Tidbits - market reviews, special events and interesting patterns

  • The Bitcoin is purely liquidity driven – but even placebos have a value

    Once upon a time …. Clay stones shards and finally coins. With the coin-monopoles came trust, with the government bonds the sheer size of the currencies. The Bitcoin was invented by digital pioneers and coders as an alternative currency, as an alternative way of keeping money safely. The Bitcoin was modeled to substitute gold and as a counter model to the “FIAT” currency and the associated national debt. Bitcoin was by design restriced in its quantitative development and in addition to that anonymized, because the technically feasible had to be made.

    Hopes for an alternative to gold quickly came – one speaks of “mining” – that inspired the media! Unfortunately, just as fast the anonymous Bitcoin fueld as black money illegal businesses, such as extortion. The most obvious is the still spreading plague of crypto-trojans. But the difference in comparison to gold is, that anyone can build alternatives to Bitcoin and that is done every day. If you tried that with gold in experiments, you would probably create very radioactive elements.

    To summarize: The bitcoin digging is artificially limited in a rather pointless technical way, a kind of self-pulling loop. The Bitcoin is a popular black money and an equally popular story in the media.

    So why is the value of bitcoin increasing? Is Bitcoin a self-reference, a Ponzi scheme, like the tech bubble in the late ’90s, or the Dutch tulip bubble in the seventeenth century? Yes, because

    The last Bitcoin miners even steal computing power or electricity to make a profit in mining, which otherwise would not be possible even in countries with cheap electricity like China.
    The already existing Bitcoins enjoy demand money launderers, but this disappears as soon as the authorities stop the convertibility, as already seen with some Bitcoin enthusiastic banks or at Visa
    and finally, the immensely growing demand from the public, who face a constantly limited supply.

    That is precisely what can be demonstrated by comparing Bitcoin development and Google Trends analysis. The following graph shows the Bitcoin (black) and the demand for the search term on Google (red).

    We therefore assume that the keyword request on Google for the search term “Bitcoin” has approximately a fixed relation to the demand for bitcoins. As a result, scientists may consider whether rather the rising Bitcoin price has increased the search demand on Google or the media writing about it. Realists would think that the media has the power to influence people.

    The Bitcoin is thus the prime example of a liquidity-driven bull market. Because bitcoin does not reflect any economic value at all, it is the perfect scientific object to study a purely liquidity-driven hausse. The bitcoin is some kond of the placebo for anyone who feels, that the value of gold is not growing fast enough.

    It can be considered that a decreasing demand on Google will be an early indicator of a decreasing demand for bitcoins. The price spiral for Bitcoins would go downwards as a vicious circle and opposite the way it has turned upwards since 2013. In addition the spread betting and CFD contracts of the various Brokers as well as the futures at the CBOE and CME in Chicago fuel the Bitcoin as firing accelerators, since their demand is catching up with Bitcoin only after a time lag.

    A look at the details of the past six months would lead us to a Bitcoin forecast of $ 8,700 (instead of $ 14,439 as of yeasterday, January 9, 2018) for the next 2-3 weeks, provided Bitcoin follows the red line in the chart given as a forecast by Google Trends.

    So – lets wait for it, but please do not write so much about it  😉

    update (16.1.2018): updated chart, new forecast as of 15.1.2018 : target lowered to 6.700 USD

    Sources: Google Trends, www.bitstamp.net

     

  • Fintech Forum Cologne

    Our customers, business partners and readers are invited to join the Fintech-Forum Uhlenbruch Fintech Forum in Cologne on 6th December 2016 in Cologne.

    Most speeches, except the first and last one will be Held in German, attendees will be Asset Managers, Investors, startups and founders.

    For registration please use our discount : FTPIF173

  • SAP Vora gives HANA another advantage

    SAP HANA is a modern real-time database that combines advantage of traditional SQL databases with some innovations in the NoSQL area, in particular data compression, as with Google’s “Bigtable”. The compression allows to evaluate large amounts of data “in-memory”, i.e. is much faster without disk access.

    But it does not work with any amount of data. We tested it together with SAP in a joint project on HANA extensively: The detailed XETRA overall market data required zip-compressed on average 250 MB per trading day and are stored in our own Hadoop infrastructure. A HANA with 70 GB of memory, was capable to store about 120 days of XETRA data or 30 GB of compressed data to evaluate it in memory. A HANA with 130 GB of storage made up to twice as much availalbe, i.e. one year of XETRA history (trades, no quotes) or compressed 60 GB of data.

    We had heard Project Vora by the end of 2014, and are grateful, that the integration of Hadoop and HANA is available as an SAP-supported architecture and starts to find friends.

    The benefits of HANA infrastructure are enormous, there are many old and new tools available, last but not least BI applications and ways of migration from the old SAP R/3 infrastructure to the new “S/4” (HANA). We were able to integrate our risk management libraries in large parts into the HANA kernel. Vora now proves that SAP eliminates the last weak points successively. We will try it.

  • Best german institutional consultants in 2016

    In the latest test we evaluated the portfolio management strategies of consultants, most of them banks in the german region. This time we ranked the portfolios in the context of two simple Multi-Asset strategies, one “optimal” and one low-risk/low-return allocation. Most consultants did their job well, however there were significant differences in diversification and expected risk/reward ratios.

    More details published here: Pressemitteilung Stiftungsberater 2016

  • review of 3rd december 2015

    The upward trend of 2-3 month gone in one day (see. Chart) ! A “year-end-rally” is rather unlikely.

     

     

    DAX 2015-12-03 um 21.32.42BUND 2015-12-03 um 21.32.35EURUSD 2015-12-03 um 21.32.28

  • Risk and Return of 150 asset manager in daily competition

    This dynamic graphic gives insight into quarterly performance and risk figures in a public contest of 150 well-known asset managers in various mid europe countries.

    The Asset Manager manage these portfolios daily since mid-2011 (red), mid-2012 (green) and November 2014 (blue) and compete against each other based on risk and return figures.

    The size of the dots shows the overall performance since the project began. x- and y-axis show quarterly volatility and quarterly performance per quarter. More information is publicly available under www.performanceprojekt.de.

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