6th September 2021 > > IOTA.

tl;dr

IOTA is the current beneficiary of a short squeeze.

Market Snap

Market Wrap

Looks like Elvis and his talking cat are worth listening to.

Occasional Series – BTC price prediction

This one is from Mike McGlone, senior commodity strategist at Bloomberg.

He claims that $100k is the “path of least resistance” though I don’t think he has put a timeframe on that.

Perhaps more interesting than simply the number, is his reasoning behind that number. He believes that BTC is on its way to becoming a global reserve asset.

To be a global reserve asset must surely imply that it isn’t just a core element of all investment portfolios, but it also held by Central Banks. Now, that would be a game-changer.

The current market cap of BTC is $1 trillion dollars, give or take.

Gold is the smallest global reserve asset with a market cap of $12 trillion dollars.

You can see where I am going with this in terms of the potential impact on the price of BTC. That impact takes BTC way higher than Mike’s $100k.

Curious Cryptos’ Commentary – IOTA (NOT investment advice) doubles in a week

Anyone who has had the pleasure (pain?) of talking to me personally about cryptos knows that I have been banging on about IOTA since March 2018.

My enthusiasm was borne out of the claim that using cutting edge technology (specifically a directed acyclic graph https://en.wikipedia.org/wiki/Directed_acyclic_graph) IOTA would allow much faster processing times (essentially instantaneous) for ZERO cost to the user. I cannot pretend to understand anything about the underlying maths but I was very excited about these two claims for IOTA. To add icing to the cost free nature of IOTA, I have it on very good authority that speed and security increase as the number of transactions increase.

The potential for fee free instantaneous micropayments for commercial use is enormous, as witnessed by their early contractual obligations in relation to developing smart car technology with VW.

The potential for fee free instantaneous micropayments to provide banking services for the unbanked (with a mobile phone and an internet connection) is enormous.

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Since my interest was first piqued, the price of IOTA has been on a bit of a ride from $1.25 down to as low as 11c. Now sitting at nearly $1.80, the power of Dollar Cost Averaging (DCA) is plain to see.

The question is – what has changed? And why now?

(OK that was two questions, but who is the pedant now?)

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At the time of my initial interest in early 2018, IOTA was not strictly a crypto, in the same sense that Central Bank Digital Currencies (CBDCs) are not cryptos. It was centralised, and the history of transactions was the responsibility of the IOTA foundation, not a blockchain maintained on a decentralised basis.

This admission opens me up to the accusation of being a hypocrite by supporting IOTA and being, shall we say, not very welcoming to CBDCs.

I will take that hit.

My defence is that, unlike any of the perpetrators of CBDCs, there has always been the vocalised intention to decentralise IOTA.

This has been largely achieved with Chrysalis and the move to FireFly wallets (a subject for another day perhaps).

So that has helped the price of IOTA.

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But I do know that all you really want to know is the single biggest reason for its 100% price increase this week.

Short squeeze is all.

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The crypto offshoot of wallstreetbets – SatoshiStreetBets – has focussed on IOTA in much the same way that wallstreetbets did earlier this year on both Tesla and that gaming retail outlet whose name I forget.

Shorts had piled into IOTA – for reasons that escape me – and SSB had scented blood.

A concerted action by the retail army of SSB has copied the retail army of wallstreetbets and killed some of the biggest leveraged players in the alt market.

I do recommend joining their reddit group – it can be quite entertaining at times.

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Short squeezes are nicely lucrative when you are on the right side, but they do not tend to last long.

If one happened to be an IOTA holder and one wanted to actively manage that holding, a 25% or more reduction in notional might be advisable, with a re-entry point at just a touch under a quid perhaps.

(NOT investment advice).