Recent Market Performance

Performance of a handful of macro indexes, as well as index and ETFs on specific sectors of particular interest. Used in our Weekly Cycle: Market Outlook Updates.

Stock Ticker

Crypto Outlook: Quantity Counts

Crypto Market Update

My weekly update on the crypto market intends to look at the market from a macro perspective. With a majority of the crypto market cap concentrated on Bitcoin and a handful of other tokens, my focus is on the major coins. I check a standard set of information sources each week and include links to articles of interest.

Crypto Indexes

The Bletchley Indexes “offer the most thoughtful and consistent approach to index construction” according to CoinMetrics. 

Original “top X” indexes were launched in June 2017, followed by a market-wide index in December 2017 and sector specific indexes in February 2018. In total, there are 13 Bletchley indexes, with charts over various timetables available for each on their site.

Below is an alternate view of the performance based on the downloadable data made available by Bletchley. This view is intended to give a side-by-side snapshot of a handful of indexes.

bletchley crypto indexes 05-07-2018


  • The Bletchley 10 is up over 75% vs USD over last month. As has been the case historically, the even index performed even better, up nearly 100% vs the dollar.
  • The total indexes have seen similar results over the last month, both versus the dollar, as well as mirroring the improved performance of the even-index.
  • Currency Index has improved over the last week after lagging behind application and platform indexes over last month.
  • All three sectors have outperformed BTC over last 30 days, though only currency shows positive gains over last week.

Global Crypto Charts

For a quick look at the global markets from another perspective, provides simple charts with a lot of info, including Bitcoin marketshare, a visualization of the top 20 currencies by volume and market cap, and more.

Total Market Cap of Cryptocurrencies

crypto total market cap 05.07.18

Market Share of Top Cryptocurrencies

Bitcoin’s market share has declined to ~38%, close to all-time lows. This continues a long-term declining trend, with new currencies such as EOS and BCH taking some of that market share.

Marketshare of top 20 cryptocurrencies

The top 20 currencies (by market cap) currently make up roughly 86% of the total crypto market share.

TradingView Technical Indicators

Based on data and info from TradingView (Click  for 30% off a pro subscription)

crypto tradingview technical signals 05.07.18

Scores based on the cumulative total of positive and negative technical indicators signals over three time horizons on Trading View. Scores are weighted by multiplying total as follows: daily (x 1) weekly (x 2), and monthly (x 3). 

  • ETH has surged compared to BTC and USD over the last month. Technical indicators suggest the tide may be swinging to favor BTC in the short term.
  • USDT has outperformed USD by over 6% in the last year.


crypto performance 05.07.18

  • BTC has been mostly flat the past week, while ETH has surged.
  • ETH has doubled over the last month (versus USD)

Google Trends

bitcoin google trends

Google Trends have mostly flattened out after falling significantly in February.

I’m hesitant to keep tracking this, as my assumption is that there will be less searches as the public gains knowledge and no longer needs to search for the term. However, significant price action could still lead to search volume surges.

WooBull Charts

Bitcoin NVT Ratio - 05.07.2018

NVT RatioThis long-term cycle tracking ratio has continued it’s downward trend yet remains well above the long term “normal range,” suggesting a downward turn could be imminent.


Bitcoin NVT Signal Chart 05.07.2018

NVT Signal – This short-term signal continued its upward trend again, reaching a recent high of 142. In the original post introducing NVT Signal, 150 was indicated as an overbought signal.

Overall, there is potential for the upward trend to continue in short-term, though NVT Ratio suggests a downturn is looming.

CoinMetrics Charts

CoinMetrics has provides great charting tools for a number of top cryptocurrencies. Kalvichkin’s NVT is a regular check for checking short term trading signals. 

Kalvichkin's NVT - BTC ETH 05.07.2018

Kalvichkin’s NVT – Similar to NVT Signal, this suggests an upward trend is likely to continue for both BTC and ETH in the short term.

Articles of Note

Is Ether a security?

I tend to overlook most regulatory concerns, assuming they’ll sort themselves out and should only be speed bumps in the long run. If the SEC determines ETH is a security, it could have repercussions for some whales. The fact that VCs have lobbied the SEC for a ‘safe harbor’ both shows how important this is, and makes me think there won’t be any major negative impact with some sort of compromise reached.

Crypto Moats

The open nature of crypto currencies allows for code to be copied or forked easily, making it much harder to establish moats (to use a Warren Buffet phrase) to protect from competitors.

Robert Miller, Director of Business Development @medical_chain, wrote on the topic and suggested some potential moats, including:

  • Superior brand
  • Superior developers
  • Partially/fully closed source code
    “Cryptocurrencies might withhold some or all of their code in the future to keep competitors from taking their code. Spencer Noon touches on this in his post The Persistent Forker but developers could put their code in a “black box” that was able to prove the code did not change over time.”
  •  Life span
    “Nassim Taleb introduces the idea of the Lindy Effect in his book Antifragile. The Lindy Effect states the future life expectancy of non-perishable assets is proportional to their current age. In other words, the longer something has been around the longer we can expect it to stay around.”
  • Network effects
  • Good governance
Fred Wilson counters Warren Buffet on Crypto Investing

Speaking of Warren Buffet, he recently made some remarks about Bitcoin and crypto, saying:

When you buy cryptocurrency, Buffett continues, “You aren’t investing when you do that. You’re speculating. There’s nothing wrong with it. If you wanna gamble somebody else will come along and pay more money tomorrow, that’s one kind of game. That is not investing.”

On AVC, Venture capitalist Fred Wilson countered by stating that he’s not looking at crypto correctly, assuming they are collectibles, rather than fuel:

But what these crypto tokens are is entirely something else. They are the fuel that powers a new form of technology infrastructure that is being built on top of the foundational internet protocols. Ethereum and EOS are smart contract platforms that allow developers to create decentralized applications (Dapps in the vernacular of crypto). Bitcoin and Zcash are stores of value that allow users to participate in this decentralized application space without the need for fiat currencies.

It’s a good counter from someone who invests more like Buffet than many might assume, given they both look to buy and hold for a long investment period.

The end of ICOs

While enormous amounts are still being raised in ICOs, with over $8 billion raised in 2018 already, it’s increasingly coming in private sales. In the Token Economy newsletter, Stefano Bernardi writes about the downside:

And I’m bored.
I’m bored because I now see startups having to spend 6 figure sums on lawyers instead of building their products.
I’m bored because I see people making a killing from being accredited investors and thus being able to access opportunities that others can’t.
And I’m bored because all of this regulatory attention and focus is necessary, given that the scammers army has found its new honeypot.
We really can’t have nice things.

And makes his prediction for the future of ICOs:

Very hard to say, but our guess is that “normal” VC rounds will become more of a norm, there will be fewer public ICOs from legit projects, and the tokens will trade on exchanges directly with the company, or its treasury unit, or some specifically chosen early investors acting as market makers.

 Why Decentralization Matters

Many of the early believers in Bitcoin and cryptocurrencies were attracted by the hope for decentralized systems. Spencer Bogart writes that the path to decentralization may be through centralization first. He cites problems with going do a decentralized model too early, as well as problems with becoming too centralized:

Either these platforms will offer strong assurances (“permissionless-ness”), in which case they will attract “sovereign-grade” attackers (and “platform-grade” censorship resistance will be insufficient) OR they will embrace censorship and permission-ing, in which case they will end up as less efficient varieties of today’s centralized platforms. Regardless, neither path appears sustainable.

The path forward: Highly decentralized base layer with increased centralization (and efficiency) on higher layers

He acknowledges a trend toward further centralization and it optimistic:

Instead, I’m most optimistic that highly decentralized networks will provide the robust foundation on top of which we can realize the efficiencies of centralization in higher layers — should it be desired. It’s a path that will likely take longer and be more difficult to build, but it might be the only viable route medium- to long-term.

Final Thoughts

A story from The Process Matters by Nick Maggiulli:

On the first day of ceramics class the teacher announced that the students would be split into two groups. One group would be graded on the quantity of the work they produced while the other group would be graded on the quality of the work they produced. The “quantity” group had to create as many clay pots as possible over the next few months while the “quality” group had to produce a single clay pot as best they could.

Months later as the students turned in their pots to be graded, the teacher came to a surprising realization — all of the highest quality pots were produced by students in the “quantity” group.

Regardless of regulatory action, crypto is here and it’s not going away. There’s a number of projects live, more in development, and even more that are just being conceived. Some projects will work, many won’t. The number of successes will increase as more projects are created. It’s early.



Crypto Market Outlook 04.16.2018

Crypto Market Update

Our weekly take on the crypto market. We primarily look at BTC and ETH, as it’s rare to see altcoins outperforming both. Still, we track the crypto market as a whole, looking for new opportunities and we hold a handful of altcoins.

TradingView Technical Indicators

BTCUSD – Buy signals on 1D and 30D, while neutral on 7D.
ETHUSD – Signals remain bearish with sell signals on 1D, 7D, and 30D basis

WooBull Charts

NVT RatioThis long-term cycle tracking ratio is very high, which is worrisom as it typically signifies a significant drop may be coming.


Bitcoin NVT Signal chart 04.16.2018

NVT Signal – Shorter-term signal has moved upward significantly over the last week and sits around 100. In the original post introducing NVT Signal, 150 was indicated as an overbought signal.

Overall, there is potential for the upward trend to continue in short-term, though NVT Ratio suggests a downturn is looming.

Google Trends

No significant changes, though a small bump this past week


kalvichkin nvt - btc

Kalvichkin’s NVT – Similar to NVT Signal, this indicates BTC is trending upward in the short-run. ETHUSD shows very similar results.

kalvichkin nvt - eth

Articles of Note

Blockchain is not only crappy technology but a bad vision for the future:

There is no single person in existence who had a problem they wanted to solve, discovered that an available blockchain solution was the best way to solve it, and therefore became a blockchain enthusiast.

Many good points in this post, though it seems to overlook that applying blockchain to existing problems may not be the best utilization. Instead, there are new possibilities, such as those seen in utility tokens.

Cryptoassets: Flow & Reflexivity :

The experience of the last six months should serve as a lesson for cryptoasset investors about the sensitivities of the current crypto market structure, and the importance of being cognizant of flows and their second order effects. As for where we currently stand, concentrated tax selling is likely nearing completion, and reflexivity has driven sentiment to bearish extremes.⁴ Now we must wait and see how far the reverberations of reflexivity take crypto, before the market returns to a focus on fundamentals-driven growth

Our Take

We’re looking at BTC and crypto in general as a short-term opportunity. It still seems like a risky time, as NVT Ratio and NVT Signal imply a further correction is due.

Market Outlook April 02, 2018

Technical Indicators

All of the indexes we follow have turned to bearish signals on daily timeframes. HACK remains the only index with a ‘buy’ rating on weekly timeframes.

With the exception of BOND, all indexes we follow still have buy ratings on monthly timeframes.


-2 = strong sell
-1 = sell
0 = neutral
1 = buy
2 = strong buy

Score gives 3x weight to 30-day indicators and 2x weight to 7-day indicators.

What others are saying

1 . Old Prof cautions about short-term trading, though believes long-term fundamentals remain positive.

Short-term trading conditions worsened this week. In mildly bearish conditions our trading approaches can still be profitable, but that might not be true for everyone. We continue to monitor the technical health measures on a daily basis. If this indicator goes to fullish bearish, we liquidate trading positions. This is not a forecast that the market will decline. It indicates increased difficulty in trading profitably.

The long-term fundamentals and outlook are little changed. The FOMC decision flattened the yield curve a bit, and that is one component of the C-Score. Based upon historical data for this indicator, I have increased the 9-month recession probability to the 18% range. I am monitoring, but not yet especially worried. Please see James Picerno below.

He also warns that Canadian marijuana stocks may be overvalued:

Pot stocks, according to a cover story in Barron’s. Bill Alpert analyzes the Canadian stocks, comparing valuations to other markets like gold and alcohol. He writes:

As they often do, investors have celebrated this emerging business early by embracing Canadian companies that claim a cannabis connection. Traveling in Canada, cabbies, bankers, and even border guards will tell you their favorites in a bubble that has floated Canadian cannabis stocks to a collective stock-market value above $30 billion. That’s already about half the market capitalization of Canada’s gold mining industry.



2. At StockTrader, Mark Hanna writes about the potential huge surge in corporate earnings:

2018 will be the year the massive corporate tax cuts boost earnings.

According to FactSet, earnings for companies in the S&P 500 are expected to grow 17.3% in the first quarter. Not only would that represent the fastest pace of profit growth since the first quarter of 2011, but expectations have been swiftly ratcheted up over the past few months. At the end of December, analysts were expecting a growth rate of 11.4%. Much of that increase was due to the recently passed tax-reform bill.


  • Solar stocks like SEDG and RUN are holding up well in a volatile market
  • OSTK is down over 40% over the 30 days
  • BSBR (banco santander) has been added to our watchlist after reaching new all time highs with an attractive P/E ratio of ~16. More research to be conducted.


Remaining mostly invested and looking into income producing assets and real estate projects to hedge should the market continue showing signs of weakness.


Predicting where the stock market will go is futile

Good perspective on how to view the stock market from Vitaliy Katsenelson. This was written a few weeks ago after the “correction” early in February:

Nobody but nobody knows what the stock market will do tomorrow, next week or next year. Stock market behavior in the short term is completely random. Completely! You’ll have a better luck predicting the next card at a black jack table than guessing what the stock market will do next.

What will the stock market do next? It’s the wrong question. It’s the question that should never be asked, and if asked should never be answered. Asking this question shows that you believe there is some kind of order to this random madness. There is not. And if you answer with any answer other than “I don’t know,” you’re a liar.

via What will the stock market do next? at Vitaliy Katsenelson Contrarian Edge

On the benefits of trend following investing

The consistency of a trend following strategy’s relative performance vs a 60/40 portfolio (impacting the ability for investors to stick with trend following) is the basis of an argument that’s taken place offline (yes, I also argue offline) with a FinTwit friend who is a huge proponent of buy and hold. It’s progressed to the point that we’ve discussed making a mini (very mini) Buffett style bet related to whether trend following or a 60% US Stock / 40% Bond allocation will outperform over the next five years (with money going to the winner’s charity of choice).

via The Behavioral and Performance Benefits of Trend Following at

Bitcoin moving closely with $SPY

Bitcoin’s case as a store of value has not proven especially strong in the past month, as it’s typically gone the way of $SPY.

Bitcoin and stocks bottomed at almost exactly the same moment. This is bad for Bitcoin. Part of Bitcoin’s appeal is that it is weird, and perhaps does not covary with standard financial assets in traditional ways. But at least yesterday it did, and that should be a force pushing Bitcoin lower.

via Bitcoin and covariance at Marginal REVOLUTION

In US, working age population is larger than ever

From Prime Working-Age Population At New Peak, First Time Since 2007 at Calculated Risk:

The U.S. prime working age population peaked in 2007, and bottomed at the end of 2012. As of January 2018, according to the BLS, for the first time since 2007, there are now more people in the 25 to 54 age group than in 2007.

Demographics is a key reason GDP growth has been slow over the last decade.

Changes in demographics are an important determinant of economic growth, and although most people focus on the aging of the “baby boomer” generation, the movement of younger cohorts into the prime working age is another key story. Here is a graph of the prime working age population (25 to 54 years old) from 1948 through January 2018.

As pointed out in the original post, the size of this group surged in the 70s, 80s, and 90s, something not always considered when comparing GDP. This could be a sign of increased GDP in the years to come, though the last time this group peaked in population was 2007.

How velocity effects crypto value

Here’s a post from Alex Evans on how velocity effects value in On Value, Velocity and Monetary Theory

The core thesis of current valuation frameworks is that utility value can be derived by (a) forecasting demand for the underlying resource that a network provisions (the network’s ‘GDP’) and (b) dividing this figure by the monetary base available for its fulfillment to obtain per-unit utility value. Present values can be derived from future expected utility values using conventional discounting. The theoretical framework that nearly all these valuation models employ is the equation of exchange, MV=PQ.

Given how important value has become in most attempts to value crpyto assets, it’s an important discussion:

 The uniting argument in the above articles is that tokens that are not store-of-value assets will generally suffer from high velocity at scale as users avoid holding the asset for meaningful periods of time, suppressing ultimate value. My claim here is that this thesis is directionally correct, but hard to operationalize.


In recent weeks, Matt Levine has written about two potential ways of driving a stock price down. The first via literally hacking into computers:

Joshua Mitts and Eric Talley of Columbia — discussing a different approach, which is that you could just trade on the fact that you could hack into the computers. Then you can disclose the hack and hope that the company’s stock will go down. Cybersecurity breaches tend to be bad news. This approach is … look, I have my doubts about how lucrative it is; cybersecurity breaches tend not to be such bad news … but it has the advantage of not being blatantly illegal. Of being legal? I mean, that is not legal advice, but her

In the second case, it’s not so much true hacking, rather it’s akin to growth hacking.

Shares of the Snapchat parent company sank 6.1 percent on Thursday, wiping out $1.3 billion in market value, on the heels of a tweet on Wednesday from Kylie Jenner, who said she doesn’t open the app anymore

So I am inclined to allow it, though I am of course neither your nor Kylie Jenner’s lawyer. But as a way to profit from celebrity, shorting a company’s stock and then being mean about its products on social media seems pretty easy, and the markets would be more amusing if someone tried it. Social media companies profit because their users provide content for free; I like the idea of the users profiting by deciding to stop.