The oscillator and degenerator hypothesis | Altcoin Investment

The oscillator and degenerator hypothesis | Altcoin Investment

By arcanu | Breaking Down Value | 30 Dec 2019


Confidence, not in an arrogant way, but in a realistic, secure way is always a bonus.

I always feel inspired and admire people that marry a blockchain project, and might have 90% or more of they're portfolio invested in only one coin. There are projects I support, although I’m more about diversifying my portfolio. But someone with this kind of fidelity and trust inspires me to research and try to understand why so much love, and trust in the project future growth.   

I understand people married to Bitcoin. It's impossible to deny the power, even if some altcoins already surpassed BTC, from a technical standpoint. Recently I came across a guy that dislikes BTC. He doesn't care if the BTC is valuable or can be even more so, he doesn't believe in its design and performance, considering the practical and technological aspects. He’s married to XRP. I dig this kind of passion. I feel the same about cryptocurrencies and the fiat scam.   

When we are choosing an altcoin to invest in, we should analyze and check the Crypto and Blockchain Project. There are factors to take into consideration like the qualitative and quantitative approach of the project, before investing. 

The first goal is to understand the team background, vision, technology, and the overall potential of a project on a mid to long term. These are the first steps to take if you don't want to invest in a scam. Value creation, the ability to solve problems, short-medium and long term vision are important factors that determine if a company is worth our time, money and thus be a good investment. 

Industries change and grow, and also the techniques for cryptocurrency analysis change. Nothing is bound and determined, and the parameters for evaluating projects mirror those changes.  

Here is an article I find useful for those who are trying to learn to analyze and understand if a project is worth investing in. How to analyze and evaluate Crypto and Blockchain Projects PART 1: Qualitative Factors  

The oscillator and degenerator hypothesis

Many if not a majority of altcoins/tokens provide little-to-no tangible value or even real-world use, and will in due time die. I'm not a BTC maximalist, but there's so much noise out there... However, many cryptocurrencies are providing real-world utility on blockchains with tangible value on key industries around the world. Altcoins benefited from the last bull run and cryptoheads are expecting alts to mimic this trend again — we may be very disappointed!? I hope not!

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The oscillators and degenerators hypothesis were inspired by Willy Woo, a famous early bitcoin adopter, analyst, and crypto hedge fund partner.  Although altcoins are nuanced, Protocol, Utility, Security, Non-fungible, in the investor perspective there are only two types of alts. Oscillators and Degenerators! And the vast majority of alt-coins are degenerators, and only a small handful are oscillators. In order to qualify an alt has an oscillator:

Oscillators, indicated by their name, oscillate with BTCUSD, and follow bitcoin’s price performance closely. Consequently they’re notably correlated with bitcoin. Oscillators also contain Store-of-Value (SoV) properties. To qualify as an oscillator, an altcoin has to follow bitcoin’s performance for at least one bull-bear cycle.

Oscillators are usually supported by Lindy Effect, indicating they’ve been around for a while and the probability for them to survive grows with every consecutive year of existence. The Lindy Effect is a theory that the future life expectancy of some non-perishable things like a technology or an idea is proportional to their current age, so that every additional period of survival implies a longer remaining life expectancy.

Most of altcoins and tokens qualify to the degenerator segment. These digital assets were by default following the 2017 bull cycle, but have lost traction since. These digital assets did not follow bitcoin’s Q2-Q3 2019 bullish reversal pattern and they’re are weakly correlated with bitcoin.

The visual imagery of a Degenerator and an Oscillator

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According to Willy Woo, if you plan on investing in altcoins, it's critical to determine an oscillator from a degenerator, oscillators are good to enter and exit to stack more BTC, never HODL a Degen, and be cautious with coins younger than one full cycle. 

 

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ETH and LTC are oscillators.

Doge is an oscillator!!! (:  

BAT, XRP, XLM, EOS, DASH, DCR are some potential oscillators...  

NEO, for example, is a degenerator. It has a relatively high correlation with Bitcoin but doesn’t follow BTCUSD and it’s lacking fundamental SoV attributes.   

Forecasts about forecasts

What is certain is that to predict the markets is to make forecasts about forecasts, and if it was an exact science and easy we would all be rich! In a time where Bitcoin, more than ever, acts as the source of liquidity to the market, I think it's wise to divide altcoins into oscillators and degenerators. Along with all the tools we already have available for conscious investments, this is a good instrument for estimating their viability and added value as alternative investments. 

 

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Fiat dual role, store of value and medium of exchange, has been creating huge gaps between financial and labor classes, leading to a perversion in government policy with economic and humanitarian consequences. I have faith in a new monetary system, but will with time, the scenario that led us to a decaying fiat system repeats in a maturing digital asset space?

Once again I say I always feel inspired and admire people (oscillators) that marry a blockchain project and against all ods place their 'trust' in projects with a real-world utility, and tangible value on key industries around the world, over the ones that promise instant profit and 'over the moon' hype. 

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What are the projects that have your full support and that you are passionate about?

And what alts fulfill the requirements for oscillators and will survive gracefully in the near future, IYO?

 


arcanu
arcanu

Musician, writer, crypto/blockchain enthusiast, ​Free Crypto Hunter, and fauceteer.


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