TheSocionomicsProdigy Post #1 Dogecoin (DOGMONEY) and how I knew it will top on 29 April, 4 days in advance of 03 May 2021. And what about now?
Dogecoin had a phenomenal bull-run during 2020-2021, growing by about 15,600% in a year or less. Figure 1 below also shows that despite the decline from nearly $0.60-$0.70 (different tops on different exchanges from $0.60 to $0.68) to $0.06, dog money is still 12,600% up since the token's inception date. The key thing however is that not many people have obtained these 12,000%. Most people who followed Elon Musk probably bought at $0.20 to $0.60, leaving them at least at a -55%-90%. This is to show the so-called effect of FOMO, which leaves those who follow to be REKT. One good question from here is, does the fact that no one is talking about dog money, actually represent an opportunity to buy a puppy (in this case doge). Before we consider this, let us first examine the dynamic around the 2020-2021 rally and how it was obvious at about 29-30 April 2021 that it will come to an end (and soon).
On 29 April, YouTube gave an euphoria signal in one video specifically dedicated to putting all capital in dog money (see Figure 1 below). To me this was the first sign that Dogecoin's run might be coming to an end. This one video literally explained that the answer to everyone's problems individuals and governments is to put everything in dog money (see Figure 2 below).
Figure 3. Elon musk flying a rocket with doge
Together, these represent a fun way to illustrate one thing - how tops of market prices are formed. In other words, these videos are not random and the fact that they are about 4-5 days and about $0.10 cents away from the actual market top is also not random.
There are similar videos about "Bitcoin millionaires" and others near the $18,000 before the eventual $20,000 top of Bitcoin in 2017. There also, some of 2019, which are about $1000-2000 away from the actual bottom of the Bitcoin (like "Bitcoin please go to moon" or "look at all my sh$t coins" ).
The "everything bubble end" indicator
In retrospect, this was actually a much more meaningful signal, that the top of tech for 2021 was in or getting close to be in. Indeed as predicted by my e-book, by the end of 2021 we had already began a market crash that lasted through the entire 2022 as well.
Looking for tops in the market based on YouTube videos may seem like a weird approach. Definitely, no investment theory would suggest there is any predictive power in this. However, is there?
Socionomics theory
Socionomics Financial Theory (SFT) proposes that in any financial market, where participating investors are uncertain of other investors' valuations about the same instruments, the pricing of the underlying investment becomes mostly non-rationally determined, subjective, ceaselessly dynamic, motivated by herding, and regulated by waves of social mood.
In this case, there was herding to become a Dogecoin Millionaire and to be as smart as Elon by buying dogecoin at a higher price than he bought. So it was somehow logical for people that they would make a profit and a killing when buying after a person who has not been known for his investment wisdom. In a way, this clearly shows that people were using Elon Musk's tweets as the way to price the investment of Dogecoin and assuming that by posting he knows better than them. Some even sold their other coins to join the Doge revolution and become millionaires quickly. Well, non-rational, herding leads to one outcome and that's the one shown by the chart of dogecoin. As usually, the smart money probably bought around COVID-19 and was out by the time it was up and retail was buying. Retail, on the other hand was left with holding the doggie bags at -80% to -90%. Now retail is likely totally discouraged (as there aren't any "buy doge to become a millionaire" new videos, and this signals a type of a bottom like in 2020/
That's all very interesting but that's all about the past so what about now. Well, let's try to make an experiment as of now. As of now, Elon Musk has had only 1 tweet about Dogecoin in the last 2 years. Will the meme king of Twitter return Dog money back to glory?
Testable Hypotheses:
Hypothesis is an assumption or an idea proposed for the sake of argument so that it can be tested. It is a precise, testable statement of what the researcher predicts will be outcome of the study. It is an integral part of the scientific method that forms the basis of scientific experiments.
Unlike those in an experiment, these are called - directional hypotheses
They specify the expected direction to be followed to determine the relationship between variables and are derived from theory. Furthermore, they imply the researcher’s intellectual commitment to a particular outcome.
Below I have outlined my 7 directional hypotheses based on this piece. I like hypotheses as a tool to outline statements which can be turned into a testable prediction. After all, we all have our hobbies and mine is to write research and test my own hypotheses.
Hypothesis 1: Dogecoin will grow to at least $1
Hypothesis 2: Dogecoin will top below $10
Hypothesis 3: Elon musk will tweet about Dogecoin at least 4 more times by Q1 2026
Hypothesis 4: Every time Elon Musk tweets about dogecoin, the token will increase in value by double digit percentages
Hypothesis 5: The top of the next crypto cycle will come by 2025-2026 and will be indicated by a set of two or three songs which appear about dogecoin or another cryptocurrency, showing the same type of euphoria as was had in 2021 about dog money (something new to put all our money in or to be millionaires from are likely to be the key themes)
Hypothesis 6: The top will not be marked by the appearance of one video, but at least two or three which all appear days/weeks from each other
Hypothesis 7: These videos might not even be about the same topic (like in the case of a song about Elon Musk which has him as the Dogeking and a song about Dog Money)
Hypothesis 8: Bitcoin mining stocks will top first and signal the top of crypto markets even before these songs, which will given an even earlier indication about the Bitcoin and other digital assets topping price
The purpose of these hypotheses is for me to summarize my opinion in a few statements, test them and write subsequent pieces in which I discuss whether these hypotheses were accepted or rejected, as a requirement of the scientific method to be valid and a continuation of this hobby.
Implications for personal investing
To be fully transparent I do not own dog money. This is because I do not like the idea of meme tokens which are promoted online be it by a famous person or not. In other words, while I do invest in Tesla stocks (you can read here) as I believe Elon Musk and Tesla will continue to deliver outstanding returns for the at least next 10 years, I do not believe in Elon Musk as the "intelligent asset allocator" who has selected the ultimate token which will become the backbone of commerce.
Even Newton, whose laws of physics I am sure most of us studied at school at one point or another and then forgot ("like every action has an equal and opposing counter-action"), is known for losing all his money in the stock market (by investing in a company which lost -99% from it's top and never recovered). This is to indicate that a genius physicist may also be wrong about markets and lose his entire wealth on one bet because he assumed he was a genius in more than his area of expertise. To me, investments aren't the area of expertise that Elon has, so I would not believe any of his views on what he considers good tokens and blockchains to invest in. I do however have full trust that he leads Tesla as a company in the right direction, which is likely to benefit my ownership of Tesla stock. If you would like to read more about my views on Tesla you can do it here for my views for Tesla stock by 2030-2033 and here for my expectations about Tesla stock to 2026-2030.
I will post more pieces about the blockchains and digital tokens I like. For now, I leave you with Figures 5,6,7 which visually summarize the different tokens I like (which are in line with BIS/IFM/WEF views about the use of Blockchain and tokens to "tokenize the world and the financial system" as well as in line with the views of other key world financial authorities, regulators and central banks and even IT consulting firms like Accenture). As it can be seen firms like SAP, IBM and JP Morgan are some of the well known companies integrating with this system. Would I prefer to make my own decisions to be made based on research by companies like Accenture about the potential of tokens like XRP to revolutionize the world by providing efficiencies and cost-benefits to e-commerce and the banking industry, or would I prefer to make my decisions based off Elon Musk's tweets? Well, I am an evidence-based decision-maker, so I will not be following the dogmoney tweets not be part of its FOMO. My riskiest investment would still be in one of these CBDC complaint tokens, for instance, I'd favor Sologenic as a much more profitable risk/reward opportunity. You can read more here. If I had a 1000x token, it'd be Sologenic and if I had a new Bitcoin, it'd be QNT.
Figure 5. CBDC Architecture and blockchains + tokens
Figure 6. Protocols of each blockchain, tps (transactions per second), transaction costs
P.s. to the question is dog money an investable opportunity? For me, no, but it would not surprise me if it grew by more than 10-12x from about $0.08 to about $1. If I add in the unknown move of the FOMO hype, I could speculate that this becomes a 20x to about $2. However, as I mentioned, to me there are far more reasonably priced tokens based on their fundamental value in a system/network of CBDCs relative to dog money.
Reminder
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Disclaimer
No one should buy or sell anything because of anything I post inside my blog. This is all that it is, a way for me to track my own thoughts, organize my research and share my unique opinions. Any opinion posted on this blog is just that - an opinion. The purpose of these pieces are to act as a motivational information tool. This is a blog about my life goals and the decisions I use to try to achieve them.
Nothing on this Blog constitutes financial or investment advice, a recommendation that any security/cryptocurrency, portfolio of securities/cryptocurrencies, other investment products, transaction or investment strategy is suitable for any specific person. Every person has unique personal circumstances, financial situation, goals, and risk capacity. No one should use the content of this Blog to make financial decisions.
In short, nothing in this blog is financial advice! Do your own research & Do your own due diligence. If you have investment questions, I highly recommend you seek help from an authorized (regulated) financial planner, which I am not.
