“Due to inflation 420 has gone up by 69”, Elon Musk’s obsession with amusing numbers may rule cryptocurrency market
Elon Musk never fails to anticipate and shock his followers by his humor and different memes. On Sunday, the CEO of Tesla Inc and SpaceX tweeted, “Due to inflation 420 has gone up by 69”.
It is maybe not related with his obsession with the funny numbers like 420 and 69. 4/20 which mean 20th of April is considered to smoke day aka day and exactly after 69 days of it, is Elon Musk’s birthday which he made fun of in his tweet once earlier but is total nonsense in context of his latest tweet.
There are more chances that his tweet is in the context of institutional traders and Investments as cryptocurrency exchange FTX owned by Sam Bankman-Fried has recently raised funds of $420 million from a total of 69 investors which also includes big names like Singapore’s massive state investment company Temasek and the Ontario Teachers’ Pension Plan Board.
Moreover,the tweet can also be in the context of the high record set by Bitcoin of about $69,000.
Former Odd Lots guest and Spectra Markets trader Brent Donnelly has asked the cryptocurrency traders to look at the meme world’s love of silly in a different way and try to embrace and inherent this big round of numbers into their strategies. He looked into the transactions level data of Bitcoin and brought the attention to the fact that the Bitcoin’s highs and lows are much more likely to fall on round numbers, or those with a ‘00’ or ‘50’ in their last two digits. The ‘420’ is not big to be statistically significant yet the emphasis of Musk on it is unknown.
Elon Musk admires and is a part of meme investing and the internet silliness. The amusing numbers and round figures can be dismissed as pure nonsense but according to him, this silliness can bring change in the brave new world of cryptocurrency so traders and investors who recognize the worth of this and embodies it into their strategies can have an advantage over those who don’t.
Donnelly, at the end, said, “The takeaways are simple once you know where the uneven parts of the distribution lie. If you leave an order to buy bitcoin at, say $47,301, you are statistically more likely to get filled than the person with an order at $47,300 or $47,299 because the majority of buy orders will be on the round number at $47,300. Most days, you’ll probably get filled at any one of those three levels, but the occasional time you get filled at 01 when you would not have got filled on or below the round number can have a big impact on your performance. It can be the difference between a red or a green P&L day.
On the flip side, if you are leaving stop loss orders, always leave them on the correct side of the round or meme number. Sell stops should be below 00 and buy stops should be above. Anyone leaving a bitcoin sell order at $69,501 this week probably doesn’t know what they are doing. On the other hand, the ones that sold at $68.998 are probably expert traders that understand markets, memes, and crowd psychology.”
