No Grin’s going up now. The Binance hack set everything back - very temporary. But the 300,000$ donation to Grin made the news everywhere. That was really good PR for Grin. People are talking everywhere now - this is good - you’ll see.
I’ve seen no such news and it’s still a new low today. What?
Is the market cap looking sticky at 20 M to anyone else?
Bitcoin dom is looking to poke 60% with eth hurting a little at 9.9 but the 10 point is right there.
The big losers on the dom charts seem to be “other” going from 22 to 19.5, and xrp losing a point and and half and iota losing a 1/5 of a point when it’s doesn’t have one.[/intentional pun]
I wonder if it’s going to be another shitcoins crash this month.
I am loading up the truck! Sub $2 grin is looking pretty dern good.
is still bearish
. . . . .
20m market cap seems like a reasonable bottom, within 2x surely, but with expansion of the monetary base continuing, the market cap would have to double to $40m in about 4 months in order for the price of each coin to remain stable. I think I’m with Monkyyy and still bearish on the price, although I’m bullish on the market cap.
There’s probably less than 4x downside risk, but the upside might offer 4x or more on a one-year timeframe. Even if you bought in now, it’s probably not a terrible entry.
*** This is not trading advice! Everyone’s portfolio is different. ***
I’m more worried about shitcoins crashing, in my mental model of what happens is money flows to the safe coins from any unsafe coins, grin being one, and then a rebound from safe coins into unsafe coins that meet the new standards of the market, as a cyclic thing, that will eventually purge shitcoins and stop the shitcoins economy. With btc Dom going upwards this could be an extra bad month for grin when it’s been downwards all year.
Note that those are lopsided outcomes.
Invest $100:
4x downside, total loss $75
4x upside, total gain $300
@Chronos
You are mixing math by looking at differences after applying a multiplication. Addition and subtraction go together, and division and multiplication go together, but you are mixing multiplicative growth (percentage gain) with a subtraction for the success metric (absolute dollars). Stick to percentages only. It’s 4x up or 4x down, and you should consider that even. It’s the same reason to look at log price charts not linear.
Are you saying that an asset priced at $2 which has an equal chance of $0.50 or $8 has a close-to-zero expected return? That’s really interesting. I’ve never looked at it that way before.
That is by definition a $4.25 expected value, for a $2.25 expected return.
That explains why I’ve never looked at it that way before, haha. So what am I missing?
This is a false result that arises from taking the arithmetic mean of a geometric sequence. Instead, we need to compute the geometric mean It’s similar to the regular average, except instead of adding values together we multiply them, and instead of dividing by the number of values, we take the n’th root:
root2( 1/4 * 4 ) = square_root(1) = 1
No gain. 1x your money.
Most financial mathematics literature assumes the price process follows Geometric Brownian Motion
At the top of the “Properties” section is the equation for expectation value of future prices:
E[S(t)] = S0 exp(ut)
Mu is the growth factor for the price process, aka rate of return (first derivative). In our case, we have the same growth rate odds to the upside and downside, so mu is 0. E[St] = S0 and we expect all future prices to equal the original price, with no gain or loss.
YES that is what I’m saying. Your expected return is exactly 0. If you think only in terms of ratios you will naturally get the correct answer. A 4x gain offsets a 4x loss.
EDIT: THIS EXAMPLE IS WRONG
(although a 4x gain offsetting a 4x loss is still true)
Suppose you find an interesting pump going on, and the rising price is approaching a resistance level. You estimate that there’s:
A. 10% chance the price blows through resistance and we earn 4x our money
B. 55% chance the price rises to touch resistance before stalling out, and we earn 20%
C. 35% chance this was a fake pump and the price is going back down by half.
Should we make this trade?
It’s not hard to use the weighted geometric mean:
BUT IT IS WRONG TO DO SO IN THIS CASE.
SEE MY POST LATER IN THE THREAD…
A. 4x is a factor of 4, to the power of 10% chance
B. earning 20% is a factor of 1.20, to the power of 55% chance
C. losing half our money is a factor of 0.5, to the power of 35% chance
multiply these together:
A * B * C
4^0.10 * 1.20^0.55 * 0.5^0.35 = 0.9963
We expect to lose money! Even though there was a 65% chance of the price going up and a 10% chance of a massive 4-bagger, the 35% odds of getting cut in half is too much. We end up with only 99.6% of our original money, for an expected loss of 0.4%
You must make sure to use multiplicative factors when doing this calculation. 1.0 = even money, 1.2 = 20% gain, 0.7 = 30% loss, etc. If the current price is 6880 and you expect resistance at 7000, use a factor of 7000/6880 for that resistance level.
For the original example, we have a 50% chance of 4x and 50% chance of 0.25x:
4^0.50 * 0.25^0.50 = 1
No gain or loss.
^^^WRONG WRONG WRONG^^^
Hope this helps everyone’s trading!
(Hahah, hope this helps MY trading by MISLEADING all those suckers who believed this post)
EDIT: THIS POST IS WRONG. Use the regular average method for a single-step trade.
Geometric mean is needed when you chain investments together, and the first investment determines the amount of money you have to spend on the second. See my post below…
6 Likes
This is good.
Do you trade options?
Feel very dumb for not knowing this. thank you.
Wish I could. AFAIK, there’s only Deribit, and they block all US customers. Any other option for options?
Of course the US will let residents trade Bitcoin options once one of the existing, well-established, traditional, US-based exchanges offers them… 
If you make this bet 20 times repeatedly, your results seem to depend on the bet size.
Using $100 as the first bet, and using the money left over from the previous bet as the amount of the next bet, you lose on average.
Using $100 as each bet amount, restarting when the 4x or 50% etc. happens, you win on average.
The trouble seems to appear because of the unknown time span. First you invest. Then you have no concept of when time T has been reached and it is time to cash out and restart with $100. If you cash out continually (every second), the odds seem to be in your favor in theory, but making a trade has other costs which inhibit this in practice.
Am I missing something?
Not sure why you think the results depend on bet size. Could you explain that? If you start with $100.00 then your expectation after one pump is $99.63. If you take that money and do this a second time, your expectation is $99.63 * 0.9963 = $99.26. If you are simulating multiple rounds, be careful that you start with the previous rounds’ money, and don’t start over with a fresh $100.00. That would be free money that covers over your losses from the first round. Also, you must chain the odds together for all combinations. If we invest in two pumps, one after the other, the odds of result A followed by result B is 10%*55% = 5.5% with an outcome of 4*1.2 = 4.8. The odds of A followed by C is 10%*35% = 3.5% chance for a 2-step outcome of 4*0.5 = 2 doubling your money… etc. Do this for all 9 possible combinations and you will get an average outcome of 0.9963 * 0.9963 for investing in two identical pumps one after the other. Using the geometric mean will be much easier 
It is true that this example assumes you know when to cash out. For example in case B, we assume we know the price isn’t breaking through resistance and we know to sell at that point, not hold on for scenario-A. A more realistic example is if the resistance is at 25% above and we only take profit if it bounces back down to 20% where we cash out. You do have to be careful when you frame your scenarios that you will actually be able to get the profit you list in each scenario without knowing the future price. In reality you should use the price levels where you would know to cash out, not the actual resistance levels (unless you are always selling at that level and not waiting to see if it holds or not.). In scenario C you probably wouldn’t wait until the price gets cut in half before you sell… replace that factor with whatever your stop-loss is.