Spiker

Financial Nihilism... As I look at all these round-trip cards from pseudo-celebrity traders, I can't help but think about how wrong the understanding of the memecoin sector has been. Post-mememania 2023/24, a lot of people decided to categorize memecoins as the permanent vehicle through which financial nihilism would be expressed. Which to me was, and still is, a very wrong categorization. It’s like clockwork, every cycle, traders observe a behavior that is permanent and then assume the specific asset expressing that behavior will be permanent too. WRONG. Financial nihilism may very well be secular. People may continue believing that traditional paths to wealth are inadequate and therefore keep looking for extremely convex ways to escape their economic position, but that does not mean the latest vehicle (in this case memecoins) remains the dominant expression of that desire. There is absolutely no reason for financial nihilism to require a permanent financial instrument. Just as it was expressed through BTC first, then ICOs, DeFi, NFTs and eventually memecoins, it can later express itself through completely different primitives. In fact, the desire that powers financial nihilism almost guarantees migration, because that desire has no loyalty to the instrument. It is loyal to perceived escape velocity, which means it will migrate toward wherever the greatest perceived convexity exists. Which brings me back to memecoins and this idea that they somehow represent the terminal state of speculation. There is no "last step" of financial nihilism, which is exactly why memecoins should be understood as a meta just like all the ones that came before them. Crypto people talk endlessly about identifying narratives, but one of the highest-value abilities in crypto is continuously re-underwriting the distribution of returns. This idea that "history rhymes" is such an idiotic one because we live in a world with enough notes and an almost infinite number of variables that you can make fucking anything rhyme after the fact. The market is constantly evolving, which means your previous return distribution should be an input into your next assumption, never the assumption itself. If all of this sounds boring to you and you don't have the energy to constantly underwrite, or simply don't know how, then let me give you one rule I think will save you a lot of money: When in doubt, always underwrite lower returns on the second coming and be forced to revise them higher, rather than underwrite historical returns and eventually discover they are no longer available. If I assume something has 3x left and eventually realize it has 20x left, I can change my mind, increase my exposure and keep playing......I might have left money on the table, but I still have my money. If I assume the same thing has another 20x because that is what things like it did during the previous meta, I can very easily sit through an 80% drawdown waiting for history to rhyme, only to eventually realize that the return distribution changed and I am now fucked. Write this down.... Opportunity cost can be recovered from.

Got a bunch of nice DMs as a result of one of my latest posts, and the first thing I want to point out is that, as always, the negative people are the loudest, but there are way more people here trying to learn than it sometimes feels like, which puts me in a good mood. Most of the DMs said the simple math opened their eyes, and from there most wanted to know how I convince myself to put fat size into bottomed charts. So let me answer it here since I sadly don't have the time to do it individually. There were a ton of bottomed charts and I specifically picked the ones I liked based on using the product, looking at the chart, understanding their evolution, talking to smart people who understood them better than me, bla bla. That kind of cherry picking is hard to teach, given it mostly comes from natural curiosity + years of being onchain....There is no shortcut there other than remaining curious, using things and asking questions... Anyways, let's assume you already know how to pick the assets you like, because what I want to explain is what gives me the balls to put fat size on them around the bottom. Two things.... The first is stupidly simple math.....again. Every percentage loss requires a larger percentage gain to get back to the same price. A 10% loss needs an 11.1% gain to recover. A 30% loss needs 42.9%. A 50% loss needs a 2x. This hurts a ton when you are looking at losses, but if you are a buyer and you invert it, this should get you pretty horny. Think of this... If something went from 100 to 70, the guy who held it down is 30% underwater, but if I am buying at 70 and it simply trades back to where it already was, I make 42.86%. God I love maths... So yep, this is a big part of how I think about bottom charts..... Buying something at 70 on its way back to 100 is a very different trade from buying it at 100 and hoping it eventually discovers 143. The return is almost the same, but at 70 I only need the asset to revisit a price it has already traded at, which psychologically is much easier for the market to get comfortable with than buying at 100 and needing it to go into PD. Once I combine this with the second thing, which is patterns, I get pretty comfy buying bottomed charts. There is one pattern in this neighborhood that we all know very well by now, which is the euthanasia coaster. Believe it or not, this pattern has worked an absurd amount of times for me. On any chart, post-dump there are only two patterns, the ones that pump, dump and never make it through a loop, which I tend to read as pure extraction, and the ones that start their euthanasia course. Once that first loop happens and the asset shows it can pull attention back after being left for dead, I am way more comfortable assuming another one can happen. And I don't give a single fuck if the next loop is smaller than the prior one because I am looking for 2/3x with fat size....If I am buying close enough to the bottom, a smaller loop will give me that, a similar loop gives me more, and if the asset gets repriced because the narrative around it changes, then I get the chance of making considerably more. When I put those two together, I get extremely turned on by bottomed charts... how can you not? You have the recovery math working in your favor + a pattern that, for me, has 90+% probs of repeating......Add patience to that and you have a damn good setup for being bullish in bears. As the bull progresses, this setup becomes obsolete because the further charts move from the bottoms, the less favorable the math becomes. When that happens, this setup is dead and you need one built for the bull.....I have those too, but we can get into that some other time. For now, let the bottomed charts keep ripping.