Will start this thread with a disclaimer. I have never invested a rupee in cryptos 😀

But I have studied bull and bear cycles and financial bubbles extensively. Saw 1992, 2000, 2008 with own eyes. The first one as a novice, the next two when I knew to analyze

The amount of chatter I am seeing in friends, family and social media about cryptos has gone through the roof. For everyone, it's a dream to make 100x or even 1000x easily. Basically, become stinking rich easily
( it never happens )
In any financial bubble, the top is made in extreme speed and violence. The distribution happens on the way down. Unless one saw the rates of 65k on bitcoin, one wouldn't buy at 30-35k or 20k. That 65k is an anchor point which leads to greed
During the tulipmania, a single piece of tulip reached a price of $750,000 in today's money. When we see that history, we think "what idiots". But consider this, as of now meme coins generated by someone in their garage are being traded at absurd prices
Then there is this joke called NFT. A piece of "digital art" basically made by someone on their computer ( who is not even a known artist) are being sold for millions of dollars
Whatever logic crypto fanatics throw at me to justify these prices or that they will go higher fails to convince me that the future generation will not call us "what idiots". We are in a manic bubble like tulipmania or even bigger
----end ---
I leave you with this chart of HFCL, the most darling stock of the 2000 bull run. I knew quite a few "smart " traders who got in at 1400-1600 range and could never sell
What I think will happen. During distribution also, there is huge volatility with price going up and down to "lure". Remember, at any bubble the prices are #always justified by logic ( which are new and against convention). Like Harshad Mehta's "replacement cost theory"

More from Subhadip Nandy

This question might have rose in your mind too, that why VIX was lower than yesterday despite the huge selloff today.
This is what I think happens . A thread.


What is VIX ?
https://t.co/VOkAwGRsHL


What is IV ( implied volatility ) ?

Now my explanations. IV is simply demand and supply. IV is back calculated from option prices and not given by the BSM model. When demand for options ( by buyers) are high, IVs will be high. When supply of options ( by sellers) are high, IV will be low.

Now look at this chart. Nifty fut and VIX are plotted together ( red line is the VIX). Yesterday's massive breakdown forced traders to hedge their positions by buying puts ( could be cash holdings, could be future longs, could be sold puts). This excess demand spiked up IVs /VIX

More from Crypto

Back with another #FreeLoveFriday. Last time, we covered how Mastercoin/@Omni_Layer pioneered digital asset issuance on blockchains. Today, let’s discuss @Chainlink and the vital role it plays in connecting blockchains to the real world.


I have said repeatedly that digital asset issuance is the killer application for blockchains. The next frontier is bringing real world assets to networks like @AvalancheAVAX, but we often face a significant problem:

Namely, how do you get data from the real world onto blockchains and into applications running on them? More critically, how do you achieve that securely and transparently in real-time? Smart contracts are tamper-proof, but they're only as reliable as their input data.

Enter ChainLink in September 2017, with a whitepaper outlining a vision for a decentralized network of “oracles,” entities that inject facts from the external world into blockchains in a suitable format for smart contracts.

Until ChainLink, oracles were trusted and centralized. This is a huge problem for high-value assets and smart contracts. High value projects, such as @CelsiusNetwork, @synthetix_io, @Aaveaave and others depend critically on oracle data.

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