3 October 2017: Bitcoin bubble

Bitcoin and other cryptocurrencies are causing polarization among investors. Many cryptocurrencies have seen their value multiplied by magnitudes that can be regarded historical novelties. Speaking of novelty: there is no doubt that the techniques underlying cryptocurrencies, blockchains or open-sourced, distributed ledgers, are of a highly innovative nature that have a potential to make disruptive changes to the economy. On the other hand, speaking of tradition: the price development of cryptocurrencies such as bitcoin looks like a classic bubble. If we were unaware of the current date, we would think that we are back in 1999. (Some might argue that we are back in 1636.) Can the rise in prices of cryptocurrencies be justified by their highly innovative nature? We will probably have an answer by the summer of 2018. Lessons from history suggest that the answer is ‘no’.

white-chapel-logo-smallUS stock indices registered another set of records on Monday. Investors have high expectations of President Donald Trump’s tax overhaul proposal and are hoping for strong third-quarter results. The massacre in Las Vegas could not influence their positive investment mood. The Dow closed up 0.68%, the S&P 500 rose 0.39% and the NASDAQ added 0.32%. The VIX sank deeper into single-digit territory and closed at 9.45 points (- 0.6%). UVXY ETFs had to pay the price and lost 1.2% at the opening. By the end of the day their loss had grown to almost 4%. XIV ETNs gained 0.6% at the opening of the trading session and recorded a gain of more than 2% at the end of the day. Danny Daredevil posted a small gain at the opening, but after trading his XIV ETNs for UVXY ETFs, he made a loss for the day. His RSS dropped to 36%. Adventurous Anny recorded a small gain before selling her XIV ETNs. Her RSS rose to 9.22%. Solid Suzy and Lazy Larry made another substantial gain and their RSS is now getting very close to 50%. Their AAR has reached 100%.
None of our models gave a trading signal at the end of yesterday’s session.

Model  Holds Start date

RSS

YTD

QTD

AAR

Danny Daredevil UVXY 1 January 2016

36.25%

-66.20%

-2.20%

19%

Adventurous Anny Cash 6 March 2017

9.22%

9.22%

0.67%

16%

Solid Suzy XIV 6 March 2017

49.28%

49.28%

2.05%

100%

Lazy Larry
XIV 6 March 2017

49.28%

49.28%

2.05%

100%

RSS = Return Since Start | YTD = Year-To-Date | QTD = Quarter-To-Date | AAR = Average Annual Return

 

Last Friday, Tim went to the final day of Dear Future,, a 7-day festival organized in his hometown. The previous editions of the festival were organized under the moniker of European Social Innovation Week. The festival focuses on some of the major challenges that humanity is facing. How do we prepare ourselves for these? How do we shape an intelligent life in a rapidly changing world? More than 100 workshops, conferences and other types of events were organized as part of the festival. Tim made a small contribution to the festival by co-organizing the screening of two movies (Bugs and The Visit) with discussions afterwards.
The festival searches not only for new solutions, but also uses new program formats and new formulas. Every day of the festival was not summarized by means of a text, but by a group consisting of a musician and four dancers. Bouwjaar ’84 refer to themselves as an ‘interdisciplinary performers collective’. Tim was impressed by their final performance, which not only summarized the day, but was a very nice finale of the festival.