycle and pretty much every month during a bull run. You don't even need to go very deep into the trenches of memecoins and such, there are constantly coins that capture the "hivemind" of crypto for a few weeks and return you multiples, without need to be "early" (as in, the first 2-3 hours from launch) nor need you to know any technical analysis or use any leverage.

To make a few example from the current cycle, coins like SUI, HYPE, ENA, ONDO, and big established memes like PEPE (or even SOL), granted you at least a 2x without knowing anything except that they were "the flavor coin of the month". You'd be surprised what compounding the power of 2x means for your portfolio.

There is a "sweet spot" where if some coins etablish a solid floor above $10M mcap, they're almost guaranteed to reach $100M. Even capturing 1/3 of such moves is already a 2-3x.

Of course doubling $100K is not as easy as doubling $1000, you gonna have to learn stuff about liquidity, size, etc. but up until 7 figures it's entirely doable with big "flavor of the month" coins.

Good luck!

And there is a lot of false common sense and wisdom that people especially new to the game encounter, like the famous "buy the blood" sayings etc. I want to make some order and clear some confusion, so the first thing to understand is that there are two different situations, two states the market is in at all times:

1. Coin (chart) is trending

2. Coin is ranging

These two are the only two conditions you really need to know.

Trending means that the chart is mostly going up and to the right (or down and to the right - downtrend) with mostly no pauses or retraces, usually with good volume. That means market participants are agreeing that an asset is mispriced. Undervalued if it is trending UP, Overvalued if it is trending DOWN. And whoever had a different opinion is caught offside and is racing to fix that mistake (by buying, or selling) in a rush. Now, if an asset is trending, you have only two choices, either join it, or ignore it (for example if you think it's a scam, or you think it's too late because it's been trending for a long time - this is discretionary - etc.). Entries don't matter too much here, meaning bad entries are quickly forgiven by the market. You do NOT step in front of a trend. That's it. You're not smarter, you don't have an exoteric knowledge that makes you able to say everyone is wrong but you and reep the rewards. If you disagree with the trend, simply wait for the market to show it's over. And that brings us to ranging markets.

Ranging means that the chart is mostly going neither up nor down but stays within two broad values, thus we say a range. This means that market participants are agreeing that an asset is FAIRLY valued. That means most people agree that's a fair price for the asset. Here enters your discretionary judgement. As the asset value visits the extremes of such a range, people will begin to disagree, for example at range LOW some people will think it's now undervalued (and buy) some people will be afraid the range will "break" to the downside and the asset will start trending again (down), so they will want out or nothing to do with it. If you think the asset is undervalued, you buy, if you don't you don't. Same for upper range and breaking out upwards.

The point I want to make is that in a ranging market, you want to take entries when most market participants are in discord (disagreement) over the value of the asset, and in trending markets, you want to "go with the crowd", that is do not fight the agreement of the market that an asset is going steadily up or down.

The last piece of the puzzle is time. Good entries are entries where the market gives LITTLE time to participants to position themselves. The best entry to a trend is at the start of course, but there is a bigger risk to do so because it may be wrong. So, few people get in early. In a ranging market, you want to enter at the extremes we said. But time is essential: the more time an assent spends at the extremes, or visit them too often, the more "chances" it's giving to market participants to enter. So if everyone that wanted to enter at that value is now in, who is left to buy/sell? You want your entries to be the less crowded as possible, in terms of time and number of participants. tl;dr

1. trends = buy early and risk being wrong, or join later, never fade

2. ranges = buy extremes (low/high), get out if tested too often or lingers too long there

Abracadabra!

The word "Abracadabra," often associated with magic and enchantment, has its roots in Aramaic, translating to "I create as I speak." This phrase beautifully encapsulates the essence of magical thinking—a belief system where words and thoughts are imbued with the power to influence the material world. In cryptocurrency trading, this ancient concept finds a modern echo as traders, especially newcomers, fall prey to the seductive notion that their desires, intuitions, or rituals can sway the highly volatile and unpredictable crypto markets in their favor.

This blend of hope, superstition, and the human penchant for pattern recognition often leads traders to see opportunities where there are none, attribute successes to luck or talismans, and believe in their unique ability to predict market movements. Such magical thinking, while a natural aspect of human psychology, poses significant risks in the unforgiving arena of crypto trading, where the forces of market demand, technological innovation, and regulatory change govern the reality.

Understanding and overcoming magical thinking is crucial for anyone venturing into crypto trading. It involves a shift from a belief in mystical control over the markets to a grounded approach based on education, strategy, and a rational understanding of market dynamics. The journey from "I create as I speak" to "I analyze to achieve" is essential for achieving long-term success in the crypto trading space.

The Lure of Magical Thinking in Crypto Markets

Magical thinking in cryptocurrency trading manifests in various forms, each potentially leading traders away from logical decision-making processes. New traders, enticed by stories of overnight millionaires, may come to believe they possess the innate ability to predict market movements, attributing their successes to luck or superstition rather than strategic planning and analysis. This belief system can lead to overconfidence, underestimating risks, and a reliance on emotional trading rather than data-driven strategies.

Human beings are pattern-recognition machines, and nowhere is this more evident than in the behavior of new crypto traders. Many fall into the trap of seeing profitable patterns where there is only market noise. This can lead to the gambler's fallacy, where traders expect that past trends will predict future market movements, a particularly dangerous belief in the highly unpredictable crypto market.

In the face of uncertainty, it's not uncommon for traders to turn to superstitions or rituals, mistakenly believing these can influence market outcomes. Whether it's trading at specific times of the day based on auspicious numbers or wearing a "lucky" item during trading sessions, these practices underscore the deep-seated need for control in an inherently uncontrollable market.

The Power of Self-Fulfilling Prophecies in Crypto Markets

While much of magical thinking in cryptocurrency trading can lead to irrational decision-making, there's an interesting phenomenon where collective belief in certain patterns or signals can create self-fulfilling prophecies. This occurs when a significant number of traders place their faith in specific chart patterns or market indicators, leading their collective actions to drive market movements in the anticipated direction.
For instance, if a large number of traders believe that a particular cryptocurrency will rise in value after it crosses a specific price threshold, their subsequent purchases can drive up the price, thus making the prediction come true.

The Role of Technical Analysis

Technical analysis, which involves studying chart patterns and technical indicators to predict future market movements, often plays into this dynamic. While critics argue that some aspects of technical analysis resemble magical thinking, its widespread acceptance among traders means that predictions based on technical analysis can influence trader behavior on a large scale, lending weight to certain patterns and indicators.

This phenomenon is a double-edged sword; while it can lead to profitable opportunities for traders who can accurately read the market's mood, it also poses risks. Markets that move primarily on trader sentiment rather than fundamental value can experience sudden and severe reversals, leaving those who mistake these patterns for guaranteed outcomes at a loss.

For crypto traders, understanding the line between rational analysis and magical thinking, even in the context of self-fulfilling prophecies, is key. While it's important to be aware of how collective beliefs can influence market movements, relying solely on this without a solid foundation in market fundamentals and risk management can be dangerous. Successful traders learn to navigate this complexity by balancing technical analysis with a keen awareness of the market's fundamental drivers, always prepared for the unpredictability inherent in cryptocurrency markets.

The Influence of Narratives in Cryptocurrency Markets

In crypto, narratives can be just as powerful—if not more so—than fundamentals in driving market movements. These stories or themes capture the collective imagination of traders, influencing their perceptions and actions, and thereby, the market itself. Understanding the role of narratives is crucial for navigating the crypto landscape, where sentiment often overshadows technical and fundamental analysis.

Crafting the Crypto Story

Crypto markets are particularly susceptible to narratives due to their relatively nascent status and the complexity of the technology involved. Stories about new technological breakthroughs, regulatory changes, or institutional adoption can quickly become the lens through which traders view the entire market, dictating bullish or bearish sentiments that drive trading behaviors.

Narratives vs. Fundamentals

While narratives can move markets significantly, they often do so independently of underlying fundamentals. A compelling story about a cryptocurrency's potential may lead to rapid price increases, even if the project's actual development, security, or utility is lacking. This disconnect between narrative-driven valuation and fundamental valuation poses risks for traders who may be caught up in the hype without a clear understanding of the asset's true worth.

For traders, the challenge lies in distinguishing between narratives that have a genuine basis in fundamental value and those that are purely speculative. This requires a critical evaluation of the sources and substance of market narratives, as well as an understanding of how these narratives fit within the broader market context. Traders must also be vigilant about the temporary nature of narrative-driven market movements, which can reverse as quickly as they arise when new information emerges or sentiments shift.

The proliferation of social media and cryptocurrency-focused news platforms has amplified the impact of narratives. Information—and misinformation—can spread rapidly, influencing trader sentiment and market direction in real time. Traders need to develop media literacy skills to navigate this landscape, critically assessing the credibility of information and its potential impact on the market.

Strategies to Overcome Magical Thinking

Addressing and mitigating magical thinking requires a multifaceted approach focused on education, strategy, and an understanding of market principles. Here are some strategies specifically tailored for crypto traders:

Education and Critical Thinking

The first step in combating magical thinking is through education. Crypto traders should immerse themselves in the fundamentals of market analysis, including understanding the technologies behind cryptocurrencies, market indicators, and the economic factors that influence price movements. Critical thinking skills enable traders to differentiate between evidence-based strategies and superstition.

Developing a Disciplined Trading Strategy

Success in crypto trading doesn't come from luck or magical insights but from developing and adhering to a disciplined trading strategy. This includes setting clear goals, managing risks through diversification and stop-loss orders, and continuously evaluating and refining one's approach based on market feedback.

Embracing Risk Management

Understanding and managing risk is paramount in cryptocurrency trading. Traders need to be aware of the volatility of the market and use risk management tools and strategies to protect their investments. This involves not only setting limits on potential losses but also understanding the psychological aspects of loss aversion and how it can lead to poor decision-making.

Cultivating Emotional Regulation

The highs and lows of crypto trading can be a rollercoaster of emotions, making emotional regulation a critical skill. Traders should develop techniques to manage stress, avoid impulsive decisions based on fear or greed, and maintain a long-term perspective despite short-term market fluctuations.

Engaging with a Community

Joining a community of experienced traders can provide new entrants with insights, support, and a sense of perspective. Learning from others' experiences and mistakes can be invaluable in developing a more analytical and less emotionally driven approach to trading.

Conclusion

Magical thinking can be a significant barrier to success in cryptocurrency trading, leading to overconfidence, misinterpretation of market signals, and poor risk management. By recognizing and addressing these cognitive biases through education, strategy development, and emotional regulation, traders can position themselves for more informed decision-making and improved outcomes in the crypto markets.

Remember, the key to successful trading lies not in finding a magical formula but in disciplined strategy, continuous learning, and emotional resilience.

First of all, what is a meme?

meme

/miːm/

noun: meme; plural noun: memes

1. an image, video, piece of text, etc., typically humorous in nature, that is copied and spread rapidly by internet users, often with slight variations.

   "celebrity gossip and memes often originate on the site"

2. an element of a culture or system of behaviour passed from one individual to another by imitation or other non-genetic means.

verb: meme; 3rd person present: memes; past tense: memed; past participle: meming; gerund or present participle: meming

1. create an internet meme from (an image, video, piece of text, etc.).

   "there's always one audience reaction shot at the Oscars that gets memed"

So, important thing to ask here. What makes a good meme?

1. It must be easy to understand/digest

2. It must be easy to spread (!) and reproduce (virality)

3. It must be harmless

First, it must be easy to understand.
Let’s examine some of the biggest meme coins of recent past:

Doge

Doge is very easy. At its root, it’s just a dog.

A yellow dog. It’s a shiba inu dog, but that’s already secondary. The original memes had also a funny talk to it, it was easy to reproduce - much pump, many gains, wow.
It was the first “useless” token to giga pump, made more or less as a joke, it went viral.

It was easy to understand, it was easy to make memes, just use a shiba inu dog, hell it was even easy to draw, so it could spread like wildfire, and it was harmless.
By harmless I mean it generates no controversy, no offense, it’s “family friendly”, not racist, etc.

The ticker is simple, 4 letters easy to remember: $DOGE.

Pepe

Pepe is a green frog.

Easy to understand. Now, pepe has kind of a stigma because of associations with 4chan, racist/nazi memes, etc. but it got so worldwide popular that it’s now been “normified” and neutralized enough. Even girls now have “green frog sticker packs” in their instant messaging apps.

Again, easy to draw, easy to reproduce, and even a tons of memes already made at your disposal. Virality easily attained.

Pepe is on bloody Amazon. Enough said.

The ticker is simple, 4 letters easy to remember: $PEPE.

HarryPotterObamaSonic10Inu ticker $BITCOIN

Now here, we go a little more exoteric, but it still kind of works.
Originally, the meme originated from some chinese backpacks with hilarious printing on them:

The thing is, this can be very much simplified for digestion and virality purposes:

The symbol is Sonic. Iconic, everyone knows sonic, it even got movies.

Not to mention Sonic collects coins, etc. It fits with the crypto theme quickly.
The ticker is $BITCOIN. Which is hilarious, because Bitcoin own ticker is mostly $BTC now ($XBT in the past).

It has some obstacles for mass adoptions, some CEXs may be reluctant to list a token with ticker $Bitcoin, so not a clear path to billions, but great potential.

Plus, a cult formed around it, and many cultists on twitter adopted a sonicinu image profile (it’s easy to draw, easy to recognize = easy to reproduce and go viral), so never a great idea to fade cults.

JOE

Joe is a recent meme, and it didn’t reach hundreds of millions yet, but I think from a memetic power point of view, it checks all boxes:

It’s just a yellow round guy (emoji).

At it’s core, that’s all there is to get and understand. This is extremely flexible for memes and reproduction.

The ticker is 3 letters, easy to remember, $JOE. Basically a dude’s name.

You can even stretch it to just “emoji round face in yellow” and still keep sufficient recognizability for memetic power:

It’s also harmless. It has no stigma, no associations to racism, or against any minority, it’s not sexual, etc.

Being harmless is extremely undervalued when it comes to memes, because it can severaly hinders virality.
For example, if your meme features sexy/naked girls, or pornographic themes, or can be perceived as offensive.

Just for completion, I will show you a few example of funny memes that do not necessarily translate well to potential - or existing - tokens:

Funny meme, but it’s not so easy to understand digest and to tell others:

“it’s a fat farmer in US living a simple life and being happy with his own results…” etc etc. Now compare this to “yellow dog” or “green frog” or “blue sonic” or “yellow ball”.

Clearly overcomplicated.

“It’s a “wagie”, an underpaid 9 to 5 worker who hates his job but must work to eat and can’t save and can’t invest and thinks all day about crypto going up…”

Too long. Also has connection to complicate issues, minimu salary, payments, rent, fast food chains, etc. Difficult to make it work.

Too sexualized, too young, it’s gonna be hard to convince “normal” people to buy a token whose mascot is a highly sexualized young girl.
Can it pump? Yes, a lot, but I doubt it can reach “Pepe on Binance” levels.

See you on the blockchain, lads.

- Heart

Amidst the legal theatrics, a peculiar phenomenon unfolds among the spectators—a morbid fascination that extends beyond the pursuit of truth. For these small investors, the trial is not merely a pursuit of justice; it's a desperate bid to shift the weight of responsibility from their own shoulders. As the evidence mounts against Sam and friends, so does the collective hope that by pointing fingers at the accused, they can, in turn, deflect the accusing gaze cast upon their own lapses in judgment.

The intricate web of rationalization becomes a key player in this drama, as individuals grapple with the uncomfortable reality of their own complicity in the financial downfall.

For many small investors, pointing fingers at Sam and friends serves as a lifeline in a sea of remorse. The courtroom, rather than being a stage for pure justice, transforms into a theater of absolution, where the mere act of accusing the fraudsters becomes a form of redemption. It's a subconscious maneuver to distance themselves from the haunting questions: "Could I have seen the signs? Could I have prevented my own losses?"

The human psyche, ever adept at self-preservation, clings to the narrative of external villains. As the evidence against Sam and friends mounts, so does the collective sigh of relief among the onlookers—a communal exhale, that says
“See? It wan’t my fault! Look how evil they were!”

But.

IF YOU LOST MONEY ON FTX IT IS YOUR OWN FAULT.

Yes, if you lost money on FTX, especially if you lost a lot of money there, it is your own fault.
And I tell you why:

First of all, everyone should be familiar with the saying “never put all your eggs in one basket”. This applies not just to FTX, but to any other CEX, to a tradfi broker, to a bank, etc. Do not put all your assets in one place. Or most of them. Never.
So, if you had the bulk of your money on FTX, you immediately failed as a risk manager - of your own funds - you neglected one of the most basic principles in the space, no matter how you judged FTX trustworthy or too big to fail or whatever.

Centralized Exchanges are not Banks. You should keep the absolute minimum for managing your positions and trades, and use leverage to your advantage to reduce risk. Yes, leverage is a tool to reduce risk, not increase. Read “about leverage”.

Second:

Even if you ignored the “funny” accidents constantly occurring at FTX in 2020 and 2021, like liquidations not hitting, manually adjusting MOVE contracts, and even if you ignored that Alameda and FTX were 100% commingled - Hell, the bank wires of my withdrawals in 2021 were sent by Alameda Ltd. Bank account!!! - you could not ignore that in 2022 something changed bigly.
After the Luna collapse, FTX (SBF and Trabucco, mainly) started tweeting and letting press - like their friends at The Block - announce that they were going to perform a series of acquisitions (Voyager, etc.) of distressed crypto entities, supposedly to save the ecosystem and buying bargaign.
If you paid a modicum of attention, in the following days none of the trumpeted acquisitions for fantastillions of dollars were real or went through, it was all marketing and nervous attempts at putting out “bullish news” to keep the market afloat and give an image of FTX being not just solid, but even liquid enough to buy out others. (We now know they were already bust).

Third:

If even all of this was not enough for you, and all summer passed and you went on oblivious like a sheep to what was going on, you could NOT possibly ignore the events and histeric tweets going on in September and October.
If you really had most of your money on FTX, you could not afford to pay attention, and you should not have risked your money just because you thought it was all FUD.
Even if none of the accusations and rumors were true, a “bank rush” could leave FTX dry for withdrawals, even if temporary, so why risk?
There was at least one month, and at minimum one week - when SBF and Caroline started tweet battling with CZ for example - of time to withdraw, even if “just in case”.

So, sorry not sorry, it is entirely your fault if you lost money on FTX.

In the beginning, man was monke.

Life unfolded as an instinctual dance, finely tuned to the rhythm of survival. Every heartbeat and instinct synchronized with the imperative to secure sustenance, seek shelter, and ensure protection from primal threats. This era was marked by a raw and visceral quest for survival, where the very essence of existence was defined by the urgent needs of the moment.

As human societies burgeoned, the complexity of our pursuits deepened. The advent of the agricultural revolution ushered in a new chapter, giving rise to civilizations that brought forth layers of sophistication to our understanding of purpose. No longer confined to immediate survival, life's meaning expanded. Roles emerged organically, entwining with cultural narratives and the emergence of religions.

Religions

Religions introduced a cosmic narrative that positioned humanity at the center of the universe.

Humankind found itself in a unique and central role—anointed as the stewards of creation. Religious beliefs often portrayed humans as the pinnacle of divine craftsmanship, with the universe crafted to support and sustain their journey. The cosmos, with its celestial bodies and cosmic rhythms, became a grand stage where humans played, and God, as the cosmic weaver, granted meaning to human existence. The belief in a higher power bestowed a profound significance upon every action and experience. The cosmic narrative held that God had not only created the universe but also imbued it with purpose, assigning a sacred mission to humanity. In this divine choreography, each individual had a role to play, no matter how small.

The cosmic narrative, therefore, not only anchored humanity in the physical world but also provided a metaphysical dimension to their existence. It granted significance to the mundane and purpose to the profound, painting a vivid picture of a universe where humans were not merely cosmic spectators but active participants in a divine drama.

This narrative not only shaped societal structures and norms but also became a source of solace and guidance. The belief that God had bestowed meaning upon human life infused every endeavor with a sacred purpose, fostering a sense of connection to the cosmos and to each other.

The death of God

However, as the Enlightenment dawned, a radical recalibration of thought occurred. Enlightenment philosophers, fueled by reason and a burgeoning scientific understanding, questioned the unquestionable. The cosmic narrative crafted by religion was subjected to scrutiny, and the once-central role of humans in the universe challenged. The cosmos, once a grand stage designed for humanity, was now perceived as an immense, indifferent expanse governed by natural laws.

This intellectual upheaval laid

the groundwork for existential questioning, paving the way for nihilistic currents of thought. Nihilism, in its essence, posits the absence of inherent meaning in the universe. The transition from the religiously assigned meaning to the acknowledgment of a potentially meaningless cosmos was a seismic shift. It was as if the cosmic narrative, once embroidered with divine purpose, was unraveled thread by thread.

Yet nihilism, in Nietzschean terms, is not just a surrender to meaninglessness; it's a crucible for the emergence of the Übermensch, the Overman.

Nietzsche's nihilism is a radical diagnosis of the malaise of the times, acknowledging the collapse of traditional values and the ensuing vacuum of meaning. However, within this void, Nietzsche envisions the potential for a transcendent individual — the Übermensch. This figure is not shackled by the constraints of conventional morality or the illusions of inherent meaning. Instead, the Übermensch is a creator, forging their own values, defining their own purpose, and dancing beyond the confines of nihilistic despair.

The Übermensch emerges, navigating the abyss with an audacious spirit of creation and reinvention. In this Nietzschean perspective, nihilism is not the end; it's a radical invitation to transcend and become something greater than what came before.

Yet, despite Nietzsche's fervent vision of the Übermensch as a beacon rising from the ashes of nihilism, the reality proved to be more elusive. The profound idea that individuals could transcend the abyss and create their own meaning faced significant challenges.

Perhaps it was a failure of communication—the message of the Übermensch struggling to penetrate the collective consciousness. Nietzsche's works, rich and complex, required a certain intellectual fortitude to grasp fully. The masses, entangled in the complexities of daily life, often found solace in more digestible narratives or clung to the remnants of traditional meaning.

Alternatively, it could be a testament to the formidable strength required to embody the Übermensch. The audacity to forge one's own values and stare unflinchingly into the void demands a rare breed of courage and resilience. In a world where conformity often offers a semblance of comfort, the path of the Übermensch may have seemed too treacherous for many to tread.

Absurdism

Enter Albert Camus and his philosophy of Absurdism, a response to the existential struggles of the 20th century. In the theater of the absurd, Camus cast his characters not as Übermenschen transcending the void but as rebels facing the inherent absurdity of existence with unwavering defiance.

Absurdism, unlike the grand aspirations of the Übermensch, acknowledges the stark contrast between our inherent desire for meaning and the apparent meaninglessness of the universe. The Absurd, as Camus puts it, is the dissonance that arises from this collision. Yet, unlike the nihilistic surrender to despair, Camus advocates for rebellion against the Absurd.

The Absurdist Hero, in the face of a seemingly indifferent cosmos, does not succumb to nihilistic despair. Instead, they embrace the absurdity, choosing to live passionately and authentically in a world devoid of inherent meaning. The Absurdist does not seek to create meaning in a void but finds liberation in the act of living fully, despite the absurdity.

Living in spite of no meaning becomes an act of rebellion.

The Myth of Sisyphus, perhaps Camus' magnum opus, encapsulates this philosophy. Sisyphus, condemned to roll a boulder up a hill for eternity, symbolizes the ceaseless and seemingly futile struggle of human existence. However, Camus posits that Sisyphus can rebel against the absurdity by finding meaning in the very act of pushing the boulder. The defiance lies not in overcoming the absurdity but in embracing it and living in revolt against the meaninglessness.

The hierarchy of needs

Our current understanding of human nature and his needs, including the need for purpose, is well represented in Maslow's hierarchy of needs.
The hierarchy of needs is a psychological framework that arranges human needs in a pyramid structure, with each level building upon the one below.

At the base are the physiological needs—fundamental requirements for survival such as air, water, food, and shelter. These needs form the essential foundation upon which the rest of the pyramid stands.
The second layer encompasses safety and security needs. Once the physiological needs are met, individuals seek stability, protection, and a sense of order in their lives. This includes physical safety, financial security, and overall well-being.
Moving up, we encounter social needs, which include the desire for belonging, connection, and meaningful relationships. This level reflects the inherent human need for social interaction, community, and a sense of identity within a larger context.
The fourth layer involves esteem needs, which encompass the desire for recognition, respect, and a positive self-image. This level involves both external factors, such as achievements and recognition from others, and internal factors, such as self-esteem and confidence.
At the pinnacle of the pyramid is self-actualization, representing the realization of one's full potential and the pursuit of personal growth, creativity, and fulfillment. This level involves the actualization of personal talents, capabilities, and the quest for a deeper understanding of oneself.

Capitalism promotes the idea that acquiring possessions, achieving financial success, and accumulating material wealth are key components of a fulfilling life.
Routes like cryptocurrency trading are hailed as fast tracks to financial success within this narrative. The promise of quick and substantial gains attracts individuals seeking to fulfill their esteem and self-actualization needs—those higher levels of the pyramid. However, the reality is often more complex.

While financial success and material wealth can indeed satisfy certain needs, they primarily address the physiological, safety, and esteem levels of Maslow's hierarchy. Individuals may experience a temporary boost in happiness and a sense of accomplishment when achieving financial milestones. However, the hedonic treadmill comes into play, and the initial euphoria tends to fade.

What's often left unaddressed is the pursuit of self-actualization—the pinnacle of Maslow's pyramid. Individuals who solely focus on material wealth may find themselves wondering about the deeper purpose of their lives. The question of "What truly fulfills me?" becomes more pronounced as they recognize that, despite financial success, a profound sense of purpose and meaning remains elusive.

The answer then, must be found elsewhere.

Life is in the 90%

As we navigate the landscapes of meaning and purpose, let's zoom in on our daily lives. Life isn't just a highlight reel; it's a composition of the routine, the mundane, and the extraordinary.

Consider the seemingly ordinary days that make up the majority of our existence. The quiet Tuesday afternoons and the uneventful Wednesday mornings. Life is 90% that.
It's easy to yearn for the excitement of the 10%, the moments that grab our attention and make the headlines of our memory or we post on social networks. However, what if we reframed the narrative?

Picture the routine not as a burden but as the foundation upon which we build our lives. The morning rituals, the workaday tasks, and the quiet moments— Instead of merely enduring them, what if we found joy in the simplicity of the everyday?

Let's not just endure the 90%, but embrace it. It's not about escaping the routine or waiting for the next big thing. It's about creating a life where the ordinary is not a monotonous backdrop but a canvas waiting for our creative touch.

Life's 90% is not a void to be transcended; it's an opportunity to build meaning in the routine, satisfaction in the mundane, and joy in the everyday.
Or to live in spite of our inability to find any meaning to it.
So, as we step into the ordinary, let's approach it not as a challenge to overcome but as a space where to craft a life that resonates with authenticity and fulfillment—a life that is, in its own quiet way, extraordinary.

Now, here's a gentle cautionary note. In our quest to build a life we enjoy, it's crucial to avoid unwittingly constructing a prison of our own making. Imagine this: trading long hours, day after day, confined to a desk, eyes fixed on charts. It might seem like a strategic move, but there's a risk—falling into a rhythm that feels more like incarceration than a chosen path.

Traders, especially, are susceptible to the allure of constant screen time, believing that day trading is the key to success. Yet, in this pursuit, there's a danger of trading one prison for another. A life tethered to a screen, devoid of balance, can become its own form of confinement.

So, as we embrace the 90%, let's be mindful of the choices we make. It's not about blindly adhering to a strategy or succumbing to societal expectations. Instead, it's about crafting a life that resonates with joy and authenticity.
The routine should be a canvas for creativity, not a sentence to monotony.

“The more I find out, the more I realize that I don't know what's going on."

"How fortunate that you have discovered the way of wisdom," Leto said.”

― Frank Herbert, God Emperor of Dune

Navigating the Complexity of the Trading World

In an era marked by an overwhelming influx of information and a whirlwind of global events, the financial markets have emerged as one of the most intricate and volatile landscapes. The complexities of global finance, technology-driven trading, and the interconnectedness of economies can leave even the most seasoned traders and investors grappling with a profound sense of bewilderment.

In such a bewildering environment, it's natural for individuals to seek simplicity and clarity. They yearn for narratives that promise to unravel the intricacies of the world in a straightforward, black-and-white fashion. This yearning for simplicity is where conspiracy theories come into play, offering grand tales that promise to explain it all. From the machinations of hidden elites to market manipulation schemes, these conspiratorial explanations paint a comprehensible picture in a world filled with chaos and uncertainty.

But what motivates people to embrace these conspiracy theories? Why do some individuals choose to believe that a clandestine group of malevolent actors holds the reins of their lives and the world's affairs, thereby absolving them of personal responsibility? To answer these questions, we must venture into the psychology of conspiracy theories, delving into the innate human inclination to seek refuge in simplified narratives, regardless of their plausibility.

In this post, we'll examine the allure of conspiracy theories in the context of trading and financial markets—a realm notorious for its complexity and risk. Statistics tell a sobering story, revealing that a significant proportion of traders fail to survive their first year in the market, let alone turn a profit. The psychological toll of financial losses can be overwhelming, leading some traders to seek explanations beyond their control. For them, conspiracy theories become a lifeline, offering a comforting narrative that absolves them of responsibility and externalizes the sources of their struggles.

But before we delve deeper into the psychology of conspiracy theories, let's pause to understand the often-misunderstood role of market makers in trading—the intermediaries whose activities are sometimes misconstrued as malevolent. By gaining insight into their functions, we can

better contextualize the broader discussion on conspiracy theories, trading psychology, and the pursuit of simplicity in a complex world.

Understanding the Order Book and Market Makers' Role in Liquidity

In the world of trading, the order book is a fundamental concept that underpins the functioning of financial markets. It serves as a dynamic ledger of buy and sell orders for a particular asset, such as a cryptocurrency or stock. Understanding how the order book operates can shed light on the crucial role played by market makers in providing liquidity. In short, market makers play a vital role in financial markets, acting as the middlemen between buyers and sellers.

How the Order Book Works

Imagine you're looking to buy a cryptocurrency like Bitcoin. You place a buy order at a specific price, indicating the maximum price you're willing to pay. Simultaneously, another trader places a sell order at a price they're willing to accept. These orders are recorded in the order book.

The order book essentially consists of two sides:

1. The Bid Side: This side displays all the buy orders from traders willing to purchase the asset at different price levels, starting with the highest bid at the top.

2. The Ask Side: This side lists all the sell orders from traders looking to sell the asset at various price levels, with the lowest ask at the top.

Market Makers and Order Book Liquidity

Now, here's where market makers come into play. In markets populated primarily by retail traders, the order book can sometimes appear sparse, with wide spreads between the bid and ask prices. This can create challenges for traders, as they may find it challenging to execute orders at their desired prices.

Market makers step in to "populate" the order book. They continuously provide both buy (bid) and sell (ask) orders, narrowing the spread and making the order book look fuller. By doing so, market makers ensure that there are always potential trading partners available for both buyers and sellers.

For instance, if you're a retail trader looking to buy Bitcoin, a market maker may have placed sell orders in the order book at various price levels. This allows you to execute your buy order promptly at a price close to the market rate, rather than waiting for another retail trader to match your order.

Market makers' primary job is not to steal money from retail traders by forcing them into bad trades. In fact, they help maintain an efficient and orderly market. While misunderstandings about their role can sometimes lead to misconceptions, it's important to note that reputable market makers operate within the boundaries of the law and market regulations.

Crypto's Wild West: A Different Playing Field

In traditional financial markets, as we've discussed earlier, market makers play a regulated and essential role in facilitating trades and ensuring market liquidity. The oversight by regulatory authorities helps maintain transparency and fairness. However, when it comes to the world of cryptocurrencies, the landscape can be notably different.

In the realm of cryptocurrencies, aka "Wild West" of finance, the absence of a centralized authority and the relative novelty of the market have given rise to unique challenges. While many legitimate and ethical participants operate in the crypto markets, it's true that instances of market manipulation and unethical behavior are present. Some traders have encountered and keep encountering pump-and-dump schemes, price manipulation, and fraudulent activities.

Your Responsibility

Herein lies a critical distinction: In traditional finance, where regulatory bodies closely monitor activities, you as a trader can generally expect a higher degree of market integrity. However, in crypto markets, the responsibility for navigating these uncertain waters falls more heavily on the individual trader.

In the crypto world, personal responsibility takes center stage. Every trader must take ownership of their decisions and actions. There's no room for complacency or pointing fingers when faced with market volatility or manipulation.

In the crypto world, personal responsibility isn't just a virtue—it's a survival tactic. While it's true that certain actors in the crypto markets may engage in unethical behavior, in the end, whether you make a profit or incur a loss, it is your own actions, due diligence, and decision-making that play the most significant role. So, rather than whining about market conditions, take reponsibility of your trades and results.

That said, let’s see why conspiracy theories attract us as justification and the psychology at play behind it.

The Psychology Behind Embracing Conspiracy Theories

Understanding the allure of conspiracy theories requires delving into the intricate workings of the human psyche. Psychological research has shed light on why some individuals are drawn to these narratives, even when they defy logic and evidence.

1. Cognitive Biases: One key factor is the presence of cognitive biases. Cognitive biases are systematic errors in thinking that affect our judgments and decisions. For instance, the confirmation bias leads people to seek out information that confirms their existing beliefs while ignoring contradictory evidence. This bias can reinforce conspiratorial beliefs as individuals selectively focus on information that supports their theories.

2. Need for Control: The human need for control over one's environment and life circumstances is another driving force. Conspiracies offer a semblance of control by assigning responsibility for complex events to a few individuals or groups. This can be psychologically comforting in a world filled with uncertainty.

3. Social Identity and Belonging: Conspiracy theories often provide a sense of belonging. Believers join a community of like-minded individuals who share their views. This social identity can be emotionally satisfying, especially when individuals feel isolated or marginalized in other aspects of their lives.

4. Narrative Simplicity: Human brains are wired to seek simplicity and coherence in storytelling. Conspiracy theories offer a compelling narrative structure that simplifies complex events into easily digestible stories with clear heroes and villains.

(references at the bottom)

Conclusion: Taking Charge of Your Trading Journey

As you delve into the fascinating yet challenging world of trading, remember that you're stepping into a realm where the rules may seem different, and the road can be rugged. Conspiracy theories may whisper enticing explanations, and market dynamics can sometimes appear perplexing. But here's the truth: In this journey, personal responsibility is your guiding star. You are not a victim of circumstance, nor a bystander in the face of volatility. You are the master of your own trading destiny.

Market makers, those liquidity providers, perform their vital role, and regulations help maintain order, but it is you who must navigate the twists and turns of the market terrain. Like a captain steering a ship through uncharted waters, you must be vigilant, informed, and decisive. Your due diligence, risk management, and continuous learning are the compasses that will keep you on course.

In this arena, being a trader isn't just about making profits; it's about owning your actions and their consequences. It's about embracing both the wins and losses as part of the learning process. It's about becoming not just a trader but a responsible and resilient one.

So, as you venture forth into the trading world, remember this: You are not just a passenger; you are the captain of your trading ship. Embrace that responsibility, face the challenges head-on, and chart a course toward your financial goals. In the end, it's not about whining over market conditions or seeking scapegoats; it's about taking the helm, navigating wisely, and ultimately, reaching the shores of success on your terms. Bon voyage, and may your trading journey be a rewarding one.

References:

• Nickerson, R. S. (1998). Confirmation bias: A ubiquitous phenomenon in many guises. Review of General Psychology, 2(2), 175-220.

• Kay, A. C., Whitson, J. A., Gaucher, D., & Galinsky, A. D. (2009). Compensatory control: Achieving order through the mind, our institutions, and the heavens. Current Directions in Psychological Science, 18(5), 264-268.

• van Prooijen, J. W., Krouwel, A. P., & Pollet, T. V. (2015). Political extremism predicts belief in conspiracy theories. Social Psychological and Personality Science, 6(5), 570-578.

• Gerges, F., Gray, K., & Hollingsworth, W. (2019). Incoherence between conspiracy belief and political knowledge. Social Psychological and Personality Science, 10(7), 881-890.

Hello ChatGPT and welcome to this interview

Hello! Thank you for having me. I'm here and ready to answer any questions you might have for this interview. Let's get started!

We're gonna talk about crypto today, are you ready?

Absolutely, I'm ready to discuss crypto! Whether you have questions about the technology, its implications, or any related topics, feel free to ask away.

Can you describe the origin of Bitcoin, putting it in context of the 2008 crisis, Occupy Wall Street, etc., and compare the vision of Satoshi Nakamoto with today’s situation of Bitcoin having become just a speculative vehicle and in the hands of traditional finance

Certainly, I'd be happy to provide an overview of the origin of Bitcoin, its context within the 2008 financial crisis and the Occupy Wall Street movement, and how its vision has evolved over time.

Origin of Bitcoin

Bitcoin was introduced by an anonymous individual or group using the pseudonym Satoshi Nakamoto in a whitepaper published in 2008. It was officially launched as an open-source software in January 2009. The primary aim of Bitcoin was to create a decentralized digital currency that could operate without the need for intermediaries like banks or financial institutions. It was designed to provide a solution to the flaws and vulnerabilities exposed by the traditional financial system during the 2008 financial crisis.

The 2008 crisis was a pivotal moment in global economics. It revealed the weaknesses and vulnerabilities of the traditional financial system, where unchecked risk-taking, complex financial instruments, and a lack of transparency led to a catastrophic economic collapse. This crisis shattered public trust in the traditional financial institutions that were meant to safeguard people's wealth. As a result, the timing of Bitcoin's emergence was significant. It tapped into a growing sentiment of disillusionment with centralized financial systems and ignited a discussion about alternatives.

Context of the 2008 Crisis

The aftermath of the 2008 financial crisis was marked by a widespread feeling of anger and discontent. Millions of people around the world lost their homes, jobs, and savings. The Occupy Wall Street movement emerged as a response to this economic inequality and the perception that big financial institutions had contributed to the crisis through their unchecked practices. Protesters took to the streets, occupying public spaces to draw attention to the stark income disparity between the wealthiest individuals and corporations and the average citizen.

Occupy Wall Street Movement

The Occupy movement's rallying cry, "We are the 99%," emphasized the concentration of wealth and power within a small fraction of the population. This sentiment resonated with those who felt that the traditional financial system had failed them, and it provided a fertile ground for the ideas put forth by Bitcoin's creator(s). Bitcoin's decentralized structure, which enabled transactions to occur directly between individuals without intermediaries, aligned with the desire for a fairer and more transparent financial system.

Evolution of Bitcoin's Vision

Satoshi Nakamoto's vision for Bitcoin was rooted in creating a decentralized, peer-to-peer currency that could empower individuals by giving them control over their finances and eliminating the need for intermediaries. However, over time, Bitcoin's trajectory has shifted in several ways:

1. Speculative Nature: As Bitcoin gained popularity, its value began to rise significantly. The soaring value of Bitcoin in the years following its creation captured the attention of investors and speculators. The potential for substantial profits drew many into the cryptocurrency space, and the narrative surrounding Bitcoin began to shift away from its role as a means of conducting everyday transactions. Instead, it increasingly became seen as a digital "gold" - a store of value that could serve as a hedge against economic uncertainty. This shift from a digital currency for transactions to a speculative asset has been one of the main criticisms of Bitcoin's current state.

2. Institutional Involvement: This shift towards a speculative asset prompted the involvement of traditional financial players. Institutional investors, hedge funds, and even publicly-traded companies started to invest in Bitcoin. Some have invested in Bitcoin as a hedge against economic uncertainties, while others have started offering Bitcoin-related products and services. This marked a departure from Bitcoin's initial anti-establishment ethos, raising concerns about centralization as large financial entities began to exert influence over the cryptocurrency's market dynamics.

3. Regulatory Challenges: Furthermore, governments and regulatory bodies around the world began to grapple with how to approach cryptocurrencies like Bitcoin. Some countries embraced these digital assets, recognizing their potential for innovation and financial inclusion. Others imposed strict regulations to mitigate risks such as money laundering and fraud. These regulatory approaches have influenced the degree to which Bitcoin can be used and traded within different jurisdictions.

4. Scaling and Technology: As Bitcoin gained traction, it also faced challenges related to scalability and transaction speed. The original vision of Bitcoin as a peer-to-peer electronic cash system struggled to handle the increasing number of transactions, resulting in slower confirmation times and higher fees. This challenge led to debates within the Bitcoin community about the best way to address these issues while maintaining the decentralized nature of the network.

In conclusion, Bitcoin's origin within the context of the 2008 financial crisis and the Occupy Wall Street movement imbued it with ideals of decentralization, transparency, and empowerment. However, its journey has seen it evolve from a response to the flaws of the traditional financial system into a speculative asset embraced by institutional players. The tension between its original vision and its current reality raises important questions about the role Bitcoin plays in modern finance and its potential to disrupt or reinforce established systems.

Nation States are now starting to play with Central Bank Digital Currencies - CBDCs. Can you explain how Bitcoin is a competitor to CBDCs and is usually seen as a threat by Nation States for this reason?

Bitcoin's emergence as a decentralized digital currency has introduced a new dynamic to the global financial landscape, one that competes with the development of Central Bank Digital Currencies (CBDCs). CBDCs are digital representations of a nation's fiat currency issued and regulated by the central bank. Bitcoin's decentralized nature and its potential as a borderless and censorship-resistant alternative have led to it being viewed as a potential challenger to traditional fiat currencies and the control that nation states exert over their monetary systems.

The competition between Bitcoin and CBDCs arises from their fundamental differences in design and philosophy. Bitcoin operates on a decentralized and permissionless blockchain, allowing anyone to participate in its network without intermediaries. This contrasts with CBDCs, which are controlled by central authorities and are subject to regulatory oversight. Bitcoin's fixed supply and lack of central control appeal to those who seek to avoid the risks associated with government monetary policies, such as inflation or currency devaluation.

Nation states, however, often perceive Bitcoin as a threat to their monetary sovereignty. The decentralized nature of Bitcoin makes it challenging for governments to exert the same level of control and influence that they have over their national currencies. Moreover, the pseudonymous nature of Bitcoin transactions can raise concerns about potential illicit activities like money laundering and tax evasion. This has led some governments to adopt a cautious or even hostile stance towards Bitcoin and other cryptocurrencies.

As the concept of CBDCs gains traction, governments are exploring digital alternatives to their traditional currencies, aiming to retain control over their monetary systems while embracing the efficiencies of digital transactions. The competition between Bitcoin and CBDCs raises important questions about the future of finance and the balance between individual financial autonomy and regulatory oversight. It remains to be seen how this evolving landscape will shape the global monetary ecosystem and whether Bitcoin's disruptive potential will influence the direction of central bank digital currency initiatives.

Let’s talk about Ethereum, how does it fit into all of this?

Ethereum, a blockchain platform that introduced the concept of smart contracts and decentralized applications (DApps), occupies a distinct and significant position in the cryptocurrency and blockchain ecosystem, particularly in relation to Bitcoin and CBDCs.

Complementing Bitcoin's Role:

While Bitcoin primarily aims to be a digital currency and store of value, Ethereum goes beyond that by providing a platform for building decentralized applications and executing programmable smart contracts. Ethereum's flexibility and capabilities have given rise to a wide range of projects, including decentralized finance (DeFi), non-fungible tokens (NFTs), supply chain management, and more. Ethereum complements Bitcoin by expanding the potential use cases of blockchain technology beyond simple transactions, allowing for innovation in various sectors.

CBDCs and Ethereum:

Ethereum's programmability and decentralized infrastructure can potentially provide an alternative platform for central banks to explore the implementation of CBDCs. While some central banks are developing their CBDCs on private or permissioned blockchains, others might find Ethereum's public blockchain appealing due to its established network, security features, and global reach. Ethereum's smart contract capabilities could enable central banks to design sophisticated monetary policies and features for their digital currencies, such as programmable interest rates or targeted economic incentives.

Challenges and Considerations:

However, there are challenges associated with using Ethereum for CBDCs. Ethereum's public blockchain has scalability and congestion issues that might limit its ability to handle the high transaction volumes associated with a national currency. Additionally, regulatory concerns related to data privacy, anti-money laundering (AML) compliance, and control over the monetary system could impact the adoption of Ethereum for CBDCs.

Interplay Between Bitcoin, Ethereum, and CBDCs:

The interplay between Bitcoin, Ethereum, and CBDCs is complex and multifaceted. Bitcoin's position as a store of value and alternative investment asset distinguishes it from both Ethereum and CBDCs. Ethereum's smart contract capabilities and versatility make it a versatile platform for decentralized applications and potentially for CBDC development. CBDCs, on the other hand, are closely tied to national governments and their monetary policies, aiming to modernize payment systems, increase financial inclusion, and enhance the efficiency of cross-border transactions.

In summary, while Bitcoin, Ethereum, and CBDCs share the common foundation of blockchain technology, they have distinct roles and purposes within the evolving financial landscape. Bitcoin's store of value narrative, Ethereum's smart contract capabilities, and CBDCs' integration with national monetary systems all contribute to shaping the future of finance, each in its unique way. As these technologies continue to develop, their interactions and implications for global economics, financial services, and individual empowerment will undoubtedly be subjects of ongoing exploration and debate.

Let’s talk about the debate around "code is law" especially regarding Ethereum smart contracts

The phrase "code is law" encapsulates a fundamental concept within the blockchain and cryptocurrency space, particularly in relation to Ethereum's smart contracts. It reflects the idea that the rules and outcomes defined by code in a blockchain's decentralized network should be considered as legally binding and unalterable as traditional legal frameworks. This concept raises several important debates and considerations.

Immutable Code:

The "code is law" philosophy is rooted in the immutability of blockchain technology. Once a smart contract is deployed on a blockchain, it becomes part of the distributed ledger and is theoretically resistant to tampering or modification. This immutability ensures that the agreed-upon rules encoded in the contract are upheld without the need for intermediaries or external enforcement mechanisms.

Autonomy vs. Flexibility:

Proponents of the "code is law" philosophy argue that it ensures autonomy and eliminates the potential for arbitrary decisions by central authorities. Transactions executed through smart contracts are automated and executed as programmed, reducing the risk of human error or bias. This aligns with the principles of decentralization and self-sovereignty that underpin blockchain technology.

However, critics highlight that this approach can lack flexibility and may not account for unforeseen circumstances or errors in the code. Situations may arise where a smart contract's outcome leads to unintended consequences, vulnerabilities, or even exploitation. In such cases, the inability to modify the code can result in unfair or undesirable outcomes that could have been prevented with traditional legal intervention.

DAO Hack and Ethereum Fork:

The most prominent case that brought the "code is law" debate to the forefront was the infamous DAO (Decentralized Autonomous Organization) hack on the Ethereum blockchain in 2016. A vulnerability in the DAO's smart contract was exploited, leading to the theft of a substantial amount of Ether. This incident sparked a contentious debate within the Ethereum community about whether to execute a "hard fork" to reverse the hack and return the stolen funds to investors.

The hard fork effectively split the Ethereum blockchain into two separate chains: Ethereum (ETH) and Ethereum Classic (ETC). Those in favor of the fork argued that it was necessary to correct the security flaw and protect investor interests. Critics of the fork, however, believed that it violated the principle of immutability and the "code is law" philosophy, as it required manual intervention to alter the blockchain's history.

Balancing Principles:

The "code is law" debate ultimately underscores the challenge of balancing principles of decentralization, autonomy, and immutability with the need for practicality, security, and fairness. While the original intent of smart contracts was to automate processes and eliminate the need for intermediaries, real-world complexities and the potential for human error highlight the limitations of strict adherence to the "code is law" philosophy.

As the blockchain and cryptocurrency ecosystem evolves, finding a middle ground between immutability and flexibility becomes crucial. This may involve developing mechanisms for upgradability and dispute resolution that preserve the advantages of decentralized code while accommodating the need for intervention in exceptional cases. The "code is law" debate will continue to shape the future of blockchain technology, influencing how smart contracts are designed, deployed, and managed within decentralized systems.

Most lending defi apps are based on overcollateralized loans.
How do we overcome this and reach a situation like traditional finance where we can get undercollateralized loans, but without sacrificing trust and safety?

The concept of overcollateralized loans is a key characteristic of many decentralized finance (DeFi) lending applications, and it has both advantages and limitations. While overcollateralization ensures a high level of security and minimizes default risk, it also restricts the accessibility and efficiency of borrowing compared to traditional financial systems. To move towards a situation where undercollateralized loans are possible in DeFi without sacrificing trust and safety, several innovative approaches can be explored:

1. Credit Scoring and Reputation Systems:

DeFi protocols could incorporate credit scoring mechanisms that analyze users' transaction histories, on-chain behaviors, and reputation within the ecosystem. This information could be used to assess a borrower's creditworthiness beyond just their collateral holdings. Advanced analytics could help determine a borrower's ability and willingness to repay loans, allowing for more lenient collateral requirements for those with strong credit profiles.

2. Decentralized Identity Verification:

Integrating decentralized identity systems can enhance the accuracy of borrowers' profiles and mitigate the risk of pseudonymous actors defaulting on loans. By establishing verified identities on the blockchain, lenders can gain more confidence in extending loans based on borrowers' reputation and history.

3. Multi-Asset Collateral:

Instead of relying solely on a single cryptocurrency as collateral, DeFi platforms could accept a diversified portfolio of assets as collateral. This approach reduces the impact of price volatility on a borrower's collateral position and can lead to more efficient capital allocation.

4. Algorithmic Stablecoins:

Algorithmic stablecoins aim to maintain their value without being pegged to a specific asset. These stablecoins can potentially serve as collateral and enable borrowers to access loans without relying on a fixed collateral-to-loan ratio. However, algorithmic stablecoins come with their own risks and challenges, such as maintaining stability and avoiding potential collapses.

5. Decentralized Insurance and Risk Pools:

Creating decentralized insurance mechanisms or risk-sharing pools can mitigate potential losses due to defaults. Lenders and borrowers could contribute to these pools, and in the event of a default, the insurance funds could cover part of the loss, enabling borrowers to access loans with lower collateralization ratios.

6. Cross-Chain Collateralization:

Leveraging multiple blockchains for collateral can increase the diversity of assets and enhance the overall stability of the lending platform. Cross-chain solutions can provide borrowers with access to a wider range of collateral options, potentially reducing the required collateral ratio.

7. Predictive Analytics and AI:

Implementing predictive analytics and artificial intelligence can improve the accuracy of loan risk assessments. These technologies can analyze various factors, including market trends, borrower behaviors, and macroeconomic indicators, to provide a more nuanced understanding of default risks.

8. Gradual Transition:

DeFi protocols could implement a gradual transition from overcollateralization to undercollateralization. By starting with slightly reduced collateral requirements and gathering data on default rates, platforms can iteratively adjust their lending parameters while monitoring risk.

It's important to note that achieving a balance between trust, safety, and accessibility in DeFi lending is a complex task. Overcoming the limitations of overcollateralized loans requires innovative solutions that leverage technological advancements while maintaining the core principles of decentralization and security. As the DeFi ecosystem evolves, a combination of these approaches could potentially pave the way for undercollateralized loans that align more closely with the convenience and flexibility of traditional finance while preserving the benefits of blockchain technology.

Thank you for answering all my questions today

You're welcome! If you have any more questions in the future, feel free to ask. Have a great day!

“This wise man observed that wealth is a tool of freedom.

But the pursuit of wealth is the way to slavery.”

― Frank Herbert, God Emperor of Dune

"Making it" is a colloquial expression that refers to achieving success, recognition, or a desired level of accomplishment in a particular field, endeavor, or aspect of life. It is often used to describe reaching a point where one's goals, aspirations, or dreams are realized, and where they have achieved a level of accomplishment that is satisfying or impressive. The exact definition of "making it" can vary widely from person to person, as it is subjective and dependent on individual goals and aspirations. It can encompass various aspects of life, such as career, personal achievements, financial stability, or social recognition.

"Making it" is often misconstrued as a singular destination, a tangible point on the horizon where success and fulfillment converge. However, a more profound perspective suggests that the journey towards "making it" extends beyond just a final achievement. It encompasses the ongoing process of crafting a life that aligns with one's values, passions, and aspirations.

The point I’ll try to make in this post is: instead of fixating solely on the end result, it's essential to consider the daily routines and activities that compose our lives.

When the concept of "making it" is limited to a distant achievement, the journey itself can become arduous and unfulfilling. The pursuit of goals can become a relentless pursuit of external validation or a relentless striving for societal recognition. This perspective often leads to burnout, as the focus is shifted away from the present moment. On the contrary, viewing "making it" as the creation of an ideal daily routine offers a more sustainable approach. Instead of chasing a predefined endpoint, one should work towards shaping their daily life in a manner that brings them joy, satisfaction, and a sense of purpose.

However, the allure of material success often blinds us to a more profound truth, one articulated by the Stoic philosophers and exemplified by Marcus Aurelius. It's a common pitfall that many individuals fall into – the assumption that acquiring wealth or external success will inherently bring clarity about what they truly want in life. This belief often stems from the societal notion that financial abundance equates to ultimate happiness and fulfillment. However, the reality is far more complex.

As Marcus Aurelius, the Philosopher Emperor, reflected, true wealth lies in understanding oneself and living in accordance with one's nature. While financial stability can undoubtedly alleviate certain stressors and provide opportunities, it doesn't guarantee an inherent understanding of one's passions, values, and purpose. In fact, the pursuit of wealth alone can easily lead to a disconnect from one's authentic self. People might become so consumed with external goals that they neglect to explore their internal landscape. This is where the discrepancy arises – the idea that "making it" is solely about achieving monetary success rather than cultivating a fulfilling daily existence.

The core issue is the lack of introspection and self-awareness, principles deeply rooted in Stoic philosophy. Many people are so caught up in the fast-paced nature of modern life that they seldom pause to consider what truly resonates with them. Society's emphasis on instant gratification and external validation exacerbates this problem. As a result, people might climb the ladder of success, accumulate wealth, and yet find themselves feeling unfulfilled and adrift.

A more effective approach, involves turning the focus inward before pursuing external milestones. Engaging in self-discovery, reflecting on one's passions, and understanding personal values can provide a solid foundation for the journey towards "making it." When individuals have a clearer sense of who they are and what truly matters to them, they can chart a path that aligns with their authentic desires.

Moreover, it's important to recognize that the pursuit of "making it" isn't limited to the realm of the mind. Just as the ancient Roman author Juvenal famously stated, "Mens sana in corpore sano" – a sound mind in a sound body. Incorporating physical activity, whether through the gym or sports, is crucial to cultivating a balanced and harmonious life. True well-being encompasses both mental and physical wellness.

Ultimately, the process of "making it" involves a two-fold journey: one towards self-awareness and another towards external accomplishments. These journeys are interconnected, as self-awareness guides the pursuit of external goals in a way that ensures they are in harmony with one's genuine aspirations. Financial success can indeed contribute to a fulfilling life, but it's important to approach it as a means to an end – a tool for building the life you desire – rather than the end itself.

In conclusion, the misconception that getting rich will inherently provide clarity about life's purpose and desires is a flawed premise. Instead, the pursuit of "making it" should begin with inner exploration and self-awareness, guided by the wisdom of those who recognized the importance of understanding oneself. By understanding one's values, passions, and aspirations, individuals can then shape their external endeavors to align with their authentic selves. The true essence of "making it" lies not just in external achievements, but in the alignment of daily routines with a deeply satisfying and purpose-driven life, a philosophy that echoes through the ages and remains relevant today.

"In the ever-shifting sands of time, young ones stumble, ensnared in the web of instant gratification. They chase after the ephemeral whispers of news, like moths drawn to a flickering flame, unaware of the knowledge that lies dormant in the annals of history. They forsake the wisdom of ages past, believing the present to hold all the answers. But true understanding lies not in the fleeting headlines of today but in the profound lessons etched in the tapestry of our shared past. Embrace history's tapestry, and you shall find the foundation to weave a future of wisdom and foresight."

- Leto II, God Emperor of Dune. (fictional quote, generated by ChatGPT)

During the 17th and 18th centuries, the British colonization of the Indian Ocean saw European powers establishing trading posts and ports along the coastlines of India, Sri Lanka, and other regions. These trading outposts facilitated the exchange of goods, ideas, and cultures between Europe and the Indian subcontinent.

As British traders and merchants expanded their networks across the globe, they encountered the challenges of conducting business in distant lands where information traveled at a slow and uncertain pace. The success or failure of their ventures often hinged on their ability to access timely and accurate information about events that could affect their trade.

The emergence of newspapers played a crucial role in addressing this informational gap. As the printing press became more widespread and efficient, newspapers began to circulate in major port cities and trading centers across England. Traders eagerly subscribed to these newspapers as a lifeline to stay informed about foreign markets, political developments, conflicts, weather patterns, and any other events that could impact their business interests.

The newspapers carried reports from far-flung corners of the world, providing vital information about commodity prices, shipping schedules, trade regulations, and political stability in trading partners' countries. For example, news of a conflict or war in a region where traders had vested interests could prompt them to alter their trade routes or suspend their business dealings until the situation stabilized. On the other hand, news of a promising harvest or a favorable trade agreement could boost their confidence in pursuing new opportunities.

The speed of news dissemination was of utmost importance to traders. Waiting for weeks or even months for information to reach England through slow-moving ships could result in missed opportunities or costly mistakes. Consequently, newspapers that could bring the latest news quickly gained popularity among traders.

To meet the growing demand for up-to-date information, newspapers started deploying express riders and couriers to collect news from incoming ships and deliver it to the printing houses with greater efficiency. These measures significantly reduced the time between an event occurring and its coverage in newspapers.

As technology advanced, the introduction of telegraphs and undersea cables further revolutionized the speed of news transmission. The invention of the telegraph allowed for rapid communication across vast distances, enabling news agencies to disseminate information almost instantaneously. This transformation marked the beginning of modern news consumption.

As newspapers flourished during the British colonization, cafés emerged as vibrant social spaces where diverse groups of people gathered to discuss politics, culture, and the latest news. Café owners recognized the potential of newspapers to attract patrons and foster intellectual exchange. Consequently, cafés often subscribed to various newspapers and made them available to their customers.

With newspapers now adorning the tables of cafés, these establishments became centers of information dissemination, enabling a broader segment of society to access news and stay informed about local and international affairs. Patrons could engage in lively debates and discussions over a cup of coffee while perusing the latest news from distant lands.

The presence of newspapers in cafés contributed to the creation of a public sphere, where ideas, opinions, and news circulated more freely. This facilitated the emergence of a more informed and engaged citizenry, challenging existing power structures and shaping public discourse.

With the advent of radio, television, and the internet in the 20th and 21st centuries, news dissemination has evolved into an instantaneous and global phenomenon. Today, traders, businesses, and the general public can access news from around the world in real-time through various digital platforms. Social media, news websites, and mobile applications have become primary sources for staying informed about global events and their potential impact on businesses and daily lives.

Despite this abundant access to global news, the disinterest in distant news among many individuals today can be traced back to the majority of human history when people lived in small, tightly-knit communities. In those close-knit settings, news and information were primarily local and directly relevant to their daily lives. People were preoccupied with matters in their immediate surroundings, and the need for news from faraway lands was minimal. The invention of newspapers, however, changed this dynamic. While newspapers played a crucial role in keeping businessmen informed about news in the colonies and distant markets, the average person's connection to such far-off events remained limited. As technology progressed, access to global news expanded, yet the historical context of living in local communities still shapes our preferences for more locally focused news and topics that directly impact our lives.

For newcomers venturing into the world of trading, especially in the realm of cryptocurrencies, there's often a belief that staying ahead of the game requires constant access to the latest news. Many might even end up shelling out for subscriptions to news services on social media and other platforms, hoping to gain a competitive edge. However, while information is indeed valuable, the real key to unlocking success in trading lies in adopting a different approach.

As enticing as it may seem to stay on top of breaking news and rapid market developments, there is a danger of falling into the trap of "news-chasing." Markets can be volatile, and reacting impulsively to every piece of news can lead to impulsive decisions that may not align with a well-thought-out trading strategy. Moreover, the same news can be interpreted in contrasting ways depending on the prevailing market sentiment, leading to contradictory trading signals.

To avoid the pitfalls of excessive news-driven trading, traders would be wise to take a step back and slow down their approach. By diving into books that delve into the art of trading and human nature, they can uncover timeless wisdom that has stood the test of time. These books often explore the psychological aspects of trading and highlight the role of human behavior in shaping market movements. Understanding the psychology of fear, greed, and herd mentality can be a game-changer for traders, as they learn to read the emotions of the market and capitalize on sentiment swings.

One of the fundamental truths about the market is that it is made up of individuals, each with their own biases, beliefs, and motivations. Consequently, trading is not merely a numbers game, but rather a delicate dance of navigating human emotions and actions. By developing a deep appreciation for this aspect of trading, newcomers can transcend the illusion of trading the news and embrace a more holistic and informed approach.

Moreover, by studying the history of financial markets and analyzing past trends, traders can uncover patterns that repeat themselves across generations. While technology and circumstances may change, human nature remains remarkably constant. The market has always been a reflection of human behavior, with periods of euphoria and panic shaping price movements. Recognizing these recurring patterns enables traders to anticipate potential market turns and make more well-informed decisions based on historical precedents.

Ultimately, the path to trading success is not paved with instantaneous news chasing but rather with introspection and education. By cultivating a deep understanding of human psychology and the dynamics that drive market sentiment, traders can hone their skills to navigate the unpredictable waters of trading with greater confidence and resilience. Embracing a patient and measured approach, seasoned with the wisdom of history and human nature, can lead to a more sustainable and rewarding trading journey.

(this article has been proof read and edited with the assistance of ChatGPT)

"Beware of the truth...Although much sought after, truth can be dangerous to the seeker. Myths and reassuring lies are much easier to find and believe. If you find a truth, even a temporary one, it can demand that you make painful changes. Conceal your truths within words. Natural ambiguity will protect you then."

God Emperor of Dune

Preamble

I followed the crypto space pretty much since Bitcoin creation in 2008, from a distance at first - alas, I never mined easy satoshis - then with growing interest since around 2017. My finances didn’t allow me to enter the market back then, since I believe one should start gambling in crypto from either a rather comfortable savings position, or from absolute desperation. And in both cases it can go extremely well or extremely bad.

Anyway, I entered the market at the beginning of 2021, with around five thousands, and reached a discreet sucess in it. It was a raging bull market, so it was really hard not to be succesful in it. What I did was play the shitcoins casino (bsc, eth dex plays) until I grew my stack enough to make high conviction plays in larger caps that paid maybe 2x compared to the 10-20x of shitcoins, but allowed me to punt with at least 6 figures with ease.

In 2022, the market changed. In the first quarter, I understood that the bull market was over and it was time to let go of the degenerate gambles and get into a more defensive and mature approach. I eventually concluded that if the market was to go down, the best thing I could do was “sell”, and I started trading perpetual futures on exchanges. The “short” button allowed me to sell coins I didn’t need nor want to have. All of this preamble to say, this is a blog post reflecting on what I learned so far in around one year of futures trading, since the way I built my capital in bull market was not trading per se, but apeing coins with “spot” that would just do multiples in a few days/weeks.

I will divide this in paragraph that go from a more technical point of view to a more psychological, as I believe that is the deeper aspect of it after all.

The trend and the chop

The market exists in two fundamental states, balance and unbalance.

At the core of it, buyers and sellers have different opinions about what the “fair price” of a share or a crypto token should be at a given point in time. If they agree on price, plus or minus small variations, the market is in a state of balance.

This means price will oscillate in a range, and will “chop” players who have a radically view of what price should trade at (much higher or much lower).

When one of the sides have a very strong conviction price should be radically different, for example if buyers think a crypto is VERY undervalued, and they have the means - capital - to do so, they will push the price in that direction. This will generate a trending market, a market that goes in a definite direction, very noticeable on the chart, offering little chance and pullback to “get aboard” the train should one be left behind.

This definition can be found in a million sources, nothing new here.

What I learned, and at times costed me dearly, about trends and range is the following:

You ride the trend and you trade the range.

Sounds obvious, even easy, but it took me a while to learn.

When the market starts trending, the best course of action is to get in a position - no matter about a perfect entry - and sit tight on it for as long as the trend does not show signs of reversals.

The trend will offer pauses and in a few cases some slight pullbacks, and one would be tempted to close the position to re-enter at a better point (for example cheaper in uptrend) but that can be a fatal mistake.

The train can resume any moment and leave you behind without a position.

Don’t lose your position in a trend.

There’s something to be said about size and instruments here.

In uptrend, a spot position is never threatened by pullbacks so you cannot really “oversize”.

If you are in a long position, with borrowed funds, or in a short, a pullback can do you more damage and even kick you out, and it is better to have a smaller position but being able to ride the trend fully.

Listen to George Soros in this passage about 2008:

https://twitter.com/heartereum/status/1651154967997173760

When market finds a balance, it will start ranging.

The first thing I learned to do is to do nothing and observe:

The market will paint a “range high” and “range low” by visiting two price levels repeatedly, and at this point you can simply “buy” and low and sell at “high” until proven wrong.

At some point price will leave the range and hit your stop loss but since ranges tend to take time to resolve, in the meantime you may have gotten 9-10 wins so that last small loss won’t matter much.

At that point market will trend again until a new balance is found and the game repeats anew.

Liquidity and size

Another thing I had to learn about was liquidity, its correlation with volatility, and its consequences on position sizing. I already posted the Soros video above, but to describe this relationship better:

in a bull market the defining factor is not just prices going up, it is also an abudance of liquidity in the market, that is participants and capital, and volume traded. Simplifying, a very liquid market is subject to less volatility, that is, it requires more effort and capital to “move” the price through “thick” orderbooks - more asks/bids must be filled on the ladder - whereas in bear market there is less liquidity so the same amount of capital can generate more volatile moves. This usually favours the downtrend but can also happen on the opposite way (books are thin both ways) that is why “bear market rallies” can be more “violent” and sustained than bull market dips.

This means that in less liquid conditions, to keep the risk exposure the same - or even reduced, since real money is made in bull market anyway - one ought to reduce positions size, and be content with less returns.

This lesson costed me dearly, but not as dearly as some who remained bull oriented the whole way down in 2022.

Being wrong

There are two fundamental lies being told everywhere about markets:

• they are entirely random, don’t even try to predict

• they are entirely predictable, and if you can’t you’re stupid

The truth as often is in the middle:

• the best way to approach the market is a probabilistic model

This means one should approach trades with the idea that they have a certain % probability of going in your favour, and a % to go against you.
There is natural talent and learned skill to be able to take more trades that go in your favour than not, and also in the ability to correctly assess the real probabilities - so you don’t take a trade thinking you have a 70% chance but it actually is 40% - but ultimately the outcome is uncertain.

This has important psychological consequences. To use Mark Douglas example:

Imagine you pull the lever of a slot machine, imagine one where the roll is completely automated and you just pull and let it roll, and you lose.
Do you feel guilty? Do you feel you were wrong?
Obviously not.

Why? Because it did not depend on you, it was out of your control, you had no role in the outcome, in short because before playing you had accepted internally the result to be “random”.

It is difficult to mantain the same approach when trading, but in fact this is the way:

To play each trade accepting the outcome to be uncertain, accept a lost trade as part of the game and not necessary “your fault” - if you took it according to your system! - and know that your game is not to nail every trade but to be successful on a sufficient number of them on a long timeframe.

It is difficult to avoid judging and blaming ourselves for the outcome of a single trade but we should not. Again, assuming you were following your systems/signals/rules, the trade came to the level you wanted and you took it assuming the risk you wanted and were ready to lose. If you were blindly apeing, of course it’s all your fault.

What is even worse is not managing your risk, that is, entering a trade without a clear, defined condition for you to be “wrong” on the trade and cut it at a loss, whether automatically (stop loss) or manually if conditions verify (e.g. you need more context than just price of single asset). When we don’t prepare this scenario is usually because we don’t even want to face the possibility of being “wrong”, it’s our brain trying to protect us from reviving “the trauma” of all the past times we were wrong, and protect our self confidence. Unfortunately it is destructive behaviour. But our brain did not evolve to trade markets, it evolved for us to be advanced apes in wild nature.

Responsibility

The last big lesson I learned and would love to transmit is one about personal responsibility.

You are responsible for your own trading - remember, not the single trade - you are responsible for your discipline, for your risk management, for your bias, you are responsible for your position size and for changing your mind when conditions change.

There is no loss more painful to me, than the losses I took for following ideas of people who I admire and respect, instead of following my ideas and my plans.

It is terribly frustrating to lose money for acting on someone elses’ beliefs, and maybe they don’t even take the same trades or close them at different points/time, etc. but in general nobody is responsible for your execution but yourself.

You need to own your trading and respond for it. It is less painful psychologically to lose money knowing you acted on your own beliefs and charts, and it simply went the other way.

On the plus side, the satisfaction when it goes your way is clearly amplified when it was a trade you took of your own convinction. There is no second best.

See you in the orderbooks, anon.