Didi Taihuttu, the patriarch of the Bitcoin Family, has based himself and his family in Lagos, Portugal - a top crypto tax haven in Europe - and has seen his bitcoin investment grow in spite of the price volatility and bear market in the crypto space through the use of a proprietary trading algorithm that he created in 2019. However, he is aware that this advantage may be lost when the development of generative AI tools makes it simpler for others to construct similar algorithms.
In the Algarve region of Portugal, Didi Taihuttu starts off his days at the rooftop of his villa, situated atop a hill that rolls down to the Atlantic Ocean. On most mornings, the natural light reflects off the house's white stucco walls against the terracotta roof, illuminating Taihuttu as he sits at a round, plastic table. With a cup of black coffee in hand, the head of the Bitcoin Family assesses cryptocurrency price charts on his laptop, as he builds his plan for the day. He mentions to CNBC, from the terrace that overlooks the cobalt-blue ocean and beaches lined with bougainvillea, that he just requires a few thousand per month to live off of, and therefore performance is not a priority.
Despite his humble exterior and unassuming lifestyle, 45-year-old Taihuttu has realized tremendous success since he and his wife and three children sold nearly all of their material possessions, including a 2,500-square-foot house, in 2017 to invest in Bitcoin when it was valued at around $900. Bitcoin's value is now over $30,000, though it briefly reached an all-time high of nearly $70,000 in November 2021. Taihuttu has capitalized on the cryptocurrency's immense volatility by regularly converting his Bitcoin into U.S. dollar-pegged stablecoins like Tether, USD Coin, and DAI. Through this strategy and the market indicator he's dubbed Didi BAM BAM, the investor has seen great success from his gamble.
Taihuttu's indicator takes into account a combination of inputs, including directional trading information and lunar cycles. It has been steering all of Taihuttu's investments since he created it prior to the emergence of Covid-19.
"We began to see the initial clues the bear market was definitively over in mid-November until the start of December 2022," Taihuttu indicated. "The long flag in the model made it certain in January 2023." He also remarked, "People should have been buying bitcoin already because anybody who purchased it at $16k is now looking at a 90% return."
The father of three claims his bitcoin investment has grown by around 50% since it reached the lowest point of the most recent bear market. However, the Taihuttus chose not to tell CNBC the total amount of their crypto investment. Nevertheless, Taihuttu shared that they had fully reinvested in bitcoin when the value moved above the $19k benchmark, so "they're not doing too badly."
The nomadic family's primary residence in Portugal is also advantageous, as it is the top crypto tax paradise in Europe. "As long as you don't make cryptocurrency for offering services in Portugal, you will not be obliged to pay any capital gains tax or any other levy," he said.
"That's a really nice bitcoin heaven," Taihuttu concluded.
Taihuttu initially relied on traditional predictive metrics such as the stock-to-flow model and the Mayer Multiple when he started day trading tokens. However, he realized that it wasn't very productive to constantly read these metrics, so he decided to build his own tool. This tool would incorporate multiple technical indicators, such as Bollinger Bands, Lower and Upper Bands, NMA, Red/Green Ribbon, NormStoch, RSI, Price Oscillator, Plot, MACD, Cross, Chande Momentum Oscillator, RSI-EMA, Full Moon and New Moon, plus a bit of astrology to provide real-time insights into potential price swings. This tool would give users short and long signals, as well as confirmation signals when it'd be a good time to buy or sell.
This model is based on several technicals, which can be broken down as follows: Bollinger Bands show price volatility over time, and consist of a simple moving average line with two standard deviation lines (Upper and Lower Bands). These bands can signal when an asset is oversold or overbought. N-day Moving Average takes the mean of an asset's closing price over a period of time, also known as “N” days. The Red/Green Ribbon indicators indicate whether the market is bullish (green) or bearish (red). The Normalized Stochastic looks at price momentum and is a variation of the Stochastic Oscillator. The Relative Strength Index is calculated between zero and one hundred and evaluates the speed and scale of recent price movements. The Moving Average Convergence Divergence (MACD) looks at two moving averages of an asset's price and is expressed by subtracting the 26-period Exponential Moving Average from the 12-period EMA. The Percentage Price Oscillator is calculated by taking the MACD reading and dividing it by the 26-period EMA, and permits comparison between assets of different prices. With Bitcoin, the Golden Cross and Death Cross signals are read when the 50-day moving average crosses above or below the 200-day moving average, respectively. The Chande Momentum Oscillator has the same function as the Relative Strength Index and Stochastic Oscillator, except it reacts faster to price changes. Lastly, the Relative Strength Index-Exponential Moving Average combines both measures into a single indicator.
Taihuttu has noticed certain intangible factors which could affect the price of Bitcoin, such as moon phases. He has found that during full or half moons, people tend to be more active in trading - buying and selling more. A look at the market chart may also suggest that during a full moon, there is usually a dump or a pump. Furthermore, these lunar phases also coincide with the opening and closing of monthly puts and options, indicating whether or not the market will experience a sell-off.
Taihuttu formerly sold the Didi BAM BAM indicator to traders, but he intends to provide it free-of-charge to certain chosen bitcoin proponents to further its acceptance. At the same time, he recognizes that his service may no longer be in demand. He mentioned, "Right now, anyone in the world can just go into ChatGPT and ask that someone construct an indicator based on selected moving averages and cycles, then put it into TradingView. That's why people like me are losing out on business."
Generative artificial intelligence (AI) is a type of AI that can create new elements like text, images, and videos from user inputs. OpenAI's GPT language processing technology has sparked an intense competition among some firms to obtain what is seen as the next "paradigm shift" in tech. Although GPT is not able to develop a trading algorithm in TradingView's programming language, Pine Script, it has caused disruption to the role of investment advisors. In March, Goldman Sachs' Chief Information Officer Marco Argenti reported to CNBC that the enterprise was experimenting with generative AI technology to help its coders craft and examine code mechanically. Shortly after, Goldman Sachs initiated its first enterprise from an internal incubator, Louisa— an AI-driven social media platform designed for corporate use. This adoption of AI is part of Goldman CEO David Solomon's effort to develop the bank digitally. Morgan Stanley is additionally utilizing GPT to answer questions their financial advisors may have. Currently, the organization has tested a GPT-controlled chatbot with 300 advisors. By means of this, the nearly 16,000 advisors at Morgan Stanley could have access to its data and research collection. Taihuttu makes use of ChatGPT too, however, presently only for writing articles concerning topics like bitcoin and the Lightning Network. He points out that even though the output isn't ranked highly in search results, it is still a useful time-saver. CNBC's Ryan Browne also made a contribution to this report.
Comments