VictorCobra

5 Years In Review - Idealization and a Revolution That Wasn't

Short
COINBASE:BTCUSD   Bitcoin
This is going to be a long post, not only because it's a bit of a review of the writing I've done over my 4 years of participating on this site, but also because it will likely be my last post for a long time. So there will be a combination of numerous links to posts from the past as well as some reflective banter.

Over the coming years, I think we will see some staggering changes in how our society functions, but hopefully also some changes in how our resources are allocated. I want to continue writing about it as it happens, but perhaps in a different format, maybe even a different medium altogether.

The next material I publish will likely be the book I've been writing since 2019. There are some ideas I throw around in there that are an extension of a lot of the work I’ve done here on TradingView, but there is plenty I haven’t shared yet. Please reach out to me directly if you want to stay updated about that, as I have a small mailing list. For now, I'm letting go of this obsessive and time-consuming hobby to refocus on some other things, such as art, fiction, and my mental health work. I’m already finding that there’s much more room in my brain without updating my charts every hour.

This is mostly meant to be a reflection on my work on TradingView. I’m honestly pretty proud of it, even though there were certainly some missed calls and things that have not played out. I think part of investing and trading successfully involves accepting both the randomness and synchronicity within the universe. I wonder if our terms “positive” and “negative” are better utilized through the lens of understanding them as reactions to apparent randomness and synchronicity. I could go on about that, but I’ll save those thoughts for another time.

These next two paragraphs are taken from my first “year in review” post, from October, 2019:

Aside from attempting to understand the movements of the cryptocurrency market, I also write a lot of fiction. Sometimes analysis feels like science fiction, because I'm making an effort to predict the most likely outcome, based entirely on how my imagination reacts to various pieces of information. It's a creative process for me - one that often involves searching for signals that others may have overlooked. Having just read Ursula K. Le Guin's Introduction to The Left Hand of Darkness, I was reminded of how great fiction writers are really also just great liars, whose goals are to illustrate some sort of truth. That's really all I'm trying to do with my analysis–––figure out the truth. There are many competing narratives out there. Ultimately, the true outcome will probably be some synthesis of all these narratives, because it seems to me that humanity tends to move in a unified direction based on increasingly global methods of communication.

Now, whether or not what I've written over the past year exemplifies any sort of truth is up for the reader/observer to decide. It's not necessarily the correctness of the analysis that makes it worthwhile for me. It's the process of figuring it out, which allows me to understand both myself and others on a deeper level. The same goes for writing fiction. But what I find really interesting is that price action is something that can tell us a lot about our collective belief in something. What I'm trying to figure out is if humanity's collective belief in cryptocurrencies will sustain and grow, and whether or not these developments will play a significant role in shaping our future. Crypto analysis is science fiction. Anyone who tells you otherwise is probably delusional. But that's my point. We all have our own delusions, some of which are shared.

THE BEGINNING OF MY CRYPTO JOURNEY

In today’s post, I’m starting from the very beginning. My hope is that some of you can relate to my experience and my learning process. I also hope to illustrate the change in mindset, as I started as a crypto investor at the age of 24. Now I'm almost 30 years old, and there have been palpable changes in my outlook - not only towards crypto, but towards life and my relationship with myself.

In November, 2017, a friend of mine first told me about Bitcoin. I had already been going through a bit of an existential crisis and feeling that society was moderately doomed. This was the perfect time to introduce me to an alternative currency. My friend said something like, "It's about to break $10,000 and once that happens, it'll probably go to $20,000. You could double your money and get out." Okay, so what? I had heard of Bitcoin before. I knew what it was meant to be, but I had no idea it had become so valuable within my two years of knowing about it. So, I did a little "research" and what I found was something that seemed to align with my doomer societal collapse mindset. Of course it was easy for me to distrust banks after growing up during the Great Recession. I decided it may be worth it to ultimately park half my savings into crypto to hedge against a possible bank collapse and the decimation of the dollar. I hardly thought of it as an investment, but more as an escape.

Unfortunately, due to delayed bank processing I wasn't able to buy at $10k, and instead bought near $13k. Because of my impatience, I started looking at coins that were cheaper and seemed to be increasing in value at a faster rate. Litecoin, XRP, and ADA were my first altcoins. I remember thinking of buying Litecoin at $100 and then watching it skyrocket to $300-400 in days. I also remember thinking of buying XRP at $0.20 before seeing it go to $3. For both, I bought high. Then there was RaiBlocks (now Nano). I bought at $12, watched it go to $30+ and rode it all the way down to $0.70 over the following year.

Then, my friend turned out to be right. Bitcoin went straight to $20k. But I did not get out. Instead, I thought it meant something - that a revolution was occurring right before my eyes. I thought a mass-exodus from banks and the USD was imminent. I wondered if I had made a mistake, so I turned to analysis and TradingView to try and figure out whether or not I had truly messed up, or whether with enough patience and fortitude I could come out ahead.

It was not the greed that initially attracted me to crypto. It was the fear I was missing out on a massive financial revolution. I didn’t want to be left behind. In the end, it turns out that greed is really fear in disguise.

Here is one of my first bottom calls for Bitcoin, back in 2019. This was shortly after I joined TradingView, but many months after I had already been following analysts on here, such as MagicPoopCannon and Botje11. Haven’t seen much of them these days.

And all the while, I continued to write about a mania period for stocks that I thought could result in a period similar to the Great Depression, all based on one fractal:



Thankfully, I had a plan for crypto. I wanted to sink half my savings at MOST, but I only put in about 1/6th at first. I dollar-cost-averaged throughout 2018 and into the first couple months of 2019. I often hated myself for it, because things just kept dropping. I had to come to terms with the fact that this potential financial revolution may not pan out, so I decided to find a career that aligned with both my values and my needs: Mental health. I did not have an easy time getting there. I started planning this career step in the middle of 2019, around the time I called the top at $13.8k.
Projects I had the highest hopes for continued to fade into borderline obscurity, even as Bitcoin seemed to be trying to recover. Yet, I was convinced we'd see at least one more run and it was going to be bigger than the first.

With this, I also expected altcoins like Ethereum to perform better when measured from the bottom, which ended up being correct. While almost everyone was calling for 80%+ Bitcoin dominance and the end of ETH, I was thinking the opposite:
IDEALIZATION

I had an idealistic view: I wanted to see some real change in the world due to these cryptocurrencies, and I hoped that the community element and its "decentralized" nature would usher us into a more utopian financial future. Even looking at the below chart, where I compared crypto market growth with Amazon stock, it doesn’t seem so far-fetched, even today.
In fact, it almost looks right on track, although Amazon never retreated to below its previous all-time high, unlike Bitcoin. But is this still possible? I continue to remain extremely skeptical unless we see some positive impact on the world. We know from the recent bull market that there have been far more negative outcomes from crypto investments than positive. For the most part, it has been money sucked into a black hole. But perhaps there doesn’t have to be a net positive. My position is now that should Bitcoin try to make new highs, it won’t result in anything good, and it won’t be the result of anything good for humanity either.

Throughout the last 5 years, I did not think it would be likely to see any crypto revolution unless traditional markets completely collapsed. Here is why:
THE REVOLUTION THAT WASN'T

I was hoping the pandemic would be the prime opportunity for people across the world and across the United States to come together against a common enemy. And perhaps even, it would become a time where cryptocurrencies became more popular. After the March 2020 crash, I continued to remain bullish, even calling a move straight to $10-12k in April.
Due to a friend suggesting I check out the chart, I made a post by request on GameStop, in January of 2021.
I speculated about a short squeeze, and as we all know it went much higher than probably anyone was expecting. I never bought because fundamentally, I never really liked GameStop, even though I bought from them as a kid. I just remember them virtually stealing a bunch of my used games, as they took them for a tiny fraction of what I paid for them.

I also made a follow-up post after the squeeze calling the top, with some comments:

It wasn’t until 2021 that I started to develop a more critical (and cynical) lens towards the crypto market in the current socioeconomic context. Some of it had to do with the meme stock craze. For part of the year, I remained cautiously bullish, even calling a bottom during the summer. This was my first post on TradingView to be featured on the front page. It was correct, in the short-term. Calling the bear trap:


I was still bullish through the end of the summer into the fall, thinking we’d see perhaps one final manic rally across markets before a financial meltdown. I made wrote some bullish articles that turned out to be incorrect, such as this one:
I also started making some posts speculating about when the debt bubble could burst, and why cash might begin to be more in demand. This was before the major breakout for DXY.
Here is another post about the debt bubble, from Oct. 2021:
I remained unsure about the timeframe, but….

THE END OF MY ENTHUSIASM

Shortly thereafter, I began speculating about an end to the party. This was due to a number of factors:

1) I noticed that projects with the best utility for transferring value at low-cost were not doing well pricewise. Ethereum was booming, but it had become extremely expensive to transfer. The ETH boom coincided with the NFT bubble (and it was clearly a bubble). I noticed the high fees people were willing to pay, just to get their hands on digital trading cards. Meanwhile, meme coins were doing extraordinarily well. The more useless something was, the better. When LoopRing (LRC) boomed in the fall of 2021, that was it for me, especially since it was clear price manipulation off the back of partnership news with GameStop (a terrible company that has taken advantage of games for decades). None of this seemed particularly revolutionary to me, but more of a practical joke that could end at any moment. Here’s my bearish post on LRC where I nailed the top and suggested extremely low prices:
2) High yields. Too good to be true, and we all know how that has ended.
3) Michael Saylor. Just doing a little research into the guy’s history told me he’s not someone to trust.
4) Super bowl ads, followed by massive price drops. When something dumps on massive exposure like this, it means price is only determined by speculation, not real-world usage or value. The speculators from 2017-2019 were rewarded, since crypto gained mass-media and corporate attention. But is there any higher to go? Not guaranteed.
5) The failure of the experiment in El Salvador. I also noticed that each time El Salvador or Michael Saylor bought, price would drop. Again, this only happens with an asset based purely on speculation.

Beginning in December of 2021, I wrote about my concern about various projects. First, I wrote about why the market seemed to be entering a precarious position:
Then, in January, I made the decision to let go of most of my crypto and get out of the market. Here is my first bearish post:
Loopring has dropped 90% since my post about it.

DOT has dropped 80% since I posted the chart:
I even got this relief rally in March-April, 2022 precisely correct.
More reflections on the asset bubble and why I think it is unlikely for Bitcoin to sustain new highs again from here.
I wrote about risk for Microstrategy stock and Bitcoin price here:
And I even called the top for LUNA well in advance of its total collapse to near-zero:

WHAT NOW?

Now, we’re in a position where the crypto market itself has all but collapsed and been revealed to be hardly more than smoke and mirrors, yet arguably the stock market still “looks” strong. You can read why I have taken the view that Bitcoin is unlikely to outperform the stock market again if you look through my posts from the last year, some of which are linked at the bottom.

We all know the crypto utopia is not what happened, but yes, I was right that crypto would have at least one more bull market, and I made enough money from it to at least not be terribly worried about my student loans But honestly, I’m not sure if I even made enough to make it worth all the hours sunk into this madness. It didn’t become the revolution I had hoped, and I don’t think it is inherently designed to do so. Instead, I started to notice some things that made me take a step back and think more practically. Was the idea of a financial revolution merely being sold to unwitting consumers for profit? Who exactly is even in charge of this market?

I don’t know how long this could take, but my speculation is that eventually these will be the last big players to fall before crypto returns to simply a niche market without much usage.



Right now in my small stock portfolio I’ve got:

MJ and MSOS – Making an assumption that although the weed market is rife with oversupply, the industry will figure itself out and be able to generate profit eventually. Currently I think these are at discounted levels but of course I could be wrong. Oddly, I’m not even in the red on these since I bought so low.

URA and URNM – making a nuclear bet. One of the most widely accepted forms of “renewable” energy, and it’s gotten a lot safer over the years.

CYBIN – speculative psilocybin play, for the mental healthcare industry. This company may go under due to quickly depleting cash reserves and large regulatory hurdles.

LYTS – a lighting company. I expect energy to become cheaper as time goes on and we find more innovative ways to deal with it. A lighting company could profit from this.

ACB – A cannabis moonshot, pretty small bet.

XYIGY – a glass company. Glass is needed for solar panels. Glass is useful.

SHECY– Shin-Etsu Chemical. They deal with rare earth materials and magnets. As you can see, I’m a materials guy. No fluff.

Over the years I’ll probably want to still partially manage my own portfolio. I can see myself becoming too annoyed by it or burdened by it and delegating that task to someone else. But I might honestly be too prideful for that. If I were one of the seven deadly sins, I’d definitely be pride.

Regardless of my own shortcomings and the mistakes I’ve made, I’m still looking forward to sharing the things I’ve learned and observed in my little book. But for now, I bid TradingView goodbye. I may post again in the future, but it could be some months until I decide to take a close look at these charts again.

Thank you so much to everyone who has provided encouragement to me throughout the years, and to TradingView for featuring some of my work since 2021. This has been the first platform where many people have read my content and shown appreciation. I think it’s given me more confidence to put my real self out there.

Until next time.

-Victor Cobra

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