Obvious Hypothesis: An Altcoin's Hype Predicts its Future Price

in #altcoins7 years ago

Preface: In the last 7 months I've created an algorithmic altcoin spreadsheet, partnered with John McAfee and built a (entirely free) community of 20k+. This article will outline the methodology of this spreadsheet, which is used by thousands who never knew the methodology behind the spreadsheet until today, March 15th 2018.

Last year I had the (quite obvious) hypothesis that a coin's price was not driven by fundamentals like we see in the stock market, but rather by three things:

  1. Community
  2. Hype
  3. Marketing

I thought that if I could design a way to quantify these three things, and then compare them against their market cap and/or volume, I could predict with relative accuracy if a coin would go up or down in value (against BTC) over a period of months. So I set out to create a dynamic Google spreadsheet that could do just that. It took several weeks, but finally I had something pieced together. What I did was create 5 identical spreadsheets. One for each batch of 100 coins, sorted by market cap. And then I ranked each batch of coins from 1-100, and tracked the average price movements of all 100, the top 20 and the bottom 20. The hypothesis being that the top 20 would outperform the market (all 100 coins) and the bottom 20 would underperform the market. I chose 20 because I knew there would be outliers. Below is a screenshot of my top 20 picks from the top 100 coins at the time based on a simple algorithm that I created to quantify this hypothesis.

Initially I was quite disappointed with the results. My top 20 picks were showing a negative correlation to the market. In other words, the coins that I predicted would do the best actually did worse than the market, on average. I stopped checking the spreadsheet every day and moved on to other things.

And then, a couple of months later, I noticed that the spreadsheet was actually showing some amazing positive correlation. The reason that it was showing a negative correlation initially is because my top picks had not yet found bottom. Bitcoin had surged over 200% over this time period, whereas my top 20 picks had surged an additional 209% against BTC! Everything is measured against BTC and not the USD. Meanwhile, my bottom 20 picks, or the picks I predicted would do the worse did about 30% better than BTC, and the top 100 market on average did about 61% better than Bitcoin. My hypothesis was correct, and I was pumped!

Percentage price changes of my top-20 picks against BTC:

Overall averages:

At this point I enlisted some great help. I called my good friend, who is a PhD accounting professor at a major university (and would like to stay anonymous). He took my spreadsheet and made it 10x more robust and dynamic. He added a couple dozen additional metrics that we thought might be more effective than the original one at predicting coin movements. He made this spreadsheet what it is today. I then started investing my own money into this strategy.

The rest has been history! I've since partnered with John McAfee, built FB/Twitter/Discord communities with many thousands of members and have spread this strategy far and wide! The best part? It is 100% free of charge, and there are no pumps or shilling whatsoever, just data-driven altcoin investing. The story of how I connected with McAfee will be outlined in a different article and is an amazing story. How has the spreadsheet done since releasing it to the public last month? It's done a bit better than the altcoin market on average, but with 97+% of coins being down since that timeframe, my picks are down as well. But altcoin investors who relied on this strategy mitigated their losses over that same period of time.

There are a few places where we discuss the spreadsheet, as well as anything crypto related. There are no signals, pumps & dumps or shilling whatsoever. Each community is highly moderated for spammers and scammers. Twitter: bit.ly/2IpiYvo FB Mastermind: bit.ly/2BHzdTC Discord: bit.ly/noBSc Spreadsheet Itself: bit.ly/noBScrypto Would love to see you all there.

Thanks for reading my first Steemit post! I look forward to becoming a part of this community, and am glad I was finally able to join!

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Welcome i am one of your followers from twitter welcome to steemit follow me back

Welcome to the community! Followed you from twitter, however I suggest you do an introduction page for more exposure upon the steemit platform

Thanks for the tip, will do. Still learning this platform. :)

It would be great to see you at the London Crypto Currency Show on 14th April! The following projects are coming to present:
@utopian-io Read their blog about the show:
@esteemapp Read their blog about the show:
@stach Read their blog about the show:
@steempress Read their blog about the show:

Also @allasyummyfood, @stephenkendal, @anarcotech & @starkerz will present. The event doors open at 09.30am and the Steem Project presentations start at 10.15am and finish at 11.30am.

There will be loads of cool steemians at our stand at the event all day where there will be presentations on the hour until 16.00. The after party starts at 17.00 at the Novotel Hammersmith.

See some blogs about the event HERE & HERE

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Congratulations @nobscrypto, you have decided to take the next big step with your first post! The Steem Network Team wishes you a great time among this awesome community.


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Where can we find your spreadsheet?

Followed from NOBS, Thanks for writing it out, it is so much handier for me. I have a page I play around with here on steemit as well. Best of luck to you.

You added me on twitter, so I found your article from there. Looking forward to seeing your future posts! You need to do an #introduceyourself post as it will help get your account kickstarted. I'm sure a lot of people would be interested since everyone loves making money. Let me know if you have questions!