Upending the FIRE game through DeFi stablecoin yield farming
Decentralized finance, or DeFi, is a broad term that refers to projects on Ethereum and other smart contract platforms that are rebuilding the world’s financial infrastructure on the blockchain. While it is certainly risky, the rewards are currently beyond anything available within traditional finance. Just look at your “savings” account. The amount of yield currently available among DeFi projects can put financial independence within reach for many people. Here, I take a deep dive on how I positioned myself for reFIREment, and allocated an emergency fund that will hopefully pay for itself and allow me to live my dreams.
I won’t get into the details of fiat on-ramps or using the Ethereum network, nor do I endorse blindly following my any of my positions. Black swan exploits and rug-pulls are still a huge risk, and my purpose here is to discuss the analysis and decision-making process that I went through in order to mitigate some of that risk. I hope you find it useful.
Wrapping up work, updates on FEI, Coinbase, BasketDAO, Alchemix
I’ve wrapped up what is hopefully my last project at work. I have a few more open trouble tickets that I need to get done, but I should be mostly clear from here on out through June 1. I’m not aware of any open opportunity that my boss has that might give me substantial more work to do in the next 60 days, so I’m getting in the the mindset that I want to be in for my post-work phase.
My wife asks why I would want to quit, when I’m making a comfortable salary and basically working less than three hours a day. That’s just it, comfortable I told her. I really couldn’t explain it. I used to have a joke that I’d repeat often: I love my job, I just hate the work. It’s been backward for a long time, I love work, I just hate my job. My wife would counter that everyone does.
I’m probably picking the worst time to do this. The nightmare scenario right now is that the market tanks, my stablecoin farms have a black swan and next thing I know I’m going to be crawling back to work at the worst time. I’m hope I’m taking the right steps. I’m doing what I think is right, and I think I have a plan that will sustain my family for the future.
I started a writeup on the stablecoin yield tranching yesterday. It’s the first time I’ve done any writing outside of these daily morning blogs since I started writing my personal update, my euphemism for my resignation letter. I put down fifteen hundred words yesterday, and didn’t even get down half of what I wanted to say. Much of it is probably rambling and needs editing, it’s not like I’m Alexander Hamilton, drafting this stuff in my head before I start writing. We’ll pick it up later today and finish the draft. It’s going up as a page, instead of a blog post, which should make it easier to keep up with, since I’ll be updating it over the next couple months to track progress.
I saw a tweet that said the worst thing you could do right now is start a fund. It’s beyond stressful and gets really bad during a bear market. I think they’re probably right. Everyone thinks that they’re a genius during a bull market, and my hubris is my worst fear right now. I see it reflected in my mother’s expression when I told her that I that I was retiring. I have got to have a solid plan.
FEI seems to have imploded. I escaped any significant loss, I put two percent of my available IRA funds toward it, about $1200, knowing that it had a high risk of failure. I figured the upside on FEI was limited, but the upside TRIBE if they succeeded would be much higher. An asymmetric bet, as they call it. I’m still holding, I don’t have any hope of a quick turnaround on this one, but we’ll see what the team — and the community decides to do.
The Coinbase ($COIN) IPO seems to be all over my feed. Their recent filings have come out and the speculation here is that it’s good for the crypto market in general. One it will legitimize the space, since the betting markets are putting it somewhere around $150B in valuation. I’m not going anywhere near this one, just watching my Voyager holdings in the event that I need to dump a part of my position. There’s also the hypothesis that a lot of Coinbase insiders are going to be dumping their shares on the market and putting the proceeds into Bitcoin, so I’m hopeful that it might kickstart the next phase upward.
BasketDAO ($BASK) is another project I don’t think I’ve mentioned here. I saw their TVL jump on DeFiLlama, they were offering LP mining for DPI tokens, so I went ahead and aped in. They basically redeemed the DPI for the underlying components and converted them to the yield bearing versions of the tokens, and call it BDPI. Now why didn’t I think of that? My BDPI automatically staked, and is still earning 300% APY via BASK tokens. There’s currently 800% APY on the BASK-ETH APY, even though the IL is fierce. For now, my game is figuring out whether the gas to claim and stake is worth the risk. But let me say also, the Sushiswap analytics page is beautiful.
I’m getting a better feel for all these games over on BSC, and put some funds into several pools, mainly to satisfy my urge to do something. Trading is ultimately a game of waiting, and all of the funds that I’m bringing over from my IRA could ultimately spell doom for me if I’m not careful. But these low-gas chains like BSC and xDAI ultimately give me a chance to test out various strategies on claiming and staking, so it’ll be interesting to see how they play out.
Finally, the most fascinating project to me right now is Alchemix. It’s caused some controversy among TradFi types, here’s the gist. You deposit funds, (DAI, for now) into their vault, and it’s put to use by their strategies, earning yield and boosts, &c… You can take up to 50% out of your staked capital in their arUSD, and sell it for dollars or whatever. You’re basically taking a pre-payment on the future yield, as you never have to pay it back. The yield generated by your deposit is used to pay back your debt. Of course the controversial part of this is the yields generated, but that’s not really the point here. If this works, long term, it is going to change the market significantly. They’re opening ETH and wBTC farms soon, and that will be a remarkable evolution in the space. Instead of staking BTC as collateral and taking a 9% loan with BlockFi if you need cash, you can stake BTC with Alchemix, take the cash for that house or business, and let the loan pay itself off.
Imagine the ramifications. Family fortunes could potentially be put to work this way. Instead of spending your ever-appreciating BTC on a house, you could lock it up for a period of time, get the fiat that you need, and later get back your appreciated BTC. Whether that would be a few months or something more akin to a fifteen or thirty year loan remains to be seen, but the ramifications are going to huge. If it works. I’ll probably take more time to look this over today after I do some more writing.
No one was on the team call yesterday, so I hung up quickly. It was good Friday and our office manager was on holiday. Bossman called me shortly after to check on me. I had a couple tasks to wrap up two projects, there wasn’t anything urgent going on. He asked me about my Easter plans, I had none. I started thinking about our beach week in August, and dream plans to fly to Costa Rica in the winter. You know you’ve got two months left to replace me, I told him. Ya, he said. It seemed his tone deflated instantly. Now that I had said it, there wasn’t much else to talk about, but my mouth went on for another minute while my mind wandered. We hung up and I sent an email. I don’t think I did any more work the rest of the day.
I spent the day flitting through Discords, Twitter, watching charts. ETH hit two thousand, so I put a one-percent allocation into FLI, a 2x leveraged ETH token. BTC just seemed to ignore everything, as it has been doing for days, trading just under sixty thousand, toying with us all. I’d been looking for stablecoin yield for days, trying to figure out where to put the last couple allocations of USDC. I had miscalculated my boost on the mStable pool, and wound up getting none for all my trouble. I decided to offload the majority of my safe A tranche to my Voyager account. It’s 9% right now, and it would be liquid if I needed it. No unstaking fee or gas costs other than a standard token send. Once BlockFi actually starts offering their debit card I can move funds there for groceries and things.
At some point during the day I saw a Tweet for the Bitcoin2021 conference in Miami the first weekend in June. Hmm, I thought to myself. I’ll have left my job, I’ll be vaccinated, and my birthday will be the following Monday. Seems perfect. Missus an I have a bunch of air miles from one of our credit cards that we really want to use as well, so we don’t even have too worry about airfare. I checked ticket prices and airfare, hotel costs, then went up to ask Missus about it with a huge grin on her face. With the kids? she asked, annoyed that I was bothering her with one of my far-fetched plans. I’ll call my mom then and see if she can watch them.
Sure, she said, rolling her eyes at me. My mom hadn’t seen the kids but once since COVID and always seemed to have better things to do than come see her grandkids. Call you mom to come watch the kids. She assumed that was the end of the conversation.
I called my mom. She was actually free that weekend and said she would come down and watch the kiddos while we were gone. I was actually suprised.
A phone call with my mom a few minutes later and was running back upstairs practically jumping. We are going to Miami! We spent a few minutes working out plans, (Bitcoin2021 for me, spa day for her, after party for both of us,) before her anxiety came back.
I’ve been burned by you before, she told me referring to a thirteen month stint on unemployment that I did before we had kids. I spent most of it smoking weed and playing video games.
That’s not going to happen again, I told her. Nothing’s going to change. I’m going to be right back down here, every day at 9AM working on other projects. I had already been in contact with several projects that week that needed technical writers, support staff, and developers, I would be busy one way or the other.
What about our mortgage and your student loans?
I’ve got eighteen months cash on hand, if I have to pay the mortgage off on June 1 to make you happy, I’ll do it. I had enough BTC on hand to do it right then, but I had told her so many times that the opportunity cost to sell now is just too great. I don’t know how much different I’m going to feel in June, but I’m mentally preparing myself to cash out half of my IRA if I need to. Student loans aren’t even due until September, and if I need to pay that off in a lump sum then so be it. I’m holding out till then. I assume Biden will erase some of it by then, or do some sort of plan to kick the can down the road.
I saw a shift in her demeanor, a little tilt that I was winning her over. She’s been having a hard time accepting what I’m planning, and every day for the last two weeks or so has been a series of skirmishes as I move forward with my dogged determination. That’s the dream, I had told my mom earlier. Don’t let the dream become a nightmare, she had responded.
I was ecstatic the rest of the day and we put the kids to bed late.
So today I plan on doing my usually monthly bookkeeping tasks for the family accounts, Moving the girls’ LendingClub accounts to their BlockFi via my bank, and balancing the joint house account. I’ll need to book those tickets, after I figure out how to pay it. Travel and lodging will be covered by air miles, but I’ve also got to book those Bitcoin2021 tickets. There’s a $50 discount if you pay with Bitcoin.
Well, I did it. Last night I sold off the remaining majority of my BadgerDAO LP, and completed funding of my USDC retirement funds. I actually overfunded it by 14% to be honest, which will actually pay my mortgage for the next five or six months. The funds, which equate to my current annual salary, will be deposited into a variety of yield farming opportunities, and should fund my expenses for the next eighteen months or so. Having this vault of funds set aside will allow me to quit my current day job so that I can focus on crypto full time. If things go well, I won’t need to rely on the USDC funds at all, but will be able to live off of the rest of my crypto holdings through investing, trading, or ideally, launching my own products.
Now that this runway has been fully funded, I need to wrap up my risk assessment of the various staking pools and start deploying funds. I’m almost settled on the safest tranche of funds, the A tranche, and will probably move the first allocation of funds into the Yearn 3crv pool after I finish writing this up. The only question remaining is whether I will allocate all of the tranche funds into one project, or if I want to split it into two. It’s the difference between managing three or six allocations.
Once I have the A tranche deployed I can move my attention to the B and C tranches. I’ll probably require much more time to make these decisions. I’ll probably do some DeFi Safety assessments on some of the newer projects before I fund them. Or, I may reserve the ‘extra’ funds for aping into new launch projects. Decisions, decisions.
As I wrote yesterday, there is a lot of other things going on, and managing these investments is going to be a full time job, at least in the beginning. Staying on top of DeFi and everything going on is a time sink, this really is a amazing industry to be in.
I finally made the decision to sell my Badger LP after looking at the charts last night. I’d been monitoring the USD and BTC pairs, and had some S/R lines I’d drawn on the chart. I told myself that I would wait for it to break both charts to sell, and just got tired of waiting. It’d been falling against BTC pretty steadily for some time, and frankly it was just too much mental energy watching it twice a day. I still retain a modest share of bBadger, as well as staked Digg and Digg LP. I’ll probably hold that and wait for Badger to release CLAWS and their other products. It really is a wonderful community, and I made a lot of money with them, but my goals have shifted.
Last note: Last evening I attended a crypto meetup event. It was outdoors at the house of someone I met on Discord, and there were about seven of us in all, a few friends and several other people I’d met online over the last year. Most of us hadn’t been to an event in well over a year. It was good to chat with others, enjoy some food and talk crypto. I loved it, and had a great time. To think that in a month or two from now I’ll be able to hang out with people without worrying about wearing a mask. I can’t wait.
Pre-COVID, we hired a woman to come and clean our house twice a month. She or her daughter-in-law would come out as a group or by themselves and spend about four hours vacuuming, dusting, sweeping and mopping, cleaning clutter, changing the beds and that kind of general housework that we couldn’t keep up with because we were too “busy”. We paid them $130 every time they came out which was much cheaper than hiring one of the professional franchise companies.
When lockdown came we weren’t comfortable having them come to our home anymore, so Missus gave them a couple months pay as severance and let them go. So for the past year we’ve gotten into a bit of a system where I would take the kids out of the house for a couple hours each weekend and Missus would do as much decluttering as possible, cleaning bathrooms and the like. No one is really happy with the arrangement, Missus because she does most of the work, and me as I think the girls should be doing more for their part to help out. Myself, I do most of the kitchen work and cooking, so I guess I feel like it’s an upstair/downstairs kind of thing.
All this talk of my early retirement has rubbed a sore spot with my wife. If we’re so rich why can’t we afford a maid, she’s remarked to me several times. So I’ve been mulling over the decision to bring back our cleaning lady.
However, I’ve been listening to the Business of Family podcast, and one of the guests was talking about allowances. Now, for the last year or two, I’ve been giving the girls an allowance, one dollar a week times their age. I read a book at the time which recommended splitting the allowance into three pots: spend, save and give. The give pot was originally for charity, but I modified it for birthday and Christmas gifts instead. I found an inexpensive app called RoosterMoney that allows me to automate the process, and I can even offer interest on the save pot. The money gets deposited in their accounts on Friday, and I give them mostly free reign with the spend money. The save pots were supposed to be for big-ticket items that I would let them choose on their birthday, but as we’ve gotten more into downsizing and financial independence, I’ve decided to show the girls the value of compound interest. The money stays in the save pot, but I’ll let them disburse the interest gained once a month if they want. Elder has over three hundred in her account, which is giving her about a dollar and a half each month.
My plan is to stop giving them allowances when they turn thirteen, and allow them to start managing the save money, but I haven’t quite figured out what I’m going to do yet. I’ve also been saving up $50/month for their “education” fund, which through my investing success has grown to around five figures. I figured by the time they turn thirteen I would start getting them involved in the management of the funds, and I would hand it over to them when they turn eighteen. But if bitcoin continues compounding at two hundred percent a year like it’s been doing for the next decade, then that might be a serious amount of money, and I’ll have to reconsider how I hand it off.
So the guest on this podcast said that instead of giving kids an allowance and falling into the entitlement trap, that one allows them to earn it. He didn’t advocate paying kids to keep their rooms clean, but instead give them the opportunity to earn money doing something that you were going to pay someone else to do anyways, like yard work. Now I had originally experimented with doing DadPoints through the Rooster app, but it was too cumbersome to do daily chores in it. I used it one time to make the girls earn a trampoline for the backyard, but that was the end of the DadPoints system.
So I got it into my head yesterday that I was going to pay Elder to help clean the house. She’d been begging me for some money for whatever, and I told her that she could earn up to $130 to clean the house, top-to-bottom for four hours. She got very excited, and we decided to go for it. So around 11:30 yesterday morning we got started. I made a list of every room in the house, as well as all of the tasks that need to be done. It was about three pages long. Then we got started, and set a four hour timer on the kitchen stove. She went upstairs to start on the bedrooms, and I set to work in the kitchen.
I had sent Younger out of the house to play with her adoptive family. The kids came to ask if Elder could play but I told them she was working. After a while they came back to ask, but I sent them away again. I furiously cleaned the kitchen, doing some much overdue deep cleaning. One of the girls, Younger’s age, asked if they could come in and play. No, I said, we are cleaning in here, and if you come in here you have to clean also. Okay, she said.
I wasn’t ready to have a house-full of little ones running around, so I gave them a test. Clean up the back deck and yard, and then they could come in and start on the living room. It took them a while to get that done, and by the time our timer was down to ninety minutes, I let them in.
That last hour and a half was a blur. I was trying to clean, keep Elder and my three other kids busy cleaning. Missus puttered about but mostly kept herself locked in her office watching Netflix. I threw out so much trash and pulled stuff out from under furniture that hadn’t seen the light of day in months. I even found my car keys, that had been missing for weeks, underneath he upholstered chair next to my desk. (I blame the cats.)
When the timer went off I pulled all the dollar bills out of my money jar and set down with everyone to divvied the spoils. We weren’t able to conqueror the dining room table or our main office, so we knocked the total amount down to a hundred dollars. I wound up giving the younger kids five dollars for the help they did, and gave Elder twenty-five. The rest was mine, since I did most of the work anyways.
I was actually quite impressed with how things turned out. We got most of the house clean, no small feat, Missus didn’t have to do all the work, I didn’t have to pay for a maid, and the kids got to earn a bit of extra cash. It was such a success that I went and marked the third Saturday of each month on our calendar cleaning day. I figure I’ll let them do it again in April, and see if they get better at it and can get the house even more clean.
I finally got a bank account setup for the LLC today, and put out the first application for an institutional crypto account with Gemini. More paperwork to fill out. I also rolled my covered calls on $MARA, up from $40 to $55, and out from June to September. This was the only way I could do it without paying the premium back at a loss. We’ll see how long I can kick this can down the road. More on that another day.
Having a checkbook control IRA means I can buy real estate, and the tweet above got me thinking about Costa Rica again. I’ve been telling myself that if everything goes well this year, with bitcoin and with vaccines, I want to get our passports updated and take a trip to Costa Rica. So I spent some time looking into it today.
They have several ways to gain residency. The most relevant to me is what they call inversionista, which requires a $50,000 investment in tourism, or $100,000 investment in reforestation. After two years of this I can apply for permanent residency, assuming I spend half the year in CR. There’s also a way to do if if one deposits $60,000 cash in a qualifying CR bank. Seems easy enough.
I even started looking at land for sale, since I can technically purchase it through my IRA, so long as it isn’t used for personal use. And who wouldn’t want to live here?
I showed this vid to the whole fam earlier and they go really excited. I’m really looking forward to getting my COVID vaccine and taking a trip this year. With the last three years of bear market, plus the last year of pandemic, I think we’re about overdue!
TL;DR: Fund an AltoIRA Checkbook+ LLC, and buy, trade, or sell bitcoin and other cryptoassets within a tax advantaged retirement account. Reduce your taxable income AND eliminate capital gains taxes!
I am so excited I’m almost giddy.
Background: I’ve been investing in equities since the early 2000’s and had employer 401Ks that I rolled over into a IRA brokerage account in 2017, a few years after I started getting involved in crypto. In 2019 I started buying Grayscale Bitcoin Trust ($GBTC) as a way to gain exposure to bitcoin. It currently makes up the majority of my total portfolio, about forty percent, and another forty percent are in crypto mining and exchange positions, and Grayscale’s Ethereum Trust. I’ve been looking for a way to reduce exposure to Grayscale’s products which trade at a premium, and put funds in BTC directly, while retaining my tax advantaged status. One of the benefits of trading within these accounts is that I can enter and exit a position without having to pay taxes on any gains.
Alto came to my attention while reading a post about the DeFi Pulse index. Alto was just kinda dropped in there as a side note, and after after a bit of back and forth with the CEO, and I went ahead and scheduled a call with one of his associates, James O’Brien.
I was a bit deflated going into the call, because the fees that I were told given were a bit off-putting, one percent a year as a maintenance fee, plus one point five percent per trade. That might be ok for someone starting out, but there’s no way I would go for that. James explained that the crypto product that Alto offers is basically a vehicle for Coinbase custody, which is geared at institutional investors. The fees are what Coinbase charges, and covers insurance on the funds. Of course, you’re limited to what tokens Coinbase offers, and you can’t move anything off to a private wallet. Fair enough, but it’s not for me.
So what really got me excited was when O’Brien told me about the checkbook LLC which is a self-directed IRA plan. You have checkbook control over your funds.
“Checkbook Control” is the term used when a self-directed IRA owner has complete signing authority over an account that gives access to his/her retirement funds. This strategy is achieved through the establishment of a Self-Directed IRA LLC. Since the LLC established is a business entity, it can establish a checking account. The LLC is funded by using retirement assets like an IRA which then funds the LLC’s checking account. This offers greater investment freedom, allowing you the IRA holder to meet your investing goals and manage your assets with ease.
These type of entities can be used to purchase practically any asset, including real estate or cryptocurrencies. And the cost that Alto charges to do the necessary paperwork is only $750 dollars, that’s five hundred to setup the LLC and necessary documents, plus two fifty a year for what I assume are the required tax documents and so forth. That’s much better. I can use whatever exchange I want, park the tokens in a cold wallet, liquidity pool or lending provider, and sell them without a care in the world. My keys, my coins.
The only real downside is that crypto assets cannot be transferred directly into the IRA. Only cash goes in. So if one has existing crypto holding that one wants to make into a tax-deductible contribution, you’ll have to liquidate to fiat, transfer the funds into the IRA’s cash account, then to your crypto on-ramp to purchase the asset again. This could lead to some slippage if one doesn’t have cash on hand, but that can probably be optimized through some dollar cost averaging process.
There’s another downside to a crypto IRA, and that’s the fact that IRA contribution limits are currently capped at $6000 a year. There are similar vehicles in the 401K space that have much higher limits. I found one company, called Solo401K, that provides this service. I chatted with one of the associates over the web. These plans are available to self-employed individuals, contract employees, but not individuals who are employed by others. The limits are closer to thirty thousand a year, and there’s other advantages, like being able to take a personal loan out against the account. Since I’m not a contract employee or self-employed, the 401K plan isn’t an option for me. Solo401K is by Naber Group, which also has an IRA option, but their setup fee is twice as much as Alto, and they charge an extra hundred a year in fees.
I went ahead and setup my Alto account this morning, the process took about five minutes. The main thing you need to think about is what type of IRA you want to open, whether traditional, Roth, or, if you’re a business owner, a SEP IRA. Other than that, there’s several forms to fill out, and it appears that it will take up to two weeks for the paperwork to come back on the LLC, which is created in Arizona.
Once this is all done, and I’ve opened new bank and exchange accounts, I will begin liquidating my IRA positions in GBTC, rolling over the cash, and buying spot BTC. I’ll probably do the same with my ETHE holdings as well. I’ll also need to liquidate enough of my existing crypto holdings to max my 2020 annual contribution before April 15th, unless I can come up with that kind of cash in the meantime. It might be a wash with capital gains on any crypto sales, but I’ll figure that out.
I’ll also be converting my employment to contractor status. I’ve already had a talk with the bossman, and I should be able to make that happen before the end of the year, and switch my IRA to a SEP or 401k to take advantage of the higher contribution limits. (Alto plans on releasing their 401k product sometime later this year.
Lastly, a warning. There are rules about how you handle funds in these checkbook accounts that you have to be aware of, like no commingling of funds, no double dealing, and nothing that enriches yourself or other family members, like buying real estate or businesses that you or they have a stake in. The IRS also prohibits purchases of collectibles, which may be a problem with NFTs, but other than that, you have complete freedom to buy any token, using lending platforms and leverage, or ape into whatever yield farm you want. As long as all the gains stay within the confines of the LLC, you are golden.
If you’re interested in opening a Checkbook+ IRA, use my referral link to get $75 off the first year’s fees.
We took a road trip yesterday. My father in law bought several acres out in the country, about two and a half hours from where we live, out in the middle of nowhere. It’s got a large lake, and a wooded lot, and we wanted to get out for the day to check it out and get the kids out of the house. It was good for all of us.
There were Trump signs everywhere. I asked my FIL if he was going to build a house on the lot, and he said that no, the area was too “primitive” for him to build there. Most of the money had fled the area for brick houses on large farms, leaving mostly poor whites and minorities around. He had bought the lot mainly so that we would have a place to camp and fish.
We did a bit of the latter. The pond was stocked, but the few fish that we caught were too small to keep, so we threw them back. The girls played in the pond. It was a beautiful day, in the mid sixties, although the pond — spring fed — was quite crisp. We did some boating around the pond, walked around the woods for a bit, and ate and talked before heading back home. It was a lot of time in the car for a short visit, but it was worth it as a bit of a recon trip. I’m not sure we’ll go back to camp before next spring, but at least we know what we’re dealing with now.
Today I got a lot of work done on the deck, putting a couple finishing touches on it and cleaning up some of the mess that I’ve left. I’ve got a couple of railings left on the stairs and maybe a few more side pieces, then I’m pretty much done till this summer when it’ll be ready to stain. The hot tub is still dead though. I’ve got to call someone to come look at the pump; the motor is leaking now, and the repair cost will determine whether we fix it or haul it off. I’d rather get rid of it than spend another $600 repairing it, all told.
We watched Playing With Fire today, a documentary about the FIRE movement. Missus and Elder and I watched it this morning, I was surprised Elder paid so much attention to it. I think she gets it. Missus enjoyed it and I thought it was worth the five buck rental. It was good to help keep us focused on the prize.
I also signed up for Lolli today, after I found out that they work with my local grocery store. I’d actually be planning on using them to buy pet food a few weeks ago, but had been procrastinating. So I went ahead and signed up and used them today, earning about a buck and a half worth of bitcoin. Missus was actually impressed by the fact that I could use it and still earn points from my credit card, especially when I stopped to see if any of my cards were offering extra percentages for the store I was using. Alas, no. Still, it should be a good way to earn some extra BTC if I can stay disciplined and order most of my groceries online. It will do me good.
I’m actually considering switching my bank. The one I use has some issue with Plaid, which is used by BlockFi for ACH transfers. Basically, I have to transfer funds from my bank to Gemini, wait five days for it to clear, then send it to BlockFi. It’s too long. So I’m probably going to set up a new checking account with the same company we use for our joint account, and use that instead. I’ve got cash on hand to pay the mortgage and credit cards through the end of the year, and I don’t want to hassle with putting it in a Yearn vault, but BlockFi would be nice if I could just move in and out between my checking account when it’s time to pay the bill. I’m going to sleep on it.
Despite that, I’ve been slacking quite a bit lately, falling off my habits. Epic Games had Elite Dangerous as one of their freebies the other day, and I got sucked right into it the past few days. It looks like quite the time suck, from the looks of it, and I’ve already put in several hours of the past couple days. I’m almost tempted to pull out my VR headset and flight stick and yoke, but that would probably turn out bad for me. When I get obsessed with a video game — I’m looking at you, iRacing! — my life suffers in other respects.
The more time during the day that I spend on crypto, especially the smart contract programming that I’m doing for the Ether auction, the more I wind up taking a break during the evenings. I’ve been taking it real easy lately, especially the more BTC keeps making three year highs. I know Missus is excited about what’s happening, at least the fact that I’m excited about it, although I probably need to temper my expectations a bit. It’s getting to the point where I’m starting to run my mouth a bit much, and I don’t want to look the fool in a year if things haven’t manifested themselves the way I expect.
Still, we’re moving in the right direction, and from the looks of it we’re moving in the right direction. I just gotta keep stacking sats.
I’ve completely obsessed lately, keeping TradingView and my IRA up on my laptop while I’m working on my day job, which has been demoted to just a single screen on my dual monitor setup. I check Zapper.Fi daily, and am on Twitter constantly during the day.
I’m still doing my job, taking care of anything urgent or important, delegating as much as I can. Ultimately, nothing is as important as what’s going on in the markets, so I’m constantly reading and trying to figure out what the long term plan is going to be.
This Tweetstorm has a couple good points. One I’ve been thinking about and seen a few times before is that this isn’t going to be like the last couple cycles, with a blow-off top and an eighty percent drawdown. My plan during the past few months was that I would sell a portion of my holdings off and save it for a drawdown. But what if there’s not a drawdown?
My target is dynamic, it’s based off the moving average at the last top, about 3.6x the 200 day moving average. That equates to a price of $39,000. The longer we take to get there, the higher the price will be, so we might now have a huge runup like we saw before. Since we’re seeing institutional players in the market now, they’re more patient, will move slower, and price action might instead be a slow, steady grind up and up.
Of course, once we see $20k I expect it will be all over the news, possibly triggering another wave of retail FOMO. I’m not sure that it will have as much effect on the market since the market cap is actually a higher due to the block rewards emitted over the last few years. I’m probably completely wrong about this.
There’s also a chance that we’re moving into the next phase in bitcoin adoption: HODL FOMO.
If accurate, it would reduce the chances of a big drawdown, furthering the need to hold on. Still, I expect some sort of pullback. Many in CT are warning that this run up is happening too fast, and are hoping for a bit of a pause here now that we’re at $17,600. Better to let the market take it’s time than have a blow off top later. Still, I’d imagine some sort of resistance at $20k, so I’ve put in a limit order on my recent $GBTC entry that I hope will translate to the $19,800 level. If it hits, I’m hoping to to have another entry before we blast off, otherwise I’ll hold the funds to deploy elsewhere.
Where? Well I have noticed today that many of the crypto industry tickers had double the gains that $GBTC did:
I’ve got some value averaging protocols engaged for several firms, and I’m low on cash, so I’ll either need to liquidate some GBTC to free up some capital, or stop the protocol. I’ve set an expiry on the GBTC sale for Thanksgiving. Hopefully we’ll blow right past $20k while the market is closed and I’ll be able to close my position without selling.
Overally, my IRA was up over 6% today, while the major indexes were down one percent. I nearly had a five-digit day. So close. My point is that it looks like things are moving according to plan. BTC is on a run up, and it seems like every day I’m a bit closer to my goal of financial independence.
On top of this, President-elect Biden signaled that he will absolve up to $70,000 in student debt for everyone, regardless of income. This will wipe by debt completely. There are questions about how fast this will happen. Apparently he can do it via executive order, so we’ll see. One thing is now clear, that I will be making the minimum payment on my loans, of which the first payment is due in January.
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.