Weekend Rundown - November 7, 2021

And the beat goes on


Geeze, the market goes sideways for a few weeks and now I’m getting questions about exiting, taking profits, etc.

I don’t take profits, for reasons I explain in my most recent post for Cryptowriter.

Read my Most Recent Post in Cryptowriter

At some point, I’ll have to exit—by which I mean sell 100% of my crypto in anticipation of a 1-2 year bear market.

When will that happen? We shall see. Hopefully, never! Possibly, sooner than you think.

Premium subscribers, I’ll keep you posted on that. Everybody else, watch this short YouTube video with my thoughts about the market cycle peak.

I’m not thinking about exiting and there’s no reason to expect I’ll need to do so any time soon. As a result, there’s no reason to bring it up.

That said, this market can move violently, suddenly, and ruthlessly. Until that changes, you can’t take anything for granted. This bull market may end sooner than you expect.

But not today. See below for two articles you may enjoy. Skimpy, yes. I’ll try better next week.

Survey Says Most People Still Don’t Understand Crypto

Bottom line: most people who buy crypto don’t know shit about crypto.

My take: shocking. Smart money entered in 2020. 2021 belongs to retail—millions of people trying to make money off of each other, a handful who understand the significance of this asset class. I worry about what will happen to these people when the market turns against them.

Why we care: it takes a while to learn the tech and get a feel for the markets. Social media caters to people who haven’t had a chance to do either of those things. If we see signs the market cycle is coming to its peak—not the normal, extreme moves up and down, but the rare climax of a bull market—will you encourage these people to “get in before it crashes” or tell them to get out before the bear market begins?

US House of Representatives passes $1T infrastructure bill with crypto tax for Biden's approval

Bottom line: in two years, the US government will make every business to report the names, addresses, tax IDs, and potentially other information for all digital asset transactions worth more than $10,000.

My take: ok, let me get this straight. Starting in 2024, the US government will make you give them personal information about people that you don’t have any information about and may never have met. Is it my personal responsibility to KYC and register everybody who sends me more than $10,000 in crypto? Can a DAO, DEX, or DeFi protocol report transactions? Does Trezor need to file with the IRS? Do NFTs count? This law is unworkable and possibly unconstitutional. Also, almost certain to face court challenges and possibly multiple attempts at repeal before it takes effect. If it does go into effect, I’ll bet regulators will take a light approach with a very narrow interpretation. It’s a logistical, forensic, and enforcement nightmare with a massive administrative burden on tax authorities.

Why we care: this law sucks for people in the US but changes nothing for investors. If anything, it will drive US citizens to use wallets from centralized exchanges that can KYC and report transactions for their users (likely for a small fee). In any event, this is a global technology, borderless and totally mobile. US already lags Europe and Southeast Asia on every metric, with Africa and Latin America quickly catching up. Jobs, money, and profits will go wherever they want regardless of US laws—possibly in spite of them.

Relax and enjoy the ride!

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