Crypto Quantic PhD: "Once I Saw the Life-Changing Potential of Crypto, I Was Hooked."
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Last Monday, we posted a link to the "How to Be Prepared for the Coming Altcoin Bull Market" article to our Telegram channel. In fact, we liked it so much that we decided to ask the author, Mr. John Wilson (Crypto Quantic Ph.D.), for an interview, and he kindly agreed.
—Mr. Wilson, on your Medium profile, you're positioning yourself as a "cryptomaximalist." When and how did you first encounter the cryptocurrency market?
I first became aware of crypto a few years ago when I had a friend do quite well in bitcoin. Unfortunately, I thought I was "too late" at the time. I then got seriously interested in crypto after I had started trading this year. Once I saw the life-changing potential of crypto, I was hooked—now it's just about all I think about outside of my day job.
—So, was it bitcoin or one of the altcoins that you decided to invest in, and with what amount of money did you start trading?
I started with bitcoin and quite a small amount. Since I heard stories of people losing money trading, I made a rule for myself; I would only invest what I could earn on the side with my writing. I did a couple of freelance articles, and that was my only injection of "fiat" into crypto. I see in groups people want to sell their house or take out a loan, but the potential returns in crypto are large—there is no need to "go all in" in order to be successful.
—You're an atomic physicist. Moreover, your nickname contains the "Ph.D." part. Do you hold a doctoral degree? If so, how does that help you in making investment decisions?
Yep, I have my doctorate in atomic physics! I think it has helped, my training as a scientist has helped me take an objective look at the market, and I am comfortable with charts and data analysis, so it was natural for me to dig in and try to understand how markets work. It is endlessly challenging and rewarding at the same time.
—While your studies, did you take any Economics or Finance electives?
No, I am entirely self-taught in the markets. My interest in markets actually started as a child when I was given a book for Christmas. That led me to buy a couple of shares of stock as a kid that did quite well (wish I had bought more!), and I have been interested ever since.
—Could you recall the name of the book so that our subscribers who are parents could help their children with their financial literacy from the very beginning?
I am a big believer in education, especially Economics for kids! I can't recall the name now, but there is an excellent resource with good reviews for that—a book and a website called "Blue Chip Kids."
—You said you were building Python-based quantitative tools for traders. Could you please elaborate on how exactly one could find and utilize those? Is there a website where you store them and are they available free of charge?
I am building some tools for my own use, and as I get them to work, I'll release them to my group and put them on my website, which is not really live yet. There are two projects I am working on. One is just a better order management. For example, I often find myself awake at 2 AM watching a trade. I might set a simple "stop-loss," but what if I want a trailing stop, or I want my stop to track a trendline? Also, on some exchanges, you can't have a "stop-loss" and a "take-profit" orders at the same time. The other thing is tools to scan crypto for trade setups, looking at the volume or other indicators and sending me alerts. With over 1,200 coins, it can be quite a chore to monitor.
—Are you developing those products by yourself, or do you have a team?
Just me! I currently don't really have any plans to sell anything, and they will probably be open source. I have been "coding" for a long time with my work, but I am far from a professional developer. At some point, I may partner up with my friend who has more professional coding experience—I just like working on the algorithms. The platform I have begun using recently is called "enigma catalyst," which is an open source quant platform for crypto, based on Python.
—The first project will require collaboration with the exchanges. Have you already decided which ones you'd like to partner with?
Most exchanges have an open API that is available, and enigma has exchange support built in, so thankfully that part is not too bad! But I am focused on Bittrex first.
—Yesterday, the bitcoin price hit a new all-time high of $10,000. What are your three bitcoin predictions for the upcoming year?
Yipes! I think we might see a currency challenge the "throne," i.e., overtake bitcoin. I think we will see ICO fever die off a bit, and I think we will see the market mature more to the point that not every random altcoin will "go to the moon," but certain classes of use case, such as privacy, payment, and gambling will do very well.
—Which digital currency do you believe is most likely to "dethrone" bitcoin? Why?
I hate to take a guess at that. It could be the one nobody saw coming, but I think the "civil war," if you call it, and the multiple forks have begun to weaken the brand of bitcoin. People are confused and don't know what to believe. These markets are driven by emotion—and brand confusion is not a good thing! The competitors all have their own flaws as well, so it will be interesting to watch. There seems to be a running joke that it will be Dogecoin, which is why I used that as the icon for my group!
—Even more brand confusion is probably coming as the Bitcoin.com founder has stated he would make his effort to ensure bitcoin cash is considered the "real" bitcoin...
Exactly! And look at the price of bitcoin cash today. With all the forks, one bitcoin is now worth well over USD 10,000!
—In one of your articles, you said that the altcoin bull market was coming. If you were to invest $10,000 in five altcoins today, which ones would you pick, and how would you distribute that amount between them?
I made myself a rule not to recommend specific coins because I don't want anyone to lose money buying something I recommend! So instead, I will tell you the process I follow:
The first thing I look at is the market cap. Sure, the overall crypto market cap will probably increase, but I'm not relying on that. Instead, I look for coins that would need to 5 or 10X just to be competitive with similar currencies that are already succeeding. Here is what I look for:
Step 1: Look for coins in a popular use case category—payment processing, privacy, gambling, etc.
Step 2: Look at the top market cap coins in that category.
Step 3: Look for valid competitors that have significantly lower market caps.
The coins with the most potential may "look" like they are nearly dead, they may be down a significant amount this year, but I want to see evidence that they are stabilizing, i.e., trading in a narrow price range for a while. This often happens before a big move up.
To avoid coins that are actually dead, I look for signs of life like a daily trading volume that is at least 1.5–3% of the market cap. So a coin with a $200 million market cap should see, say, $4 million of daily volume (look for consistent average volume, not just daily spikes).
Now, your entry price matters a lot—don't fomo in. You can watch for a solid break of a critical level and buy on confirmation. And be sure to set stops. I am not a fan of "HODL no matter what." It's better to get out when things aren't working out and look for another chance to enter than to ride the trend all the way down and be out of the game!