Bitcoin Bears Spotted



As if you didn’t already know that the bears were eating bitcoin’s lunch, right?

But is this a deeper downtrend? Is bitcoin a bubble or not? How long will it last? And finally, will bitcoin crash?

Can we trust the big banks and Jamie Dimon to give us the straight dope? That bitcoin is a fraud? No, we can’t. Why? Because so is the fiat dollar and every bank that uses them — all frauds.

There is no real money to be had, save gold or silver. On the other hand, at least some of the coinage used by nations are real and retain actual value. I mean at least the nickels and quarters in the US. The pennies are now copper coated zinc. But the paper fiats? The electronic representations thereof, sitting in our digital bank accounts?

But just maybe we can trust one voice out there. A lone voice of reason in an otherwise crazy crypto-world. Someone beyond the control of anyone.

Why am I telling you this?

Maybe I can save you some money and if so, just maybe you’ll read more of my blog. And then the little money fairies will come and dust me with ad sharing revenue and I can quit my day job.

Fat chance.

In the world of cryptocurrency one character seems to stand out: Smooth. If you don’t know about him, you probably should.

I scan his comments a lot. Get a feel of the cryptoverse, if you will. The only thing is, he comments on several threads and you need to pick them out. Little gems in the digital ether spread out like crumbs.

I have blogged about Smooth before and won’t bore you with details of his/her/their exploits. Instead, I’m here to display a bit if news. What Smooth says, since he often responds to questions on Reddit and bitcointalk.org.

I’m not after the technical stuff, but the layman stuff. Stuff better than Jamie Dimon, since Smooth lives in coding world. Dimon lives in the government fiat world.

Will the crypto-market nosedive soon? And for how long? That kind of stuff.

As many of us know, Smooth is a developer at Monero and works on Aeon. He’s the lead dev at Aeon, not to be confused with Aeternity, a newcomer. Here’s a bit about Aeon, if you want a rundown.

Still, this is all conjecture. Smooth’s persona could be a well-constructed piece of disinformation. Not that his comments are misleading, but his identity is well camouflaged, as it should be in today’s monetary culture.

For the sake of argument, I’ll say that Smooth is a guy, middle aged, who works near a Silicon Valley-like hub and codes. He could be American or maybe even a Romanian immigrant. He may have a French sidekick and several Monero devs to keep him in line.

More conjecture. Smooth is none other than fluffypony’s alter ego. Fluffy being the face of Monero, Riccardo Spagni.

In short, we don’t know Smooth. I’m sure someone does, but the anonymous handle and picture of The Big Lebowski may not really give us the entire story.

Nonetheless, Smooth does leave a lot of commentary, which I hope he will continue to do, even at the risk of being discovered by the governments with their ability to ferret out writing patterns with super, but not-so-secret software. A forensic examination of style and so on, used to compare against known samples.

Smooth must know about this. Maybe he’s not as paranoid as he should be.

Aeon could be Monero’s test bed, as well. And a backup plan if Monero should crash. Hence the recent remarks by Smooth wanting to clarify that Aeon is not a fork of Monero?

At any rate, here are some recent ‘out of context’ tidbits from Smooth. They can serve as very educational – enlightening. Maybe they are also good to use as sort of a touchstone.


A refresher on Bytecoin. Here’s what Smooth says…

His responses on Bitcointalk.org:

Regarding Bytecoin and the ongoing shady dealings therein:

Their intentions were to launch the coin as a premine scam and take a lot of money out of the coin and put it into their own pockets. That of necessity requires inducing other people to put a lot of money into the coin. Which they are still trying to do at some level with the continued (if laughable) shenanigans with “Jenny” and other shills.

This was for those of you who still think Bytecoin has a chance.


Now onto the bear problem. More Smooth goodies.

Monero Speculation:

To clarify I’m not pointing to a bearish sentiment (though one could point not only to the China news but to the increased regulatory pressure from the SEC in the US, Canada, Singapore, and others as potentially bearish) as much as to increased downside risk and decreased short term upside.

Personally, I am acting on this belief by reducing my risk profile in crypto positions to those I’m more comfortable holding through a possible correction or even bear market, but that doesn’t mean selling all or going short.

Monero…I haven’t yet sold any at all (in a long time), but I’m considering lightening up on that too here. >100 USD/XMR and >1 billion USD cap is great, but again, short- to mid-term, relatively reduced upside and increased risk.

And a follow up…

…I see a good possibility this current bull run in crypto may be close to running out of steem [sic]. That doesn’t mean crypto doesn’t have a bigger future but it requires both internal and external changes, which may come more slowly…

Monero Speculation (and crypto-speculation in general).

Have we reached a sort of crypto-market saturation? Are the bears about to come out?

…when considering exponential growth of viral ideas. Compare…with 2014 when no one gave a…about crypto and you would literally have to poll hundreds or thousands of Average Joes…to find someone interested in it much less owning it.

This does not mean there is literally no one left who could buy who hasn’t bought yet. Most likely, by the time we realize that has happened it will be too late and the price will already be crashing, unless you are able to call the exact top (unlikely). It means we are getting close. The balance of risks has become more symmetric. The remaining upside is quite comparable to the plausible downside.

Note, I’m talking about short to mid-term upside without [a] major change to conditions…not  about [a] plausible…scenario where crypto replaces gold or the dollar as a global reserve currency…I’m making a short- to mid-term trading observation based on current market psychology and demographics. If you think that outcome is likely (enough) and are comfortable with large drawdowns while waiting for it then by all means buy/hold/increase your long-term holdings.

And…

I had that happen…right around the time of the market top in 2013.

It is a bearish indicator. It means that the wave of FOMO [Fear of Missing Out] has reached the masses. The only difference at that point is how many decide to buy and how much, but the important fact is that there are really no more big [sic] wave of people to reach (at least not ones with money). When Mayweather and Paris Hilton are promoting ICOs, when it is being covered on CNBC, Bloomberg, etc. every day, who is left? Price gains are certainly still possible, but the risks have become a lot more symmetric.

There is one more wave to reach and that is conservative institutional money that will allocate to crypto as an asset class given ETFs (or similar vehicles) but not before. That’s potentially a big wave ($1 T or more). It may or may not happen this cycle.

What Smooth meant by “this cycle” is a bit ambiguous. What’s more, the ETF issue may never work at all.


The point of all of this? Pull in your crypto-horns or wait this out.

For those of you wondering about Steem.

Regarding Steem, Smooth indicated:

You can look at economic reality here…the mining was not competitive. It was at near-zero cost, based on asymmetric and privileged information, and therefore very much unlike competitive mining that takes place over a significant period when there is ample opportunity for information to disseminate (and the developers are not admittedly and deliberately exploiting their exclusive access to that information to gain a very large non-competitive advantage).

So the outcome is effectively (about) the same as a premine, regardless of how they got there. (And conversely such an outcome would most assuredly not be achieved with competitive mining over an extended period as with Bitcoin or Litecoin.) Achieving the equivalent outcome of token distribution and investor funding of developer efforts via a different mechanism is effectively synonymous with looking past form to function (i.e. “economic reality”) to me, but I’m neither a prosecutor, nor a judge, nor a jury. There is a small caveat here but I don’t think it ultimately changes the conclusion so I will omit for brevity (and economy of my writing effort).

Lately, scam accusations have plagued Steem.io.


And again in the Monero Speculation thread, but more about bitcoin, Smooth advises:

BTC is being priced more as a risky speculative asset at this point than as a safe haven.

From Reddit:

Regarding Bitcoin (Redditor: smooth_xmr):

Bitcoin can’t be described as secure under the model in the white paper.


Regarding the forking of Cryptocurrencies.

A recent goodie:

Literally anyone can hard fork any (open source) cryptocurrency. It can’t be prevented.

The only thing that matters is whether a community (of any significance) supports the fork, and likewise whether a community (of any significance) continues to support that original. End of story.


Based on Smooth’s comments over the past several weeks and the actual cryptocurrency bear market occurring, we might want to heed his advice. Set aside some of your profits if and until the dust settles.

Smooth does not exactly specify how to do this, but Tether might be an option for some.

In any case, as we are often reminded by Smooth, critical thinking is a requirement in the crypto-world.

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