Willy Woo seems like a high stakes altcoin gambler.He’s typically trying to find insane 100x to even 1,000 x gains, and he’s ready to stomach the type of volatility that might eliminate three-quarters of his portfolio’s worth over a few weeks.And while daily investors might be bewildered by those concepts, it’s not too unexpected for Woo, given his background.While now best known for his innovative viewpoints on cryptocurrency, Woo got his start in the trading world buying derivatives throughout the run-up to the 2008 financial crisis– he began shorting bank stocks right before the banks collapsed. And that experience offered Woo a pretty solid understanding of the best ways to trade markets when they’re at their most volatile. Plus, with a background coding as a teenager, it’s no wonder Woo was drawn to cryptocurrency.It was best around the
time bitcoin struck the$1 billion mark that Woo got thinking about crypto, shortly after transferring to Bali, where, as he explains it, he “decreased the bunny hole.” While his first venture– similar to other investors simply getting in– was bitcoin, he’s given that altered his tune, deciding the real action
is in altcoins( alternative cryptocurrencies). “My specific portfolio is extremely, really high gain, high danger. It’s extremely unpredictable, “stated Woo.Data explorer Even still, he’s got a pile
of data to back up those threats as the ideal choice. “Under the data that I have is that the majority of coins when they release that are effective
, they produce a specific chart,”he stated, pointing to the Falcon 9 rocket launches as a visual.”The images reveal the rocket releasing up with this high trajectory and then it levels off and continues moving progressively up.”Although, trying to find those breakouts features some gnarly lows, too.But to Woo,” We’re not trading here. We’re investing. We’re going to put it in a drawer like an investor does.
“For him, buying cryptocurrency isn’t really about short-term trading gains, however about longer-term investments. Due to the fact that of this, Woo mostly focuses his attention on the “early launch” of cryptocurrencies, where the trajectories are steepest, wishing to get the 10x to 100x trajectory that a few of the finest coins have actually had during their initial run.Woo thinks that chasing after those sort of returns will be much more profitable in the long run than the “dull”300 percent to 400 percent annualized returns that bitcoin is now generating.And then, once the coins grow– generally rising to the variety of
around half a billion dollars– that’s when he starts seeking to exit.But even without that investment thesis, Woo has data that reveals significant returns even if you’re simply investing blindly in all altcoins.
“Even if you were n’t filtering the shit from and buying whatever under the sun when they released– all 700 approximately coins– even the fraud coins, actually it’s near a 50/50 split where 50 percent was underperforming bitcoin, but around HALF was surpassing bitcoin.”Mathematics behind the insanity It’s the data behind Woo’s financial investments that would make most crypto financiers drool, as his strategy takes motivation from an even deeper set of computations than just market cap.For circumstances, Woo is a major consumer of blockchain explorers like Blockchain.info, utilizing stats like
mempool, connection rate,
trade volume and miner income to judge the health of a network.With that in front of him, he then imagines the data and looks for patterns to emerge.Woo generally operates in metaphors and examples, trying to find ways to compare the cryptocurrency to other things. He might ask himself: if bitcoin fulfills a comparable role to PayPal– facilitating digital payments– what are the metrics one can use to measure bitcoin’s potential?Woo has actually been searching for a crucial criteria ratio for cryptocurrency for some time, one that will provide the very same kind of insight that the cost to incomes ratio( P/E )offers for equities.
While a financier can analyze the marketplace capitalization of a coin as the cost, the essential 2nd part, the revenues, isn’t really available in the cryptocurrency space.The next closest proxy, inning accordance with Woo, is sales– or, when it comes to PayPal or bitcoin, the total worth of the deals that ride on their networks.”I treated that as the closest thing we’ve got to a price to incomes [ratio],”Woo said.By using that kind of P/E, he continued:”You can just start to look at it to see if it stands. Does the valuation track the deal going through it? When you comprehend that information, you can aim to see where it’s pumped and where it’s dumped in the past.
“While that’s a good starting point, Woo doesn’t stop there– not when there are other data points that can be mixed and matched, developing new ratios and brand-new data metrics, searching for the golden ticket that will enable him to anticipate with more certainty the best ways to invest.” I’m just attempting strange things, here’s some information here, exactly what if I tinkered it in this method?”he said.Rails over train cars and trucks All that information crunching has actually left Woo focused primarily on cryptocurrencies as procedures.”For the very first time, we can purchase these procedure stacks and any app that’s built on them, you get a [sort of] cut,”stated Woo, adding:”You can purchase the property in which individuals plant down their companies.”And with that thinking, Woo does not worry much about buying applications. In his mind, the applications that ride on blockchain procedures are beginning to look more and
more like Silicon Valley startups– where nearly 10,000 launch per year and just a handful prosper, with only one ending up being a unicorn like Facebook.That, he believes, is
a far more speculative play, than purchasing the base-layer procedure cryptocurrencies.This risk also keeps Woo away
from many initial coin offerings(ICOs )as well, a not often heard technique in today’s crypto space. Rather of long-lasting financial investments, Woo sees
most application specific tokens as merely”FOMO-nomic “(playing off the acronym”
fear of missing out”)hype.So for Woo, it’s all about the long-term “HODLing”pattern with tokens that provide the rails for application train cars.And sure it takes some preliminary due diligence– Woo promotes looking into the founders and consultants to see whether any big names are prepared to put their track record on the line for the project, as well as costs time in associated social channels and forums.But in the end, Woo’s viewpoint after buying is simpler.” When you’ve done your due diligence, you pretty
much rest on it for six months to 2 years and ride out the bumps.”The leader in blockchain news, CoinDesk is an independent media outlet that pursues the greatest journalistic requirements and abides by a strict set of editorial policies. Intrigued in offering your expertise or insights to our reporting? Contact us at [email protected]!.?.!. Disclaimer: This article ought to not be taken as, and is not planned to supply
, investment suggestions. Please perform your very own comprehensive research study prior to investing in any cryptocurrency.