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Last week, I went to a bar a few miles from the U.S. capital of Washington D.C. But I wasn’t going there to have a drink.
It was one of those great neighbourhood bars with an impressive selection of local beers on tap. And according to their menu, they also have the best cheeseburger in the state of Maryland.
But with my laptop under my arm, I had other things on my mind… I was there for a blockchain developer meeting.
I’m neither a programmer or developer, the guys who write the programmes that use blockchain technology. But since I’ve been active in the blockchain and bitcoin space for years, the organiser invited me to join.
When I entered the bar, I was directed towards a small staircase that was hidden off to the side of the room.
The host laughed that she put the “bitcoin meeting” in the upstairs back room because, “you crypto people get carried away”. I didn’t know any of the other meeting attendees personally, but in my experience, she’s not wrong.
The goal of the meeting was to gather together a group of developers working on different projects and find ways to help each other.
So I expected there to be dozens of developers excitedly discussing cutting-edge future projects.
But instead, there ended up being just four of us in the big room. It was like expecting the best cheeseburger in the state and being offered a pile of peanuts.
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Why were there so few people at this meeting?
Maybe it wasn’t well publicised. Or a lot of developers didn’t have time to come.
But I think the reason is the graph below. It shows the performance of the price of bitcoin this year.
As you can see, bitcoin has fallen from over US$18,000 since December. As the price of bitcoin dropped, general interest in blockchain technologies has also declined.
But since June, bitcoin has rallied from under US$6,000 to over US$8,000. A lot of people think that there will soon be a lot of new money flowing into bitcoin if bitcoin ETFs gain regulatory approval for American investors.
So if things are looking better for cryptos, why weren’t there more developers at the meeting?
“We used to fill this room with people eager to help each other with blockchain,” the organiser told me.
“There just isn’t as much speculation on the part of programmers,” another meeting-goer said.
Crypto prices have moved up from their lows – but the enthusiasm for cryptos hasn’t returned (yet). And despite the recent rally, bitcoin prices are still down about 60 percent from all-time highs.
The conference indicator
As we’ve told you before, sometimes the best market indicators are right in front of your eyes. (In the past we’ve told you about the hemline and skyscraper indicators).
The small turnout of meetings like this is a sign that things are close to getting as bad as they can.
You see, conferences and meetings are overflowing at market tops. That’s when you should sell. But it can be a buying opportunity when prices, and investor interest, are down.
Just look at the mining sector…
In April 2016, my colleague Kim Iskyan attended a mining industry conference where hardly anyone showed up.
At that time, commodity prices were suffering… taking the prices of mining companies with them. At its January 2016 low, the iShares MSCI Global Metals & Mining Producers ETF (New York; ticker: PICK) was down 59 percent from its 2015 highs.
But since that conference, investor interest in mining companies has turned around… and PICK is up 85 percent. Had you paid attention to this indicator and bought PICK shares in early 2016, you could have made a tidy return by now.
Of course, conference attendance (like share prices) can always fall further. A conference might be canceled (or a company might go bankrupt). But if that happens, you know you’re even closer to a bottom.
Things are already looking better for cryptos
There is no “Developers Meetup Indicator” (yet). But if there were, it would be a good sign for the prices of cryptocurrencies. And with bitcoin prices beginning to recover, things are already looking better. So if you want to invest in cryptocurrencies, right now is a great time.
And if you’re curious about whether I tried the “best cheeseburger in the state”… I did. It was pretty good. But it’s not for everyone. The secret? The chef mixes cheddar cheese into the beef patty, dunks it into a beer batter, then deep fries it. Understandably, I walked the three kilometres back to the hotel.