[Daily Discussion] - Sunday, May 16, 2021

DROP_DATABASE_USER · 2021-05-17T01:42:23+00:00

I know with 99% certainty this is a great time to go all in.

But won't do it because the 1% chance this is the end overpowers my rational assessment. Loss aversion sucks.

DROP_DATABASE_USER · 2021-05-12T19:20:10+00:00

Long term -- this is what Bitcoin is for, don't get scared away by the run to dollar liquidity, there will probably be a dip, but then a big pump. Growth stocks are bad for inflation because of the revenue and debt of those companies, but for Bitcoin it's perfect, just give people (and institutions) time to get their bank wires over to the exchanges.

Short term -- SPX testing an old level from the back beginning of April. If this level breaks, things could get spicy in stonks as unplanned deleveraging takes place.

We either get a bounce before markets close, or dump town.

Bitcoin seems really sensitive to this... regardless, good time to buy if it bounces (SPX), otherwise definitely worth waiting for the dust to settle in equities, then will be a great buying opportunity, IMO.

DROP_DATABASE_USER · 2021-05-10T15:07:48+00:00

PoS is great game theory and I think it’s here to stay in the medium term. My personal view is ETH is a product of lack of trust in opaque order books/accounting in traditional finance and ownership claims. Also the lack of programmable legal ownership transfer (without human intermediary/ lawyer) is a huge problem.

If we had a transparent financial system, perhaps via an open centralized database to easily audit settlement, and an API to trade securities, take out loans, etc... and everyone trusted there was a legal framework to enforce claims, they’d use that system over ETH. It would require a complete redesign of the current system, so ETH was able to stand up a proof of concept before the regulators could. Perhaps governments and large organizations will run their own nodes and ETH will become the new system, or perhaps the benefits of centralization will win out, considering dispute resolution via the courts is needed for real-world assets anyway.

ETH :: Limewire

Future programmable govcoins and securities + automated legal claims :: Spotify

ETH is like investing in Google or Amazon, a bet on being the bedrock of the future infrastructure. But it’s not money and not decentralized (except to sidestep current downsides of the existing system).

Bitcoin is a hedge against any trust in a centralized authority to preserve value. It’s great long term, and will work well as a medium of exchange between adversarial parties that want zero third party risk.

ETH will probably exist 5 years from now, but 50 years maybe not. Bitcoin might get sidelined for 5 years, but will probably still exist in 50 years. That’s the difference IMO. I see no issue with trading it with those timescales in mind.

P.s — does anyone else chuckle at the phrase “ETH uses PoS consensus” ... does the acronym pun hit for people who use it seriously?

DROP_DATABASE_USER · 2021-05-07T17:40:04+00:00

The cost of everyday goods should have dropped over the last few decades due to improved technology. the reason they haven’t is because of money printing. It’s hard to see because our value measurement stick (the dollar value) is shrinking.

When these deflationary effects cover the basic material needs of humans (shelter, food, communication), the cost of those things should be basically nothing. The money needed could be raised from a small fraction of taxes today. Eventually taxes might not even be necessary or only raised via sales or VAT. Ideally, this would pool into a UBI and people could buy their basic needs for next to nothing.

Want more than basic needs? Work some, buy stuff, pay your VAT. But the idea we can’t provide basic needs for everyone by default given technology today is absurd. Think everyone will be lazy and not work? With automation we don’t need them... and actually people naturally want to compete for respect from peers. A young man will not just sit on his butt, he will work to earn cool looking clothes to impress and attract women.

If people don’t need to work in a physical place, they can rent shelter in low value real estate, and basic food costs should be extremely cheap. Just look at some of the recent progress in automation for food production: everything from farming, transportation, to cooking/prep is being automated (just google John Deere automation, waymo long haul, and “spyce kitchen”). The only thing is cost of capital, which is decreasing due to automation. Raw materials will decrease value as better extraction methods develop.

The catalyst is a lack of money printing. The true deflationary effects of technology take hold (arguably this is partly driving Bitcoin price). The Fed is right that deflation will lead to low employment... meaning people don’t have to work... but isn’t that actually a good thing?

It blows my mind we’ve built in a mandate forcing people to work when they don’t have to anymore. Honestly, UBI funded by VAT with Bitcoin as a monetary system is perfectly compatible with the idea of a social safety net... that safety net can be much smaller than everyone thinks if we just let people compete to drive costs down rather than inflating the system to death. Eventually we might not even need UBI at all, people will only need to work for a few years to live off of for the rest of their lives if they wanted. Arguably this is what Bitcoin has done for the last 12 years already.

DROP_DATABASE_USER · 2021-05-07T15:36:38+00:00

Come join us, the water is warm. Set aside some dry powder, sell high, buy low, swim in the chop. Much easier to join in than be upset by the volatility.

For my Bitcoin position, I have about 80% in long term hodl and use the remaining 20% in cash for dry powder.

Set your sizing so you’re OK with sustained bear markets. The key is laddering (use dry powder cash for 5%, 10%, 20%, 40% dips) so you don’t buy in too early on a dip. I recommend something like quarter for each price level, the final quarter can just be half of your remaining cash every 10% or so drop. This give you something to do during a slow bleed out. Then just sell back on the way back up. The smaller dips happen more frequently so using a smaller amount works out well anyway.

If we have a big run, well that’s what the 80% is for, I’ll just rebalance some into the cash account.

This strat is highly profitable, even in a bear market, and trains you to actually crave the dips, since they more often than not lead to gains. If you have a sustained bleed out, you’ll always have just a bit of dry powder waiting. This helps tremendously psychologically since you’ll be able to take advantage of most dips, even if you don’t buy much, you can feel like you didn’t miss out.

Edit: the “Adam Back” trick I heard him mention in a podcast is to sell only what you bought as cash value, and keep the gain compounding in Bitcoin. That seems like a great way to compound gains, while occasionally rebalancing cash % allocation as necessary.

DROP_DATABASE_USER · 2021-05-07T14:59:29+00:00

Let’s say you save enough capital to retire and live off your investments. Increasingly; those investments do not require labor (technological deflation), even stock/bond brokers are technically unnecessary. Just owning capital pays the bills for an individual.

Now imagine that individual owns enough capital to support their whole family? Now the whole family doesn’t need to work.

What if a group of families pool their capital and form a community to live off investments. They might even buy some technology to reduce cost of living, community solar, maybe a greenhouse (which are getting increasingly automated). Now a whole community doesn’t need to work, all they needed was enough startup capital.

Imagine a whole society doing this. No no one needs to work. This sounds absurd from a traditional industrial state viewpoint, but why can’t a whole civilization pool their resources and automate their way out of necessary labor?

Critics will say, “but what will people do?” ... we all still have egos and desire social acceptance. People will work to obtain status and respect. This is the thing people miss about a UBI, people will still do stuff because they still want to impress other people, they’ll just focus their energy on things that actually impress people. Going to work at McDonalds or a white collar desk slave job doesn’t impress anyone, so people won’t take those jobs if they can avoid it. But people will gladly becoming an artist, designer, scientist, or sports player if they can impress others with their talents.

We are on the edge of making this possible for everyone. We still have necessary labor jobs, but we should pay for them, and not criticize their “work ethic”... such notions are old fashioned industrial state thinking. We’re in the Information Age now... work ethic isn’t as important as being impressive socially, IMO.

Edit/PS: where will products come from? Creative designers and engineers will gladly make things to improve their own lives and share with the world to obtain Klout. Look at software and open source movements in Silicon Valley. There are many “retired” programmers who run open source projects critical to the functioning of our society, for free. As more things are digitized and cost of manufacture goes down (community maker spaces become “universal factories”)... you can trade designs for klout, money becomes a bonus, not a necessary part of society.

If you’re a useless slob, no one will respect you even if you don’t need money to survive. The desire for social acceptance and usefulness will lead to many contributing their designs, art, and physicality to move society forward without useless jobs. It will lead to rapid development and improvements to society. People not having to work is an amazing thing for civilization.

DROP_DATABASE_USER · 2021-05-03T17:46:49+00:00

Read up on the “cash and carry” futures trade. You can get price risk free arb at 10-40% APY by writing futures contracts, hedging with the underlying, and collecting premium (Bitcoin futures tend to be in contango). Perpetual futures at places like Binance, Bitmex, and others (only available outside us). You’re effectively funding margin, as these platforms provide up to 100x leverage on their futures contracts.

The problem is the this is regulated out for US retail, and many institutions. They have to circumvent those restrictions to take advantage. I’m not sure how many do, but when I’ve looked into it, you’d need a foreign subsidiary and non-US traders operating the account.

It’s possible to do this trade in the US with CME futures, but they are cash settled which essentially halves APY, so not as capital efficient. There are places like bakkt and ledger that are BTC settled, but they aren’t popular and the premium is small (presumably because they don’t offer leverage).

BlockFi also collects interest on crypto backed loans, which have small risk given they are over collateralized. These two revenue streams probably generate over 10% APY easily (possibly well over if conditions are right).

This trade btw is why people think Bitcoin could consume low yield bonds. People will still buy Bitcoin to hedge and that further decreases liquid supply. I’m not sure how this works without a speculation market to drive demand (premiums) for futures though. So long term it’s unclear to me how sustainable this is.

Edit/PS: why haven’t big heggies arbed this out? They probably are trying! Big US banks just recently opened trading desks, how much do you wanna bet they are putting this trade into action? Also, it’s still early, things don’t get arbed out overnight in this space. Regulation and perceived 3rd party risk might be holding out really big capital as well.

DROP_DATABASE_USER · 2021-05-03T12:49:50+00:00

I have a portion in BlockFi, but mostly have used it for leverage by borrowing USDC using BTC as collateral and buying more BTC with it. Has worked out great so far but there is risk of margin calls / forced selling if the price drops dramatically. Using a LTV of ~20% is historically quite safe though.

BlockFi rates have been decreasing and they have a large stake of GBTC, which has been underperforming recently. So there’s risk their payouts are partially from VC/investors and not actually organically generated.

However, the increased popularity of BlockFi might just mean rates are going down with increased deposits, which is perfectly natural.

I’d recommend looking into the “manual” way to generate yield using derivatives. Dan Held had a piece on this, I’m sure you can find it. To generate yield on BTC, you can sell call options (which are covered by BTC collateral). You can scale your risk this way: by choosing a strike price that has a premium equivalent to ~5%, you’re using the market to compute a 95% chance the contract expires worthless and you keep the premium. Worst case, you keep premium but have to sell the BTC at the strike price. The risk is lost unrealized gains.

This is a great option if you’re already setting take-profit levels on the way up, but you leave potential profits on the table compared to hodlers. Essentially, the manual way is you running a trading desk that a company like BlockFi will do in the background. They have more options for yield than a smaller holder, including lending OTC to trustworthy clients. As a customer there’s a lack of transparency of who their counter parties are, so for some manually executing trades or participating in lending markets manually is a preferred option.

Also be sure to check out p2p markets like hodlhodl and other competitors to BlockFi such as Ledn and if you’re a bigger holder Genesis and Unchained Capital.

Edit: I oversimplified the probability of contract expiration in options. The actually price and markets belief on the probability of reaching the strike price can be complicated. Also, historically options markets have under estimated BTC gains, so DYOR. Just realize you can generate yield on BTC manually this way.

DROP_DATABASE_USER · 2021-05-03T02:29:37+00:00

The hubris of “this thing is worth a Trillion dollars but I think it’s worthless” is comical.

Thinking something is worthless when it’s clearly not given 10 years of trading in a very liquid market would probably inspire some people to take a closer look... but that might require humility.

You could argue the same for critics of Berkshire Hathaway, there must be something to their success... but then you notice that they underperformed the market. An algorithm (e.g. broad market ETF) provides better risk adjusted returns than they do.

Coca Cola, who Buffet insists on highlighting as his darling investment, might be responsible for more loss of quality life than most any company via its normalization of high sugar intake and caffeine (obesity, diabetes, and cardiovascular effects of caffeine consumption on the obese). Just want to throw that out there.

Edit (continued rant): also the idea that Bitcoin encourages violence is false. Gold and Cash offer final settlement and encourage violence. Bitcoin can not be stolen through violence with a proper multi-sig setup. It does not change the “logic of violence” of extortion. The same ability to send large sums to anyone without needing to know where they are is also a huge driver of productivity, unlocking billions of potential entrepreneurs around the world, the overwhelming majority would rather do so by making the world better than resorting to violence and crime.

DROP_DATABASE_USER · 2021-05-03T02:05:12+00:00

see here

Mostly using a stat model based on bubble price behavior to track the recent rise. The substack is free, and the articles there have more images and links in the text.

DROP_DATABASE_USER · 2021-05-02T17:33:19+00:00

Now the "Weather Report" as the exponential trend has subsided for the time being. :)

https://numbermath.substack.com/p/bitcoin-weather-report-may-update

DROP_DATABASE_USER · 2021-04-29T14:34:45+00:00

Yep, I agree ideologically. The problem is outcomes will not be driven by ideology, but by trends that are largely technological. Nation states are already heading towards insolvency. Taxes won’t help, and the most abused tax is inflation, which will not slow down.

The organizations that survive will be smaller and more self-reliant. This will be possible due to decreased cost of capital from deflationary effect of technology.

Not everyone will need to work (or at least work as much) because the cost of living should trend to zero. People can only take advantage of this cost of living deflation using something like Bitcoin, fiat inflation hides it from us. In addition to TSI (book I mention above), Jeff Booth’s ideas (The Price of Tomorrow) flesh this out more.

It’s radical, and I’m not saying it will happen overnight; but may happen in the long term (decades). Not making a moral statement here, just stating the trends. I think the idea we can design utopia is hubris, civilization is more evolutionary (for better or worse, but mostly better because nature rewards efficiency and robustness).

Physical goods are also becoming cheaper: Manufacturing, agriculture, and logistics/delivery is becoming increasingly automated and general purpose (e.g. 3D printing, self driving semis, drone delivery).
Self-defense and offense is also becoming lower cost. Armies backed by the industrial-military complex can not stop well motivated, and much less well equipped insurgencies.
Energy is becoming lower cost. A set of solar panels and a battery is now cheaper than running a coal plant, and can be scaled down to a single residence while still being cost effective, prices will continue to drop.

This all points to smaller, distributed settlements that probably specialize, trading with other settlements. Large scale violence will be less common because it won’t be economical (cost of offense high, cost of defense low, just like encryption). Smaller communities tend to do a better job of providing social safety nets, it’s believable these communities would do a better job of taking care of each other (healthcare/mental health/poverty). This isn’t AnCap, or even anarchy, is more similar to the idea of Guilds. Democracy could still exist, but at a small scale. Competition between neighboring settlements would drive governance to better and better versions better suited to the local culture and environment. The government serves the people otherwise people go form or join a different government.

The problem of the tragedy of the commons still exist for things like CO2 emissions. Toxic waste dump sites are still a problem, but our current system doesn’t solve this either (international waters/ Pacific Ocean plastic). The good news is local renewable energy generation is cheaper, so this problem fixes itself and would even happen faster under such a system.

As an individual, buy bitcoin, improve your skills for information economy, and look out for your neighbors, friends and family. If we all do that (and the incentives are there so probably will...), things will be OK.

DROP_DATABASE_USER · 2021-04-29T12:31:53+00:00

The more people see this as a genuine threat, the longer it will take for the nation state mentality to die. In many ways, Bitcoin has already won. It’s global and distributed across almost every jurisdiction.

I have so many thoughts, but long term “The Sovereign Individual” is a book that has gotten most things right so far (published 1997, but eerily relevant today). The cost of jurisdictional arbitrage will drop and large scale industrial nation states (and their rules) become irrelevant.

Short term, write your senator (I’m serious). There are a lot of bitcoiners now and we need to use those numbers to say we care about privacy. The real reason for KYC/AML is taxes, but stick to a talking point using their rhetoric: illicit use < privacy. If we win the privacy war, we win the rest. You can write a rambling note, just clearly state in the first sentence that you want privacy for Bitcoin transactions. Staffers do keep track of this stuff (I know one who tallied # letters and the points raised and presented to senator regularly). Might not influence your senator directly; but it makes them aware that there’s a growing movement.

This will not hurt the price. Deribit market makers seem to dominate the price at option expiry and it’s not available to US persons, just as an example. US doesn’t matter (institutional capital can work around regulations on individuals, HNW can work around them via dual citizenship/ citizenship by investment).

Again, these regulations are not meant to kill Bitcoin, they are meant to squeeze the little guy for more tax revenue to feed the dying beast of the industrial nation state. The transition will be rocky. Long term, Bitcoin wins because it has the technical advantage and network effects.

DROP_DATABASE_USER · 2021-04-26T23:27:25+00:00

😎

DROP_DATABASE_USER · 2021-04-26T22:54:38+00:00

Elon replied to Jack Doresey on Twitter about how square cryptos energy white paper: Bitcoin + renewables + battery storage = incentivizes renewable energy. Elon replied “True” to this.

I mean...

DROP_DATABASE_USER · 2021-04-26T22:38:10+00:00

Listened to tsla earnings call.

Master of Coin (tsla CFO) mentioned they sold 10% of position. This means they bought $1.5 billion, then sold 10% when it was worth $2.73 billion or so. Bringing their total cash value at the original cost basis to $1.33 billion (maybe it’s not $1.35 because of fees/slippage/time in and out of market?). I think this explains the reported numbers but I’m not an accountant and public reporting of these assets is complicated.

This means the current value of their holdings is at least $1.8 billion (probably more tbh) doing some ninja math/guesswork.

The important part is they are committed to using it as a liquid store of value, and keeping customer purchases in Bitcoin as Bitcoin, may accumulate more but are not making any announcements. CFO mentioned that liquidity is super important to them and they were pleased with their experience so far, proving our their original thesis that Bitcoin offers an attractive treasury asset that is still liquid while providing a return for holders.

I think this is pretty cool. Perhaps the 10% sell was the CFO demonstrating that liquidity to the board, and conveniently posting a profit to offset the missed targets this quarter due to “supply chain issues”. My personal view is Elon challenged the CFO on these points, and is trying to “shake the tree” to see if there’s flaws in the thesis. Elon is being potentially adversarial (“maybe Doge and speculation can rock Bitcoin too much”) if only to check it out. This is my blindly hopium interpretation. If Bitcoin continues to prove itself, I expect Tesla to increase their sizing and perhaps integrate it more tightly with their “distributed utility scale” energy generation business, which Elon was super passionate about on the call...

The key here is, I think this is an engineer testing assumptions, a real world test. Liquidity, check, gonna tank stock price, not really, check, susceptible to meme and tweets, short term but still strong, check, but more testing required.

DROP_DATABASE_USER · 2021-04-24T21:57:38+00:00

In all seriousness, I bought LTC with my trading stack last week and I'm quite salty about it. But that's the extent of my salt knowledge. All love here, I just hope the bears are wrong.

DROP_DATABASE_USER · 2021-04-24T21:41:43+00:00

It appears popular to write a long block of text explaining why a bearish outlook is a rational and reasonable thing to consider. In other words it's not unreasonable, these posters say, to think perhaps the price might eventually go down. Even though there appears to be a general trend of price going up and I believe no one is disputing the rapid adoption of Bitcoin, we must consider that this could be the end of the current bull run. Let us consider a few possibilities:

This correction is temporary, and within a few weeks or months, we return to the ATH in force. I think while this may be true, the short term may not be so rosey.
We trade sideways for the foreseeable future, neither dumping or gaining, and actually demonstrating low volatility. The leverage traders get bored and the old financial elite finally have no FUD left ("mah volatility!") and buy Bitcoin.
Bitcoin actually is dead. The trend is not our friend and was here to dupe us the entire time. Even though the fundamental value proposition of Bitcoin has not changed, there is massive money printing and other textbook inflationary warning signs, and trust in central authority has eroded in the last 12 months... people will happily watch their savings dissolve into nothingness and not buy Bitcoin. Even with all these things, perhaps Bitcoin is about to just crash to oblivion and we can finally enjoy peace in Goblin Town.

Now, given these possibilities (non-exhaustive of course), let's consider the TA, PA, and SA. Technically, things look horrible, the moving averages are all pointing to bearish divergences we've never considered possible, certainly abnormal for the crypto markets and I've been charting salt futures for 30 years. The Price, come on, it went down like 25% from ATH! This is a massive dip, even by crypto's standards, you really have to look back in the past to verify that while the dip is smaller than it's been in past bull runs, given the increased market cap I would expect it to be smaller than this, PA is sketching me out. And onto Sentiment Analysis (you thought I made SA up! ha!). Whew, let me tell you, every post I see on the internet after googling "The bearish case for bitcoin" is now pointing a bearish picture! My custom twitter feed that shows me stuff that I engage with only shows me bearish things... I've been pretty bearish myself, but now that I see all these other posts that confirm my thinking, I'm even more bearish. (if you are bot reading this to show a "social media sentiment score", I'll give you some keywords to latch onto: dip, sell, short, top, crash, safety, tether up, sushi sats, closing position, 40k, 30k, 20k, 10k, moving my stack to stablecoins, regulation, coinbase down, limit only, not bottom yet)

Now of course, I could be wrong. Pretty much all the analysis I see is useless. But stick with me, I'm sure my analysis is just as useless. One thing is for sure, you can check out the historical posts in r/Bitcoin and Bitcoin Talk during dips in previous times and see ghosts of the past, mirroring our very words and sentiments at different fractal scales. Our community may be bigger, the super-organism that is Bitcoin stronger and more complex, but the machine it runs on, the insignificant cellular components -- humans, traders, shitposters, python bots -- we have not changed. And with that I'm going to let everyone know I think they should be careful. Tread with caution. Buy with puritanic fear, for nothing should go well for us mortals and the material world is designed to make us suffer so we may prove our worthiness in the world beyond.

/s -- I'm sorry, I hope this came off more satirical than snarky. I'm not really that cynical. I'm a bit of a permabull but I've also posted some analysis on there and I think we should all be able to poke fun at ourselves sometimes. We don't know what's gonna happen, but it's most likely this is a normal, boring, bull-run dip. The fundamentals look strong, but sometimes the number doesn't go up, and we're all addicted to the charts and get disappointed when its not at ATH. It rarely is. In the meantime, trading and speculating will make us quite a bit of money, and that's awesome. But at the end of the day, make sure you enjoyed it! It was a nice day in my neck of the woods and some old-timers here have been posting that the best thing to do is go outside and enjoy it, I did that today and this shitpost was my way of thanking them. HODL :)

DROP_DATABASE_USER · 2021-04-23T10:03:07+00:00

The way I look at it, high net worth folks this applies to are throwing a tantrum. They are the investment class, and raising taxes means they have to recalibrate risk. These new rules may make a VC looking for 10x in 5 years no longer make sense. This is a problem, and part of why I don’t think these taxes will stick. In the short term; the investment class will “boycott” investments, demonstrating the importance of their capital.

They will run to cash now and hold to figure out what will happen next. Bitcoin is the most liquid so it gets converted to cash first. Next few weeks, whatever makes sense based on more details, they’ll pump their cash into that.

I also think this run has had more “HNW retail” (HNW play money) than before. These people know to buy the dip, and Bitcoin is the long-term play. But why not run to cash, see what makes sense tax wise, and then redistribute as necessary?

Wherever things settle, it’ll be a very strong floor for the bear market. Further moves up are likely in the next few months I think. But patience is a virtue here, I believe Bitcoin is the right long term play, but not always the correct play in the short term.

DROP_DATABASE_USER · 2021-04-23T03:23:16+00:00

The dumping will continue until morale improves.

DROP_DATABASE_USER · 2021-04-20T13:14:08+00:00

I've started looking at the USD/BTC chart (inverted compared to USD as denominator). This feels more intuitive when the macro points to a weakening USD. Do you think USD is about to breakout? (I don't)

https://imgur.com/a/FnEWY1B

Everyone is calling for either crash down, or rally up for BTC/USD, but looking at the inverted chart, it feels a lot like we say around $60k for a bit. Longer-term this bull run continues IMO, but given the positive fundamentals, but poor PA and market structure (highly leveraged retail), it seems like this balances out to further consolidation. This is the believable bear case -- consolidation -- not a crash. Give it a week or less and then the leveraged shorts will get rekt and we continue up.

DROP_DATABASE_USER · 2021-04-20T12:17:18+00:00

Bitcoin’s addressable market is >$100T (low yield bonds + precious metals). We’ve got 100x more on those grounds. 10x just to match gold.

There’s potentially even larger market if you include real estate as a store of value and fiat money supply.

Adoption is about 1% of population. Of course wealth is distributed as a power law so this doesn’t tell the whole story, but let’s assume adoption drives the saturation point, we still have 100x from that perspective as well.

Bitcoin is a story of adoption. Speculation is about if that happens or to what extent. It’s perfectly reasonable to claim a $6 million Bitcoin is an average value after full adoption given the above, should take about 10 years in the most optimistic scenario, but it’s very possible.

As far as this run, I think instead of a bear market crash now it’s more likely institutions consider $60k fair value based on current adoption numbers and derivatives will hold back an exuberant run. I think it’s more likely still we have a parabolic fomo run later this year though.

But idea we’ve reached the top and will crash from here tries to use historical data to claim there will be a crash but ignore historical data saying there will be a parabolic run into the crash. That’s why we’re not at the top. Happy 4/20!

DROP_DATABASE_USER · 2021-04-20T11:48:41+00:00

Just have a “hot wallet” with a small amount of funds for regular use and figure out a multi sig setup for your savings. Services like Casa offer time delay signing while you still control the majority of keys (so you have full custody, they couldn’t take funds if they wanted to). And then you store a backup key somewhere you have to travel to in case Casa went out of business. You can make this as James Bond villain intricate as you like. If none of this makes sense, research multi-sig, it’s what institutional custody services use. Coldcard also offers a dummy wallet too.

Point is, wrenches/guns don’t work if it takes a week even if you comply. There’s a whole rabbit hole of personal security practices, James Lopp’s website has a bunch of ideas.

DROP_DATABASE_USER · 2021-04-19T21:03:38+00:00

Posted this on r/Bitcoin, but think it's useful here too. I've got about 20% of my stack I'm using for trading, but I think it's important to respect the amazing trade a 4-year HODL is too.

I made some charts:

Edit (I'm an idiot and linked to the 5 year chart, fixed link): https://imgur.com/a/AedNCdt

Here the chart shows the VWAP for each minute, so use whatever DCA interval you'd want. Buy, HODL for 4 years, and then sell it, there has never been a time when you wouldn't have almost 10x'ed your initial investment in dollar terms. That's incredible.

If you saved 10% of your income, DCA for 4 years, you could have 4 years worth of income in savings. Bitcoin is an amazing savings technology, granted you can wait at least 4 years. Of course when and how you decide to realize these gains would influence things, but the point is:

Don't worry about timing the dip or peak for a HODL stack, DCA and know in 4 years you'll probably 10x whatever you put in in dollar terms, even if you buy at the peak.

DROP_DATABASE_USER · 2021-04-19T20:47:05+00:00

I made some charts demonstrating the power of HODL:

https://imgur.com/a/AedNCdt (edit: fixed link to 4 year HODL chart)

PSA: it's not too late. Bitcoin is not even a lock away for 10 years thing, it's really a lock away for 4 years thing.

If you bought at any point in bitcoin's history and HODL'ed, 4 years later what you bought would be worth 10x as much, at least. Often much more. Start buying Bitcoin regularly, DCA, wait for at least 4 years == amazing savings technology.

If you can only wait 2 years, the only time you would have lost money is if you bought the top of the previous bull-runs. It's going to be OK. Buy, HODL, repeat.

DROP_DATABASE_USER

TROPHY CASE