The Cryptocurrency Trading Journal

Sprout · Feb 8, 2021

NoahA said:
Sure, but once everyone is looking for an exit, what does that do to the price?

The government can easily say that with rising BTC values, they are making it illegal to trade in the US because they are trying to protect the consumer. It is so incredibly easy in my opinion. So if you have a coin sitting there at 50k or 100k, how are you controlling your risk of it losing 99% of its value very quickly? It could very well be an overnight decision like this, as opposed to weeks of going back and forth with 10% down days, but at least giving those paying attention time to get out.

Crypto's success will more than likely lead to its demise. It serves no purpose for the government, and in fact, makes it's work that much more difficult. The US does not need competition for the dollar. Perhaps at this very moment, watching it unfold is an excellent learning tool, but at some point, I do believe that all governments will need to take back the control over their currency.

I mean look at how China imposed laws limiting how much money you can remove from the country. Sure, there are ways around it, as there will be with BTC, but the mere threat of either the FED or some other government entity looking into the role that crypto plays in the financial stability of the US dollar will cause a huge drop in its price.
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World Population ~ 7.8billion
US population ~ 331million

Fair to say, throughout it’s entire existence, it has not only survived in an adversarial environment but thrived.

Bitcoin doesn’t care about nation states.

Sprout · Feb 8, 2021

Daal said:
https://www.cnbc.com/2021/02/05/mar...nt=Intl&utm_source=Twitter#Echobox=1612542991

The crypto mental transformation is real. Cuban now defending Doge. And I would agree with him. His only mistake is owning LTC, which is complete garbage and has no chance of outperforming BTC in the long-run. All of its 'advantages' over BTC are just trade-offs that decrease its security
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Sprout · Feb 8, 2021

Daal said:
UNI, Sushi, AAVE, COMP, FTX, CRV, YFI, 1INCH. But its not a big position, something like 0.5% of my networth. I find it hard to analyze these tokens, who will be the winners? I dont know and I dont think anyone knows, so I'm betting on a lot them.

I do like the idea of the Uniswap token a lot, because its more of a brand bet than a platform bet. The platform sucks balls right now with the huge fees. But when they launch Uniswap with a Layer 2 solution, its going to rock and I bet the Unitoken will affect the governance of that too. So basically, its like owning the team, and all future platforms they put out. And the token holders can get part of the profit of the platforms if they desire
They are also backed by the top crypto investors (Andressen Horrowitz and Wilson Ventures), so I do like Uni a lot
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DFI is an index token that has those top projects and saves on gas.

Daal · Feb 8, 2021

Sprout said:
DFI is an index token that has those top projects and saves on gas.
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awesome. tks for that

Daal · Feb 8, 2021

NoahA said:
Sure, but once everyone is looking for an exit, what does that do to the price?

The government can easily say that with rising BTC values, they are making it illegal to trade in the US because they are trying to protect the consumer. It is so incredibly easy in my opinion. So if you have a coin sitting there at 50k or 100k, how are you controlling your risk of it losing 99% of its value very quickly? It could very well be an overnight decision like this, as opposed to weeks of going back and forth with 10% down days, but at least giving those paying attention time to get out.

Crypto's success will more than likely lead to its demise. It serves no purpose for the government, and in fact, makes it's work that much more difficult. The US does not need competition for the dollar. Perhaps at this very moment, watching it unfold is an excellent learning tool, but at some point, I do believe that all governments will need to take back the control over their currency.

I mean look at how China imposed laws limiting how much money you can remove from the country. Sure, there are ways around it, as there will be with BTC, but the mere threat of either the FED or some other government entity looking into the role that crypto plays in the financial stability of the US dollar will cause a huge drop in its price.
More...

Just realize that you are not an expert handicapper on the odds that the US government will do anything, most people aren't. And to not invest in a space with 10x-20x-Xx potential because of some chance something bad might happen is crazy. In poker its called 'monsters under the bed syndrome'

Daal · Feb 8, 2021

Michael Saylor created the 'bitcoin on the balance sheet' virus, Elon Musk has now unleashed it to the masses and there is $2.5T of patients (cash on corporate balance sheets) waiting to be infected by it. If the rumors that Apple is buying are true, then this will turn into a bitcoin pandemic. $2.5 trillion in cash...

Daal · Feb 8, 2021

Victor Hugo

NoahA · Feb 8, 2021

Daal said:
Michael Saylor created the 'bitcoin on the balance sheet' virus, Elon Musk has now unleashed it to the masses and there is $2.5T of patients (cash on corporate balance sheets) waiting to be infected by it. If the rumors that Apple is buying are true, then this will turn into a bitcoin pandemic. $2.5 trillion in cash...
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Why should TSLA even bother making cars at this stage? Just keep buying BTC. The revenue stream from cars is almost non-existent, and Elon having the cash to buy BTC is only because of the additional shares they sold.

And how on earth will the balance sheet looking going forward. The assets side can easily fluctuate 10% a day. What happens if on the last day of the year BTC takes a deep dive and completely messes up the balance sheet. This shit is just all getting too crazy now if major corporations will be listing BTC instead of USD in their financials.

tsznecki · Feb 8, 2021

Good journal @Daal but I was hoping it would be more active than making macro calls, you have another journal for that.

I'm looking to increase Defi exposure substantially on a pullback. Looking at AAVE, UNI, COMP, SNX, YFI, Polkadot.

Daal · Feb 8, 2021

NoahA said:
Why should TSLA even bother making cars at this stage? Just keep buying BTC. The revenue stream from cars is almost non-existent, and Elon having the cash to buy BTC is only because of the additional shares they sold.

And how on earth will the balance sheet looking going forward. The assets side can easily fluctuate 10% a day. What happens if on the last day of the year BTC takes a deep dive and completely messes up the balance sheet. This shit is just all getting too crazy now if major corporations will be listing BTC instead of USD in their financials.
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You are only looking at the first layer of things. Did you know that someone that wants 100% safety in a portfolio needs to add stocks to it? I have run the numbers (backtesting going back to 1926), you cant just put 100% in T-Bills or T-Bonds, or gold. Its a balance between bills, bonds, gold and stocks that creates safety over different enviroments. So even though the person is adding volatility (stocks), risk is going down (risk being measure as something like CAGR/Max DD or the Sortino ratio).

Bitcoin is similar, we are talking about 2-3% of a balance sheet, not all cash (although, some will put way more than that). But if USD goes into the toilet, that 2-3% will be a life safer. If you dont have it, then you are fucked. So ironically, you DECREASE risk by adding.
Chamath said it best, BTC is insurance against the governments doing dumb shit. Its better to have insurance than not have it