Bitcoin Craze, $1000 increase in 1 week

A $1000 in a week, that may seem nuts[1]. None of us who own stocks are used to this sort of gains.

Some have asked me to comment in private. Look, I have always been fascinated by market chaos, a topic of interest since 1989. Everyone around me liked to predict DJIA, S&P500, Indexes, and stocks with paper charts, algorithms, off the shelf charting products, buying research reports, following Mootley Fool and street advice. You should do your own homework.

about my interest: I like to analyze stocks and cryptocurrencies. Here's a bit about myself. After doing failure analysis of airplane structures, I used to watch the US markets using quote-track, a smart device hooked into the stock exchanges, it provided tick-by-tick prices. I traded stocks, then options, went all the way up to the highest levels offered by the brokerage accounts. How exciting! I traded for fun with advice from stock brokers, market research reports and using all the market tools there were to figure out which way to bet. I made money and I lost some too. I thought of educating myself more. So, I got my investor advisor license. I was not sure if this was sufficient to help me understand the markets. Warren Buffet is a big fan of fundamental analysis and the markets just don't work that way, I soon realized. The technical indicators were interesting as each told a different story. In short, you couldn't tell looking at the chart what the next second or the day was going to look like. Noise also adds to stock price chaos with Wall Street Analyst upgrading and downgrading stocks. Long short, they all know more than us because they are in to this every second. As ordinary people, we don't.

Black–Scholes model did not make any sense to me, frankly it was not that good even as a risk management tool. I spent approx. two years programming all the stock market techniques that are available, they all had their pros and cons. So, I decided to write my own algorithm one equation at a time, often refining along the way. I tested with historic data of DJIA, S&P500, stocks and often did not sleep until I understood the insights from the markets, and was able to capture and develop an empirical model. It was still good, but not good enough as I had to watch and use my head to guide the model (frankly because of market noise from trading desks to Wall Street analysts who influence market behavior). It had to be automated. So, I was after the math, the equation and a system that would help guide an understanding of the market trends with above 50% accuracy. When it got better and the outcome improved, I sent it to the US Copyright Office as I did not have the resources to patent it or perhaps I was just too lazy. I get scolded sometimes :)

Back to Bitcoin Run Up. If Warren Buffet sees the sharp rise, and reads Mark's comments, I am sure he will be amazed too. Now, Mark Yusko is predicting Bitcoin to hit the roof.

• $25,000 end of 2018,
• $75,000 end of 2020
• $200,000 end of 2022
• $500,000 end of 2024

What do you think?

I have learnt not to fight the trend. Would you wait for the price to come down or take the risk? Before you jump in to Bitcoin craze, understand the risks involved or hire a professional advisor to assist you. Hindsight is always 20/20. You could loose all your savings. Tread cautiously.

Note: All opinions are my own and do not reflect anyone's views nor that of my company.

References:

[1] Bitcoin World: Why the world never sleeps?