Market Commentary – Crypto Fractal Fury – 02/09/17

This is more excitement than the Fury 325, the world’s tallest and fastest gigacoaster… and the drop is much steeper.

The crash is supposedly because of warnings issued by the PBOC and subsequent halting of withdrawals by OKcoin and Huobi. I find this reminiscent of the Silk Road crash in October 2013. At that time, I thought it was idiotic for BTCUSD to sell off because of something that could be considered a benefit to the ecosystem. That turned out to be the case as prices rose by a factor of 10 over the next two months. Maybe this time is different, but more involvement by Chinese authorities in the Chinese exchanges may be a good thing if corruption stays out of the system. Same goes for any network of centralized exchanges in any country. Perhaps someday a practical and functional decentralized (or semi-decentralized) exchange will be a reality.

The hedging trade I spoke of yesterday paid off as my bids got filled this morning at 950 and 955 on Coinbase and Gemini. Things should begin to settle down now, at least temporarily. I will be keeping some cash on hand in case of lower prices. I also bought a good chunk of ETH, as I see ethereum as potentially superior technology. The rising bitcoin tide seems to be lifting all boats so I expect ETH to be higher beta if the bull market continues. We shall see.

I am leaning toward this being a “buy the dip” opportunity, rather than the start of a longer term bear market. If it is the latter, then the bear started on Jan 4th. If the former, then I think we have yet to hit the upside acceleration phase. The next few months and towards the end of the year should be interesting.