Crypto is Easy: Insights for Profitable Investors
Crypto is Easy: Insights for Profitable Investors
Weekly Rundown - January 8, 2023

Weekly Rundown - January 8, 2023

Going to be a big year


I heard from YouTube that crypto’s about to blast off or collapse within the next week. Twitter tells me it’ll trend down forever until the US central bank starts printing money again. Reddit says it’s all dead.

I guess it depends on what you consider “blast off,” “collapse,” “trend down,” and “dead.”

Does a 20% pump to $20,000 count as a blast-off? Does a 20% drop to $14,000 count as a collapse? For any other asset, those are big swings. For crypto, those are fairly tame moves.

If bitcoin’s price falls $5 each day for the next six months, it’ll reach $16,000. Does that count as “trend down?” On a weekly trading chart, that price is a “higher low” (a structural uptrend).

Can something be “dead” if it still exists?

As my college professor said, "where you stand depends on where you sit.”

Robert Shiller won a Nobel Prize for demonstrating that financial assets have no intrinsic value and Harry Markowitz won a Nobel Prize for proving that risky assets can boost returns without adding volatility to a financial portfolio. Warren Buffett disagrees with both of them.

I’m not one to challenge Nobel Prize winners or question Warren Buffett, but they can’t all be right. That didn’t stop any of them from being successful.

What does that mean for you?

Whatever you want it to mean. It’s 2023, let’s stop fussing over semantics and appreciate what’s going on around us.

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Also, I could use your help thinking through potential outcomes from problems at Digital Currency Group, the parent company of the Grayscale Bitcoin Trust (a profitable financial product) and Genesis (a failed trading desk).

DCG owes up to $1.6 billion that it can’t repay and it’s under investigation for fraud and other crimes. This week, its creditors may force it into a do-or-die decision about bankruptcy.

As long as somebody buys or takes over GBTC and the other funds, why would anybody need to sell any cryptocurrency as a result? Creditors take a bath (in fiat) and we move on . . . right?

Everybody invested in DCG with fiat. All claims are fiat. Grayscale can’t sell bitcoin from the trust. DCG has less than $1 billion worth of crypto (otherwise they’d have already sold it to pay everybody back) and if there’s any crypto related to the financial dealings, it’s already lost or sold . . . right?

The psychological aspect is obvious. Some people will sell bc either they’re scared or they believe “bad news must mean prices have to go down.” Some people who might have put money into the market will hold off until later or give up the idea totally.

What am I missing? Leave a comment to tell me.

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I actually don’t mind people giving crypto to centralized entities.

Sometimes, centralized entities give you rewards or other benefits for keeping your crypto with them. As long as you’re aware of the risks, you can actually do better with them than on your own or with a DeFi protocol. I still keep a list of Crypto Savings Referral Links.

See the List

That said, it’s the exact opposite of what crypto’s designed to do. Ironically, crypto will make most of these entities obsolete. Which is why I found this tweet humorous.


Please read my most recent report on Top 100 Altcoins—Which Will Survive Through the Bull Market?

Check Out My Report

It’s my take on each of the top altcoins as I reviewed them in updates from September 2022 to January 2023, with the following information for each:

  • What problem it tries to solve.

  • My brief thoughts about the project.

  • Its performance against bitcoin over the past year or two (also previous history as applicable).

  • Video commentary when available.

  • Survivability score—how likely will it stay in the top 100 through the bull market?

If you’re ever going to get into altcoins, now’s the time. Hopefully, my commentary helps you make a decision about what projects to look for. You may learn something along the way!

I’ve bought an altcoin every two weeks since June 2022, all within my portfolio strategy.

Read My Portfolio Strategy

I should finish my altcoin buys around the end of March or early April. Paid subscribers know what I’m buying as I buy it.

Once I’m done, I may allocate to altcoins here and there as market conditions allow, or I find a new project, but I will mostly stick to bitcoin, occasional altcoin reports, and general commentary about the altcoin market (rarely about specific altcoins).

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Non-Fungible Apps

Ignacio de Gregorio dives into an emerging cryptocurrency technology: non-fungible apps.

NFAs tokenize applications as immutable smart contracts, eliminating central points of failure, regulatory seizure, and the risk of losing access to a valuable product or service when a team or community disappears.

(This doesn’t solve the data problem—somebody needs to store all these apps and related information somewhere that’s as immutable, secure, and verifiable without bloating the blockchain. I suspect we’ll solve that problem with decentralized storage platforms like Arweave or 0chain, but that’s a story for another day.)

For a better and more fulfilling understanding of the NFA concept, read the article, A revolution is coming to Crypto apps now.

Read the Article

It’s behind the Medium paywall but you get three free articles when you visit the page from a fresh browser.


Rekt News and The Defiant shared an article summarizing a conversation between Defiant reporter Marvin Lanes and the anonymous Rekt team.

Marvin’s covering Tornado Cash and the trial of Alexey Pertsev. You’ll find interesting insights in the interview, which covers the actual court hearing, Pertsev’s actions, and the Dutch and US government’s motives.

Read the Interview

As we move through the regulation/litigation stage of crypto’s evolution, I’d encourage you to pay attention to your government’s actions with nuance and an open mind. As we’ve seen lately, it’s sometimes hard to know who’s the hero and who’s the villain.

For reference, here’s the video that spurred the conversation.

Mark Cuban says a wash trading scandal will cause crypto’s next implosion

Bottom line: a famous US entrepreneur and TV personality says a regulatory crackdown on wash trading (pumping and dumping tokens) will crush the crypto market.

My take: everybody knows exchanges are wash trading or turning a blind eye to wash trading on their platforms, but wash trading is by definition market neutral. I’m not sure why its removal would cause an implosion. You can expect it will cause some naïve crypto participants to sell out of fear and might make others move their money into some other asset. How much? If anything, we should cheer the removal of a harmful, shady practice.

Why we care: it’s always good to recognize short-term risks that may never materialize.

Read the Article

Should We Legalize Market Manipulation for Crypto?

Speaking of market manipulation, I floated a regulatory idea after I heard that a Twitter personality got arrested for rugging a DeFi protocol.

Basically, I advocate for a safe harbor or global fight pit for new DeFi protocols. Everybody’s incentivized to make as much money as possible with these protocols through any means necessary, but only within the confines of a specific, public, real-world environment that’s gated or separate from the financial system.

Anybody can participate and the winners get to keep whatever money they make. Like iron sharpens iron, a proving ground for DeFi protocols with proper disclaimers so people know what they’re getting into.

Protocols that fail will die and the hackers/scammers will reap big rewards. Protocols that survive will exit the safe harbor zone and their token holders will reap big rewards.

I published the article as a Medium post for Data Driven Investor and posted it as an NFT on Mirror, Should We Legalize Market Manipulation for Crypto?

Get the NFT

This idea seems crazy but it’s basically what we already have, just without the backroom, hidden arrangements and daisy chains that spread contagion. Also, it’s ridiculously expensive to do something like this with legacy technology (and probably not even feasible) but with cryptocurrency, it’s not nearly as hard.

Food for thought.

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Relax and enjoy the ride!

Crypto is Easy: Insights for Profitable Investors
Crypto is Easy: Insights for Profitable Investors
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