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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.

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Wash trading PRIA for airdrop slots

Things are nuts right now.

I’ve spent most of my time thinking about PRIA and how to game it. I there’s a way to compute the minimum future airdrop payout. By comparing that to the current price and gas costs of a transaction, one can sell the future payout for ETH, burn that eth for gas on a transfer, and will be guaranteed at least the same amount of PRIA back in a future airdrop, two hundred blocks later. That’s the plan at least.

I’m still working out the calculations. I can only estimate the gas as this point, and I’ve still got to simulate the transfer cost, which includes burn, treasury and airdrop fees. This holds increases at some point during the airdrop cycle, so the question is whether I code this up in the main Javascript module that I’m creating, or set up an actual contract in Truffle that I can run it against. I’m not sure yet.

What I do know is I woke up this morning to find a huge run up on price. Gas costs are still high enough that it means flooding the airdrop queue will cost more than the ultimate payout, but if one assumes that PRIAs deflationary price action will continue, then one may be willing to risk more.

We’re also talking profitability from a minimum future payout. One can assume that the actual future payout will be higher than the minimum, since any transaction with a fee larger than the airdrop payout will increase the airdrop balance, not drain it.

I have also determined that flooding the entire airdrop queue in one transaction is likely impossible, due to gas costs, and I believe the upper bound is around 20 at a time. Still, I should be possible to sell PRIA on Uniswap, and self transfer enough to qualify for a spot on the queue in one transaction. One could cover gas costs, and insure that you get back at least as much as the total costs, both the gas fees and any transfer funds.

This process would theoretically allow someone to accumulate PRIA with zero capital risk. They would basically be arbitraging the costs now for the expected payout on the next airdrop cycle.

$PRIA price chart

On top of all this, it looks like $BTC has crossed a critical threshold. I had to zoom out on the weekly to get a bit of perspective on this.

Not only have we broached the critical rsistance line at $12,060, but we’re also about to break through a multi-year uptrend support that was only breached by the COVID-dump. We saw a little bit of action above this line a few months ago. And yes, I know these kinds of lines on a log scale aren’t sustainable, but it’s clear to me that we are in a bull market.

The orange line at the top is a moving profit-taking target based on the Mayer Multiple, the factor of price to the 200-day moving average. I calculated the 2017 peak to be around 2.8 times, so when we get to that price level, I plan to take some profits.

I had that feeling this morning that things were happening. Recently, I saw a Tweet that said if you feel like bragging, then it’s time to sell.

I’m starting to feel that way right now.