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.