Author Topic: This is why BTSX has fallen in market cap  (Read 5137 times)

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Offline liondani

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Among famous cryptos, week-to-date, BTC has fallen by 6%, DOGE by 7%, NXT by 13%, Stellar by 16%, Mastercoin by 25%, and BTSX by 35%...  Thus please don't forget the whole space is currently in a rather bearish environment, and given the recent uncertaintly and upcoming changes for BitShares one should expect BTSX to underperform.

The % loss might resemble a bubble/bust one observes in a broad stock market. Having said that, losing 2/3 of $ value from the top (less so in market cap terms) is way too small compare to crashes in individual technology stocks/sectors. Even BTC lost 4/5 from the respective tops during two recent downturns, not to mention pump-and-dumps previously observed in cryptos.

Given the amount of uncertainty/perceived risk for the whole crypto space and crack-downs by regulators, there was little new institutional or mass retail money inflows coming into the sector following the liquidation of rather speculative positions in Dec 2013... The whole crypto economy is currently struggling with the negation of super optimistic price and adoption predictions by BTC evangelists last year.

So for BitShares community, it is a good time to stay patient in terms of price expectations and concentrate on productive work, consolidating internal strength and planting the seeds of future success.

Most of the POW-altcoins medium-term survival depends on speedy adoption, on a successfully launched rocket (like DOGE). Otherwise there is no reason to stay invested, because there is no substance for the "secondary rocket" to take off when such coin's very functionality is compromised or descending into insignificance among 500 competitors... In such projects the slogan "HODL" is spread by pumpers into the believers in order to enable them to offload maximum worthless coins at elevated prices.

BitShares as a project is in a very different position with committed developers and marketers, superior tech, strong business ideas, bright community, and secured startup funding. So, however difficult it might be watching negative "mark-to-market", there is neither reason to panic, nor to follow frequent price movements too closely and emotionally (every down move usually creates 3 x negative emotional energy compared with positive from a correspondent upmove, unless you are waiting to buy cheap). Even if sales by weak hands and good traders caused the market cap to fall further in the region of $10m, apart from emotional reactions by HODLers this doesn't provide new reasons to doubt the medium-term push and long-term perspective. Therefore, I suggest that the main reasons for HODLing BitShares are both committment to the project and the uncertainty of when / at what level exactly the price bottom is completed and turn-around occurs (usually at time of widespread pessimism and following bad news). Dedicated investors can at any time follow their own educated guess with regards to the probability of complete failure, thus adjusting the size of their BTS stake whenever they see significant chance of failure.

On that note, I wish everyone sincerely involved into BitShares patience and strong moral, leading to amazing success in the (even maybe if not immediate) future!
+5%

would like to see that post stick on top for a view days...

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Offline Empirical1.1

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"Here Taleb draws upon one of the fundamental assumptions of economics and finance — humans are risk adverse in that they fear losses more than they like gains. On  a short time scale, investors observe the variance of the portfolio, not the returns. This variance contains little information of value, and in fact, observing a portfolio at any time scale always contains a combination of returns and variance. Furthermore, human emotions are unable or unwilling to understand the difference between the returns and variance of a portfolio. Undue reliance on short term fluctuations in a portfolio can be very damaging to an investors mental health:"

http://www.curatedalpha.com/2011/nassim-taleb-on-the-difference-between-noise-and-information/
+5%

extending on mira's comment, according to nobel prize winning work of kahneman and tversky in behavioral economics, risk aversion is observed whenever a trade or investment is in the winning territory, leading the most people to realise profits too soon. On the contrary, whenever a trade or investment is in the negative territory, most people tend to risk-seeking behaviour in order to avoid the pain of realised losses and thus not cutting the losses quickly enough for a winning trading strategy.

http://pages.uoregon.edu/harbaugh/Readings/GBE/Risk/Kahneman%201979%20E,%20Prospect%20Theory.pdf

Paul Krugman won a Nobel prize too   :P  And according to the paragraph you just quoted those of us holding BitShares are making a mistake and should cut our losses  :P

For the record I'm holding and may be a buyer again if it gets to $25 million.

Also regards you original analysis, don't forget though it's a merger, and all pieces lost a lot if value not just BTSX. Also look at BTSX pre serious dilution discussions, we were on a steady BTC uptrend, so it's not just a fall from where we were but where we would of been. Once the merger goes through BTS is bound to recover anyway & grow, hence why I'm a hodler and maybe a buyer soon but I would like to peak into an alternate reality where BTSX didn't consider dilution or changing developer focus for another 12 months...

Well, Paul Krugman has a very strong and divisive political agenda, which is not true of Kahneman. :D Indeed, there have been several economics prize winners with theories which proved to be bonkers in the real world, e.g. Sharpe for efficient markets...

The merger resolves imho one of the major limitations of initial BTSX business model:
https://bitsharestalk.org/index.php?topic=10833.msg142678#msg142678

I don't think that those holding are making a mistake... This is just observation of how most people tend to act. E.g. those who bought BTSX at in retrospect speculative $90m market cap are unlikely to have sold at $70m, but will probably be waiting for it to get to $150m to sell there... Nobody knows for sure where trends turn, but knowing how most people tend to make decisions might help one to avoid systematically losing strategies, assuming lots of trades in various assets.

Oh, you are waiting to invest $25m? Thats a great news - everyone should then buy now!!! *lol*

Yeah, I only lightened up by a bit @ circa $50 million. I was happy with my new position but at $25 million even those there's some risk involved it would be ludicrous to not back up the truck on something this good. I don't think it will get to that level though.

The merger of one BitShares brings in a lot of strong advantages not least of all the focus of key talent & one simple marketable BitShares. The market is obviously sending a clear message that it thinks otherwise (lot of uncertainty at play too) I was pretty vocally against some of the moves but tried to play it cool for the sake of the merger and my self interest, seeing BTSX dip below $30 million this morning when that's what people were paying valuation wise on Feb 28th when it was just an idea, really frustrated me. As I said I'm not selling though.

Offline kisa

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"Here Taleb draws upon one of the fundamental assumptions of economics and finance — humans are risk adverse in that they fear losses more than they like gains. On  a short time scale, investors observe the variance of the portfolio, not the returns. This variance contains little information of value, and in fact, observing a portfolio at any time scale always contains a combination of returns and variance. Furthermore, human emotions are unable or unwilling to understand the difference between the returns and variance of a portfolio. Undue reliance on short term fluctuations in a portfolio can be very damaging to an investors mental health:"

http://www.curatedalpha.com/2011/nassim-taleb-on-the-difference-between-noise-and-information/
+5%

extending on mira's comment, according to nobel prize winning work of kahneman and tversky in behavioral economics, risk aversion is observed whenever a trade or investment is in the winning territory, leading the most people to realise profits too soon. On the contrary, whenever a trade or investment is in the negative territory, most people tend to risk-seeking behaviour in order to avoid the pain of realised losses and thus not cutting the losses quickly enough for a winning trading strategy.

http://pages.uoregon.edu/harbaugh/Readings/GBE/Risk/Kahneman%201979%20E,%20Prospect%20Theory.pdf

Paul Krugman won a Nobel prize too   :P  And according to the paragraph you just quoted those of us holding BitShares are making a mistake and should cut our losses  :P

For the record I'm holding and may be a buyer again if it gets to $25 million.

Also regards you original analysis, don't forget though it's a merger, and all pieces lost a lot if value not just BTSX. Also look at BTSX pre serious dilution discussions, we were on a steady BTC uptrend, so it's not just a fall from where we were but where we would of been. Once the merger goes through BTS is bound to recover anyway & grow, hence why I'm a hodler and maybe a buyer soon but I would like to peak into an alternate reality where BTSX didn't consider dilution or changing developer focus for another 12 months...

Well, Paul Krugman has a very strong and divisive political agenda, which is not true of Kahneman. :D Indeed, there have been several economics prize winners with theories which proved to be bonkers in the real world, e.g. Sharpe for efficient markets...

The merger resolves imho one of the major limitations of initial BTSX business model:
https://bitsharestalk.org/index.php?topic=10833.msg142678#msg142678

I don't think that those holding are making a mistake... This is just observation of how most people tend to act. E.g. those who bought BTSX at in retrospect speculative $90m market cap are unlikely to have sold at $70m, but will probably be waiting for it to get to $150m to sell there... Nobody knows for sure where trends turn, but knowing how most people tend to make decisions might help one to avoid systematically losing strategies, assuming lots of trades in various assets.

Oh, you are waiting to invest $25m? Thats a great news - everyone should then buy now!!! *lol*
« Last Edit: November 01, 2014, 07:26:50 pm by kisa »

Offline Empirical1.1

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"Here Taleb draws upon one of the fundamental assumptions of economics and finance — humans are risk adverse in that they fear losses more than they like gains. On  a short time scale, investors observe the variance of the portfolio, not the returns. This variance contains little information of value, and in fact, observing a portfolio at any time scale always contains a combination of returns and variance. Furthermore, human emotions are unable or unwilling to understand the difference between the returns and variance of a portfolio. Undue reliance on short term fluctuations in a portfolio can be very damaging to an investors mental health:"

http://www.curatedalpha.com/2011/nassim-taleb-on-the-difference-between-noise-and-information/
+5%

extending on mira's comment, according to nobel prize winning work of kahneman and tversky in behavioral economics, risk aversion is observed whenever a trade or investment is in the winning territory, leading the most people to realise profits too soon. On the contrary, whenever a trade or investment is in the negative territory, most people tend to risk-seeking behaviour in order to avoid the pain of realised losses and thus not cutting the losses quickly enough for a winning trading strategy.

http://pages.uoregon.edu/harbaugh/Readings/GBE/Risk/Kahneman%201979%20E,%20Prospect%20Theory.pdf

Paul Krugman won a Nobel prize too   :P  And according to the paragraph you just quoted those of us holding BitShares are making a mistake and should cut our losses  :P

For the record I'm holding and may be a buyer again if it gets to $25 million.

Also regards you original analysis, don't forget though it's a merger, and all pieces lost a lot if value not just BTSX. Also look at BTSX pre serious dilution discussions, we were on a steady BTC uptrend, so it's not just a fall from where we were but where we would of been. Once the merger goes through BTS is bound to recover anyway & grow, hence why I'm a hodler and maybe a buyer soon but I would like to peak into an alternate reality where BTSX didn't consider dilution or changing developer focus for another 12 months...

Offline kisa

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"Here Taleb draws upon one of the fundamental assumptions of economics and finance — humans are risk adverse in that they fear losses more than they like gains. On  a short time scale, investors observe the variance of the portfolio, not the returns. This variance contains little information of value, and in fact, observing a portfolio at any time scale always contains a combination of returns and variance. Furthermore, human emotions are unable or unwilling to understand the difference between the returns and variance of a portfolio. Undue reliance on short term fluctuations in a portfolio can be very damaging to an investors mental health:"

http://www.curatedalpha.com/2011/nassim-taleb-on-the-difference-between-noise-and-information/
+5%

extending on mira's comment, according to nobel prize winning work of kahneman and tversky in behavioral economics, risk aversion is observed whenever a trade or investment is in the winning territory, leading the most people to realise profits too soon. On the contrary, whenever a trade or investment is in the negative territory, most people tend to risk-seeking behaviour in order to avoid the pain of realised losses and thus not cutting the losses quickly enough for a winning trading strategy.

http://pages.uoregon.edu/harbaugh/Readings/GBE/Risk/Kahneman%201979%20E,%20Prospect%20Theory.pdf

Offline mira

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"Here Taleb draws upon one of the fundamental assumptions of economics and finance — humans are risk adverse in that they fear losses more than they like gains. On  a short time scale, investors observe the variance of the portfolio, not the returns. This variance contains little information of value, and in fact, observing a portfolio at any time scale always contains a combination of returns and variance. Furthermore, human emotions are unable or unwilling to understand the difference between the returns and variance of a portfolio. Undue reliance on short term fluctuations in a portfolio can be very damaging to an investors mental health:"

http://www.curatedalpha.com/2011/nassim-taleb-on-the-difference-between-noise-and-information/

Offline kisa

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Among famous cryptos, week-to-date, BTC has fallen by 6%, DOGE by 7%, NXT by 13%, Stellar by 16%, Mastercoin by 25%, and BTSX by 35%...  Thus please don't forget the whole space is currently in a rather bearish environment, and given the recent uncertaintly and upcoming changes for BitShares one should expect BTSX to underperform.

The % loss might resemble a bubble/bust one observes in a broad stock market. Having said that, losing 2/3 of $ value from the top (less so in market cap terms) is way too small compare to crashes in individual technology stocks/sectors. Even BTC lost 4/5 from the respective tops during two recent downturns, not to mention pump-and-dumps previously observed in cryptos.

Given the amount of uncertainty/perceived risk for the whole crypto space and crack-downs by regulators, there was little new institutional or mass retail money inflows coming into the sector following the liquidation of rather speculative positions in Dec 2013... The whole crypto economy is currently struggling with the negation of super optimistic price and adoption predictions by BTC evangelists last year.

So for BitShares community, it is a good time to stay patient in terms of price expectations and concentrate on productive work, consolidating internal strength and planting the seeds of future success.

Most of the POW-altcoins medium-term survival depends on speedy adoption, on a successfully launched rocket (like DOGE). Otherwise there is no reason to stay invested, because there is no substance for the "secondary rocket" to take off when such coin's very functionality is compromised or descending into insignificance among 500 competitors... In such projects the slogan "HODL" is spread by pumpers into the believers in order to enable them to offload maximum worthless coins at elevated prices.

BitShares as a project is in a very different position with committed developers and marketers, superior tech, strong business ideas, bright community, and secured startup funding. So, however difficult it might be watching negative "mark-to-market", there is neither reason to panic, nor to follow frequent price movements too closely and emotionally (every down move usually creates 3 x negative emotional energy compared with positive from a correspondent upmove, unless you are waiting to buy cheap). Even if sales by weak hands and good traders caused the market cap to fall further in the region of $10m, apart from emotional reactions by HODLers this doesn't provide new reasons to doubt the medium-term push and long-term perspective. Therefore, I suggest that the main reasons for HODLing BitShares are both committment to the project and the uncertainty of when / at what level exactly the price bottom is completed and turn-around occurs (usually at time of widespread pessimism and following bad news). Dedicated investors can at any time follow their own educated guess with regards to the probability of complete failure, thus adjusting the size of their BTS stake whenever they see significant chance of failure.

On that note, I wish everyone sincerely involved into BitShares patience and strong moral, leading to amazing success in the (even maybe if not immediate) future!
« Last Edit: November 01, 2014, 08:12:45 pm by kisa »

Offline hpenvy

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Picked up another 16 BTC woth of BTSX this morning on BTER. I'm either an idiot or saw an amazing deal. :)
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Here's a theory,  keeping in mind that no explanation can account for everything.  There are always many things going on to account for what the price is doing.

If I had a large stake of BTSX and I wanted to get a bunch more.
This looks very appetizing.


So you buy $132,000 worth of bitUSD first.  Then Sell your BTSX on the exchanges to push the price down.

If you can push it below .000043 BTC/BTSX ( above 68.68 BTSX/bitUSD) and keep it there for a moment while youve got your orders to sell all the bitUSD you acquired earlier on the BTSX exchange ready to capture all these margin calls.

So long as it takes you less then what you profited from triggering the margin calls to do it( could be as much as 300 BTC worth of BTSX, depending on where you bough bitUSD)   you've capture a sizable profit and increased your BTSX holding.  As well, now you can buy as much of the BTSX back as you're able at the now depressed prices.


 

I wouldn't mind cleaning out some of those grandfathered shorts. They're not paying interest and get a free ride for a year.

You got it.  :)

Offline jsidhu

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Looking at volume I suspect we had about 100 million btsx sold from people leaving... so now hopefully they into stronger hands.
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There is plenty of market space for everyone. I look forward to seeing how the different technologies grow and adapt.

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Offline CoinHoarder

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TL;DR: Too much change too fast.. dilution and playing with the incentives of those that have previously invested in AGS and PTS is not cool.

Changing things on the fly does not work with cryptocurrencies, as people like to know what they are investing in, the long term goals of the project, and that those goals won't constantly change on a whim. By changing so many things so drastically and quickly, I am sure we have lost some big stake holders that are now uncertain of Bitshares' future and the success of some of the recent changes. For instance, dilution is a word that carries a very negative connotation in the cryptocurrency community. Also, you guys are playing with the incentives of AGS/PTS/BTS on the fly and that is not cool.. it provides uncertainty to investors and scares people away and the market is reflecting that. I am sure there will be some big PTS holders that show up over the next few weeks that don't follow Bitshares day-to-day. They will be irate when they realize that a final snapshot was taken and that their PTS holdings are now worthless. People "in the know" will come out OK as they can still sell their PTS for Bitcoins at a reasonable exchange rate, but the people that are not will not come out as good as the others.

I think combining DACs was a good move, but when you start playing with the incentives of AGS/PTS/BTS and the incentive structure of DACs themselves (dilution) on the fly, that is not cool. So, although I agree with the main philosophy of the merger, I believe the way it has been carried out was sub optimal. I suggest the Bitshares community take a long hard look in the mirror at this point in time. Write Bitshares' goals and the vision of the project, and then etch that vision in stone. Only change economic incentives of a cryptocurrency when absolutely necessary (preferably never) to the success of the project.
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Offline jsidhu

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In my mind, this is why BTSX's marketcap has fallen:
http://www.alexa.com/siteinfo/bitsharestalk.org

It's less popular because BTSX had a bubble and now people are bored and have moved on.

Being a Nxt fan, interesting Nxtforum currently ranks higher than BTSXtalk in terms of traffic:
http://www.alexa.com/siteinfo/nxtforum.org

Sorry the name NXT coin will not catch on.. its too dumb, you can solve the world's hunger crisis and smart money will not budge.

Yeah.. NXT is going to die because of it's name.. just like google, kleenex, siemens or Analtech..

Those names were new... NXT (the NEXT one?) really? It's what kept me out as a developer anyways. Usually first reactions are most important. Can't speak for others but I get a similar feeling from others not involved... the ones that are involved im sure are doing it for a stake to pump n dump.... hows the SuperNET thing coming along?

But you should use your own advice, analtech although it has gotten over the hump suffers from name ridicule which I'm sure hurts sales:

http://blog.chron.com/sciguy/2009/01/should-analtech-change-its-name/

"Analtech faces certain challenges because of the “juvenile” humor that has developed in the past few decades and current web filters that may block the company name"
« Last Edit: October 31, 2014, 08:47:44 pm by jsidhu »
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Offline hughmanwho

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In my mind, this is why BTSX's marketcap has fallen:
http://www.alexa.com/siteinfo/bitsharestalk.org

It's less popular because BTSX had a bubble and now people are bored and have moved on.

Being a Nxt fan, interesting Nxtforum currently ranks higher than BTSXtalk in terms of traffic:
http://www.alexa.com/siteinfo/nxtforum.org

Sorry the name NXT coin will not catch on.. its too dumb, you can solve the world's hunger crisis and smart money will not budge.

Yeah.. NXT is going to die because of it's name.. just like google, kleenex, siemens or Analtech..

Offline Empirical1.1

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The reason why BTSX hasn't rallied is because BTSX was priced for perfection prior to the merger and buying PTS/AGS doesn't help it achieve any unexpected growth.  I mean did any of you think that Dan had the possibility of leaving and focusing on other stuff before he announced the merger?  I highly doubt 90% of the community did...

The announcement showed small cracks in the BTSX foundation that investors (NOT pump and dumpers) didn't see before...

In short: Bitshares is what most of us all thought BTSX would be, but with more outstanding shares... hence the selloff

This part makes a perfect sense! And as Xeldal said usually there is more than one factor at play.

Yip this was pretty much my analysis...

For BTSX it will be tough short term. At the beginning of the month with highs of 0.000093 was when they thought they had a stable client & marketing incoming, with key developer focus for another 6-12 months and limited BitAsset competition.

I imagine from an exclusively BTSX shareholders point of view, BTSX is paying a 20% tax,  introducing dilution & a short term unstable client  in exchange for what they thought they already had at the beginning of the month.

I think the changes are necessary though and I'm looking forward to seeing BitSharesX become BitShares and I think we'll see the price rise steadily from there presuming no complications.

BTS will probably need to see some tangible benefits & developments before they appreciate the value of the merger and start hitting those highs again.

https://bitsharestalk.org/index.php?topic=10760.msg141674#msg141674