What the Italian Referendum could mean for the price of Bitcoin

bitcoin, Bitcoin Trading


With the Italian referendum approaching on December 4, 2016, global markets are heating up with trepidation and Bitcoin is once again in the limelight as a potential safe-haven asset.

The referendum, if passed would in effect put more power in the hands of the government by streamlining power of the Senate.  Spearheading the referendum is Italian Prime Minister Matteo Renzi, who has publicly vowed to step down from office if the referendum is unsuccessful. On the flip side, the anti-establishment Five Star Movement (MS5) have used Renzi’s pledge as a conduit to campaign against the referendum and against Renzi himself.

What does this mean for Bitcoin?

If MS5 runs a successful campaign and Renzi steps down, the result would put MS5 in position to grab power and further their agenda; another referendum to leave the European Union and exit the Euro. If successful, this could cause a flood of investors exiting the Euro and into other currencies/assets with Bitcoin being a strong candidate.

We’ve seen numerous instances where such movement has happened, the recent Brexit being the most notable. During the Brexit referendum to leave the EU, we saw favored results to remain. It wasn’t until the last few hours of voting, upon which the votes switched to favor leave and shocked the markets.

Brexit Results
Votes  %
Leave 17,410,742 51.89%
Remain 16,141,241 48.11%

Prior to the vote, we saw the market had priced in a remain sentiment. Upon signal that leave was probable, the markets swiftly reacted, and the Euro and Pound plummeted, while Bitcoin and Gold flourished. Take a look at the charts below from the night of the Brexit vote, June 23, 2016.





The Italian referendum is having similar effects to the markets, however contrast to the Brexit sentiment prior to the vote, the Italian referendum is favored to fail after the latest polling results from November, 18 as depicted below.


A quick look at the EURUSD, 60 chart shows markets have already priced in the sentiment of a “No” prevailing, and a potential future exit from the EU spearheaded by MS5 (note that other factors are playing into the fall of the Euro, including imminent interest rate hike by the FED, loose monetary stance in the Eurozone, etc.).


Conversely, we are already seeing a positive movement in the BTCUSD, 60 chart indicating a positive sentiment in Bitcoin partially stemming from uncertainty in the future state of the Euro.  btcusd-1hr

Trading strategy:

With markets priced for a failure of the referendum and potential increase in power of MS5 and potential future exit of the EU and abandonment of the Euro by Italy (a lot of “if’s” here), traders should watch the polls carefully on Sunday and react accordingly. If the referendum fails as predicted, Bitcoin could see an even greater influx of demand, potentially pushing the price even higher than what has already been priced in by the market. Conversely, if the referendum passes, we could see money move out of Bitcoin, and a price depression as investors regain certainty in the Euro. Traders should watch carefully as much of the country is still undecided and the vote could swing either way.

If you have any questions on this strategy or just want to chat, feel free to contact me at wesdewayne@gmail.com via email or g-chat. For those who have asked, I do most of my trading on Whaleclub where you can use Bitcoin to trade stocks, forex, crypto, and commodities up to 100x leverage. Get a deposit bonus when you join via my referral link (and a nice bonus for me as well): https://whaleclub.co/join/ekOFIO

Happy trading!






What a ban on gold imports could mean for the price of Bitcoin in India

bitcoin, Bitcoin Trading, Regulations
In the wake of the demonetization of the 500 and 1000 Rupee notes as announced by the Indian Prime Minister Narenda Modi on November 8, 2016, in an attempt to crack down on the black money economy; rumors have spread like wildfire among Indian merchants that gold could be the next target of Modi’s wrath.
If the attack on cash wasn’t foreshadowing enough, an amendment bill, just introduced by Finance Minister Arun Jaitley, has called for a 50% tax on unaccounted deposits (black money) or 85% tax if caught.

India, a country which citizens have historically paid only 1% income tax, these changes have brought a serious crackdown to the underground economy in an attempt to thwart black money trade and increase the breath of the tax authority.


Since Modi’s tenure as Prime Minister, he has vowed to cleanse the country of black money and corruption, which accounts for as much as 20% of the country’s GDP. Gold, which India is the second largest consumer in the world, and is one of the primary means to hold unaccounted for wealth in India, is not likely to be far from Modi’s crosshairs.
With the recent spike in demand for Bitcoin in India causing massive disparity in price between Indian exchanges and more mature exchanges in other parts of the world, there is no doubt that the people of India are considering Bitcoin as an alternative means to hold unaccounted wealth outside the reach of Modi’s campaign.  If Modi does in fact enact a ban on the imports of gold, which seems an increasing possibility, the demand for Bitcoin could increase dramatically beyond what we are already seeing for the country.
Consider the volume chart below courtesy of coin dance, which shows that since Modi’s initial announcement to demonetize the 500 and 1000 Rupee notes, Bitcoin volume in Rupees on https://localbitcoins.com/ has increased dramatically.
Week Volume (INR)
11/12/2016 11,192,335
11/19/2016 16,242,585
11/26/2016 27,670,106

Between the week of Modi’s announcement 11/12 and the week of 11/26, volume on localbitcoins has increased a staggering 147%.  Additionally, as reported on CoinDesk, Unocoin, one of India’s most popular Bitcoin exchanges has just released a mobile wallet for iOS and Android. This is incredibly important in unlocking the ability for a potential mass adoption of Bitcoin in India as statistics show that as of January 2016, that of the 375 million internet users in India, 303 million or 81% were mobile internet users.

Considering an import of gold being a likely scenario in the near future, the massive increase in volume of Bitcoin transactions in India, and the technological advances of the Bitcoin exchanges in India; the conditions are a perfect storm to facilitate a massive increase in Bitcoin demand surpassing what we have seen from the demonetization of the 500 and 1000 Rupee notes in the preceding weeks.   If this scenario plays out, an influx of buyers will flood exchanges, and demand could push the Bitcoin premium in India even higher.
This situation presents a unique opportunity for traders in countries with matured, large volume exchanges to offer Bitcoin via Indian exchanges for a premium and pocket the profit. In practice, this is not so easy, as Indian exchanges are currently only trading in INR (Rupees). This makes withdrawal from participants who do not have a bank in India difficult as they cannot withdrawal Rupees, convert to their local currency and repatriate those earnings back to their country of domicile (due to KYC documentation requirements). However, this presents a unique opportunity for those participants to pair with a partner in India who does have an Indian bank account to facilitate the withdrawal and international bank transfer. The pair of individuals would need to come to terms to split the premium gain and could repeat the process until the market corrects itself and prices stabilize.  Note: an arrangement of the sort should only be conducted with a trusted party; look out for scammers.
Have a different opinion or just want to chat, feel free to contact me at wesdewayne@gmail.com via email or g-chat, or simply leave a comment below.
Happy trading!

Profiting from Bitcoin demand in India amidst demonetization price surge

Bitcoin Trading


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The price of Bitcoin is absolutely surging in India amidst demonetization of the 500 and 1000 Rupee notes as announced by the Indian Prime Minister Narenda Modi on November 8, 2016.

As of approximately 2:00pm ET November 24, 2016 the price across the three leading Bitcoin exchanges in India had an average Bitcoin buy price of 67,735.33 INR or 984.92 USD.

Exchange Buy price (INR) USD Equivalent
Coinsecure 66,698.00


Unocoin 68,838.00


Btcxindia 67,670.00





At the same time, the price across the three leading Bitcoin exchanges in the US had an average Bitcoin buy price of 735.92 USD leaving a 249 USD or 33.8% premium on Bitcoin in India.

Exchange Buy price (USD)








So how can traders in the US profit from this arbitrage opportunity while it lasts? There are two ways which I will outline below.

  1. Send Bitcoin from your US exchange/wallet to one of the Indian exchanges listed above and sell for Rupees. Hold rupees until the demand is satisfied, prices converge between the US exchanges and the Indian exchanges the equilibrum price is established. Exchange Rupees back to Bitcoin and withdrawal Bitcoin back to your US exchange/wallet. Note that unless you comply with KYC requirements, you can currently only do this method on the Coinsecure exchange to the best of my knowledge. It should also be noted that holding money on exchanges is extremely risky considering how vulnerable we have seen exchanges are to theft from hackers.  As this method requires holding Rupees on the exchange until the price converges back to equilibrium, it widens your exposure to the risk of the exchange being hacked and losing your funds.
  2. If you have a bank account and proof of address in India, you can comply with KYC requirements on the Indian Bitcoin exchange. This will allow you to withdrawal your Rupees to your Indian bank account, exchange to USD and transmit back to your US bank account. This method follows the same protocol as 1. above, with the distinct difference of exchanging your Rupees to USD and taking the 33.8% (current) gain immediately as opposed to holding Rupees and waiting for the prices to converge before exchanging back to Bitcoin. Note, you will incur exchange fees from your bank that will eat into your profits with this method. Further, this method will only be relevant to those holding both a bank account in the US and India.

If you have any questions on this strategy or just want to chat, feel free to contact me at wesdewayne@gmail.com via email or g-chat.

Happy trading, and happy thanksgiving!


Brexit Trade Analysis (BTC/USD)

Bitcoin Trading

Foreword: In this article I will explain in plain English, the trade I executed during the night of the final votes resulting in the United Kingdom leaving the European Union. Although there were many plays that one could have made that night to make money, this post will be focused on BTC.

Trade executed (via https://whaleclub.co/):

Brexit Trade

Analysis and Rationale:

During the final few days leading up to the referendum, odds heavily favored that the UK would remain in the EU.  Note the impact on BTC as it falls drastically until voting day (June 23).  During late hours of the night on voting day, the gap closes and official votes begin to put more favor towards exit than anticipated.  Note BTC begins to trade up and down through the night of the 23rd as votes are neck and neck between remain and exit.



As BTC has already priced in remain sentiment, and leave rapidly becomes a possible outcome, this presents an opportunity to long BTC.  Consider the two possible outcomes: 1) Remain wins out, and BTC possibly drops further, or 2) Leave wins, and money moves into BTC driving price up.

Late that night, as the votes are swaying back and forth between remain/leave, massive sells are put on the EU, with simultaneous buys on gold. The odds begin to drastically favor leave, and BTC remains largely unchanged.  At this point, we buy BTC at $641.19, with the assumption that BTC will soon catch up and follow gold as investors seek safe havens.


The referendum, which resulted in an overall vote to leave the EU, as opposed to remaining an EU member, by 51.9% to 48.1%, respectively lead to a rapid devaluation of the Euro and continued run up of gold, seeing roughly a~(4%) decline in the EURO and ~10% increase in Gold overnight.  Meanwhile, BTC rapidly appreciates hitting our $680 target on June 25th.

What did you guys think of this trade? What other factors were you considering? Comment below and lets discuss!