Wall Street disaster expert Bill Noble: Crypto spring is inevitable
In another reality, Bill Noble would be just another guy in a suit behind a big desk at the Fed or the SEC, probably murmuring negative incantations like “crypto is bad.”
He’s certainly got the track record for it: JP Morgan, UBS, Morgan Stanley, Goldman Sachs. But that’s Noble in an evil mirror dimension. In our world, he is a true crypto guy, talking to me in a t-shirt with bicycles in the back of the room. He turned from the Dark Side and joined the rebels.
He is known for his popular YouTube podcasts and TV appearances. Currently, he is a senior market analyst at Token Metrics.
Wall Street career
While studying economics (1987–1991) at Rutgers University in New Jersey, he managed to wangle one of only two sought-after internships at the time at JP Morgan’s forex desk on Wall Street. Noble started off when trading technology was primitive and lots of analysis was done by hand on paper. In August 1990, he was put in charge of the desk, while everyone went on holiday, “‘Cos nothing happens in August, let the kid fill in.” Then Iraq invaded Kuwait, and all sorts of craziness broke out in the markets.
“The price volatility seemed so extreme to me. I had no idea how anyone kept track of this. So, I went to the technical analyst who was attached to the currency unit. I said, ‘I bet everybody comes to you looking for help trying to figure this out.’”
“He goes, ‘Actually, no one does.’ So, he gave me John Murphy’s chart book [Charting Made Easy] and took me out for sushi. And I was off to the races from there using charts.”
During his years of progression through the conventional Wall Street milieu, he became an expert technical analyst, which he combined with writing reports on different markets. During crashes and Black Swan events — like the 1998 implosion of Long Term Capital Management, which nearly cratered the western financial world — Noble was the go-to guy. “I’m like a firefighter: When everybody’s running out of the burning building, I’m running in,” he jokes.
From stocks and bonds to crypto analysis
In 2017, he became intrigued by crypto. He went to an Austin, Texas Bitcoin conference and started doing charts for Ether by hand, which eventually became a gigantic scroll as the price went up and down. Then he met Bitcoin early adopter Charlie Schrem walking through an airport (who has had a crypto career with spectacular ups and downs, even doing jail time connected to the Silk Road marketplace implosion). They got together in crypto.IQ, a consultancy service aiming to improve cryptocurrency analysis with stocks, bonds, interest rates and other mainstream data, which no one else was doing at the time.
In September 2019, Noble joined Token Metrics as a senior market analyst. Led by CEO Ian Balina, the subscription service provides retail traders with AI-driven insights, combined with the work of analysts researching the volatile cryptocurrency markets to assist in making beneficial trades, whatever the overall conditions.
He explains it puts an “artificial intelligence system together with my charting. You effectively have a quantitative research product, an institutional quantitative research product that we can deliver to retail, which, you know, is not, is not really around. I mean, there are data and service providers, but, you know, we can provide you with tools you can use yourself. Plus, we have top analysts that look at everything from charts macro to NFTs.”
As I recall, Sterling crashing is usually the start of contagion. $GBP has always been a canary in the coal mine. #DXY
— Bill Noble (@crypto_noble) September 26, 2022
Noble has 17,600 Twitter followers, a popular YouTube channel and is a sought-after guest analyst on crypto TV, with his Tony Soprano-esque, no-nonsense New Jersey accent.
He thrives on crypto’s volatility, “It’s 10% up or 10% down each day,” he says. “I don’t have to wait five years in between crises. As a matter of fact, I only have to wait about 45 minutes.”
Noble stresses that you need to be very flexible in crypto technical analysis and not tied to one methodology. Surprisingly, he looks to the distant past for his basic systems, “Gann works very well [William Gann, an influential early charting pioneer]. I find that the systems — Wyckoff is another — anything that worked in the early 20th century when stocks were the wild west, and there were 50 publicly traded car companies [work well]. I find Fibonacci is also helpful; Tom DeMark’s work is excellent.”
The current state of the market
Taking something of a contrarian position, he sees the current crypto winter as having a long-term benefit: clearing out the market and liquidating terrible projects.
“The previous run-up was driven by a massive liquidity push by central banks. Then when central banks had to pull the liquidity, you had the ‘2008 crash’ of crypto. Speculative assets that never should have gone up, to begin with, went back to zero.”
Noble forecasts that for the crypto economy, we can see the beginning of spring, a resumption of growth, after the crash, much like the many crises he weathered in the conventional financial markets, such as 2008 or 1987. He points out that various gurus like Warren Buffett wrote off the internet and Amazon after the 2002 crash. Buffett told CNBC in 2019 that he’d been “an idiot for not buying” shares in Amazon in the past.
“Bear markets are good times to do your homework because Mr. Market is now sorting out who’s gonna win — and who’s gonna lose.” He is bullish on Ethereum as a Web3 backbone. “Web3 is the next internet, connected by Ethereum and Polkadot.”
Noble is also bullish on privacy coins and approving quotes from United States National Security Agency whistleblower Edward Snowden: “One day, your wealth could be held against you.” The central banks’ push toward centralized digital currencies, which will mean that all transactions will be watched by Big Brother, will create momentum for privacy coins like Zcash. “Privacy coins are going to go from being for pirates to being for regular people.”
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Psychology of trading
Psychology plays a big part in trading. Noble explains that many of the best traders use physical exercise early in the morning to prepare themselves for the stresses of trading.
“It’s really about emotional management,” he says. “They also set up a research framework and stick to it. You have to have a method or a style, and you have to study to get there.”
He explains that the legendary trader Bill Williams (who invented numerous indicators, including Awesome Oscillator, the Alligator Indicator and the Market Facilitation Index) made his students do three pages of “stream of consciousness” writing before he would let them trade, to empty their heads of emotional and intellectual blocks to trading. Noble encourages people to read Williams’ book, Trading Chaos.
Noble recommends that more emotional investors should adopt a long-term approach rather than the intense ups and downs of day trading. Hold a portfolio for a significant time and only make a few trades per month or year. With yield farming, you would still be getting a return on your investment.
And of course, if you can hold on, then Noble says that long term, the future is bright.
“During a tightening cycle, crypto is going to get hurt, like anything else, but as the tightening cycle comes to a close, crypto is the future of money.”