Eric Wall Profile picture
20 Nov, 3 tweets, 1 min read
Honest question: how do you price in something when you don't know what the price effect of it should be? How do you avoid over-pricing it in, or under-pricing it in?
If the halving was priced in, how did anyone know that the effect of the halving was going to be exactly as much as it had been priced it in? We know that they didn't price it by S2F or Rainbow because the price was only $8.7k. How would you know if that was enough/not too much?
It is impossible to know if something was priced in if the effect of the event is an unknown variable. Those arguing that the halving was priced can't have been S2F or Rainbow believers (price wasn't that high), so how do they know $8.7k wasn't a huge over- or underestimation?

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More from @ercwl

18 Nov
Felt like doing some degen leveraged trading today but @BitMEX asked for KYC. I thought about it for a bit then decided to swap some BTC for WBTC and trade some @dydxprotocol perpetuals and @HegicOptions options. Thoughts: a bit clunky & costly, but still felt better than KYC.
What it looks like:
I know that there are a few custodial exchanges out there that don't impose any KYC yet, but I'm just tired of having to keep track of my email inbox for that email that says "New verification requirements! You got 2 weeks to withdraw your funds!". It's just stressful.
Read 6 tweets
5 Nov
1/6 In 2017, people were buying the top of a retail-driven rally based on a narrative that "they were getting in before the institutions".

In the days before the top, the head of the Brazilian stock exchange B3 quickly flew me across the Atlantic to give bitcoin presentations.
2/6 While there was definitely interest in bitcoin, it was perfectly clear to me that the institutions were nowhere near being ready to seriously enter the market.

I wrote an unpopular piece then called "Shorting the Great Bitcoin Bull" which garnered virtually 0 interest. Image
3/6 Today, three years later, the price of bitcoin is approaching the same levels as in 2017. What's different now is that I don't have the slightest intention of shorting bitcoin--not even a small urge.
Read 6 tweets
30 Oct
I'm curious how people with large DeFi allocations are handling this emotionally--not sure so many expected such a drawdown to happen even as BTC was going up? The fact that many seem to be quiet about it leads me to think it might be painful to talk about.
If I were to offer some comforting words, here's how I'd think about it if I was a e.g. a UNI holder: has something fundamentally changed? Governance tokens have the benefit that you can pretty easily calculate what prediction of the future you were buying
The fully diluted supply of DeFi tokens were known ahead of time so you could always know what numbers you were betting on when you paid the market price you paid. Are you more bearish on Uniswap 10xing its Sep volume + activating the fee switch today vs. then? If not, why worry?
Read 7 tweets
17 Sep
Morning thoughts:

So right now there's $495m worth of Uniswap (UNI) tokens (implied $3.3bn Y2024) that just flooded the market overnight out of nowhere.

Can you answer the following question: Does this now mean that the cryptocurrency community as a whole is $495m richer?
"No! Zero new fiat entered the system. Nothing was raised in an ICO. The cryptocurrency economy can only grow if people send in new fiat. Various cryptoassets trading at arbitrary exchange rates with each other doesn't magically increase the total wealth. There must be inflows."
☝️ If you think like this, I think you must be confused. Markets don't work that way. I mean, you could argue that Uniswap (UNI) hasn't had proper price discovery yet and that there's not nearly enough market depth to absorb a $495m sell order. True, but that's a bit separate.
Read 7 tweets
16 Jul
If you want a mental model of S2F/S2FX that actually works, you can use @saifedean/@100trillionUSD's work to form an intuitive understanding that's basically "oh yeah, successful SoVs that end up amassing sizeable portions of global wealth are indeed usually very scarce!"
Then take bitcoin which has perhaps the most finite supply of all, and realize that yes, if this thing works out, it's going to be the mother of all SoVs. If we work out the tech, UX and regulatory issues to a reasonable degree--imagine how highly valued it could become!
It could truly become worth a lot--imagine something that gobbles up all the world's money value and outperforms gold & real estate as SoVs and is at many times appreciated as safer venue for capital growth than equities/bonds, 100 trillion USD is a low bet. We could double that.
Read 14 tweets
15 Apr
1/15 Today, I'm comparing the two currently most popular bitcoin price models: Rainbow chart vs S2F!

Rainbow chart:
✅ Tried & tested log regression (2014)
✅ Never changed
✅ Has emoji 🌈

S2F:
❌ New & complex (2019)
❌ Changes often
❌ Sounds like a sex position

A thread 👇
2/15 Origin story:

The Rainbow chart was invented by the well-known Redditor /u/azop who posted these charts for years for no personal gain on /r/BitcoinMarkets.

@100trillionUSD (S2F) is a pretty cool guy, but Azop is a real OG (posting these graphs since 2014).
3/15 Theory:

The S2F model posits that small variances in the emission rate can dictate the BTC price, when really it's set by supply/demand. Demand is the much more volatile factor & more likely to influence price, but S2F does not model it. The Rainbow chart has no such issue.
Read 16 tweets

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