Banano shill post #2 + price analysis

On July 05, Banano coin was [escrow trading]( in the ratio 3100:1
(3100 bananos in exchange for 1 nano)

Today, the last big trade happened at the rate 2000:1

There has been a tremendous increase in price even in this bear market.

However, it should be noted that most of the coins are undistributed as of now and the circulating supply is very low and it’s not meeting the current demand. Hence the price rise.

Banano is just a fork of Nano and a meme coin like doge. It does not make promises to change the world.

However, it’s a fun coin with a fun community. I have bought some coins and put on my seat belt.

Up or down. Let’s ride.

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Predicting the price of bitcoin

The price of bitcoin is not like the price of a company’s stock, or the value of a currency, or even the price of gold. A company’s true value changes in relation to its surrounding industry sector, the performance of the sales of a product, or the changing of management. There is no technical difference between the Euro and the Dollar. More gold can even be produced by investing in mining the Earth’s crust for more gold.

Bitcoin is technically unique. It is the first, most battle-tested, most secure, and largest, decentralised currency. And unlike gold, or any other commodity, there is an absolute hard limit of 21m bitcoin that can ever be produced. Any other object in the world can be produced more of, by investing time and human labour to produce it. There are techniques to producing arable land from desert; sea water can be desalinated to make it drinkable; asteroids can be mined for gold – it’s not easy, but it’s all technically possible. But no matter what we do, we will never produce more than 21m bitcoin. This leads to the conclusion that bitcoin is the first truly scarce store of value (Saifedean Ammous, The Bitcoin Standard).

Coupled with the utility that bitcoin can also be used as a near-instant digital payment system, this has led to valuations of bitcoin, based purely on its utility, of over $1 million. For example, [one research paper]( valued each bitcoin as $5.8 million. [This other valuation (page 1 of 7)]( puts it at $4 million. Many others have valued one bitcoin as over a million dollars, taking into account the current size of the gold market, current size of the broad money supply, etc. Bitcoin is technically superior to them all, due to the elimination of trust, and the absolute scarcity. Bitcoin and even the crypto market in general is still [extremely small](

I believe the price movements seen thus far are bitcoin breaking through dollar price barriers, on the way to its eventual multi-million dollar valuation. There are four major notions to bear in mind:

1. The only factors that influence the price of an object are the true value of it (i.e. how useful it is to humans), and how valuable humans think it is. In other words, the object itself, and the humans that buy/sell it.

2. The technical usefulness of bitcoin hasn’t changed (it has, in fact, improved).

3. Since the invention of bitcoin, the human mind has not changed.

4. Due to psychology, immediate price movements of a product influence a human’s perception of the value of the product, i.e. regardless of the usefulness of the product itself, if the price is going down, an average human is more likely to sell, if the price is going up, a human is more likely to buy.

For example, if I told you about a company who’s shares have gone from under $2000 dollars, to $7000 in a year, that’s over 250% yield in a year, which you’d no doubt agree is a stellar investment. But I’ve just described bitcoin’s yield in the last year. People forget that fact, because when they see the chart, they see [this](

If you were trying to assess the investment opportunity of bitcoin in July 2013, you would be looking at [this graph](

Trying to assess the investment opportunity of bitcoin today, you’re looking at [this graph](

The similarity is striking. Based on the notions I’ve just stated, I believe that the pattern of what has already happened will essentially happen again. The conventional mantra of “past trends do not guarantee future performance” is a statement that investment companies need to tell people when they try and guess stock price movements. Bitcoin is not the same as any other conventional investment at the moment, and the phrase does not apply. Bitcoin is a newly-discovered commodity. Everything is the same as it was in July 2013 – the product is the same and the humans are the same. Except for one crucial factor. Bitcoin’s price is now of the order of $1000 instead of $100. The price movements are becoming “slower”, i.e. the graph is becoming more “stretched”, because bitcoin is closer to its true valuation in July 2018 than it was in July 2013. It’s a curve approaching a true value – see [this log graph]( of the entire price history and you’ll see it’s actually becoming less volatile overall.

In terms of the many “crashes” that the price has gone through, I believe that this is down to human psychology. Again, nothing changed about the technical utility of bitcoin to force people to sell. There was no CEO fired, no technical fault that was discovered about the blockchain, there was no product released that was a big flop. Bitcoin remained the same. Indeed, the biggest external shock to bitcoin has been the bankruptcy of Mt Gox, which was handling a staggering 70% of bitcoin trades before it went bankrupt in February 2014. What did this do to the price? [It was hit, but not as much as it was hit a few months earlier, at the end of 2013](

So what happened at the end of 2013? It was the first time bitcoin was priced at over $1000.

Powers of ten, especially powers of ten of the dollar, which is the most common currency of bitcoin trades, matter hugely. Imagine living in a world where bitcoin had only been worth tens of dollars, then suddenly it’s over a hundred dollars. It looks expensive, so you sell. Why do shops sell things at $9.99? Because $10.00 looks expensive. Why do people say “you look like a million dollars”? Why not “you look nine hundred grand”? If you told someone “you look like nine million dollars”, they’d ask, “why not ten million dollars”? People think in terms of top tens, centuries, millennia. There’s a TV show called Who Wants To Be A MiIIionaire, where the top prize is exactly $1,000,000. If the top prize was $999,999 it would be frustrating. If it was $1,245,379 it would be arbitrary and weird.

Human psychology of the power of ten is the only reason for bitcoin’s major crashes. If you look at the [all-time log graph, overlaid with dollar powers of ten](, you’ll notice that every single time bitcoin breached a dollar power of ten, it looked expensive, so people generally stopped buying and started selling. It’s that simple. Obviously the pattern won’t be perfect – sometimes a whale will come in and temporarily force the price to well over a power of ten before it crashes back down. But the fact is that every time it breaches a power of ten, it looks expensive, so it will be sold until it drops below that power of ten.

What about non-dollar power of tens? In April, a strange price movement happened which looked like a mini-crash, yet it wasn’t associated with a dollar price mark. You’ll probably be able to identify the price movement [here]( It just so happens that [this mini-crash happened at the 1 million Yen mark]( It was the first time it had crossed that value in over a month – Japanese buyers must have seen this, then piled in. It looked expensive to the holders, so they sold. The effect is reduced in scale because the Yen isn’t used as much as the dollar – but the effect is the same.

Looking at 2013’s crash – the time from breaking through the dollar power of ten barrier and the low point was 3 months. 5 months after that, it had breached the next power of ten, before enduring a longer selling period (the longer selling period is because of people’s reluctance to sell something that has just broken through 2 powers of ten. People look at linear graphs, not log graphs). Comparing to the crash we’ve just gone through, and assuming that we’re recovering from the low point now (as it looks like we are), it was around 6-7 months from the power of ten mark and the low point (around twice as long as in 2013). [See comparison]( Assuming the pattern roughly repeats, I estimate that around July-August 2019, bitcoin will be valued at $100,000. It will peak just above that (maybe $110,000), then endure another very long selling period of several years (someone who famously made a bet about eating part of himself will (un)fortunately lose), where it will reach a low of around $20,000 to $30,000. The cycle will then repeat again, but even slower – it will climb and eventually break through the million dollar barrier, slowly crash below it, then slowly climb possibly to the ten million dollar mark, where it will gradually fall below and settle at its true value of 4-5 million dollars, per the valuations above.

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