I have been completely useless for the past two days. I wrote Tuesday’s two thousand word post as a way to distract myself from anxiety around the election, and that was probably the last productive thing I’ve done. It seems that Biden has won, while Trump is contesting the results as we knew he would. Meanwhile, bitcoin has gone on an epic run that has put me in a state of ecstatic shock.
BTC waited until the polls closed on Tuesday to breach an eighteen month high. Betting markets swung wildly to Trump after he won Florida and it became apparent that this would be the Blue Wave that Dems were hoping for. I actually managed to go to bed at a decent hour, to my credit, instead of staying up for hours past my bedtime, obsessing over Twitter and results. I think I was mainly tired of Trump trolls in my TL.
By next morning the odds had swung back in Bidens favor, and bitcoin began it’s nonstop climb from $13,500, up two grand as I write this. It’s been completely insane. My high exposure to crypto funds in my IRA paid off handsomely today, as I was up over seven percent today, over five figures, before dropping by the close.
Of course CryptoTwitter has lost their minds. There have been arguments over which candidate would be better for crypto (answer: either), but my theory is that the markets have been pricing in a Biden victory since the run we say from $11,600 mid-October. More specifically, I think that they’ve been anticipating a peaceful transition.
Trump still refuses to go quietly, he just held a presser that the national networks had to cut off lest he undermine democracy any more than he’s already done. He’s even lost Fox News, and now it’s just down to his rabid fan base. I’m actually much more hopeful than I thought I would be, I just hope that we can have some resolution out of these last remaining states in the next day or two and that the Supreme Court doesn’t have to get involved. God help us.
This quick run near $16,000 has really put me in a pickle, and is really putting the pressure on my decision making. I’ve revised my moving average targets to match the 200-day MA that the Mayer Multiple tracks (I’d been using 100-day,) and have revised my sell target, keeping it in line with the 3.6x 2017 peak. Current target: $36,000. Of course this is a moving target, the longer we take to get there, the higher it will be. Or we may never hit it, who knows. Maybe this time is different.
My whole philosophy behind this sell plan is to try and time the market top, then buy back in after we see another pullback. The goal is more BTC. That said, I will be looking at a huge long-term capital gains tax bill if I sell. My average entry price is around $6,000. So, as an alternative, I’ve been throwing numbers around to see what I price I need BTC to be at in order to maintain my current income using only interest generated via lending platforms.
That number ranges from $250,000 for something conservative like BlockFi to a more reasonable $75,000 if I’m willing to try some of the riskier platforms using wrapped BTC. I’m still not convinced either way.
And to show just how degenerate my mind has been, I’ll tell you something. I got a credit card offer in the mail today, offering balance transfers and zero percent APY on purchases for the next twenty months. My brain immediately started scheming on how to take advantage of this. Step one, find a fiat on-ramp that allows zero-fee credit card crypto purchases, and max out cards. Step two, deposit stable coins with BlockFi at 8%. Step three, earn compound interest for twenty months, then convert to USD via ACH to bank and pay off card.
No one has gone broke faster than by playing with borrowed money, as it is known, but this is also basically how the big banks have made money off of the fed for years. Borrow funds at zero percent, then buy bonds or make government backed loans at prime plus. It’s still risky, and Missus would likely divorce me if I tried to pull something off. She got mad at me when I told her I was delaying my mortgage contributions cause we had too much cash in our shared accounts.
Well, it’s probably for the best. I’m well positioned as it is, there’s no need to get greedy and so something completely stupid. It’s not like BlockFi is zero risk. Who knows what will happen. I am trying to spread my funds around different platforms: BlockFi, Yearn, and I think I may take a dip with Fulcrum to see what it’s all about. One of the problems with these platform is the variability in profitability. It may be better to just stick with BlockFi for a stable rate, at least with wrapped BTC. Stablecoins seem much more lucrative on DeFi, but I’m seeing less and less incentive to hold fiat right now.
Right now I’m not sure how much more we can sustain, we’re almost at $16k, so either the price pulls back or otherwise just plows through it to the stratosphere. I’m just holding on to my hat at this point and watching the green candles come.
It’s already been a hell of a ride.