Blockchain Man

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.

My last post ended with “time to go relax”, and I think I overdid myself. There was a fair bit of debauchery. I was trying to avoid buying Cyperpunk 2077, so I went and spent sixty dollars on a EA Star Wars trilogy pack with three games on it. So I’m fully refreshed and looking forward to getting back in the swing of things.

Yesterday, Missus made a bunch of chocolate chip cookies. We made the mistake of leaving a tin of them on top of the microwave before we went to bed. I thought for sure that Younger was going to sneak downstairs before she went to bed to grab some. She actually waited until this morning.

She was sleeping with me and got out of bed before dawn. Missus and her regularly play ‘musical beds’ during the night, so I figured she was going back to her room, where her mom was sleeping. I fell back asleep for a moment and she came back in the room.

“Daddy, if Elder tells you that I was sneaking cookies she’s lying.” Yea, sure. I made her let me smell her breath, just as a test, I thought I smelled chocolate. I didn’t react, just rolled back over to see if I could grab another few minutes. It wasn’t to be. I went downstairs to check the cookies, and sure enough, there were only two left. Poor kid, if she hadn’t said anything to me about it I probably never would have noticed.

I didn’t punish her for it, but I did tell her that she couldn’t have any more cookies for the rest of the day, even though her sister could. She didn’t get it, and it set off a tantrum. It’s been one of those days. We’ve been having a lot of them lately. Younger doesn’t get out of the interaction that her older sister does at school, and she feel like she gets the short end of the stick as the little sister. She’s been having a hard time with it. There’s not a lot I can do till the vaccine is more widely available. I’ve been taking the girls out to the playground a lot — making them wear masks, of course — and we spent about four hours out there on Saturday. Beyond that and our Quaranteam family down the street, she doesn’t get much else in the way of social interaction. It drags on her, and us as well. She’ll start kindergarten next year, but it’s a long way to September.

Today’s markets were great though. My brokerage account was up the most it’s ever been in absolute terms. It was about eight percent overall, erasing all of last week’s downside and putting it a new all time high. Voyager ($VYGVF) absolutely killed it, apparently NFL Hall of Famer Marshall Faulk joined as key advisor. $MARA and $ETHE were up as well, all three around eighteen percent.

Not much has been going on with my crypto trades. I got stopped out on my XBT margin trade on Kraken, so I’m done for the month. I still have an ETH trade open, but it’s been ranging since I opened it last Tuesday.

I have been deploying some USD funds that I have on my main exchange. I market bought some more YFI, as well as some AAVE. I still have about three weeks of DCA funds on there right now, so I’m trying to hold some for now until paycheck on Thursday. Twenty percent weekly right now.

I did blow through all of the mined ETH on everything I could get my hands on through Uniswap. I did a table of all the coins mentioned in the Messari 2021 report, and picked up one, $NOIA, that was mentioned several times. Also PowerPool ($CVP), Aragon ($ANT). And also a few that some of my degen PRIA follows mentioned: Unfederal Reserve ($eRSDL) and Reflect.Finance ($RFI).

I also spent some time working on Ether Auction today, although I didn’t get very far. My setup is sub-optimal, and I’m not sure how to go about setting it up more efficiently. I’ve got two repos open in ItelliJ, one for the contract and the Hardhat scripts, the other for the React app itself. So I have one terminal window open for Harhat node, another to run the deploy script. Then I have to delete the data directory for my Graph node, run docker-compose, then I have to create and deploy the subgraph itself. Then, I have to run React tools in another console, and the React app in another. It’s a bit painful.

I kinda hit a dead end trying to pull data from the chain directly through an Ethers provider, since most of the stuff I need is actually in the subgraph. Unfortunately I discovered a Cross-Origin Resource Sharing (CORS) error that I’m tracking down right now.

Now the kids are in bed, and I’m ready to relax. I should probably go work out and work off some of these cookies…

It feels like a lot happened today, but not a lot of what I wanted to. I stayed up too late last night and got a late start today, and had quite a bit of work to do for Zombie, LLC. NIST-related stuff. Not fun. Will mean a lot of work for me in the future, and not the kind that I’m going to enjoy doing.

Markets were a bit crazy today, BTC was down quite a bit for most of the day but turned around before the end of the day with news that Mass Mutual Insurance Company had bought $200 million in BTC for their general ledger balance sheet. Nuts. Things are happening.

I decided to sell some Stellar that I’ve been holding onto for several years. It was a giveaway from 2017, I think I got it listening to a podcast. I sold it into my margin account for about $75. I’ll probably put it toward BTC, or maybe as a long-term play in YFI. I’m feeling very bullish on it after reading what Messari has been publishing.

I took a look at my IDEX holdings today. I hadn’t seen a payout since September, so I figured that my node had stopped. It hadn’t. The rewards have just been so lousy, even with the supposed fee doubling. I’ve seen maybe a 5x upside in price over the past year, but I’ve actually been losing in with the AWS charges for the node. It stinks. I was actually going to sell, but they have some other staking rewards going on in anticipation of their forks for Polkadot and Binance chain. It might be worth holding on for a few more months. We’ll see. IDEX has actually been on of the worst performing tokens since the DeFi “winter” these past few months. Out of two dozent tokens, IDEX is one of three or four with a negative return, around twenty percent.

I get better returns mining ETH on my rig at home.

I have the sense that my attention is getting split in too many directions right now. I haven’t gotten anything substantial done in the past week or so, and I feel like I’m slacking. I guess I shouldn’t be so hard on myself, I am watching two kids all day long, cooking and cleaning up after them, helping them with school. How much should I be getting. I might need to sit down and recalibrate my expectations. Just getting through the day should feel like an accomplishment. So what if my output isn’t what it should be? Just who am I measuring up to? My bills are paid, my kids are clothed and fed. Who cares?

I do. I want to be done with this day job crap, having to take care of stuff I don’t care about that clients I don’t care about either. Family comes first from now on. Spending time with my kids is the most important thing. That and capitalizing on the financial edge I have. Ten years from now my kids will be teenagers, and as long as I don’t do anything stupid I’ll probably be one of the one million richest bitcoiners on earth. It’s practically guaranteed at this point.

I still want more though, while it’s still cheap during this cycle. Indications are that we’ll have a slight correction over the next few months, maybe a dip down to 15k between now an May. I don’t know how likely that is, but I need to start planning to convert some of my USD funds into crypto.

It’s time to convert some positions and buy the dip. This will likely be the last one below $20K.

I managed to climb out of bed a bit early this morning and get in a short workout while I listened to a bit of this Knowledge Project episode with Randall Stutman on the essence of leadership. There’s a really powerful moment in there that that talks about the one thing that everyone wants: a fan. He tells the story of Tiger Woods’ famous shot on the 16th hole in the final round of the 2005 Masters, and says that the crowd was yelling so loud and that the earth was shaking, and that the reason that the ball finally fell over the lip of the cup after sitting there for 2.2 seconds was that the three thousand people that were there watching wanted it to go in.

Everybody wants a fan.

It stuck with me the rest of the day, and I tried to keep it in mind when I was dealing with my kids and my coworkers.

I spent most of the day re-reading the Messari Crypto Theses for 2021, taking notes so I could share some thoughts on Twitter and possibly in a longer form here. I actually canceled my LinkedIn membership today and signed up for Messari’s Pro service, I know their analysis is the best in the industry, but this report really sealed the deal for me. I think I’ve been spamming everyone with it, I think it should be widely read.

I’m taking notes in RemNote, my poor man’s version of RoamResearch. I’ve got a feeling like I’m missing out on something without Roam, but I’m going to stick RemNote for now. I need to save all the cash I can right now — it’s Christmas, and those credit card bills are going to be due next month. Just kidding! I purchased everything using points I saved up over the past year, and haven’t paid out of pocket for anything

I also touched base with Dr. Mantis from the PRIA project, he’s working on a new one, and I got him to share the smart contract code for it. Haven’t looked at it much yet, but we’ll see if I can decipher it. More to come on that.

I continue to do some small “explorations” on Kraken with leveraged trades, feeling out how things work. My first couple BTC orders have been slightly off, playing with my entry before crashing straight through to my stop loss. I may need to recalibrate things. I have ETH and XRP (I’m so ashamed) positions that are still in play, so I’m going to see how things go so I can ge a sense of the fees while I’m dealing with a small position size. I’m tempted to go in on BTC for a third time, but I’ve already struck out twice this week and can’t enter any more positions until I close or protect the two that I have open now. Those are the rules.

The one thing I didn’t do today was work on Ether Auction. I think I’m probably experiencing a sense of overwhelm with the project — the dip — as Seth Godin calls it. So I just need to take some time and plow through and make a little bit of progress on it. I was actually reading over the Yearn.Finance repositories to see how they have their website setup, and I took away some patterns from there that I may be able to put to use without having to pull another framework into the project. I just need it to work well enough. The perfect is the enemy of the good, as they say.

And one more note that has me pleased. Elder has finally seemed to embrace playing the piano. I she’s been practicing Santa Claus Is Coming To Town for a week or two now, and was bragging to her teacher that she can play it, and is going to perform it for her class over Zoom next Thursday. I’m so proud, and glad that she is sticking with it.

I myself am sloooowly making my way through Claire De Lune, and after a bit of stagnation over the past week, have been working my way through two of the hardest measures in the piece. I’ve been practicing it daily for less than three months right now, and have been drilling these long, flowing runs over and over. Just doing it day after day after day, until it becomes subconscious. Automatic. I know I can do it, cause I did it with guitar after so many years.

I suppose programming is the same. I keep at it, and I should get to the point where these languages and frameworks become invisible to me, and I can focus more on the program flow and the bigger architectural pieces.

Maybe then it won’t seem so overwhelming. I just got to keep grinding.