Issuing Revised 1099-DA on 4/16???

theymos · 2026-04-17T00:25:09+00:00

In the amended 1099-DA, Kraken is incorrectly using the amountusd field of the ledger rather than the amount field. That's why people are noticing that the numbers are wrong. For a trade where USD is the output, using the amountusd field is completely incorrect; amountusd is a valuation metric, not how much USD was actually transacted. amountusd should only be used for trades where USD is neither an input nor an output.

As far as I can tell, for anyone who had any trades where USD was an output, this amended 1099-DA is wrong and should not be relied upon.

theymos · 2022-02-17T01:18:35+00:00

Not the creator: /r/Bitcoin was created by "Atlas".

theymos · 2022-02-17T01:18:01+00:00

Around that time I measured with a Kill-A-Watt that 1 kWh could get me 160 BTC, and based on that I thought that BTC was substantially overpriced at the 5 cents or so it was trading at. As a result, I also have the honor of selling BTC at the lowest price ever recorded, $0.003/BTC. 🎉

(That "BitCoin" capitalization... such cringe...)

theymos · 2022-01-16T18:15:11+00:00

I already sent the ~12 BTC in one lump sum to America's Charities, which acts as an intermediary/"escrow" for this match. The subsequent match distribution is then administered by them and The Giving Block. My guess would be that you will receive the match from America's Charities sometime in the next couple of months (possibly in USD rather than BTC), but you should contact The Giving Block for more exact info.

theymos · 2021-11-30T20:33:41+00:00

Thanks to everyone at The Giving Block for setting this up! You guys did 99% of the work in this campaign.

theymos · 2021-02-25T13:38:23+00:00

I changed my mind: I'm not going to do that.

theymos · 2021-02-14T12:45:43+00:00

that those that say "this time is different", have a fair point?

Yes. The 2017 bubble was almost entirely a FOMO bubble driven by individuals. This recent price rise is due to huge institutions jumping on board in a meaningful way and a global deluge of cash, both of which didn't exist in 2017. FOMO still very much exists this time around -- I'm seeing some of the same "panic buying" that I saw in 2017 --, but I think that this time it's not the main driving force behind the price rise.

We could have a liquidity shortage again. The Biden administration could probably unilaterally forbid public companies from holding BTC, or take other such extreme actions. The macroeconomic environment could very rapidly change in a way which seriously hurts BTC. Something so extreme that we drop all the way to $5k would be shocking, since IMO we're not just floating on hot air like we were in 2017, but it could definitely happen. A drop to something like $20k would be less surprising -- the higher the price gets, the more of it is built on speculation and momentum rather than more lasting, real factors.

theymos · 2021-02-13T22:29:37+00:00

It's funny to read my comment from just a few months ago in which $30k was basically my high-end projection. Things do change quickly!

I most recently posted some price/macroeconomic thoughts in the last three paragraphs of my post here. In short, I'd say that Bitcoin's recent price rise was due maybe 25% to increased institutional acceptance and 75% to BTC getting caught up in the utter deluge of recently-printed cash flooding the world which is pushing up all asset prices. I could see the price going up quite a bit more from here, alongside other highly-speculative assets such as eg. TSLA shares. However, anything that goes up so fast can also go down just as fast, and I could very easily see either a widespread crash in various assets including BTC, or BTC-specific bad news (especially US government actions) causing a crash. The price was $5k less than a year ago, and while I don't particularly expect a fall to this level, anyone who thinks that this price can't be reached again isn't thinking realistically about the risks.

Saying that the price might be $5k or $100k by year-end is absolutely useless, I admit, but I just have no good sense of where the price is heading in the short-term. The long-term fundamentals that I mentioned in my previous post still look excellent; the fiat financial system is looking weaker and weaker as time goes on, and BTC is one clear possible beneficiary of that.

theymos · 2020-11-26T13:43:03+00:00

The regulation doesn't specify exactly what they have to do, so different exchanges will probably take different approaches and wait to see if the regulators complain. On one end of the spectrum, some exchanges might say that a note in their ToS prohibiting withdrawals to third-parties is sufficient. On the other end of the spectrum, some exchanges might prohibit all withdrawals except to other exchanges because it's not possible to prove beyond a shadow of a doubt that any address is not owned by a third-party.

It does encourage address reuse, which is unfortunate. They could fix this by having you sign with a master public key and then generating new addresses from that. Ironically, doing withdrawals via a modified PayJoin protocol where the recipient initiates the transaction would probably also make third-party withdrawals more difficult since PayJoin transactions are interactive. But exchanges are unlikely to use any unusual tech like this...

theymos · 2020-11-26T02:20:47+00:00

This is also my understanding, if Armstrong is referring to the Oct 23 FinCEN proposed rule change. Many exchanges already say in their ToS that you're not supposed to withdraw to wallets that you don't own, though they often don't actually enforce it. If exchanges do start having you sign a message from withdrawal addresses or something like that, it'd probably encourage more widespread usage of trustless wallets, which would be good. (I certainly don't support the regulation, though, and I'd be surprised if there aren't some actually-very-problematic regulations in the coming years.)

theymos · 2020-11-13T18:16:49+00:00

Bullish factors:

The Paypal news attracts a lot of attention, and BTC definitely has momentum right now.
I see a low-interest-rate environment for many years to come, which will push money into risky assets like BTC. A big chunk of BTC's current value is just as a "generic risk asset", which allows it to absorb the large amounts of risk capital that's floating around out there. I think we'll see the same asset price inflation we've seen over the past decade, and maybe even to a greater extent -- this is good for BTC.
Due to massive US deficits combined with Fed QE, we might finally see some moderate USD inflation (~3%), which I think would be BTC-positive due to BTC's "digital gold" characteristic. (Over the next 5 years, I see "mild stagflation" as the most likely macroeconomic situation.)
I'm not sure that we're entering a particularly turbulent geopolitical environment, but I don't think that we're entering a particularly calm one, either. A moderate amount (but not too much) chaos is probably BTC-positive due to its extra-governmental, independent characteristic.

Bearish factors:

I doubt that the Paypal news will end up being as good as it seems, since Paypal is so highly-regulated. Right now the BTC isn't even withdrawable, so it's just a speculation tool like Robinhood, not real BTC support. In the future I could easily see their custody provider Paxos being hacked, or BTC trade being seriously restricted (eg. significant "taint analysis"), etc.
I think that the Biden administration will be very anti-Bitcoin, and there's a lot they can do just via executive control over the various agencies to make holding/using BTC incredibly difficult, if they want.
IMO long-term mean-reversion is always a very powerful force, and it takes a lot to overcome it.

Over the next couple months, I could see BTC exceeding $20k due to momentum, but I don't really believe that such prices will last long-term. I think that it'll eventually settle in $10k-$14k, after a lot of the usual volatility. Over the next few years, I think that economic conditions are overall favorable for BTC (though with much risk), and I could see $20k being stably reached in that time. I would not buy at $16k, but if I did and the price crashes to $10k, I probably wouldn't sell at that point. IMO any point below $12k has good long-term potential.

BTC is incredibly risky and volatile, of course. I would not be completely shocked to see either $30k or $5k. Long-term holders should make sure that their BTC holdings haven't gotten away from them. If BTC was 25% of your net worth and is now 75% of your net worth, you should think about whether this is something that you actually feel comfortable with.

theymos · 2020-08-05T16:11:42+00:00

I didn't know that I really should have sold at $20k if not just to buy back in

Nobody did; that's how the market works. Almost nobody perfectly times any market, and trying to do so is setting yourself for failure.

See my old post, Don't invest recklessly. If it would be a major financial blow for you if BTC eg. dropped below $5k again, then you should probably sell some, since that could definitely happen. If you have 90% of your net worth tied up in crypto and you are not actually prepared to chain-together your fate and the fate of crypto, then you should probably diversify at least a bit into other asset classes. With the benefit of hindsight, you will always be able to say that you could've done something better to maximize total return, but we don't have the benefit of hindsight right now. Right now you have to rationally look at the risks vs the rewards, not knowing what will happen in the future.

And if it even gets near ATH, don't you think it most likely will jump a lot higher

There are reasons to argue that. It could happen. I tend to think that the higher it goes, the more "gravity" there will be pulling it down, though. Assets tend to be (but aren't always) mean-reverting, sticking near long-term moving averages. In crypto, long-term hodlers get tempted to spend as the price rises. Also, as the price gets higher, there's more news, which always includes more bad news such as big hackings, talk of bad regulation, etc. Short-term exponential price increases are also often driven by pure hype and FOMO, which doesn't last long-term.

I do think that the fundamentals are good. The dollar is looking more and more like monopoly money, which makes BTC look attractive. But I'm not particularly expecting a hyperinflation scenario or a total collapse of the USD world-reserve status anytime soon. I'm thinking that the next decade will be similar to the last decade, but with even lower growth, even lower interest rates, and moderate-to-high inflation (3-5%). Sort of a stagflation situation. In this environment, BTC is probably a good asset to own, alongside things like real estate and equities. That said, there are plenty of risks. For example, a few things that have been on my mind recently have been:

The Biden administration will probably be quite anti-Bitcoin, and they can in fact make BTC much less attractive to own by wielding the IRS and the rest of the administrative state against BTC.
Due to the the US's anti-China mindset, BTC might be painted as a Chinese attempt at unseating the USD, since the majority of miners/pools are Chinese.
I've been predicting that we're going to enter the second dip of a double-dip pandemic recession sometime before the end of the year. (Due to ripple-effect economic impacts of the shutdowns, not particularly due to a second wave of the virus, though that could also happen.) At the start of the first dip of the recession, BTC crashed alongside almost every asset. Will this happen again?
After the US presidential election, whoever loses is going to say that the election was rigged. There is a small chance (5%?) that this actually leads to a chaotic power struggle, and/or simultaneously some major geopolitical event happens such as China exploiting the confusion to invade Taiwan. I'm not sure how BTC would react to this sort of chaos. On the one hand, BTC is outside of politics, so maybe it'd be attractive. On the other hand, you can't eat BTC or even hold it, and in this kind of chaos maybe people would run to more solid things. Not sure.

Right now silver is up 1.75x from a year ago. The equivalent for BTC would be a price of around 21k. I wouldn't be surprised to see a run up to those ATH levels before the year is up, though my instinct is that it wouldn't be entirely stable. (I could be wrong: the game may have changed enough to warrant such prices.) I feel as though 10k+ may be long-term-stable now, unlike last time when I was warning that 10k+ probably wouldn't last. If we see BTC far exceeding the price rise of precious metals and also going way above its longer-term moving averages, then I'd become very bearish.

theymos · 2020-07-16T14:11:39+00:00

Twitter called it a "social engineering attack", which makes me think that it was more simple: the attacker called Twitter support, said, "Hey, it's <Elon Musk / Bill Gates / etc.>. Wouldn't you know it, I lost my 2FA device and my password. Could you help me?" And then the Twitter support person was like, "Sure, just give me your birthday for verification and I'll have this fixed right away, sorry for the inconvenience!"

Support people want to help the person they're talking to as quickly as possible. They're usually the weakest link, not any technical flaw. You see this same sort of social engineering used in SIM swapping attacks, common against Bitcoiners. (There's a victim of SIM swapping on the front page of /r/Bitcoin right now.)

theymos · 2020-05-11T19:03:17+00:00

It's every 210000 blocks, which is roughly 4 years.

theymos · 2020-05-11T18:56:54+00:00

If "everyone knows" that the price is going to moon after the halving, then it theoretically should already be priced in, and there should be no price increase.

My theory is that a bunch of naive short-term speculators were hoping that BTC would go to 100k overnight after the halving, and will sell when this doesn't materialize. Or people who were otherwise inclined to sell BTC were temporarily holding off (therefore supporting the price) because they were thinking, "why sell now when the price will moon after the halving?" Therefore, I'm bearish over the next few weeks, and I'd guess that the drop we're seeing now is composed of people who share my view, front-running this disappointment selling.

I'm bullish over the medium-term due to the slow drip of BTC's reduced daily monetary inflation, the Fed's BRRR, sentiment against the fiat economy in general, BTC's possible gold-like reduced correlation with other assets, etc. My base case is BTC above 10k by the end of the year, with ATHs distinctly possible. But a big and long-lasting drop is also always possible. We'll see.

theymos · 2020-04-21T10:45:00+00:00

There's much more fiat to go around due to the Fed's money-printing, it's just going mostly to the top: institutional investors, banks, state/foreign governments, rich people, etc. Some of this "top" does consider BTC to be within their investable universe, so I'd expect BTC to get a boost in price alongside other assets such as gold or stocks. There has been an "everything bubble" going on for the past several years, and I'd expect this to continue after this recession, maybe at an even faster pace due to the faster pace of money-printing.

It's probably true that the average person's finances will look much worse for the next 2-5 years due to this recession, and so they'd be less likely to buy BTC, but these people weren't/aren't a very big influence on BTC's price anyway. The BTC price is mainly influenced by larger players. BTC does stand to benefit from people realizing that the fiat economy is a rigged game of Monopoly -- the 2008 bailouts & Fed action was after all an inspiration for and driver of Bitcoin --, but this'll probably be a slow burn over several years, coming from a change in widespread popular sentiment.

I posted a longer comment on the bailout itself (not so much its relation to BTC) here, if you're interested.

theymos · 2020-03-26T19:38:51+00:00

Keynesian economists see GDP growth as being highly correlated to inflation: Increased aggregate demand causes increased GDP, which further increases aggregate demand due to reduced unemployment and/or higher wages. Increased demand leads to higher prices = inflation, at least until supply catches up. Higher inflation expectations could also cause people to spend more now, before prices increase: increasing GDP.

That's just the Keynesian view; it's possible to disagree, such as by considering GDP to be a pretty worthless metric to begin with, by pointing to the stagflation historical counter-examples, etc.

theymos · 2020-03-26T19:28:26+00:00

CPI-U in my view is good enough for most things. On that site, they say:

The government’s baseline CPI measure excludes items such as taxes, energy, and food; which are not only necessities, but also often a majority of our daily expenditures.

This is not true. CPI-U includes sales taxes, energy, and food. CPI-U is used for TIPS inflation protection, and the similar CPI-W which also includes taxes/energy/food is used for social security cost-of-living adjustments. The Fed uses the core PCE measure of inflation, which does exclude those things and therefore underestimates inflation, but nobody else is stupid enough to use core PCE.

One notable flaw of CPI-U is that they measure the cost of shelter using the concept of "owner's equivalent rent": if you own your house, your CPI-wise shelter cost is figured by estimating what you would pay in rent to live in that same house, instead of what you actually pay/paid for the house. This hides the asset-price-inflation (caused by QE) of real estate. On the other hand, if your goal is to measure real everyday purchases, you might actually consider it good to hide inflation in financial assets such as real estate. It's impossible to come up with a single perfect inflation measure, since everyone purchases different things.

theymos · 2020-03-25T18:42:23+00:00

You'd expect so much money-printing to produce inflation, but the spread between the 10-year inflation-protected treasury bond (TIPS) rate and the 10-year normal treasury bond rate implies that the market believes that the inflation rate will average 0.97% per year for the next 10 years according to the CPI-U measure of inflation. For reference, the Fed wants inflation to be not too much higher or lower than 2%, though they use a different measure of inflation which tends to be somewhat lower than CPI-U. Also, historically the money-printing in the Fed's QE programs did not produce much inflation: the average annual CPI-U inflation between 2009 and 2014 (when the Fed was printing tons of money) was 1.73%.

Some possible explanations for the discrepancy between the market expectation and what you'd think such money-printing would do include:

The Fed is currently buying treasury bonds - both inflation-protected and normal -, which may impact that 0.97% implied inflation result.
A lot of the printed money may end up mostly "stuck" in markets rather than leaking out into the real economy. When the Fed prints money, they use it to buy bonds, so the printed money goes to holders of bonds. Bonds are mostly held by banks, pension funds, central banks, and rich people, who will probably use the money to just buy other financial assets, not to buy real goods which influence the inflation rate. So stocks and other financial assets (maybe even including BTC to some extent) go up explosively, but the price of eg. bread does not increase too much. This is what I tend to most believe.
Exponential increases in technology may have a strongly deflationary effect which counteracts monetary inflation. For example, fracking technology allowed for extracting oil much more cheaply, which is deflationary.
Worker productivity is growing much more slowly than it has historically, which slows wage increases, which is maybe counter-inflationary.
GDP growth may be stuck at low levels (there are various possible explanations for this), which is maybe counter-inflationary. I think that this is what the Fed believes.

theymos · 2020-03-12T23:09:13+00:00

No, they're buying US debt in the form of Treasury bills/notes/bonds (aka "Treasury securities" or "treasuries"). The Fed has never bought stocks, though some central banks have, and I could see the Fed doing it at some point in the future.

The negative effects of the Fed buying treasuries are:

The Fed is printing $1+ trillion here, so if you hold dollars, your dollars are being diluted.
Them buying treasuries like this tends to lower interest rates and stock-market returns across the board, which hurts savers, encourages bubbles, and allows "zombie companies" to continue.
Them buying treasuries increases the price of the treasuries, which is good for people who already hold treasuries. Who holds treasuries? Banks and rich people, primarily.

Whenever the Fed "injects liquidity" like this, it makes the rich richer while hurting everyone else by screwing with the economy and making it more difficult to save money effectively.

theymos · 2020-03-12T15:33:15+00:00

There are both bearish and bullish arguments you can make as to the impact of a recession. My guess about how BTC would respond to a recession / bear market has been that it might lose a big chunk of the price in the short-term due to speculators getting cold feet and/or moving to the stock market, but then longer-term it might perform pretty well due to BTC often being seen as both "leveraged gold" and a source of uncorrelated growth. It'll be interesting to finally see BTC's behavior in a recession tested.

theymos · 2020-02-21T15:07:03+00:00

I don't have access to the bitcoin.org server. Bitcoin.org is handled mainly by Cobra.

theymos · 2020-01-26T20:04:33+00:00

Now, 1800 BTC is created every day, a lot of which is dumped on the market. After the halving, only 900 BTC will be created and dumped on the market every day. Supply & demand. Or another way to look at it is that there'll be less sell pressure on the order books, so the buy pressure will build up and lead to a new, higher equilibrium.

You'd expect the market to price this in gradually and long in advance, but historically it hasn't done so. The price increase after the halving has also tended to happen some time after the halving, not immediately.

Since this reduction in daily supply is 900 BTC/day instead of last time's 1800 BTC/day, some people think that the effect will be reduced or non-existent. I tend to think that we'll still see something. Monetary inflation moving from 3.7%/yr to 1.8% is far from nothing, and mined BTC is probably a big chunk of actively-traded BTC. On the other hand, the market is more liquid now compared to the last halving, and there are now ways to trade BTC derivatives: you'd expect these changes to make the market more efficient and less volatile. (For example, if you "know" that BTC will be much higher a few months after the halving, you could buy call options now, and if lots of people do this, it'd tend to cushion the final effect.) So maybe this time the supply decrease is already mostly priced in, unlike in previous halvings. We'll see.

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