The last year has been a rollercoaster
with bitcoin, a
constant up and down.
Every day on the news
bitcoin's up, bitcoin's down,
it was like something
the whole world ...
- It was headline news.
- It was headline news,
all the time. But now
it's gone pfffff,
it's gone right down,
there's less anxiety,
compared with before. So
what will happen now, do you think?
A specialisation is developing
in people's knowledge.
In fact, I don't think this
is extremely negative.
- Okay.
What most people are finding
is that there's a downturn
in searches, on Google
Trends for example there are
fewer searches, there's
less interaction on Twitter
and as a result the price
of bitcoin is going down.
This could be interesting
in terms of perception
of its value. Whereas
in fact, at least
from what I see, it's
not exactly like that.
Okay.
- There's greater specialisation
with regard to
both knowledge, in
terms of knowledge,
and quality. Especially
in the last few weeks,
even though the summer
has only just finished,
we have seen more interaction,
a stronger interest among
among financial institutions
or very important companies,
venture capital,
at financial level.
- Right.
When you see a chart,
this is getting down to brass tacks ...
You get up and look at charts
because that's your job,
as an analyst, you look
at a load of charts,
all the time, charts, up and down.
Whereas, I was saying to a
friend just now, if I look at a chart,
I look at it and to me it means
absolutely nothing.
I see the curve,
it's going down, I say,
okay, it's going down.
That's it, that's the
extent of my analysis.
Or before it was up,
but that doesn't help me
to forecast in some way
a future trend.
What are the
main signs you look for
when you analyse a chart,
which help you decode
the situation?
I trained as a technical
analyst, so in any case
I see the patterns in charts,
the technical shapes that
have a significance
as regards a possible
hypothesis for the future.
But many people mistake
technical analysis
for ...
- Certainty.
Certainty about  the future.
They're always hypotheses,
always hypotheses.
Always hypotheses that
naturally are confirmed
by statistics, so in any case
if in the past a technical figure ...
What do you mean
by technical figure?
The configuration that
emerges from the chart,
drawn by the chart, because
it really is a drawing,
even if it is very abstract or
only refers to numbers.
The numbers are
coloured, drawn on this palette,
which has price and time axes.
The patterns, the figures,
that have already been
confirmed in the past, are applied
to the future hypothesis.
So if I see a certain
type of curve, I say, okay,
generally when there's
this type of curve,
I know this thing happens.
This is something you learn
with time and with experience.
- Right.
- People should realise this,
it's not just by reading a textbook
or taking a course, which
in any case is the basis
from which to start, because
you can't acquire
knowledge simply because you
read about something on the internet
or because you read
a textbook, a chart.
You have to start somewhere.
But then it depends on your
experience and application
over time.
- And with the quantity
of hot air in circulation
in every sector
clearly the crypto world
has a lot of hot air
but, of course, there's
hot air everywhere,
in these new worlds
it's even easier to
pull the wool over someone's eyes
because it's difficult to understand
what people are talking
about. What do you think
are the things to look at
in order to avoid
being caught out
by real rip-offs
where you say: "No, this
doesn't work,
this coin really doesn't make sense",
or, instead, it makes
sense because a, b and c,
is there something that
you look for?
It's experience, a person's curriculum,
which of course you
have to know about
to understand. As you rightly
said, this is a sector
where, even though it's been
going for 9 years, in terms of
experience or qualification
it's very limited.
Because as regards
technical analysis,
a lot of people came in
last year, because
there was a demand
and where there's demand,
as you well know,
there naturally also
has to be a supply.
And since supply is short,
anyone who realises that
there's a need ... people don't
check, don't ask for specialisation.
In some ways, this
is a bad thing,
but even so people turn to
someone who can be presented
as a professional. As something
that however isn't qualified.
That person too has come into
it through people they know
and I've found this a lot,
before coming into the
sector, not just coming in,
but actually understanding the
cryptocurrency sector,
because with traditional finance
yes, there are some
comparisons you can make.
But it's a completely
different sector,
because its dynamics ...
What would you say
are the main differences?
I'd already seen this
from my direct experience
with cryptocurrencies.
And I was very pleased to find it
among financial analysts too
on Wall Street, who had left
traditional finance
to work in
cryptocurrencies. And
statistically what emerges
is that the cryptocurrencies move.
They go 15 times faster
than Nasdaq in 2000,
in other words at the time
of the dot com bubble, when
volatility was already high. And
if you take a very volatile time
and multiply it by 15,
then you realise
that this sector is difficult
to tame in the sense
of understanding the trends.
As you were saying,
a technical analyst
wakes up and goes to sleep
looking at charts.
For better or worse,
they've got the experience,
for example technical
figures that
they use for reference,
are deeply imprinted.
So for someone coming in
for the first time, I
would strongly discourage
them from moving into
trading, or any sort
of speculation like trading
over the short term, if you don't
already have an excellent background,
not good, an excellent cultural
background in terms of
the approach of the
traditional technical analyst.
It looks easy, but actually
you lose a load of money
if you don't know what you're doing,
if you don't have the faintest idea.
And then there's a new
currency every two minutes,
a new token. You might
say, okay, Pierce Brock makes
two billion, Eos, and
you say, okay,
this is someone who, with his team,
has a certain type of experience.
Then you can look at it a
thousand different ways,
they've made two billion. Okay,
it may be different if it's an ICO
of 4 kids who've never
done anything in their lives,
who only have a powerpoint
and you say, yes, okay,
will they do what they
promise, yes, no.
So, successfully assessing
every situation carefully
takes time and skill,
that's the thing.
Technical analysis, from
this viewpoint, filters
a lot of the hype
surrounding ICOs.
Because to analyse
an instrument,
in this case, a coin, a token,
I need a prior history,
So an ICO, which
arrives ex novo
and therefore doesn't have a past,
can't be analysed.
And that keeps me
at a distance and this
is what we are seeing
in 2018, a lot of people
have come in,
as we were saying,
into the cryptocurrency sector,
because they had this idea
they would multiply their
capital, their investment
in just a few weeks,
not months, weeks.
And this was because
there was a huge
quantity of offers from the ICOs.
With projects no one
knew anything about.
A bit like what happened
in traditional finance
with the dot com
bubble in the Noughties.
People came in only
because they saw
everything going up,
multiplying in a very
short space of time.
Whereas now 2018
or right now in the
second half of 2018
a very extensive
selection is underway.
Because people who
had come in
with this illusion, what
I call an illusion,
at the beginning of
2018, now unfortunately
most of them have
lost their investment,
or have seen it
more than halve.
The latest estimates show that
since the beginning of the year
more than 70% of the
new ICOs, listed
at the end of 2016, early 2017,
the majority of which reached
their peak in January,
more than 70% of them are
losing over 90% of their value.
And I'd like to see
how many coins really
keep their value,
because there are
3,000 of them, so ...
Of all these cryptocurrencies,
are there some that
you monitor
more closely, or that
are your favourites
in inverted commas, or are
you an agnostic and simply
value the one that's
doing best, or worst,
at the time?
It's impossible to follow them
all, today, in October
there are more than 2,000
listed cryptos, tokens.
And double that for the
ones that are not yet
listed. It's impossible
to follow them all.
As I said earlier, the
advantage I have
is a statistical base of data from
the past concerning
the token, the cryptocurrency.
I personally
pay greater attention to
the top 15, by capitalisation.
Then of course the
most closely followed are
the top 3. Bitcoin, also
because it has statistical data
going back 9 years, 8 years
to be precise.
Then there's ethereum, which
is also doing very well
because it is heavily traded
over the course of the day.
Then ripple, even if it's
not a real decentralised
cryptocurrency, it still
attracts a lot of attention
in part because it has its
volatility, in inverted commas.
And what do all your
charts say is happening now?
This ethereum people
always talk about,
one day you read: "Vitalik
will go, everything will collapse",
another one says: "No, no,
he doesn't count,
ethereum's got smart contracts
and it works".
From your analyses,
what trends do you see
for bitcoin and ethereum?
I see bitcoin as the
industry benchmark
for cryptocurrencies,
the reference crypto,
in part because when there's a crisis
as there was recently, it was
the cryptocurrency
that people went to
from all the others
as the safe-haven crypto.
A bit like gold.
Bitcoin is the digital gold.
So it is
the absolute benchmark.
For ethereum
we have to understand
what the future will be
more than anything
not just in terms of
ethereum itself,
but as regards
everything concerning
the other blockchains
that have emerged during 2018.
Until last year,
ethereum was
in any case
the outright leader,
the one you could
develop smart contracts for.
Today things have
changed, there are others
and this certainly affects
the unicum of ethereum.
Ethereum
suffered a lot over the
summer and autumn
of 2018, from the hype
about cryptocurrencies. At
the start of the year, it rose sharply,
from November to January,
it rose sharply.
Its value tripled,
compared with
the values of last autumn,
in 2017, because there
was this explosion
as you said in ICOs.
So to take part in an ICO,
you had to buy ethereum.
- Right.
- This drove
the rise in value of ethereum.
The same thing happened
a few weeks ago.
During the summer of 2018,
the ICOs that were in trouble
began to sell ethereum
to make some cash.
And this certainly
led to a collapse
in the value of ethereum.
Vitalik, and his declarations
undoubtedly have an
impact on the position.
It depends what mood
he wakes up in.
He's a real character,
but in any case people follow him,
but what I'm seeing,
even recently,
is that today Vitalik no longer has
such an influence ...
- Okay.
- on the value of ethereum.
His declarations certainly
have an effect, they are
taken into serious consideration.
But that won't be
the only thing that moves
the value of ethereum
further up or down.
- So, other
trends you see now
in the crypto world,
apart from these two
main cryptocurrencies?
Do you see other
interesting trends
that the media may
be neglecting,
but that you say: "This
could be something that
happens?".
- That doesn't concern cryptocurrencies?
Let's say that concerns the
crypto world, but perhaps
has been less obvious in
this phase, but which you think
is important, if
there is one.
In the financial sector,
this is exactly what's
happened, I myself
found out only in the
last few weeks,
it concerns the ETFs,
because recently the ETFs
have had great appeal
in the cryptocurrency area,
because on bitcoin the ETFs
are eagerly awaited
because they can help
to raise the value
of the bitcoin price.
Why?
Because the ETFs,
which are instruments that
can be used inside
investment funds and
undoubtedly
would bring liquidity, capitalisation
to bitcoin.
And this means, since there
is a demand among institutions,
we're talking about billions
of dollars that would come
into the sector, this
would certainly raise
demand and consequently
the actual value.
So this also means bringing
derivatives into the crypto world.
A much greater influx of derivatives.
Because in any case, derivatives
are there. Last year there
was great expectation
about derivatives
as futures on bitcoin
and the first bitcoin derivatives
were launched in December,
and in fact bitcoin reached,
coincidentally at least
in my view, others believe
it was due to this factor,
at the time of the launch
of these two futures
in December 2017,
the value of bitcoin
reached a record high,
just under 20,000 dollars.
We already have these
two instruments
but their underlying
isn't bitcoin, they replicate
the trend. You can describe
them as synthetic.
So what do they do?
Anyone who wants to take part,
who wants to
buy or to sell them
short -- because in finance
you can also sell without holding
the asset. This doesn't
contribute to a real value
for bitcoin, because as I said
they replicate the trend,
so buying a future doesn't mean
that as a result I buy
a bitcoin. In fact
when the contract expires,
it's recorded as
dollars. But the next step
as traditional finance
moves into this sector,
will be physical possession
of bitcoin, and there are
already companies that are
or have already made important
launches. Important
companies on Wall Street
in traditional US
finance, which have
said that on expiry of the
contract, they won't liquidate
with dollars but
directly with bitcoin.
And this means that
the guarantor company,
that holds the financial instrument
which in this case underlies bitcoin,
holds bitcoin. And this
is very important.
Right.
Super. Good luck
for everything. Great.
