Boom time

Today was absolutely insane. There was some good news about another COVID vaccine which set the equities markets up today, and $ETH hit $600, which set the crypto markets roaring. It was amazing. I finished the day up eight percent, for my first five digit day, (and then some.)

The news behind $DPW was that they announced some partnerships with restaurants to provide electric vehicle charging stations. I’ve had a standing trigger since September to set a trailing stop next time it pumped past five dollars, and it triggered at 5.39, which cut me out of a couple hundred dollars to the close.

Overall, I’m glad to be out of this one. I had picked it after I misinterpreted some news about their involvement with bitcoin, and got caught up in that first big pump gap a week after I opened the position. By the time I hit my value averaging targets in the grey box, I was down, so I set the trigger, hoping that it would have another big spike that I could capitalize on. Turns out it worked, so yay me. I feel a lot better about the other, pure-crypto plays in my portfolio, and would rather put my focus there than worry about these guys in the future.

Ethereum was obviously the driver in today’s rally, and again, the fact that the mining companies are up even more shows me where I need to be focusing my cash. $RIOT and $MARA and the rest are doing really good.

Strangely, BTC has been pretty flat despite a big dip over the weekend, I think the fact that it’s basically back where it was Friday has proven really bullish for the market. In fact, $BTC was down from Friday’s levels, but $GBTC was up five percent.

I have actually been anticipating a BTC dip when we get near ATH levels, and I had calculated a GBTC price of 22.40 for a sell order. Today’s close set us at 22.15, so I’m thinking I may want to reconsider that order. If the premium keeps running up like today, we may hit it without any price movement by BTC, and I may get stuck holding the cash. I’m going to sleep on it and see what happens overnight.

In spite of today’s mind-blowing rally, I still managed to get pulled into four different fires at work. And it gave me a bit of solace while dealing with the bullshit, knowing that none of it mattered and that ultimately I didn’t have to put up with any of it if I didn’t want to. I got so much done today, I even managed to take the girls to the playground for an hour this afternoon, cooked lunch and dinner and did grocery shopping.

All in all, today kicked ass in more ways that one.

Changing strategies

Another day, another 2020 ATH. $BTC broke $18K before I went to bed last night, and despite a $1000 drop that was quickly eaten up, we’re back at $18,200, ready to continue our journey.

I’ve been seeing something interesting play out with the Bitcoin related equities like $RIOT, $MARA, and $BTBT; they’ve been running faster than BTC and $GBTC. I’m not sure why this is, I guess investors think that they’re undervalued. The main question right now is whether I’m over-allocated in GBTC right now.

It’s 43%, so yea. I figured it was the best play on a BTC run, but with the others outperforming, I may need to reallocate. But I’m almost out of cash, so I’ll need to sell some to reallocate. My last GBTC purchase was on July 15, at 13.60. Current price is over $20, so I should probably sell enough to cover a week’s worth of my value averaging protocols for the big gainers. My two percent targets have increased, so I’ll have to update my value averaging script and make sure I have enough capital allocated to allow it to run.

Done. Now to see how it plays out.

Progress continues on the Ether Auction. I figured out some problems with the Hardhat/Waffle/Chai tests that were failing, and added some functionality to allow claiming the proceeds. Writing the tests out really forces one to clarify all the possibilities. I also found a big bug with the time lock parts of the contracts that were making them end seven seconds after they started, not seven days.

I’ve got some additional tests cases that I need to write to finish the auction contract itself, then I need to figure out how to deploy it to a test network and starting working on the UI. I’ve started going through the React course on FreeCodeCamp, and will deploy a create-eth-app once I have the contract deployed.

I want the website up and running before I deploy the first contract. I’m debating whether I need the autodeployer setup, or whether I just want to manage the first one manually as a test.

There’s also some interesting things with the Open Zeppelin upgradable contracts that I may want to add in before all is said and done. I’ve implemented a self destruct function that can be called three days after the auction ends, but using one of the proxy contracts to hold state might allow me to reset the auctions for the subsequent rounds.

We’ll see how things develop.

DeFi notes

This weekend was a bit rough.

The kids were on my nerves the whole time and my temper kept flaring up. The girls seem to think they can just do whatever they want and ignore what I ask them to do. It’s infuriating. Missus is stressed out from work, and has been sleeping a lot. I’m stressed out cause she’s sleeping a lot and it feels like I’m doing most of the work around here.

We did manage to have some fun around here. I had promised Younger an ice cream party if she learned her letters. She did that several weeks ago and has been waiting patiently through Halloween and her friend’s birthdays, and Saturday I took her to Cold Stone and let her pick out three different flavors. She was really distraught when I told her that her friends wouldn’t be able to come over till Sunday, and on Sunday she must have asked five or six times if it was time.

So they came over yesterday afternoon and had their ice cream in the backyard. And these kids are exhausting, man, I tell you.

We also watched Biden’s victory speech Saturday night, although I had a hard time getting Elder to pay attention to it. I told her it was important to watch cause she’s so young that she probably doesn’t remember anything about the Obama presidency, and I want her to remember this moment. Younger probably won’t remember it. Missus was more interested in Harris’s speech and making Elder watch it. She didn’t see any point in making her pay attention to another old, white dude. Still I think moving on from the Trump presidency as soon as possible is very important.

Most of my time this weekend was spent reconciling my DeFi transactions, trying to figure out how to reconcile the ycrvBUSD that I have. I owed the girls some, so I got those numbers recorded in my Notion database and moved a bunch more fiat into them. I was tempted to buy more BTC, but decided to stick with my stablecoin strategy for the time being.

I also spend some time on the Yearn Discord and reading over the smart contracts to try and figure out just what the heck is going on. I pulled my ETH out of the vault since it was inactive, and considered doing so with LINK save for the fact that I don’t know what else to do with it. I talked to someone about using it as collateral on Aave for something else, but I don’t want to risk it.

Also, it seems that there is a new test USDC vault, which there seems to be some excitement around. I was tempted to move some funds there but I’m playing with savings here. I’m already nervous enough after hearing of some US-based crypto lending firm filed for bankruptcy this week. I don’t know enough about their business model to know whether BlockFi is at risk as well, but much of CT seemed to think so.

After I deal with day job stuff I need to take a look at my altcoin lending portfolio. Several positions should have stopped out during the pre-election run up, but I’m not entirely sure I had my stops set properly. Cosmos, PolkaDot, and Serum are all well below my stops, only ChainLink has managed to hold its position. I need to calculate my losses and figured out if I’m allowed to make any November trades. I found a new degen yield farming site and am tempted to try and take a position on one or two. If I was smart I would just wrap my BTC and put it in a vault. Alternatively, I don’t have any CRV or YFI tokens, and as much as I’m relying on the vaults I should probably allocate some funds there.

But the best strategy might just be to hold my BTC for now. It seems on the verge of a breakout this morning, and I have no idea what equities will do this morning now that Biden has won. We’ll see.

Evening update

BTC was mainly quiet today, resting while alts seem to be pumping. Bitcoin has held steady mostly today while the election results come it. Several outlets are calling it for Biden, but several states are going to recounts. It seems that Dems may be able to squeeze out a Senate majority as well, pending results in Alaska (!) and two runoff elections in Georgia early next year.

I spent some time this morning thinking about how to design the Evil Ether Auction app, and exactly how I want to make it work. Nothing solid yet, but I’m trying to figure out how I want the mechanics to work. I’m thinking that it’ll will have a series of rounds, starting at one ETH, and that the proceeds from the first auction will be used as a starting amount for round two, and so forth. I’m thinking the last round would be for 32 Eth, enough to fund a masternode. I’ll either keep the proceeds of the last round, or possibly put a bid tax at some nominal amount as a developer fee. We’ll see how that goes.

My most recent fiat funds cleared ACH on my onramp, so spent more time today thinking about strategy. The GUSD Curve pool is basically garbage, so I’m probably going to stake the bUSD pool. There are a couple degen opportunities out there, Harvest seems to be going strong, recent hack withstanding, and someone pointed me to SnowSwap, but I’m not playing around with these funds. I trust BlockFi and Yearn, but I’m not willing to take chances on any other platforms with significant sums.

I also spent a lot of time thinking about tax ramifications of lending platforms and all this DeFi activity. It’s going to be absolute nightmare. I don’t think CoinTracking has done much work in this area, so I’m probably going to have to take a look at TokenTax when the time comes. Considering that it integrates with Turbotax, I probably should.

The rest of the afternoon was spent going over CSV exports of my Ethereum transactions, trying to line up all my activities over the past few weeks, trying to match fiat to various pools. I haven’t been doing a good job with my earmarked funds, and I’ve got some cleanup to do before I make any more conversions. Trying to keep track of funds earmarked for my family members in one wallet is proving tedious, but keeping them in a separate wallet is out of the question, given gas fees for vault deposits and withdrawals.

I have to be very disciplined if I’m going to keep things straight, and I’m still not sure the best way to keep track of it. Hopefully I can keep things straight in a spreadsheet or Notion table and not have to go as far as putting together a custom database or ledger. I’m going to go back to it here shortly and shore up my calculations and see what I come up with.

Irresponsibly long

flying plane with contrail during nighttime

Today has been crazy. I woke up this morning to find that $BTC had made a bit of a run overnight, making a nice wick up from $11.2 to $11.4. I’m sitting on some cash in my IRA, and I was very tempted to add to my $GBTC position at market open. It seems like we’re at a turning point, and that things are going to move very, very quickly. As a reminder, in 2017, the price went from $11.6 to 19.8 in two days.

Ultimately, I didn’t do anything, which is fine, even though we had some healthy price action today. I often joke about being all-in on crypto, but it’s really not a joke. I’ve got some equity in my house, along with a mortgage, but pretty much all of my liquid assets are in crypto. Most of it is in BTC, and I’ve got Eth and other alts as well. I’ve got the bulk of my savings in my IRA savings. Most of it is rolled over from my 401k from my corporate days, and it has the benefit of allowing me tax-free gains. I don’t have exact percentages, but about a third of that is in $GBTC. Over the years I’ve been adding positions in $MARA, $RIOT, and Hive Blockchain, and I’ve recently opened positions into $ETHE and $GDLC.

So I’m pretty invested in the success of BTC right now. I understand that having all this money in correlated assets like this doesn’t spread the risk at all, but it feels better than putting it all in GBTC.

Until recently, the long-term plan for the liquid assets had been to wait until they were enough to pay off my debts, mainly the mortgage and student loan debt. I actually have a whiteboard on the fridge with the break-even numbers written down. I update the debts whenever a new statement comes in, and I’ve been updating the BTC price first thing every morning.

Now though, I can’t imagine actually selling everything. I do plan on taking some profits at a certain point, I have a target. But with the recent rise of DeFi platforms for lending and interest, it seems like a better approach to try and leverage some of these platforms to generate income.

That’s the difference between being rich and having wealth. It might take me longer to get to the point where I’ll have enough to live off the interest generated by lending, but if everything goes the way I anticipate, then selling my bitcoin to pay off my debts early could well be one of the worst financial mistakes I ever make.

A lesson: about eight years ago I needed a new car. I had been driving a $1500 Ford Escort for several years that I had bought after my last car had been repossessed. It was a junker. The insulation around the doors was torn out, so every time it rained water would pour in on me from above. After several years getting my life back together after a business bankruptcy, I decided that it was time for an upgrade. I decided to get a used BMW, and set my budget at $7500. After weeks of searching, I found the perfect car, but it was $8500. I decided to sell a small stake of some Netflix stock that had done very well, and used it to buy the car.

I loved the car, but fifteen year old BMWs need a lot of work, and I probably put another $3-5k into that car before I got rid of it three years ago. Before I did, I looked back at the price of that thousand dollars worth of Netflix stock that I sold and calculated the value.

Eighteen thousand dollars.

So yea, the next six months might see my holdings get to the point where I could liquidate them, pay half to Uncle Sam, and pay off all my debt. But now, I fully expect bitcoin to go 4x from that point, enough to generate income for the rest of my life. Enough FU money to say “no” to almost anything, and have the financial freedom and independence that most can only dream about.

My dad recently retired, my mom did so a few years ago, and my wife’s parents did so recently as well. They worked their entire lives, making a life for themselves and raising us right. And my wife and I have been fortunate beyond belief to be not only surviving during this pandemic, but thriving. We talk every day about what’s going on, and I’m more confident that ever that our plans are going to work out.

Crypto Twitter is abuzz right now, and everyone is excited. I’m trying to remain calm and prepare for the craziness that is going to happen when BTC hits another all time high. It’s going to happen fast.

Even now, at the end of the day, bitcoin is still minting new yearly highs. I only hope that the feeling I feel right now isn’t greed, it’s opportunity.

This Saturday, Halloween, is the anniversary of the Bitcoin whitepaper. Satoshi had a strike of genius timing the halvings around the US Presidential elections. I’m not sure how much of what we’re seeing is in anticipation of a Trump or a Biden win, but the divergence to the stock market, which is reacting negatively to a rise in COVID cases, could just be the start.

I’ve been packing for this rocket ship for years, during this entire bull market. The fuel is loaded, the trajectory is set, and I’m strapped into my seat listening to the countdown. Now I’m searching my mind wondering if there’s room enough for a little bit more mass, an extra oomph that will take us out of the solar system and get us to Alpha Centauri a little bit faster.

I, and you, better act fast, cause liftoff ain’t gonna wait for either of us.

Trading notes

Today was a pretty good day for crypto markets.

Jack Dorsey, CEO of Twitter and Square, announced that Square bought $50 million of bitcoin, about one percent of Square’s treasury. Markets pumped, and my portfolio did pretty good, up 4.52%.

That puts me up 50% in $GLDC after a week! $ETHE is above water finally, after a month. I spent a good deal of time trying to refine my new trade plan calculator, to figure out how to protect my position. I need to protect my capital, but I don’t have a rule yet on how to do that. The TD Sequential was supposed to be my indicator for stepping my stops, but I’m beginning to wonder whether my strategy is sound.

My recent strategy has been a bit of knife catching, trying to open a position when it marks a ‘nine’ down on the TDSeq. I set my far enough below support lines that I don’t get taken out by some whale hunting stops, and then wait. Here’s the most perfect example of what I’m talking about.

The hypothesis is that seller exhaustion will spawn a turn around on the nine mark, and the price will move up. I got lucky here.

The question now is what to do. From a capital preservation standpoint, I should raise my stop above my entry point to make sure that I don’t lose money. This will also open up my capital for another trade, since I’ve already got six percent of my capital at risk. I could tighten the stop to just under my entry, which would have a lesser protective effect.

Or I could take profit. I’m not going to do this, however, as I’ve started noticing another trend off of these TD Sequential signals. I’ve noticed that breaking above a green sell signal can mark the start of a parabolic run. In the GDLC chart above, you’ll see the green dotted line coming from the left. We have a daily close above it, and then two days later… POW! Seven to thirty-six dollars in three days. GDLC is a bit of a bad one to use as an example though, as the pump lagged a similar movement in BTC by three days.

While I figure out my strategy, I’ve been working on my trading spreadsheet, incorporating some new tips I’ve learned with regard to some formulas. Hopefully it will make my planning process more coherent in the future.

I really feel that things are really close to popping off. The fundamentals of bitcoin are strong, and despite all the bad news that has been going on lately, the market has been holding strong. I’m trying to prepare for some crazy times coming up. We’re less than a month away from the election, and who knows how things could go at this point. The fact that BTC hasn’t taken a tumble these last few weeks is very, very bullish, and I can’t wait to see what happens next.

Another step toward financial freedom

Well, I did it. I sold my car. I’ve knocked three years of payments, almost seven grand at three percent interest, off of my debt board. It’s progress. Next step, seventy grand of student loan debt.

Of course the big news today was Trump’s positive COVID test result. I was a bit hung over this morning and sat down first thing at my desk and pulled up one of my news feeds and saw the headline. I jumped out of my seat and ran upstairs to tell Missus. I spent most of the day on Twitter reading headlines. Simply amazing.

One of my new positions, $EQOS, got stopped out. Good thing it did too. I just opened this yesterday, and only deployed about a tenth of what my risk management calculation limit was. Good thing. So I only lost one tenth of two percent, not two percent.

Strangely enough, my other position Grayscale’s Digital Large Cap fund, $GDLC, was up 25%, in spite of its underlying assets, mainly BTC and ETH, were down. Go figure. It may be time tighten my stop on this position, at least to baseline. I’ll don’t have a hard and fast rule about this.

My BlockFi withdrawal has cleared to my BTC wallet, so it’s time to check the exchange and see what to pick up. There’s so much blood out there right now. PolkaDot looks like it’s at a good level, and given my interest in it, it may be a good time to pick up some tokens and work on building a stake.

It’s almost bedtime for the girls, and Friday night, so I’m going to take off here and get them wound down, then I may spend some time relaxing tonight. Not that I didn’t overindulge last night. Tomorrow I have to get up at a decent hour and work on my deck. I’m hoping I can get the lower patio done and have the hottub ready to put back in place.

Bad Omens

I had a dream last night that I set my laptop on fire. Not like the battery got hot and it lit up kind of fire, but I intentionally set it on fire. Okay, maybe the fact that it went up in flames was an accident, but I was definitely doing something I wasn’t supposed to. I was more at a loss for the physical value of the hardware than anything on it, but still, I was relieved when the “I’m dreaming” realization came through.

I found myself thinking about this Tweet this morning, and what type of technical skills are needed to pull something off like that. My brokerage bot is just a simple API call application; I definitely need to figure out how to consume websockets to be able to do real-time stuff like this. Being able to watch order books and place or cancel orders in response to changes will really up my game.

As far as the Ethereum aspect of this goes, I’m not sure if you would have to run your own node or if something like this could be done on an Infura node. Not sure whether he’s watching the mempool or just following transactions on the network.

It’s the first of the month, which means I need to get cracking on some things: moving money from the kids Lending Club accounts over to their BlockFi. I think I’ll make rebalancing my DeFi vaults a quarterly affair, I don’t have enough to warrant the gas fees for smaller amounts. I will be making a withdrawal from my BlockFi and putting it on the exchange. I missed some trades that I wanted to take since I had vaulted my funds earlier.

I really need a dashboard to track my gains. Zapper doesn’t seem to be very accurate, although yEarn does let me see the monthly performance, in fact, every time I check their page they’ve made updates to their UI to provide more information. It’s still a pain that I have two wallet addresses that I’m using on it. Maybe there’s a way to transfer the vault balance? I’m guessing no since I’m staking a token. The balances are probably stored in an array and can’t be transfered.

I’ve obviously got a lot of work to do with Ethereum and smart contracts. I really love this kind of work, learning programming languages and building stuff. Too bad my regular job is all filled up with bullshit like fixing crashing laptops. My boss actually told me “don’t drop your sugar at the door” in response to me offering a technical next-step in response to one of these problems. I literally said that they needed to update the driver package on their Surface laptop. That is not my sugar. Boss has no idea what it I can do. He’s still locked into the stuff we were doing when we started eight years ago and hasn’t grown since. I’ve tried to tell him about the opportunities and he hasn’t popped out of this small business mindset. Sigh.

I feel like Zombie, LLC will be stuck with small-time players who are looking for technical support. We’ve got a few good managed services clients, but we’ve got no sales team, and the fact that Boss is unable to lead us as a team has left me completely disillusioned. Things will not change. I was listening to ILtB and someone said “if you take the best player on a high school team and you let them practice with a college team, they’re going to get better. They’re going to run faster than they thought possible.”

I’ve outgrown this team, and I need to find a better one.

The Bitcoin Standard

I just finished reading the last pages of The Bitcoin Standard, and I’m a bit conflicted about it. Obviously, Samedian Ammous is a great mind and deserves a ton of credit for the work he’s done as an advocate and professor, however the book has left a bit of bitter taste in my mouth. I’m not sure whether it’s because he challenges a lot of my progressive ideals, or whether he’s really as insufferable as he seems.

On the one hand, I have to admire the man for being so sure of his beliefs. He is fanatical in some respects. The way in which he regards his ideological opponents, Keynesians, Leftists, and most of the crypto community with disdain, is something to behold. If I could only dismiss opposing viewpoints with such aplomb… the wonder!

His sound money premise seems logical, and he does a good job carrying the torch for the Austrian school. His interpretation of the history of money and is solid, and he stakes his interpretation for the last two hundred years with much conviction. I’ll admit that the ramifications if he’s correct are quite dire, and offer a plausible explanation for the past hundred years of monetary policy. And seem to offer a roadmap for what comes next.

And if he is correct, then it means that the direction and role of bitcoin as an alternative to the current fiat system is ordained, and gives me even stronger incentive to go all in and hodl, hodl, hodl.

One of the most important points that he makes (and he stressed this during the recent interview with Laura Shin,) is the comparison of high versus low time preference. High time preference is of shorter duration than lower preference, and Ammous provides historical evidence of unsound money systems being tied to lower time preferences.

Unfortunately, a good deal of the book is filled with Ammous’s moral judgements of everyone he disagrees with. Keynes is a “libertine” who never studied economics, and apparently a pederast. Milton Friedman and others are treated harshly as well, but perhaps the most cringe sections of the book is where he rails on “modern” art, and pop music, notably Miley Cyrus, dismissing their lack of skill or craft compared to Michelangelo and Bach. It has a distinct “get off my lawn” flavor.

His hatred toward the authoritarians of the twentieth century leaves no room for communists, socialists, and by extension, liberals and progressives. Everyone who might disagree with him gets similar treatment. It is totally on-brand for Ammous, given his reaction to the Coronavirus lockdown on Twitter.

It’s a shame, really, as it seems to spoil much of the book, and probably puts off a lot of readers. I’m sure Ammous could care less, as he has enough fans and acolytes of his worldview. Still, I’m left wondering if there is a gentler, less irascible version of this book out there. The historical presentation is A+, but the high-mindedness I could do without.

Lastly, he does dismiss almost all of the crypto community, especially the “blockchain, not bitcoin” crowd. The only purpose of blockchain is for digital cash, he argues, and all other implementations of it are a waste. Ethereum and other altcoins are waved away as useless since they do not share the main quality that makes bitcoin important: its lack of centralized control. Bitcoin is what it is because of the way which it was brought into the world and released to the wild. Ammous says that no one will ever be able to change the immutable characteristics of bitcoin, the consensus mechanism, the emission rate (block rewards and halvings,) or even the block size. He makes an exception on the possibility of SHA-256 becoming vulnerable at some point in time and requiring a fork, but that’s waved off because of the economic vulnerability.

In all, the book is worth a read if you can stand having your assumptions challenged in such a sanctimonious way. I don’t know if I would recommend it to someone as an introduction to bitcoin, since it is so dense. For those already well down the rabbit hole, it does help fill the gaps in why bitcoin is destined to be the sovereign currency of the internet, and possibly even the world of the twenty first century and beyond.

Feeling down

I finished reading The Ascent of Money yesterday, and immediately started on The Bitcoin Standard, by Saifedean Ammous. The book has been touted on perhaps the best book on bitcoin economics, but Ammous remains a bit of a firebrand to me. I follow him on Twitter, and he’s a bit of a Coronavirus skeptic. Not necessarily from the disease itself, but from the shutdowns and economic effects that they’ve had.

He’s very vocal, say the least, and a bit arrogant. He was actually just on Laura Shin’s Unchained, and she asked him about his response to something Yuval Noah Harari said in Sapiens about debt, and Ammous said something to the effect that “I have no interest in what a Marxist anthropologist has to say on economics,” before going off for several minutes on the subject. That’s not to say that the man isn’t brilliant or hasn’t written a great book, but he comes off as a bit insufferable. I should have known when I saw the introduction was written by Nassim Nicholas Taleb.

I spent way too much time today on Zero Hedge, questioning everything. Now I’m ready to short hotel chains with put options, hoard my cash and set tight stops on all my equities positions. Apparently Europe is about to institute martial law or something and go back into lockdown, and we’re about to have a huge market correction. I don’t know. I went down the rabbit hole a bit today and looked at a blog focused on economic collapse. I haven’t felt this paranoid since I was into 9/11 trutherism and peak oil. The proximity to the election is a bit a unnerving.

My Amazon position stopped out this week, closing a position I’ve held for over ten years. Now my portfolio is a quarter cash, another quarter $GBTC, and the rest is split between three dozen or so equities, with $NFLX and $ATVI being the largest of those.

I have added Compass Pathways ($CMPS) to my watch list. They have a synthetic version of psilocybin that they currently have in phase three trials for treatment resistant depression. It’s something I’ve been interested in for a while. MAPS co-founder Rick Doblin made the rounds on Tim Ferriss and Peter Attia‘s podcasts last year, and it amazing to think that they may actually get this approved in the United States.

Other than that, I haven’t been too active today, just taking it easy with the family.