Didi Taihuttu, the head of the Bitcoin Family, is based in Lagos, Portugal - Europe's number one location for those looking to minimise their crypto taxes. Through the use of his own trading algorithm, which he created in 2019, he has been able to enjoy success with his bitcoin investments regardless of the volatility of the market and even during a crypto bear market. That said, he is also aware that the advantage he has may vanish as AI-generated programming grows more and more advanced and accessible for anyone to use for writing similar algorithms.
On most mornings, Didi Taihuttu rises from his villa in Lagos, Portugal located in the Algarve region of the country. Taihuttu's villa is decorated with rustic charm with its white stucco walls and orange terracotta roof illuminated by the Mediterranean sun. Sitting under a round plastic table, he checks out cryptocurrency price charts on his MacBook Pro and contemplates which trades to start his day with. "Our performance is not really important to us since we only need a few thousand a month to live on," he explained from his deck overlooking the blue Atlantic Ocean, the cliff-backed beaches, and bougainvillea.
Despite his unassuming exterior, Taihuttu has achieved great success. In 2017, he and his family renounced traditional possessions, exchanging them for bitcoin. At the time, bitcoin was valued at about $900 per coin; today, it is worth over $30,000, and recently peaked at $70,000 in November 2021. This volatility has enabled the Dutch family to increase their crypto funds. To benefit from market fluctuations, Taihuttu regularly trades his bitcoin for U.S. dollar-backed stablecoins like tether, USDC, or DAI. His savvy move has paid off, thanks to a market indicator he developed known as the Didi BAM BAM.
Taihuttu has been relying on the combination of directional trading data and moon cycles in his indicator for all of his investing decisions since constructing it prior to the Covid-19 pandemic. He remarked, “From mid-November to the start of December 2022, we saw the first signs the bear market was completely over. This was confirmed in January 2023 when the long flag showed in the model. Individuals should have started buying bitcoin already because each coin purchased at $16K is now worth $30K – that’s a near 90% yield.”
The father of three went on to share that their cryptocurrency investment is up about 50% from the bottom of the latest bear market. While they declined to disclose the exact amount of their crypto holdings collectively, Taihuttu did concede that they had already bought back into bitcoin by the time it breached the $19,000 price point so their “not doing so bad.”
The Taihuttus' chosen place of residence in Portugal has made a big contribution to the success of their crypto assets. Portugal is known as a haven for tax-free cryptocurrency earnings provided that there is no income from providing services within the country. Taihuttu called it, “A very beautiful bitcoin heaven.”
Taihuttu began day trading tokens by employing metrics such as the stock-to-flow model and the Mayer Multiple as a means to identify when an asset's worth has become disproportionate to its intrinsic value. However, he found that spending time examining these measures was not an effective use of his time, so he decided to build his own predictive trading tool. It fuses the best technical indicators available with elements of astrology to generate real-time predictions of possible price shifts. His blend of indicators includes 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. Short and long signals to buy and sell, as well as confirmation signs, are displayed on the charts when it is deemed as an opportune moment to invest.
This model is composed of several technicals that measure various aspects of price volatility. Bollinger Bands measure price volatility over time by calculating a simple moving average line with two standard deviation lines known as the Upper and Lower Bands. Movements in and out of these outer bands indicate whether an asset is oversold or overbought. N-day Moving Average is a type of moving average that takes the mean of the closing price of an asset over a variable period, or "N" days. The Red/Green Ribbon displays bullish (green) and bearish (red) market conditions. The Normalized Stochastic (NormStoch) looks at price momentum and is a variation of the Stochastic Oscillator, which compares the closing price of an asset to its price variation over a designated period. Relative Strength Index (RSI) also assesses whether an asset is oversold or overbought, using a scale of 0 to 100 that measures the speed and scale of an asset's recent price swings. Moving Average Convergence Divergence (MACD) compares two moving averages by subtracting the 26-period exponential moving average (EMA) from the 12-period EMA. The Percentage Price Oscillator (PPO) measures the MACD reading by dividing it by the 26-period EMA; this makes it possible to compare the PPO measures of different assets with larger price discrepancies, since it is expressed as a percentage. In the case of Bitcoin, a Golden Cross is read when the 50-day moving average crosses above a rising 200-day moving average, and a Death Cross when the 50-day moving average crosses below a falling 200-day moving average. Chande Momentum Oscillator measures momentum similar to the RSI and Stochastic Oscillator, yet responds quicker to price changes. The Relative Strength Index-Exponential Moving Average combines both measures into a single indicator.
Taihuttu believes that the moon may potentially have an effect on the price of bitcoin. He has observed increased trading activity at full moons and half moons. Additionally, he has observed that the lunar phases are often correlated to the opening and closing of bitcoin's monthly puts and options. He suggested that in combination with a full moon when the market is at the top of the Bollinger Bands, a market sell-off may be expected.
Taihuttu used to make money off selling the Didi BAM BAM indicator to traders, yet he plans to now give it away to certain bitcoin promoters in order to facilitate usage. He has come to the realization that his income source is decreasing. "Anyone globally can go to ChatGPT and speak to them and say, 'Make me an indicator relying on the moving averages and this cycle or that cycle, and create me a script that I can use in TradingView, and then they can make their own indicators," said Taihuttu. "I'm not profiting as much from this."
Generative AI is a type of AI capable of producing original content based on user input and large datasets. OpenAI's GPT has caught the public's attention, prompting a competition between tech companies over what could be the next breakthrough.GPT isn't able to translate user input into something like Pine Script (TradingView's programming language), but it has caused a stir in the investment arena. Goldman Sachs' CIO Marco Argenti declared in March that the bank is utilising generative AI to help its developers create and assess code. Goldman has since spawned Louisa, an AI-driven corporate social media platform, from its own incubator as part of CEO David Solomon's aim to modernise the bank.Morgan Stanley is also taking advantage of GPT, trialling a chatbot with 300 advisors so far. It seeks to enable the bank's 16,000 advisors to access a repository of research and data.Taihuttu has deployed GPT to create articles about topics such as bitcoin and the Lightning Network but he acknowledges that the output doesn't tend to rank highly in search results and the software's origin is generally detectable. Ryan Browne of CNBC also contributed to this report.
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