Kodak is Now a Crypto Company

I wanted dislike the new that Kodak has pivoted towards crypto. The news sent the stock up over 200% at the time of this writing. I’ve mentioned other examples earlier which seem ridiculous. The ridiculousness is not necessarily in companies trying to get into crypto – its the reaction in stock prices (disclosure – I may be long or short KODK).  In this instance Kodak seems to have a plan to develop its own currency and mining equipment.  Kodaks a tech company and (should) have the resources to get this together. (As opposed to Rich’s cigars).

Kodak Crypto Stock
Kodak Crypto Stock

Lets be honest though – to me this stock has no business being up over 200% on this news. There is major risk to this venture for a myriad of reasons. And in my mind this is actually one of the better crypto-related ideas I’ve seen from a listed company. Sure Kodak could succeed and return to glory with this business plan. But we’re along way from some speculative tech and major profit. Much like cryptos with no intrinsic or extrinsic values the price shoots up through the roof just on the idea that new buyers will come in and push up the prices.

This isn’t investing, its gambling – at best speculation.


Incoming Bitcoin & Altcoin Buy Wave?

Disclaimer: This is just rampant speculation. I own crypto.

A thought struck me today as the crypto market has been fairly quiet the last few days compared to the mayhem a week ago. Many crypto currencies like Litecoin and Ethereum were up 50-100% last week, only to trim gains this week. CBOE Bitcoin futures didn’t appear to have much impact on price at all in the first week of trading either. In hindsight its clear to see that the market needed to cool, but I have a feeling that the “cooling” might be over for a bit.

I dont think that price is down because demand is down. I suspect what we saw was the first “wave” of another to come.  Why is it “to come” and not “here”? People can’t get in fast enough. Exchanges are overwhelmed with new signups.

For example, Coinbase which is now the #1 App on Apple added over 780,000 new users THIS MONTH.

Bittrex shut off applications for new users because of demand.

People tell me they can’t get their accounts open pretty much anywhere. Amazing, if true.

All these people are coming online, desperate to make gains. Should a little rally spark FOMO will kick in and we could see a big move in the market.


Here’s One Way the Bitcoin Bubble Doesn’t Burst

Lets Face It, This is A Bitcoin Litecoin Ethereum Bubble

Coinbase is the #1 App on the Apple App Store and your Barber/Grocery Clerk/Grandmother are all buying in. Prices have surged unbelievable amounts in the past few days (let alone year). My hunch is that most people buying in now are trying to get rich and are not trying to escape the grasp of the evil Wall Street empire.

Keep in mind, just because there is a price bubble doesn’t mean the technology isn’t awesome. The prices of Bitcoin or Litecoin could go down 90% and the tech would be just as mind blowing.

Its also possible I’m wrong and that prices just keep going up. Many point to this chart showing internet adoption:

Bubbles that did not pop

The key to all these tech was ADOPTION – people used them. This chart is also talking about ADOPTION and not PRICE. These are two different things, but brings me to a point:

People drawn in by trying to get rich might just stick around and ADOPT crypto tech.

Clearly millions of people are flooding into the crypto space, and if they don’t SELL but start to transact with each other using Bitcoin or Litecoin – then prices might not come back down.

Bitcoin Needs A Killer App

Just as email is what made people use the internet Bitcoin doesn’t have that killer app. Its hard to buy and sell crypto – its confusing. Coinbase has done just an OK job of being a Bitcoin gateway for people and they are crushing it. But still – sending payments from Coinbase to another person isn’t obvious. Thats not what Coinbase was designed for (it was designed to overcharge you for crypto purchases).

Enter: Square.

Maybe this is the App that turns Bitcoin into “Venmo” and drives adoption. Square’s founder and CEO is Jack Dorsey the CEO of Twitter. I couldnt find anything about the number of Square Cash users, but here is some insight on the app network.

Square Bitcoin App

The reviews claim that buying Bitcoin on the app is very easy and intuitive. People also trust Square.

All these people speculating on Bitcoin price could suddenly find themselves transacting quickly and easily using Bitcoin. They could adopt it. That might keep prices up, or even be a catalyst for higher prices.

In the end we’re in the first or second inning of all this tech. Prices will do what they will but its clear that crypto is here to stay.

Pigs Get Slaughtered: Margin Trading Bitcoin

There is a famous saying “a fool and his money are soon parted”. One thing that bothers me about the Bitcoin space is all that all of the people catching this rising tide think they are the Warren Buffet and can’t lose. News flash: you aren’t a great trader. When every crypto goes up everyone looks like a genius. Then they get cockier and their false bravado builds pushing them to trade on margin making even more money.

Then suddenly a sharp drop in price hits a few margin players as the exchange forces them out of their position. This creates cascading margin sales as other people are then forced out.

This article on BI talks about the guys hurt in Bitcoins recent flash-crash. They trade using margin on Bitfinex and when the price tanks they get liquidated at prices they say aren’t fair. Its possible they were forced out at bad prices – but they still would have lost a lot of their holdings. Keep in mind these guys are using margin (very dangerous) on an exchange which is completely unregulated and has major rumors of shady behavior. This accident was waiting to happen.

This brings us to a well known trader saying to all those in the crypto space:

“Bulls make money, bears make money, pigs get slaughtered”

Bitcoins All Time High Price

Why are Bitcoin prices rising exponentially? I think this is “retail” buying all with a fear of missing out (FOMO). I mean, who wouldn’t look at this chart and think “now is the time to buy?”


Anecdotally I can say that Coinbase has been trading at higher prices relative to other exchanges over the past several days even weeks.  Coinbase is arguably the easiest platform for “retail” investors to buy Bitcoin. News broke recently that Coinbase now has more users than charles schwab.

This tells me that the small retail buyers are pushing in trying to get in on the action. For reasons I’ve discussed earlier its impossible to try and call a top – even a temporary top.  Big dips have happened, but there have been buyers eagerly awaiting entry. This is reinforcing new buyers who feel getting into bitcoin is a “can’t lose” proposition. Maybe these buyers are right and we’re witnessing a paradigm shift to Bitcoin as the new “money”. Or, maybe prices have gotten ahead of themselves. Who knows.

Anyone that claims to knows what happens next is a liar. Just don’t trade with more than you can afford to lose, and enjoy the ride.

Bitcoin Popular with Preppers & They’re Wrong

Much has come out recently about Bitcoin becoming more popular than Gold as a hedge against calamity. This makes inherent sense to me for “mainstream” investing. Bitcoin is outside of the banking system and control of government. Its (on its way to becoming) universally accepted and has shown great utility for people in escaping governments which are collapsing (see Zimbabwe and Venezuela).

Whats odd to me is when the Preppers come in and we see stories that they are looking to Bitcoin as an alternative to gold for use in a doomsday scenario. Bloomberg highlights this here:

Across the North American countryside, preppers like McElroy are storing more and more of their wealth in invisible wallets in cyberspace instead of stockpiling gold bars and coins in their bunkers and basement safes.

They won’t be able to access their virtual cash the moment a catastrophe knocks out the power grid or the web, but that hasn’t dissuaded them. Even staunch survivalists are convinced bitcoin will endure economic collapse, global pandemic, climate change catastrophes and nuclear war.

“I consider bitcoin to be a currency on the same level as gold,” McElroy, who lives on the farm with her husband, said by email. “It allows individuals to become self-bankers. When I fully understood the concepts and their significance, bitcoin became a fascination.”

On one side she exhibits a true understanding of the value of Bitcoin – becoming a “self-banker”. This to me is the greatest value of Bitcoin. On the other points I am lost.

If the power grid goes out for a sustained period or there is a nuclear war then forget Bitcoin. Firstly the Bitcoin network would most likely grind to a halt particularly if the power problem is in China or any other place where mining is concentrated. If they can’t run then the network crashes and you can’t trade those precious bitcoins. In a true doomsday scenario you are going to want food, toilet paper, etc and are going to want to trade for things with true utility.

What I suspect is happening is people are jumping on the bandwagon here for bitcoin as a speculative investment betting that prices will rise. They then claim that Bitcoin is useful (even if the power grid is down) to support their speculation. If you are a truly wanting to get out of the system you can convert all of your fiat cash to Bitcoin and use Bitcoin exclusively to buy and sell everything (get a Bitcoin Visa card). I don’t get the impression that is what preppers and others like them are doing.

This brings me to my final point. Bitcoin can be a beautiful answer to much of what is wrong in this fiat/central banking dominated system. If people all started to use  bitcoin rather than hold it because it will make them rich – then Bitcoin has a real future. I suspect that it will take a systemic shock to get people to switch to using Bitcoin to transact. An event wherein everyone sees the value of being outside the banking system.

For now it appears Bitcoin is more of a “get rich quick” scheme.

This Guys Math Says Bitcoin Put in a High

I like to read different methods of pricing bitcoin. I came across this one on reddit which points to $7,500 as a top. Permanent or short term top, who knows. But his logic is interesting. Remember – see both sides.

From Reddit

Bitcoin Will Crash Below $3000. https://bitcointalk.org/index.php?topic=2396770.0

Bitcoin rises from $611, June 2016, to the current price of near $8000. This is an exponential rally, a rise with an accelerated rates. Such a rally defines a market bubble as it will very quickly reach a level that cannot be sustained – when the bubble must burst crashing the market. The past examples are the Dutch Tulip Bubble of 1637 and the Dot.com bubble of 2000. Such bubbles always bring prices to levels where it started.

That exponential markets must crash may be just a simple law of nature. In order for such inflated prices to be maintained, there must be some support from the underlying fiat money supply. The maintenance of trading volume means generally a greater money supply allocation to such a market; it is likely such cannot be maintained at a point in time causing the market to burst.

I have done an exponential curve fit of bitcoin prices from 2016/10/6/611 to 2017/11/16/7843. Extrapolation of the exponential curve (y = A exp (kx)) is done and the figures shown below.

Data: coindesk.com 1 year data number of points = 25 curve fit : y = 501.428 exp (0.006268 x)

2016/10/6/611 0, 611 2016/11/19/751 44, 751 2016/12/26/903 81, 903 2017/1/26/915 112, 915 2017/2/26/1180 143, 1180 2017/3/16/1173 161, 1173 2017/4/23/1284 199, 1284 2017/6/1/2452 238, 2452 2017/6/28/2584 265, 2584 2017/7/30/2746 297, 2746 2017/8/19/4206 317, 4206 2017/8/26/4387 324, 4387 2017/9/11/4190 340, 4190 2017/9/13/3874 342, 3874 2017/9/22/3603 351, 3603 2017/9/28/4185 357, 4185 2017/9/30/4353 359, 4353 2017/10/6/4370 365, 4370 2017/10/12/5439 371, 5439 2017/10/24/5519 383, 5519 2017/10/28/5733 387, 5733 2017/10/31/6447 390, 6447 2017/11/9/7146 399, 7146 2017/11/15/7280 405, 7280 2017/11/16/7843 406, 7843

days 0, 2017-11-16, $6389 days 10, 2017-11-26, $6802 days 20, 2017-12-6, $7242 days 30, 2017-12-16, $7710 days 60, 2018-1-15, $9306 days 90, 2018-2-14, $11231 days 120, 2018-3-16, $13555 days 150, 2018-4-15, $16359 days 180, 2018-5-15, $19744 days 210, 2018-6-14, $23829 days 240, 2018-7-14, $28759 days 270, 2018-8-13, $34708 days 300, 2018-9-12, $41889 days 330, 2018-10-12, $50556 days 360, 2018-11-11, $61015 days 540, 2019-5-10, $188558 days 720, 2019-11-6, $582704 days 900, 2020-5-4, $1800738 days 1080, 2020-10-31, $5564849 days 1260, 2021-4-29, $17197135 days 1440, 2021-10-26, $53144558 days 1620, 2022-4-24, $164233406 days 1800, 2022-10-21, $507532895

The extrapolation data may be used to predict when the bitcoin bubble may burst. The method is to make use of proof by contradiction. It makes an assertion X; then it uses deduction logic starting from X to arrive at other statements of truth. If if arrives at a statement such as : 3 < 2, which is clearly false, then a contradiction exists refuting the assertion X. We can us this method on the extrapolation data.

Assertion : Bitcoin can reach $507,532,895 in five years, by 2022.

Unlike in mathematics, we cannot here make deterministic deduction using pure logic. We can only make a judgment based on our common sense and intuition and say how likely something may happen.

Most of us very likely would dismiss bitcoin at $507,532,895 by 2022. So we try other extrapolation figures. Say we also dismiss $5,564,849 in 2020, 3 years from now. So when is this bitcoin bubble likely to burst.

The price based on the exponential trend has the figure $6389, days 0, 2017-11-16. We are now doing at $7800 at this point which seems too high above trend. In the least there should be a significant correction – or it may even mean this:

Bitcoin bubble may burst any time now.



If You’re a CEO just say “Bitcoin”

Update 12/14/17 – Had to note this one: “Rich Cigars Inc” is now going to be a blockchain tech company. Makes sense. Stocks up….850%!!!!

Rich Cigars Is Now A Blockchain Tech Co
Rich Cigars Is Now A Blockchain Tech Co



Squares CEO Jack Dorsey (also CEO of Twitter) announced Square is going to add the ability to buy Bitcoin through its app and the stock is up ~3% today.

square bitcoin chart
square bitcoin chart

There are other examples here where stock news comes out including buzzwords like “bitcoin” and “Blockchain” which sends the stock soaring. If the recent Bitcoin/Bitcoin cash debacle proved anything its that this crypto space is rapidly changing and highly speculative. If you’re a CEO you can’t possibly predict your revenue from adding Bitcoin. Bitcoin is growing slowly as a payment method but its dominated by traders and holders. Yes “blockchain” is a revolutionary idea that will change business but I question the incremental value of Square adding Bitcoin purchases. Don’t get me wrong, as a holder of Bitcoin its great news. But is it really going to move the needle for Square in the near future?

I am not sure if the people buying Square on this news are just bullish on Bitcoin and its a way to express that, or if they think this is really going to boosts Square’s business. I wonder if the launch of Bitcoin Futures on the CME this December will cool this off a bit.

To me it reeks of speculation when stocks rip up just using these catchphrases and is something that helps build the Bitcoin “bubble” case.

Something Stinks About Bitcoin Selloff/Bitcoin Cash Rise

What follows is all a guess – conjecture.

Bitcoin was due for its Segwit2x hard fork around November 14th. The price heading into the end of last week was all time highs around $7,500 USD.  The  proposed fork caused some controversy and there was bickering for months. On one side was existing Bitcoin supporters, and a separate small but influential group formed by the “New York Agreement“(NYA). The NYA gang included some of the biggest names, most pioneers in Bitcoin who carry much influence.

They also most likely have stacks of Bitcoin (just google their names) held for years. That most likely means they hold Bitcoin Cash coins from the fork several months ago. Suddenly these 6 write a note, calling off the fork.

This is what they said (emphasis mine):

“Our goal has always been a smooth upgrade for Bitcoin,” a group of leaders in bitcoin development told members of the SegWit2x mailing list Wednesday. “Unfortunately, it is clear that we have not built sufficient consensus for a clean blocksize upgrade at this time. Continuing on the current path could divide the community and be a setback to Bitcoin’s growth. This was never the goal of Segwit2x.”

First there is a quick spike of a few hundred dollars. This would seem to make sense as now there is more certainty for Bitcoin. Suddenly, however the price tanks.

Bitcoin Price Crash
Bitcoin price crash following segwit2x cancellation

Bitcoin Cash immediately starts to take off.

Bitcoin Cash Price after Segwit2z
Bitcoin Cash Price after Segwit2x

Here is a theory – I have no proof of this. You have a core group of Bitcoin “elite” with giant pockets of both Bitcoin and Bitcoin cash. To “protect Bitcoin” they call of the segwit2x fork and immediately start dumping Bitcoin and buying Bitcoin Cash. They already own Bitcoin Cash from the fork in August 2017, and they are selling Bitcoin at all time highs. Tweets and blog posts suddenly start shooting out everywhere announcing the “death of Bitcoin” and volumes spike through the roof.

Sounds nuts, right. Well guys did this is stocks in the 1920’s (read here). Basically a bunch of guys would get together and start pumping up a stock, pushing out fake information. That got greedy speculators on board ad caused them to run the price up. The guys on the inside would then dump.

Who knows if this is what happened. Its all very strange, but I suspect well find out in the coming weeks.



If ICO’s Slow Can Ethereum Rise?

According to coinschedule October (~$400mm)had much less ICO issuance than November (~$800mm) Coincidentally the SEC is starting to go after the ICO scam artists, something thats been sorely needed as people (aka “Investors”) can’t be relied upon to do their own due diligence.  Regulation should help remove some scams and improve the quality of the ICO offerings.

While I had soured on the price of Ethereum as a result, it appears (its still VERY early) that if this ICO market can slow issuance the price of Ethereum could propel.

From a technical perspective you could argue a move through $350 would signal “breakout” and possibly higher prices.

Ethereum Price Chart
Ethereum Price Chart

Plus the Bitcoin fork is out of the way – it appears Bitcoin price was propelled by many looking to collecting a “free” bitcoin when the segwit2x for took place. Its common for traders to sell ethereum, litecoin or other “alts” to go long Bitcoin (and vice versa).