How about working from home in your underwear? Do you hate corporate meetings worse than the plague? Would you rather be traveling the world, having adventures and sleeping on a beach in Thailand than grinding your life away in an office for fifty years?

Then you might just be a trader, my friend.

But what kind of trader are you?

Are you looking to make steady, slow, conservative profits, year after year and protect yourself from big risks? Or are you looking to hit the home run trade, knock it out of the park and retire early to travel the world eating fine food and hiking in the rain forest?

Of course, there’s no shame in going conservative. It’s a lot easier. Just buy and hold some assets. If that’s your game, stick to my easy button strategy, Mastering Shitcoins, the Poor Man’s Guide to Getting Crypto Rich. In my opinion, that’s the best way for someone who has a life and obligations and a family and who can’t afford to stay welded to their computer screen all day. It’s a simple plan and one I employ with part of my portfolio.

But there’s another kind of trading strategy too. It holds the potential to deliver the kind of massive returns that most people can only dream about in their wildest fantasies.

Momentum trading.

This is where you’re looking to hitch a ride on a rocket and crush the market. You don’t just want slow and steady results, you want a grand slam and you want it fast. I’m not talking 20% returns. I’m talking 1000% or 2000% or 20,000% returns.

Impossible? Stupid to even try? Crazy?

Maybe.

The real question is, can it actually be done?

Turns out it can.

How do I know? Because I’ve gone out and found the traders who’ve done it.

I’ve sat at their feet and soaked up their wisdom. I’ve listened and learned. I’ve made money and lost money so you don’t have to make all the mistakes. My Padawan training is complete.

Now I’m ready to show you what I’ve learned from these legendary masters. In this brand new series of articles, The Ultimate Guide to Crushing the Crypto Markets, I’m going to share all of their best strategies and secrets.

Some of these folks have paid trading dojos and private groups and training materials.

I’m giving you everything I’ve learned for free.

Why would anyone do that?

Because it’s what I’m wired to do. I’m an author, a teacher and an open source idea factory.

Knowledge wants to be free.

And one of the best ways to find the wisdom of the ages is to study with the best of the best.

Studying the best in the world is a time honored strategy going back to Dale Carnegie and Napoleon Hill and other self help masters. But if I’m being honest, I’ve never really been a fan of self-help gurus. They always seem long on motivational pep talks and short on actual technique.

I want practical trading techniques, not a lot of fluff.

That’s what I got.

So let’s leap right in and learn how to lay siege to the market and storm the citadel of the 1%.

(Psst. If you’re really impatient you can skip to the end of the article and see the charts of actual cryptos on the move. Actually if you’re impatient, stop reading right now because the market is designed to steal money from impatient people.)

Let’s roll!

The Hidden Masters

First off though you’re probably wondering who are these people?

My criteria was simple. I wanted to meet traders who started with between $1,000 and $45,000 and turned it into millions of dollars in under two years.

The second criteria was that they actually did it. Like Tim Ferris said in 4 Hour Work Week, no pretenders allowed.

And I didn’t want people who just bought and held in the biggest parabolic boom in history. I wanted traders, people who made more than buy and holders.

Yes, that is possible.

Still you probably don’t believe these people exist or that it is possible.

It’s ridiculous right? Nobody can beat the market.

And yet I’ve studied with five different traders who’ve done just that, believe it or not.

Actually I don’t ask you to believe anything because belief is the death of intelligence. All you need to do is look, listen with an open mind, learn and then decide for yourself. Every single one of these people, four guys and one gal, stressed the need to transcend your limiting belief systems and believe it can be done before you do anything else.

Jordan Belfort, the Wolf of Wall Street, said “The only thing standing between you and your goal is the bullshit story you keep telling yourself as to why you can’t achieve it.”

That’s just the thing. Most people don’t believe it’s possible or they think the people who did it got lucky.

If you believe that you can or you can’t, you’re right. I used to think that was some hippy dippy crap, but it turns out it’s literally true. If you don’t think it’s possible you can’t even get off your ass and get started.

But this is not going to be some power of positive thinking new age nonsense puff piece. Positive thinking only gets you to the starting line. You can visualize a million dollars and a Lamborghini all you want but that’s not going to get you there. Only hard work, discipline and study will. Making mistakes and learning from them will.

But first you have to think it’s possible.

And yet even after reading that I’ve met and worked with five people who’ve done this, most people will write it off as impossible. To do that they have to actively deny evidence to fit what they already believe. That’s how belief systems work. We’re wired to think we’re right even when we’re wrong. It’s crazy but it’s true.

If I walk into a room of people and ask them who’s a better than average driver, 90% of them will raise their hand. The other 10% won’t raise their hand because they know I’m asking a trick question but secretly they believe it too. Everybody does.

Since it’s impossible for everyone to be better than average there’s only one conclusion we can come to here.

Most people are lying to themselves and to the world.

There’s reality and there’s what you think about the world. Usually they’re not the same thing. When your beliefs meet reality, reality wins every time if they’re not in sync.

You might think you can eat whatever crap you want and never work out but after eating burgers and fries for forty years you will learn your last and hardest lesson.

So that’s step one from every single one of these legendary traders.

Get your mind right.

Those of you who are looking to read more about the topic or learn some basics about cryptoassets can check the end of this blog post, where I am simply collecting some interesting links that I believe are worth a look.

Before we start

I need to establish some basic definitions. To me, there are three different kinds of Cryptoassets:

a) Cryptocurrencies := Cryptoassets that are mainly used to store value, speculate or transact on the blockchain. Examples are Bitcoin, Litecoin and Dash as well as ZCash.

b) Platforms or true Utility token := Cryptoasstets that enable decentralized applications (DApps) or enable other token to trade on their blockchain. Examples would include Ethereum, Lisk, Blockstack or Tezos (when they launch)

c) Security token := any and all ICOs that are sold to investors so that they can speculate on the progress of a start up. This would include TenX, Monaco, Status and Iconomi amongst a host of others.

Parallels to the .com bubble

Back in 1999 and 2000 the stock market went crazy about anything related to the internet. These are the parallels to today:

• ICO = IPO

In the late nineties and early 2000s there was an IPO (initial public offering) boom. The Nasdaq was driving new highs every day and new public companies would list there or on any of the “New” or “Tech” market segments established by other stock exchanges. If you took part in the bookbuilding process and bid for stock during the IPO, you were often able to double your money on day one of trading. Everyone was taking part — institutions, high net worth investors and your local retail guy who worked at Walmart or drove a cab. As a matter of fact cab drivers handed out tips of the next hot IPO to their riders. Most IPOs only needed a business idea that was vaguely related to the internet to achieve success.

Today this is very much the same story in ICO world. It appears everyone has taken part in an ICO or a pre-sale of some random token that promises to use the blockchain to deliver your local groceries or some other ridiculous idea that could potentially benefit from a Dapp but certainly does not need a token to work. Some of these ICOs, especially in early 2017 have indeed 10x the money of people who invested, which has fueled the boom. Note that the list of non-scam ICOs (looking at you, Veritaseum and not because you are legit…) that have actually done well for their buyers in Bitcoin terms (not in US Dollar terms) is quite short. The one difference today is that the token, most of which are using the Ethereum blockchain to trade, have absolutely no ownership rights. But that is a point I will come to later. For now, let’s just remember that the ICO mania mirrors the IPO mania nearly two decades ago.

• Anything blockchain soars

In the .com bubble existing technology firms listed on the Nasdaq sometimes decided to add “.com” to their company name and saw their shares surge, sometimes 30–50%.

Well, guess what is happening now… There have already been a handful of companies that simply added “Blockchain” to their company name. Note that this is just a name change in many cases… And of course their value has soared just because of that.

• New valuation paradigms are being thought up

During the .com bubble, the major problem for analysts and investors was that most of the companies had losses and not profits, so there was hardly anything to value them on. Traditionally, things like Free Cash Flow yield, EV/EBITDA and P/E multiples or DCF analysis are being used to value equities. The problem with all these methods is that if profits are forecast to be negative for a substantial period of time or very tiny in relation to market cap, the ratios do not make sense and DCF will rely mostly on the “terminal value”, which is an assumed value in perpetuity based on profits 10 or 20 years out. As none of these methods made sense (not because they did not work, but because the shares traded at ridiculous levels), analysts thought up new methods to value internet stocks. This went so far that the oft-read standard volume “Valuation” added an entire chapter on the valuation of internet stocks that was later taken out again as it was obvious bogus.

Fast forward to today — the same is happening again. While I want to be clear that there are important differences in that Bitcoin does have some sort of a value as a “store of value”, people making up new ideas like network value for token (not so much for Bitcoin) just makes no sense. Analysts and investors alike are ignoring valuation methods and seem to be fine with projects that offer nothing in return to carry “kick starter” valuations of 100m USD+.

Some worrying differences of the blockchain bubble and the .com bubble

While there are obviously worrying parallels between the two bubbles, there are even more worrying differences.

• The object of speculation

While during the .com bubble at least people were receiving actual equity for their hard-earned cash, when they invest in most ICOs (the ones of the security token type above) they receive no rights in return. Let me stress this: they receive NADA, ZILCH, NOTHING of any value. They are invested in hot air. This is especially true for those ICOs that offer a product or service that does not really need a token. Let that sink in for a minute: because someone said “blockchain” you have bought hot air off a person that you do not know in the hope that someone else will buy it from you for a higher price. The only thing that helps you is the “greater fool theory” (if you do not know what that is, it is probably you).

• The idea of market cap

I have written about this before. Market cap is defined as the value of all (ALL) shares outstanding in equities.

However, if you look at coinmarketcap.com, the “go-to” site for crypto market caps, you will notice that they only count the “Circulating Supply”, which is generally the amount of coins NOT held by team members of the firms that are selling them. In other words, they are showing only “free float” market cap if you were to compare it to equities.

Think about it — when you say Project XYZ is “only” worth 100m USD on coinmarket cap, it should be at least 200m (which is already crazy), you are probably ignoring about 50% of the token held by the founders of the project. These can be sold too… So not only are the valuations of 100m USD and more for hot air, these are not even the full story.

Coinmarketcap.com, by the way, used to have a feature to show “Total market Cap”, which they have conveniently dropped from the site. (Edit: in an answer below I was told that you can still find this feature in the coins and assets separately, it just disappeared from the main overview site. In case you were wondering, it shows total crypto market cap at $700bn+)

A new website shows total market cap as default and even marks the known scams: https://onchainfx.com ‬

Edit: I actually feel this is so misunderstood in Crypto right now, I wrote another article on this topic:

• The amount of scams

In equity markets, of course there are occasional scams and there were IPOs that turned out to be founded on not much more than a pyramid scheme. However, looking at crypto ICOs, the sheer amount of obvious scams is breathtaking.

Projects such as Veritaseum, Monkey Capital or WCX all reek of pyramid schemes, scammers and unprofessional conduct. While WCX still has a chance to turn out differently (as the ICO is not over yet, but things look quite spooky with no team members public and the nominated escrow for the money confirming that he holds no coins in escrow), the other two by now are confirmed scams (as for VERI, check the links below, as for Monkey do the same). This is truly terrible as it combines the worst of no regulation, internet anonymity and greed. Update: I think it is fair to say the people behind WCX are confirmed scammers. Read this.

• The type of investor

While the .com bubble had its fair share of retail investors, the main driver were the institutions. In the crypto bubble, the field is made up almost exclusively of newcomer retail investors that probably have never held a stock in their life. This is the reason why things like technical analysis work much better in crypto than in equities, because these markets are quite obviously more likely to be driven by fear and greed than established markets. TA is only a way to structure analysis of fear and greed after all.

What I am really getting at here though is that most of these people have no experience whatsoever with losing money in investments. When the bubble bursts all of them will be headed for the exit at the same exact time. Furthermore they lack the skills of recognizing that we are in a bubble and that they are invested in hot air. If anything like that is suggested in any of the numerous slack or telegram channels of any of the hot air projects, whoever posted it directly gets blocked in the channel or showered with “this is FUD” accusations (fear uncertainty doubt, a crypto acronym that is supposed to say “this is just fearmongering, if you just hold your investments you will do great”).

Little do all these people suspect that the only reason they are not already crying is that their invested security token have only lost value in bitcoin terms but held stable or only lost a little in USD terms. However, if you look at any chart of any security token vs bitcoin, you can quite clearly see that the only thing these are good for are short “pump and dumps”. After a pump they ALWAYS dump to a lower level. Now imagine what happens if Bitcoin ever falls again…

• Missing (enforcement of) regulation

It is quite obvious that all governments have been surprised by the ICO boom. Therefore regulation in the space is scarce, inconsistent and unclear. Not only does this give rise to the scams mentioned above, but also consider the following:

a) as long as token are not clearly classified as securities wash trading, insider trading, spoofing and literally any kind of negative market conduct is not specifically outlawed. It might be seen as legal by the people who engage in it and of course it is extremely easy to do for those involved in a project or having gained a following in social media.

b) most token actually fit the definition of a security by the SEC. Note that to be a security, a token needs to EITHER offer security-like rights (dividends, share of profit, voting rights) OR be offered to people who buy it in the expectation to sell it for a higher price later. Practically, if the token gets listed on an exchange and that is part of the ICO promise then it is a security. Most people do not want to understand that the second part of this definition currently covers ALL (all…) ICOs. Rightly, securities need to follow certain regulations before they can be sold and investors need to be educated.

c) the Cryptoworld seems to think it is immune to regulation in the future. This is a mistake. The moment a government like the US or the EU attaches a prison sentence to trading securities that are not properly following regulations (hint), to selling these securities or even owning them, watch law abiding citizens flee crypto. Of course Bitcoin won’t disappear, but it also won’t be trading at 6000 USD or more… Instead crypto should welcome regulation. It solves a lot of problems, ethical and otherwise. Note also that currently the biggest exchanges are actually located in the US with people who have addresses and lives running them. These are not immune to regulation.

So what will happen in my view?

I believe that there is currently a massive bubble going on in the space of “security token” defined above. This bubble somewhat extends to “utility token” and “cryptocurrencies” as well, but it is clearly home in the ICO space.

The likeliest scenario is that the two elephants in the room (US, EU) issue some sort of regulatory framework for ICOs and cryptoassets in general. I expect them to distinguish between pure network token or cryptocurrencies (which will likely include Bitcoin, Ethereum and some others) and security token. Almost all of the existing ICO space will firmly fall under the security token regulations. (Edit: SEC chairman Clayton: “I have yet to see an ICO that doesn’t have a sufficient number of hallmarks of a security.”, Wall Street Journal Nov 9 2017)

As a result, all major exchanges that have any kind of human owners, developers or known actors will be mandated to de-list all of these security token with immediate effect and they will follow this order. As for decentralized exchanges, given the trade in these token will be illegal and the projects that sold them might well have to refund investors, I am not so sure these are the way out that solves everything. I actually hope they aren’t because regulatory certainty is a positive, not a negative.

When this happens, all ICOs will lose 90%+ of their value (just like during the .com bubble…) regardless of the strength of their projects. I keep bringing this up, but Amazon fell to 5.5 USD / share in 2001. It now trades at 1000 USD+. So also the good projects will fall 80–90%…

At the same time the utility token related to the ICO boom will probably crash in tandem (after potentially spiking as most people first sell their security token for utility token and then for bitcoin and then for fiat), but possibly not as deep and they will recover in time. Most of these are valuable technologies that nobody wants to harm in the long term. Cryptocurrencies such as Bitcoin will also be impacted, but I would expect an almost V-shaped recovery there as the listing of futures on the major exchanges, the formation of ETFs and more regulatory certainty will undoubtedly introduce institutional money to the space and more than 90% of that will flow into Bitcoin. Make no mistake though, Bitcoin will also suffer.

In the aftermath of this ICO carnage, I would expect the same story as with the internet firms from 2001. Really good projects will give their token holders equity-like rights and fulfill securities regulations. New ICOs will be strong companies that will have a good value proposition and again, will actually be selling something valuable and not just hot air. When this ICO 2.0 phase starts, platforms such as Ethereum will also strongly recover. Just like it happened with the .com firms, I expect this wash out to be a positive medium term effect and to unlock a lot of value. There is not a doubt in my mind that the blockchain (and with it networks like Ethereum and currencies like Bitcoin) will to a large extent replace current market infrastructure and even actors (like banks and clearing houses or stock exchanges). But the wash out will need to happen before that and it will happen. It is not a question of IF, but WHEN.

Oh and dare I throw in that I highly doubt the legality of the USD Tether project. Do you really think the US government will allow a third party to offer their currency as a custodian without any public audits or licenses? I don’t…

I would therefore personally not invest into any random ICOs at all nor their respective token at this late stage in the game. The likelihood you can buy all of these cheaper at some point over the next 12 months is extremely high. Again, this is not to say that the blockchain is not the future and it is not even a case against Bitcoin (I would claim it is probably a case for it) or Ethereum. But I do hope this serves as a small wake up call to everyone getting delusional about the potential riches of the crypto world at this precise point in time.

If you enjoyed reading this, please clap and find me on twitter. You might enjoy these more recent articles as well:

Meta Drive is a game, and the metagames reflect a new modern approach to gaming as such. Metagames step beyond the usual computer gaming and transcend outside of the prescribed rules of the computer game only. Their users have an extensive system of different factors to affect the game and can apply the skills learned during the game in the real world. If computer games were often associated with a time waste, metagames deliver material results.

What is Meta Drive?

Meta Drive creates an opportunity to polish your driving skills on the actual road and, in addition to this, monetize your game.

Meta Drive helps to learn how to drive better and safer in virtual reality and helps to form good skills applicable to your real drives.

Facts

Meta Drive is a Drive-2-Earn app that establishes the concept of driving for earning in the form of passive income. The driver’s financial gain is calculated using several algorithms, including safely driven miles based on Driver Score, NFT, and Game-Fi algorithms.

Meta Drive is a Game-Fi app for drivers with built-in algorithms that enhance the driving experience, allowing you to measure your professionalism on the road and gradually strengthen it.

The social mission

The Meta Drive project has a social significance, as it is focused on reducing traffic accidents and deaths through an incentive system in the form of NFTs and tokens of the $MDT project.

Meta Drive users receive and use their NFTs in the form of cars. When driving a car to work, on a trip, or for a journey to the Grand Canyon, users will earn in-game currency, which may later be used in the game to improve their virtual NFT car or to gain profit.

Through the gamification of the driving process, we aim to motivate millions of drivers to drive more safely on the roads, turn routine driving into an exciting journey, and introduce the principles of WEB 3.0 into the core of our lives.

To better understand the utility of this metric, we compare market depth for the top non-stablecoin cryptocurrencies relative to their ranking by market cap, as ranked by CoinMarketCap. We compute depth by taking the sum of bids and asks within 2% of the mid price for all USD and stablecoin-quoted pairs across 19 centralized exchanges.

The good news is that there seems to be a positive relationship between liquidity and market cap for the top 10 crypto assets — the larger the market cap the deeper the market depth. However, this relationship is less clear for smaller-cap altcoins.

Overall, crypto market liquidity is very concentrated, with the gap between BTC/ETH and altcoins persistently high. As of November 2022, the average depth for BTC and ETH was over $190mn and $130mn, respectively. For context, average depth for each other asset analyzed is below $30mn. Overall, the top 10 crypto assets attract 80% of total market liquidity.

Smaller altcoins also exhibit strong divergences with no consistent relationship between market cap and liquidity. For example, Chainlink’s LINK token is more liquid on CEXs than DOT, SHIB, UNI, and AVAX despite its market cap being lower by 30–50%.

These divergences could be partly explained by the fact that CEXs are not the main market for some of these smaller tokens (such as UNI or WBTC), which have higher volumes on DEXs. However, the divergences suggest that altcoin liquidity is unequally distributed and not wholly correlated to the token’s market cap.