Sunday Rundown - August 15, 2021
Mountains or molehills?
Sorry I haven’t posted free content for a while, I’m still on travel. Thanks for sticking around :-)
Looks like bitcoin’s on the move, bringing the rest of the market with it. Is this a bull trap that will send the market down to its September 2020 lows? Or a disbelief rally that will send prices to the moon?
Premium subscribers, I covered my analysis in five updates over the past two weeks, including one crucial update regarding my plan for bitcoin’s bull market. If you missed those updates, head over to the Crypto is Easy landing page for the most recent ones.
Rumors say institutions are buying Ethereum now, then altcoins soon after. Don’t sleep on the king but don’t neglect the great projects trying to catch up. I have a healthy allocation to altcoins as part of my overall portfolio strategy.
Read below from some articles you may enjoy.
Ecoinometrics - The Other 60/40 Portfolio
Bottom line: Ecoinometrics shared two ways to boost your non-crypto portfolio with bitcoin without trading or timing the market.
My take: more investment porn for tortoises. Also, food for thought. We often look only at gains/returns on our crypto but it’s also useful to think about how an asset fits within your larger financial plans.
Why we care: this is something to share with no-coiners. Many people buy stocks because “they go up” and bonds because “they don’t lose money” but mostly don’t buy bitcoin. A few of them might stop and reflect on their assumptions long enough to give it the benefit of the doubt. Or at least use this information from Ecoinometrics to rationalize their FOMO when they eventually put some money into the market.
BitMEX Crypto Exchange to Pay $100 Million to Settle Probes
Bottom line: BitMEX paid the US government $100 million to stay out of its business.
My take: good for them. For regulators, it’s all in a day’s work. Just look at all of the enforcement actions they make that have nothing to do with crypto, probably +1,000 each year. If major news outlets like Bloomberg covered every non-crypto enforcement action like they covered crypto enforcement actions, that’s all they’d ever write about. But nobody cares about whether OrangeHook, Inc got suspended for not filing its paperwork. Unless OrangeHook dealt in bitcoin. Then Bloomberg and Wall Street Journal would be all over it. Crypto gets clicks.
Why we care: a lot of people dismiss these stories as FUD or rally around the “government is killing us” meme. I’d love to see the data on whether crypto crimes get more attention from US authorities than other crimes. Perhaps it seems that way because we only hear about the crypto ones and not the others.
[US government] hits crypto exchange Poloniex with $10 million fine
Bottom line: Circle paid $10 million to make its troubles with Poloniex go away.
My take: see my comments on BitMEX. This settlement is probably a good move on Circle’s part. The company’s going public via a SPAC at a $4.5 billion valuation, I’m sure they don’t want to give potential investors even a moment’s pause over a former subsidiary’s crimes. For $10 million, they made those worries go away.
Why we care: the US government has fined crypto businesses for years. These fines mean nothing—they’re usually chump change. BlockOne paid $24 million for an unregistered $4 billion ICO. Don’t worry about these fines.
It’s easy to get wrapped up in the US government’s business, but regulators don’t make the laws, they simply enforce the laws.
I’m sure FinCEN, SEC, and other agencies want more authority or latitude, but that comes from Congress. Congress doesn’t know WTF it’s doing on crypto and it’s certainly not a priority (yet). During the infrastructure debate, the Secretary of the Treasury plead her case to Congress and lost. Things don’t always go the way you think they will.
Let’s not get complacent, but also let’s not make a mountain out of a molehill. It’s great that crypto went nuts about an infrastructure bill with a probably-unenforceable provision that won’t take effect until 2023. We need that sort of vigilance because in politics, once you give an inch, somebody will end up taking a mile.
As far as investors and participants in this market, we don’t need to factor the US government into any of our decisions yet. Don’t worry until you need to.
Relax and enjoy the ride!
Sunday Rundown - August 15, 2021
Thanks for the update Mark. Your update reminded me of a calculation and discovery I had recently Id like to share with CIE:
So I decided DCA-ing was too hands off for me when I first started buying Bitcoin approx 1 year ago. I thought with some research and my knowledge from traditional equities markets I could make some well timed buys and sells. You know where this is going already I'm sure.
If I look at my buys over the 1 year timeline I can see my attempts to time the market. I did pretty well the first half (from July 2020) bc I can see the dots on the left and right of short lived pumps. Yes, I thought I had tamed Bitcoin back then.
The 2nd half (when I decided to give ALTs a gander) I did not do so well on timing. That euphoric top? I did some good ol buying hi selling low. Lol . Blamed it on... whatever. Doesn't matter. But it was a stressful year trying to get my head around BTC and crypto as a whole and suffering all stages of market emotions. Beating myself up, angry at the "manipulators", media, FUD etc. In the end, it's perfectly clear I really had no strategy and was following what social media fed to me.
BUT, since I was working with capital only available this day or that week, in different amounts, it ended up kind of randomizing what I thought were genius moves at the time! I was DCAing all along, on average. No, there was no routine, but from the looks of my history you'd think there was.
The reality struck me yesterday when I decided to look back at the closing price every week, on the same day, starting from the 1st buy I made.
The price averaged out to 32k over 52 weeks. For easy maths let's say one invested $10k split evenly over the 52 weeks. They would have accumulated ~ 0.312 BTC today worth around $14k. That's a 40% ROI.
I know, it's not a 2x, 5x or 100x but this perspective is from someone or anyone who might have started a year ago like me. I will keep my numbers private but I ended up with a few percent over 40. I hardly would call it beating the market. (Now, take the reading when BTC was 60k and... Lots more gain obvs, but right in line with DCA again)
So the moral of the story I arrived at was:
Damn, all that stress, all that analysis, all that late night research trying to figure out who had it right... All in vain. I would have been basically right where I am had I just diligently bought each week and lived a much less stressful year! Maybe DCA isn't so bad after all. Not vs a noob trying to pwn bitcoin from day 1.
The kicker is that CIE plan kinda saved me from coming in far under that 40% ROI. I started to follow the Puell chart and the MRZV (I forget the correct name sorry) chart and it kept me from FOMO buying and panic selling. So thanks to you for that.
Finally, it leaves me with a question: If you had a few new members today, and it was their first day ready to get in the market (assuming they did basic Bitcoin and alt education) would you suggest your plan as is, and they should just step into the strategy wherever it happens to be at present, or would your initial advice (non financial DYOR I know) be different? I'm sure you get noobs all the time asking wen moon. But let's imagine these hypothetical noobs are well adjusted and unemotional. What would you tell em?
Cheers!