”Macro-scale quantitative market analysis”
T Quantitati In `tor MARCH 14, 2021
VOL.I. . . No.50
BC ANALYTICS, LLC
Abstract By BENJAMIN J. COWEN, PHD
You have jumped into the cryptoverse! Welcome to the 50th edition of The Quantitative Investor, a weekly newsletter for those who want to dive deep into the metrics of various financial markets, with a focus on cryptocurrencies, and visualize data not often presented elsewhere. The main objectives of this newsletter are to graph key metrics, identify any trends or correlations, and present the data which will help the reader understand long-term price movements. This report is strictly not financial advice and should not be treated as such. Instead, it is focused on analyzing historical data, presenting the data in a manner which is informative, and making a few projections Figure 1: Binance Coin price vs. time with a color-coded risk based on mathematics alone. The reader is still expected to do dimension. their own research when it comes to investing, especially within the cryptocurrency asset class.
Binance Coin Risk Metric
Fig. 2 shows the Binance Coin price (primary y-axis) and risk (secondary y-axis) vs. time. Now you can clearly see the BNB price spikes that occasionally happen. This figure clearly shows how little time BNB tends to spend in the upper risk bands; in fact, BNB spent years below 0.5 risk (from early 2018 until only recently). Based on the risk chart, it does seem like BNB still has some potential upside within this bull market, notwithstanding a Bitcoin capitulation.
By popular request, I am adding the Binance Coin (BNB) risk metric to the risk dashboard. This coin is likely going to be in the top 10 for quite some time, and thus merits a dedicated risk metric for guidance in navigating its volatility. Fig. 1 shows the Binance Coin price vs. time with a color-coded risk dimension. BNB actually has a fairly interesting history, with the risk going to the 0.9-1.0 risk band in 2017 and then a few months later in 2018. Recently, the risk surged up to approximately 0.8 risk before having a slight retracement. The current risk of BNB now sits at approximately the same level as many of the other major altcoins we follow, which is now in the 0.6-0.7 risk band. I have discussed BNB in some prior premium videos; my thinking on this coin is that it is here to stay, and will not likely be dropping out of the top 10 anytime soon. An investment in BNB sort of follows a similar line of thinking of investing in people; namely, in this case it would be CZ, the CEO of Binance. Binance is one of the most popular exchanges (if not the most popular) so I do not see BNB fading into obscurity Figure 2: Binance Coin price (primary y-axis) and risk (secondary y-axis) vs. time. anytime soon.