Had a discussion with @VentureCoinist that made me think about a few of the reasons why "this time is different" with respect to the $BTC ETF filing coming up from CBOE. Let's dive right in.
So, we know that Bitcoin has had several attempts at getting an ETF traded on institutional exchanges - several failed starts by VanEck and by the Winklevii twins (which was of course shot down)
Reasons: Lack of regulation, low liquidity, low security among others
Since then, we've had a few developments in the space however.
- CME Futures have more than doubled Bitcoin trading volume in the past 6 months across all markets (liquidity)
- CFTC probes are regulating manipulation
- CBOE promises to insure customer holdings (security)
Here's something most people don't talk about but is a general curve that traders follow as they mature in the space. It deals with how traders actually trade, whether it be short term, mid term, etc.
Most people start off with very small portfolio sizes, maybe a few bucks.
It makes sense at that level to do daytrading, scalping, arbitrage, or other forms of "quick money" that you can repeat many times even in one day. It allows you to be super flexible and take advantage of news as it comes, as well as guaranteeing liquidity should you need it.
Eventually though, your portfolio size gets a bit too big to market buy/sell without moving the markets - you also loosen your stops due to the same reasons as above. If you get stopped out at a 10% loss you dont want to trigger a huge sell wall there, making things worse.
A few general thoughts on the market as we approach 2018 and beyond.
1. As most business off and online don't work during the holidays, many projects were pushed to January, causing an oversaturation of projects. Even with all of these January ICO's most leads I've talked to are between three and ten times over subscribed.
2. ICO mania will continue until at least February, when I expect we may have a dip in projects to invest in. At that point investors will look towards mid and small cap plays to generate returns & accumulate ETH to generate alpha. Expect a large run up in ETH during this time.