thecoinrepublic.com
- Tesla CEO and internet provocateur Elon Musk tweeted that there’s a propensity to reject a lot of memes as absolute rubbish, such as the preoccupation with funny numbers like 420 and 69
- Brent Donnelly, a former Odd Lots guest and Spectra Markets trader, has urged crypto traders to embrace the foolishness and use the meme world’s love of goofy and large round numbers into their approach
- Stop-loss orders, on the other hand, should always be placed on the correct side of the round or meme number. Buy stops should be above 00 and sell stops should be below 00
Tesla CEO and internet provocateur Elon Musk tweeted that there’s a propensity to reject a lot of memes as absolute rubbish, such as the preoccupation with funny numbers like 420 and 69. However, there is mounting evidence that they are beginning to matter for institutional traders and investors. For example, Sam Bankman-crypto-exchange Fried’s FTX recently received $420 million in capital from 69 investors, including major heavyweights like Singapore’s Temasek and the Ontario Teachers’ Pension Plan Board. Bitcoin’s record high of roughly $69,000 makes sense when seen in the perspective of online pranks.
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Brent Donnelly, a former Odd Lots guest and Spectra Markets trader, has urged crypto traders to embrace the foolishness and use the meme world’s love of goofy and large round numbers in their approach. He shows that round numbers, or those with a 00 or 50 in their final two digits, are far more likely to fall on Bitcoin’s highs and lows, based on transaction-level data from Gemini. While it’s easy to dismiss hilarious numbers and round figures as pure online nonsense, the point is that in the brave new world of crypto and meme investment that Elon Musk so brilliantly epitomizes, internet nonsense might matter. Traders who notice the nonsense and use it in their methods may have an edge over those who do not.
Once one knows where the uneven areas of the distribution are, the takeaways are straightforward. Because the majority of purchase orders will be on the round number of $47,300, if you leave an order to buy bitcoin at $47,301, they are statistically more likely to get filled than if they put an order at $47,300 or $47,299, because the majority of buy orders will be on the round number of $47,300. Most days, they will likely be filled at one of those three levels, but getting filled at 01 when one normally would not have been filled on or below the round number might have a significant influence on their results. It can determine if a P&L day is red or green.
Stop loss orders, on the other hand, should always be placed on the correct side of the round or meme number. Buy stops should be above 00 and sell stops should be below 00. Anyone placing a bitcoin sell order at $69,501 this week is most likely inexperienced. The ones that sold for $68.998 are most likely professional traders who are familiar with markets, memes, and crowd psychology.