Month: December 2020

Twenty-nine thousand

So today was an interesting day. I had to pick up my dad from the hospital today, so he hung around the house with the kids until after lunch and I brought him back to his car so he could drive home. Technically, he wasn’t supposed to be operating a vehicle at all, but he’s stubborn.

Markets were on fire today, and I took the girls to the park for a couple hours while BTC was making new ATHs up at $29,300. I continued de-risking my ETHE position, and am just stockpiling the cash until I see what happens on Jan 4th. I may start scaling back in right away, it depends on what the volume looks like, I suppose.

I spoke to my friend, E., today. I oranged-pilled him earlier this month and he texted me late this afternoon about an account verification problem that he’s having with Gemini. After we discussed that I just started talking strategy with him. It’s amazing how quick he’s picking stuff up. Apparently he’s been watching all kind of YT videos, and he already has a sense of the difference between BTC and ETH. I tried to warn him about touching anything else in the meantime, until he knows what he’s doing, but he’s obviously been doing his homework. On top of that, he’s already onboarded several of his friends. I’m really impressed!

He’s literally spamming all his friends and family to open BlockFi accounts right now, and go all in 50/50 on ETH. I just need to get him on cryptotwitter and his conversion to the dark side will be complete.

“You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete”

— Buckminster Fuller

Today was much more relaxing. I spent most of the day with the kids, we went to the library and took them to to the park not once but twice so they could burn off some much needed steam. (The kids wore masks.) They seemed in a much better mood today.

Our quaranteam family is now actually quarantining, after a trip to Tennessee where not one but two of the grandparents tested positive for COVID. So far none of them are showing signs, but we’re going on strict vid-chat only for the next week to make sure they’re clear.

My dad’s in the hospital today for his arrhythmia, this is the fourth time they’ve had to go up through his thigh with an electrode to zap his heart, a treatment for atrial fibrillation (afib) called catheter ablation. I’m not sure what the next step will be, but I know that he’s doing this to avoid a much more serious procedure that will require several days in intensive care.

His mom, my grandmother, called to day to check in on him, and it was good to talk to her for the first time in probably over a year. Younger doesn’t know who she is, but Elder seemed more caught up in her library books when we did vidchat. She’s been isolating, and didn’t even gather with anyone for Christmas, as COVID has been running rampant in the rural midwestern area where she lives. I promised we’d be out there to visit family right after we get our vaccines.

I didn’t spend too much time in the markets today. Things were down at the open, so I only checked in a few times. I put in another sell order on ETHE, to continue de-risking as we approach the share lockout I wrote about yesterday. The day ended up much better, only down two percent, and BTC looks like it’s starting up another run at $28,000.

There’s been a lot of good news today. More firms are planning on investing in BTC, and an NFL player just announced that he’d be receiving half of his salary in bitcoin.

There’s so much stuff that bothers me about the way this is being reported. The technical fact of the matter is that his salary is still paid in USD, but he’s converting it to BTC using this new service from Strike, which I assume is some sort of ACH or direct deposit service. They’re automating what I do every week when I deposit fiat and my cron job runs a Python script to place a limit order on the exchange and transfer the calculated amount of BTC to my hard wallet. Maybe I’m a bit salty about this, but I just don’t like the way it’s being portrayed.

I don’t have a better name for the period between Christmas and New Years, so Feast of Fools will have to do. I took the week off, and will probably make it an annual thing if I can. Hopefully this will be the last year I actually have a “job”, so I’m not setting the bar high here.

To be honest, there wasn’t that much missing from my day. I did most of my morning routine the same as ever, puttering about on Twitter and gleefully rubbing my hands together watching the markets. Today started up very strong before dropping back to between four and six month’s salary. I was tempted to send out a screenshot of my IRA balance along with a message to be thankful it wasn’t an income bearing account. I’m not FIRE yet.

I tried to spend some time with the girls, but they were more interested in ignoring my directions than doing what I asked for most of the morning, so they did their best to get on my nerves until after I went and picked up groceries for lunch. Then it was over to their grandmother’s for the afternoon. Missus did take an early break from work and we watched have of Tenant, which was more coherent than I expected it to be, considering all the the confusion on Twitter. I couldn’t hear half the dialog, but I assume it didn’t really matter, considering the point of the movie is these crazy set pieces like a 747 being driven into a building.

I’ve been binging The Expanse novels, I finished one a couple night ago and have been working through the penultimate one, also while watching the series on Amazon with Missus. I’m really hooked on them. It’s sci-fi melodrama, but the sci-fi stuff and plotting is really good, and it makes for a quick read. Each chapter is about ten minutes, so I can tear it up in short or longer chunks, depending on the time of day and what else is going on.

A Twitter follower sent this over regarding $ETHE, apparently the lockup is falling and a lot of new shares are going to get dropped on the market on Jan 4. It’s probably trouble.

There are a lot of factors to consider here. Since the 22nd, the premium has dropped from 239% to 146%, even while Ethereum has been on a bit of a rise. So has the price of ETHE. The question is how bad could things dump? If ETH continues it’s climb, it might not matter, and I doubt that all of the investors that were locked in are going to want to dump if we’re in the midst of a bull run. Still, I don’t want to risk the massive gains that I’ve had on it this last few months, so I sold of a bit of my position earlier today. I may continue to do so this week and re-asses. It’s too bad that I can’t set a trailing stop on this, so I may have to settle for a limit order for now. We’ll have to see how things play out, but right now, taking some of those 800% gains off the table is in order.

Bitcoin has been on a tear recently, starting a five thousand dollar climb since Christmas, breaching $28,400 while I slept. It’s been whipsawing a bit the past couple hours, forming a doji on the four hour chart. Alt pairs are trash right now, and probably will stay that way until bitcoin decides to take a breather. Ethereum is running on the USD chart, but I’m not doing anything right now other that continuing my dollar cost averaging.

I’m almost giddy thinkin about what’s going to happen Monday morning if we stay at this level or above. GBTC and the other crypto equites are going to blast off, it will be insane.

I’ve taken off all of next week, which will be my annual Feast of Fools celebration from here on out. Missus is still working, but I’ll be able to hang out with the kids and do whatever I want without having to worry about Zombie, LLC. Who knows, maybe I’ll never have to go back at this point. Ha ha, not likely. I’m nowhere near the point where my crypto holdings can provide the income I need to pay the bills. For now, it’s just a race to save and set aside enough fiat for the eventual 25-30% drawdown/shakeout that should be coming.

And if it doesn’t come, then that’s OK also.

I’ve positioned myself very, very well in my IRA. It’s sad that I can’t touch any of it for another quarter century, but that’s the rub, I suppose. I haven’t maxed out my contributions this year, as I’d rather the money go into BTC directly. I may reconsider before filing taxes next year.

I had some conversations with my mom, dad, and brother recently about what’s going on. My dad read something on Yahoo that bitcoin was “splitting”. Not quite sure what he was talking about, maybe he read something about the halvening? Dunno. Both parents are doing well, thankfully. Dad gets the economic argument about money printing and currency debasement. I didn’t get into it that much with her. Anyways, her husband is more savvy about finances. He’s been into the Motley Fool and forex and stuff like that. I bought him a copy of Burniske’s Cryptoassets, several years ago, but as far as I know, he still hasn’t bought any. Who knows, maybe in a year I’ll be caught up to them.

So I’ve been very vocal around the house the past week or so, ever since my portfolio started going crazy and I’ve been seeing five-digit gains everyday. Missus finally decided to get onboard and buy some more bitcoin, so I set her up with a BlockFi account yesterday and moved her funds off of my hard wallet. We’re still in a bit of a pickle cause she uses a local credit union that can’t link with them directly, so getting funds there is going to involve multiple steps. It’s not ideal at all. At least she’s earning interest now, and I’ll get her set up on a dollar cost average program here soon.

The SEC filed suit against Ripple Labs earlier this week, and CT has lost their collective minds. It was all over my feed Monday night. I’d say the majority of those I’ve been following hate XRP, but there are some who recognize that this suit is bullshit and are therefore rooting for Ripple. Still the details of the lawsuit look pretty bad.

Congress passed a couple of bills, one was an omnibus spending bill, a budget extension to keep the government funded, and the other was the COVID relief package, with an insulting $600 cash payment. Many people, including President Trump, conflated the two, bemoaning that we were sending millions of dollars in foreign aid while US citizens got nothing. “VETO” was trending on Twitter for a day, then Trump came out and said that he was sending the bill back and that he wanted Congress to increase the payments to two grand. Pelosi said “let’s do it!”.

Today is the first down day I’ve had in the equities market in two weeks. GBTC, ETHE and MARA are down, (#1, 2 and 4 by market value) taking the rest of my portfolio down to levels not seen since… yesterday.

Speaking of Grayscale, they’ve announced that they are closing their funds to new investors. Apparently this is something they do from time to time, although the funds are still open to their current customers. My hunch is that there is a huge supply side problem. They’re sucking up so much of the BTC (and ETH) supply, that I’m would be surprised if they’re having problems meeting demand.

Tomorrow is Christmas Eve, then I’m off work until 2021. I’m not planning on going anywhere, just needed to take some leave cause I can. I will try to do something productive, but I haven’t been able to do that for last two weeks. I’m going to finishing going through the Messari 2021 Theses, then start working my way through this new one from The Block.

So today is the winter solstice, the day of the Mars-Jupiter conjunction, which won’t happen again for another couple of centuries, and we can’t see the sky. It’s been cloudy all day. Alas.

At one point today, Missus came down into my office. I told her I was up over five figures again today. She was mildly surprised. The bitcoin I helped her buy three years ago is up 5x but she’s still on the fence about buying more. She thinks that I’ve got enough for both of her, and she’d rather keep her stuff in index funds for now. Alas.

Bitcoin took a bit of a dip this morning. I bought some more and put up a few layered bids all the way down in case there are any more wicks over the next couple days. BTC futures expire on Christmas day, so who knows what will happen.

BTC recovered from the dip, and ETH was fairly stable, but ETHE still climbed up almost eight percent. This market is ridiculous, and I still don’t think we’ve even started.

Spent some time going through my CoinTracking account and making sure my info is up to date. I have some old bags I’m about ready to dump. district0x ($DNT) is doing nothing, and I want to dump it to pick up some more DOT or ATOM. Avalanche is looking like a good play. They’re planning on importing the ETH EVM state into their blockchain, what they call a friendly fork, and are giving everyone equivalent ETH on their chain. Will be really interesting. Might have to move my ETH off of BlockFi before the snapshot.

I figure I’ll keep putting the BTC price for the blog title every time we hit a new ATH. I figured we’d have a quiet weekend, but Saturday morning proved otherwise.

2020: The year bitcoin went institutional

I’ve been eying $50-60k for the coming year, but I’ve been seeing crazier predictions out there recently. The Winklevoss Twins have made the case for $500,000, and that’s been echoed by Celcius CEO Alexi Mashinsky. Of course, Max Kaiser had to one-up them with his prediction for one million. Kaiser’s argument is that institutional demand is so high that it is outpacing supply, which is true, but it remains to be seen whether will move that fast.

I had been scheming on a way to take advantage of some zero-percent APR credit card offers in order to throw some stablecoins in a lending platform like BlockFi or Yearn’s BUSD vault. The main sticking point I was having was the difficulty in purchasing assets using a credit card. It’s possible, but entails a three percent fee, and I ultimately decided not to do it. Then last night as I was struggling to fall asleep, it hit me. Just carry a balance on the cards and spend like I normally do. Instead of paying the cards off, I could just put the USD in a lending platform, and basically arbitrage the eight percent interest on the balance until the twenty month intro rate comes to an end. There’s the risk that the lending platform could collapse, but this risk could be reduced by spreading it over different platforms. Still, considering a thousand dollars a month with an eight percent interest rate, we’re only talking around $500 of interest income in a year. Still not worth it.

There’s been a lot of consternation about the new crypto requirements Mnuchin is trying to push through on his way out the door:

They’re using the term “self-hosted” wallets as some sort of Orwellian term to make it seem like we’re all a bunch of degens. It’s bad framing. “Self-custodied” is a bit better, but I’m not sure what’s best. “Private” seems best to me, I’m just a bit perturbed that regulators are being either ignorant or disingenuous.

The next dollar problem has just arrived

It may be confirmation bias on my part, but the link above (via Zerohedge) gives details about accelerating monetary inflation. The thesis here is that the pandemic has been used to cover up previous economic weaknesses in the global economy, and that despite the promise of normalcy that the vaccine is giving us, the next few months will show just how fragile things are. The tl;dr is that the increase in the M1 monetary supply is being put to use to buy up assets, and that credit is drying up outside of financial businesses. Basically, the only solution at this point is to print more dollars, which will destroy the value of our fiat currency. It’s worth reading the whole article.

So today was roller coaster. I stayed up way too late last night, BTC just didn’t stop. I finally went to bed at 2AM. Got woken up by the kids at eight and checked the charts. Bitcoin still hadn’t stopped moving.

Checked my brokerage account and did a double take. Premarket was up almost exactly the same amount as close yesterday. Another four months salary. Insane.

I got on the work call and about lost it. I think it was a mixture of disbelief and being hungover, but I just didn’t have it in me. I’m so done. I’m taking off for the Christmas to New Year break and I don’t know if I’ll even go back. The issues I have to deal with are so trivial to me these days that I can’t bring myself to summon the mental energy to care about it. First world problems, I suppose.

Last night I was speaking to an Italian person who was replying to some of my tweets about the Bitwise index ($BITW). He’d gotten the 70% return yesterday and was asking me if I thought it would keep going up. I told him about the premium, but apparently they don’t have access to Greyscale in the Canadian markets, and this is more diversified than the BTCQ fund they have over there. When I saw the markets this morning, I got a bit of FOMO and was about to place an market order for BITW, but market orders aren’t supported on OTC tickers, so I didn’t. Good thing I didn’t, cause BITW gave up all of the gains from yesterday.

At one point today BTC was up to $23K, and I was looking at gains equal to half a year’s salary in my IRA, so I took Younger to the park. I finished the day just hanging out with the kids. Mainlining caffeine to get me through the latter part of the day.

One thing that happened last night that I am proud of is that I managed to onboard my old business partner into crypto. I’d messaged him at $20K, and told him what I’d been going through, and he was finally convinced. He opened up a BlockFi account, and is going to start dollar-cost averaging into BTC while earning more on the interest on his USD. I’m so proud of him. I just wish I could have convinced him earlier. He’s got a lot of catching up to do.

Analyzing the BITW premium did give me an idea. Since crypto equities are doing much better than BTC during this market, I thought I might try to calculate the premium for the public companies listed there. There may be enough information publicly available to determine whether they seem valued correctly. If we know the percentage of BTC that was purchased and underlying value at the time of purchase, we can come up with a simple valuation against NAV, as one might do for Grayscale. However, there is additional information available. We know the market cap and the percentage of that market cap in BTC, so we should be able to factor that in as well. By analyzing this information across the market, I may be able to find a deal. I’m working on pulling the data into a spreadsheet tonight and should have some preliminary numbers soon. We’ll see.

I woke up to find that Elder had already been up for almost two hours and had done all her morning chores including the ones that I usually have to nag her about. She really wanted to watch a show. BTC was hovering right below the line I had drawn at the ATH from earlier. So I did a little happy dance and told her to go ahead while I meditated. When I was done I went in the wife’s office and did a little happy dance and told her that today might be the day. I did a little happy dance. We talked about money for a few minutes and she told me that she might buy some bitcoin. She’s teased me in the past, but I did my happy dance anyways.

I sat down at my desk early cause I was too happy to do anything else, and I remember looking through alts. Missus came down and I was talking and clicked on the XBT price and thinking, “hmm, why is Kraken so much higher than… OH SHIT!” $20K it was.

The hardest part was getting my stuff together enough to hop on a call a half hour later with work to do our morning scrum. Amazingly, I did manage to get a fair bit of work done. It was hard though.

I did send out a few texts to my friends who I’d been shilling to, and wound up opening the bottle of scotch that I’d been saving for the occasion. Even Missus joined in on the occasion. At one point today I showed Elder a picture of the chart and she said “wow, a lot of people must be buying.” Yes, dear.

We’ve been rained in for a couple days, so the girls have been at each other’s throats. It got real bad today. In spite of all that, today was a net plus. Younger is working on her letters and drew a perfect “A”. And Elder got 100% on her reading test.

So ya, today was a pretty good day.

So today was an absolute blast again. Yesterday and today combined for almost half of my annual salary. Crypto is amazing and I can’t believe it. Of course I’m just talking about crypto-related equities for the most part, BTC and ETH really didn’t move much, not compared to what public equities did. More on that in a second.

I onboarded my brother today. He’s overseas and he called me for help with a computer component order and I told him I’d order it for him if he sent me some bitcoin in exchange. Turns out he had an Ethereum wallet that had been sitting untouched for a couple years, and he didn’t know how to open it. I helped him unlock it and got him to deposit it with BlockFi. I also remembered I had a couple hundred dollars of BTC and ETH in my phone wallet, which I am going to use to ape with, so WIN.

If you’d like to sign up for an account and start earning interest on your USD stablecoins or crypo assets, sign up using my affiliate link.

The biggest move of the day appears to be Bitwise’s Top 10 Crypto Index Fund, $BITW, which was up some 39% today alone, over 250% in the last week. I’m a bit befuddled about the why though. I tweeted last week about how it’s basically Grayscale’s Digital Large Cap fund $GDLC, with a few extra tokens that account for maybe 5-10% of the total holdings. Not enough to make that much of a difference in returns. It also seems that BITW has a much higher premium than Grayscale. It almost hit 400% today.

$MARA was up almost 30% today, and Hive Blockchain ($HIVE/HVBTF) decided to join the party as well. Hive is a bit late, having finally matched their 2018 high. They’ve still got a ways before they’re back at their 2017 high but hey, at least I’m no longer underwater on my position.

And $MGTI had a 45% day, but they’re still down 99%, so let’s just forget about them.

Voyager Digital continues it’s meteoric rise. I truly wasn’t expecting it again today, but they keep making me feel like an investing genius. I shilled them again today cause they are making me a lot of money. I might actually have to open an account with them at this point.

As far as macro news goes, two pieces of news.

So yea, things are getting really exciting right now. I’m going to chill for tonight and hope gas prices come back down so I can make some more moves. For now, it’s time to chill.