TwoCitiesCapital

I have the exact opposite opinion I think Gold in the near term will continue to play the portfolio/monetary role it has and is probably safe from disruption. But by the time BTC is high on the S-curve it will have demonetized gold and taken its place in portfolio allocation leaving gold....like silver (gold silver ratio has gone from 10-20x historically, and 40x post WW2, to 90x post demonetization). In a world without BTC, I believe gold outperforms stocks over the 2020 decade. In a world with BTC, much harder to say because I don't know how quickly the monetary premium/portfolio allocation will erode. I'd expect I WONT' want to own gold in the 2030s.

What I've started telling myself is that the worst 30-year return for US large cap stocks was ~7% per annum on a nominal basis. If I do ~7% for the next 30 years, I can replicate my income today in retirement without adding another cent. And I will be adding more cents. My salary today won't go as far in 30-years, but I'll be paying way less in taxes (assuming tax regime is similar between income/capital gains/qualified dividends), will also not have a mortgage, and will not be saving $40-50k/yr so I think I'd come out just fine. This has made me more forgiving of high valuations that have permeated most of my adult life. I still avoid indexing and select individual securities, but am less worried about starting valuations than I have been in the past. I still own a hefty allocation to bonds because of my job in financial services means my income is largely impacted by fluctuations in the market just like my portfolios are but have stopped adding to them and have gone back to buying select equities with most of my savings cash flows despite my concerns on market valuations. I don't know what to tell my dad though. He hopes for retirement in the next ~5 years. The worst 5-year return is quite a bit different than the 30-year return and inflation matters a hell of a lot more so its real returns, and not nominal, that actually matters for him. That's is a much tougher nut to crack. I agree with the above that having 2-3 years in cash and the rest be risk-on is not a bad approach, but I'm not sure 2-3 years is enough. Many U.S. stocks still haven't caught up to their nominal highs in 2021. That's 4-years of no price growth for many stocks even while purchasing power has eroded significantly over that period of time. We had a huge bear market in 2022, seemingly followed by a large recovery, but that large 'recovery' excluded a huge chunk of U.S. stocks. The indices have papered over that weakness by being ~20-30% in a handful of performing names. Stocks like Disney, Tyson, Nike, Target, Home Depot, Dollar General, Verizon, Proctor & Gamble, etc tell a very different story from SPY. There are A LOT of names in the S&P 500 with uninspiring performance and negative real returns over the last 4-years. And this is the exact opposite of what happened between 2000 - 2013 where the broad indices basically went nowhere while owning individual value stocks did fine. So do you index or not? Do you plan for 3-years for a recovery? Or 5? or 13? I'd think you'd want 2-3 years in cash equivalents followed with perhaps another 2-3 years in higher risk fixed income that can be replenish some of the cash as its being spent and be leaned on if your equities take longer to recover than 2-3 years. It doesn't have to be treasuries - can be things like IG corporates/mortgages, a slug to HY/EM debt, and a slug to gold/TIPS for real rate hedging. But we've seen multiple times in the last 30-years that 2-3 years was NOT enough time for a lot of names to recover, especially not in real purchasing power terms, and that is even with all of the passive flows/optimism/monetary policy/low interest rates supporting record valuations over that period.

So we're right on schedule for another

I've never traded futures directly so maybe I have this wrong But are futures more like stocks where you trade the cash notional? Or are they more like options where you trade some contract premium that is a lot smaller and settle the notional at the maturity if not closed out? Because I thought it was the latter and thus shorting Yen futures produces little cash to reinvest, but maybe I have that wrong?

I sold out of my position about a month ago and replaced it with calls expiring in March. Upped the notional a bit, put a time limit on being right, and took cash out of the position to buy other things that have traditionally had strong seasonality at the moment. Fingers crossed for a pop by March. My rational is rates are attractive relative to inflation, have a good probability of being attractive relative to near/intermediate growth, and are heavily shorted....

As someone who has experience staking - the yields aren't entirely real. You pay fees to claim them which eats up a healthy chunk of the returns. The tokens the yield is paid in fluctuate in value which can eat up a chunk of the returns. And then transferring to an exchange to convert to actual USD/stablecoin is a transaction fee that eats up a chunk of the returns. In addition, pending how the staking is structured, if it results in a change of token (like staking in Yearn used to by giving you a Year pool token in exchange for your token deposit), then that transaction is taxable. As is converting back to your initial token when you withdraw it. And the taxes? A nightmare. Every transaction consumes ETH as your "commission". That ETH has a gain/loss associated with it that then needs to be declared. Then, if you want to do it right, that gain/loss gets capitalized into the basis of whatever transaction/token you just took on further complicating forward calculations of gain/losses on tokens you've acquired. I have a ~$30-40k loss carryforward from staking in 2021 - 2023 despite the yields being "positive" the entire time. As far as market making, most market-makers are making returns sub-treasuries for supporting their token pairs. It's been awhile since I looked at the data, but is why I never dabbled in it back when I was staking because the gains weren't there.

My understanding is Seg Wit in 2017 was a soft fork with Bitcoin Cash hardforking off to change the block size to 32 MB. Either way, no transaction history was changed, the BTC that exists today is still backwards compatible with the version of BTC before that while Bitcoin Cash was not. BTC has thrived. Bitcoin Cash didn't and has since forked again and has had multiple instances of being highly susceptible to 51% attacks while some of its hard forks afterwards HAVE been attacked. In something that needs to be measured in trillions, these are peanuts. Especially considering there has been no formal competitor. How much real world stablecoin/treasury tokens do you expect if/when the US releases its own fully backed/endorsed digital dollar? It is NOT. It is wholly independent from and unrelated to the yields. Yields could go to 10% tomorrow and Coinbase could decide to continue paying 4%. Yields could go to 0% tomorrow and Coinbase could decide to continue paying 4%. Yields could remain as is and Coinbase could decide to cut it to 2%. You move the USDC to another wallet and it doesn't matter what Coinbase wants, you get 0%. And while I'm sure it can be bypassed via VPN - neither of those stable coin issuers claim to pay interest to those within US domiciles for fear of being regulated as securities. And since they're not offered to US investors, what regulatory regime are you relying on if they make off with your money?

The difference is that the community is truly decentralized with BTC and any hardfork fails because the weight of inertia to move to something of unproven value from something of proven value is a hard pill to get the majority to swallow. The game theory here supports the OG chain in any outcome. It wasn't a hack. It was a flaw in the code that was exploited. The code worked exactly as written. And "anyone" can use the Ethereum classic chain? Sure. But when the control was largely centralized within the Ethereum Foundation, and they backed rewriting history and supporting the new chain instead, it basically all but ruined the OG Ethereum chain overnight by moving all liquidity/support/development to the new chain leaving the old one for dead. When it comes to changes in the protocol - all matters what the community wants. If the community is controlled by a handful of centralized entities, like ETH is/was, then it only matters what that handful wants and everyone else is just along for the ride. BTC relies on control being separated between different participants with different priorities and influence is NOT based on the size of your stack - like a checks and balances. And ALL parties incentivized to support the price of BTC and making hard forks risky to jump from the chain with all liquidity/support/function to a new chain that unproven and has none of those things. Not to mention we now have a history of failed attempts further dissuading future attempts. Unlike Ethereum, the primary BTC chain is the OG one because its design was successful and decentralized. ETH was centralized, those entities pushed to rewrite history, hardforked a new coin, and then asked everyone to forget about the old one. That is how it is different. I don't disagree that some items may be tokenized. I largely disagree that Ethereum will be the platform for listing those tokens as I see limited utility gained from a decentralized network outside of individuals in sanctioned areas getting access to global liquidity...which monetary authorities have an incentive to stop and know exactly who to go to to get it done since the network is significantly more centralized. The 4% yield from Coinbase is a promotional offer to get you to hold USDC instead of Tether (any other stable coins) because Coinbase owns an interest in the company that issues USDC. The token/stable coin itself pays nothing which you would notice the moment it transfers out of Coinbase to any other wallet. It is NOT the pass through of interest earned on the stable coin reserves. It is no different than JPM Chase offering me $600 bucks to open a checking account or Bank of America offering me 0% interest on balance transfers for 18 months. Seems we have a chicken and an egg problem. Companies will move to it because of liquidity, but liquidity won't arrive until there are useful products and companies moving to it? I still don't see the sell for Schwab, IB, Fidelity, etc. They have access to large global exchanges that are very large relative to anything Ethereum can presently offer. There is nothing stopping the exchanges/brokerages from partnering together to develop an intra-net like blockchain protocol between themselves that is jointly owned, operates 24/7, and allows greater liquidity and market access than any one individually can do. This is how Visa started with big banks partnering together for a global payment network.

+1 Has few of the characteristics that lend to BTCs value. This is especially true after the move to PoS where power/control is even further centralized. Additionally, even before PoS, ETH has a history of rewriting transactions. Is it really an immutable/decentralized ledger if some group can just hard fork it to change transactions they don't like and throw the bulk of power/support/coins behind this altered narrative/history? What characteristics actually make it valuable? It doesn't matter. There is no enforceability/repeatability to that. The inflation rate can go higher, or lower, based on issuance and network fee burn/usage. It's going higher at the moment. And just like it has in the past, the policy can change. There is zero certainty. Meanwhile, we can be certain of what BTCs will be because it's the same as it was 15 years ago. Perhaps. But what systems that provide any real use case value are on ETH? I like Chainlink and think it will do well if we ever actually get a decentralized financial network, but hard for me to understand the value add here for decentralization. Centralized ledges can do everything ETH does cheaper and faster while BTC now has basic programmability for when you absolutely need an uncensored/irreversible settlement. What does ETH do? What real world value is there so far? There is some interesting stuff/developments with DAOs as a new way or organizing, but even those don't require a decentralized ledger necessarily. Remittance payments/stablecoins is a valuable use case, but one that is highly likely to be usurped by the formal digital dollar when released. And more so - this activity alone doesn't support current size of ETh network valuation and is much more ably handled by L2 anyways - so value doesn't accrue to L1. When I dabbled in DeFi in 2021/2022, everything was based on yield farming tokens, or earning transaction fees staking stable coins pulls for conversion between one and another, or staking derivative exchanges that traded crypto derivatives. The entire economy was circular....and still is 4 years later. Where is the development to bring real world on chain? If I'm Schwab and decide to tokenize stocks, why would I use ETH instead of my own internal ledger OR some agreed upon industry standard/protocol?

I have difficulty with their desktop app - especially doing option spreads. But the mobile app is

Maybe it's different in Canada? Mine automatically converts the USD to euros in the amount of the purchase. I pay a small fee for the currency conversion ($1-3) and a small fee for the purchase ($1-5).

So once again, this seems to support my question above. If the value is accruing to L2 operators and not to ETH validators and ETH holders ...what is the value of ETH?

What do you make of ETH no longer being "deflationary"? Seems to me that's a pretty big negative in the narrative? Especially since BTC inflation of only 1% halved again last year. ETH's inflation is acceleratint precisely because it isn't being used and thus little is being burned. What other value prop does ETH offer? I understand it's cheap relative to BTC based on history. I guess I don't understand what fundamentally supports that value like I do with BTC? As someone who dabbled in DeFi in 2021 - 2024....not sure I am actually convinced anything worthwhile will come out of this project anymore other than stablecoin transaction revenues. Does that support a market cap of $300+ billion?

They have two tiers - the commission based and commission free. I've never tried the later as I feel I've always gotten value for their paid tier. As far as "additional" fees - not really. Every exchange has different fee structures, but I'm typically paying $1-5 per trade (once converted back to USD) and sometimes get PAID for the trade if I'm adding liquidity. Not to mention, their securities lending shares interest typically covers the cost of most of my commissions in a month since I'm not placing a ton of trades to begin with.

I'll second IB. Customer support is lacking. As is the UI. But their execution, costs, and access to int'l markets seems unparalleled. If I had to choose 1 brokerage, it'd be IB.

No discomfort for me doing them, but I was doing it on equipment like the guy in the video and haven't tried tall chairs/stools as stand in. I typically will do a 2-3 sets of 20 at body weight or where a weighted belt of +25 and do sets of 10-15.

Similar to body-weight dips, but instead of bending your elbows, you're basically shrugging and unshrugging while keep arms straight. Didn't listen to the audio, but he demonstrates the exercise at the end of the video:

I still think there is resistance to it. Less so in the past, but back in 2018 everyone in traditional finance that I work with was badmouthing it BECAUSE it was only moonboyz and collectible cat jpgs that defined BTC/ETH. The general populace had probably never even heard of it - which once again makes you stick out if you start accumulating significant portions of this "money" you can't touch/hold/see/understand - especially when it then cratered into COVID. I picked it up in 2019 when I changed my mind. Nobody in my immediate peer group seems to have done that. And the few coworkers are dabbling in it are dabbling with small speculative sums that are inconsequential and often bypass BTC for meme coins. More akin to putting it on black in casino than having a specific investment thesis. It still feels like you stand out as a proponent of BTC no matter how well thought out. But that may be changing with it take center political stage. I just don't know if it's actually a good thing that the president behind $TRUMP is also the one supposedly in support of BTC.

I think this is a decent framework, but I'm not sure it's all entirely based on faith in the system and belief in its success. I tend to think our system is doomed for failure, but not necessarily because central banks can't work or that there isn't a framework that could work. I think the primary tragic flaw is people forget the failures of the past and don't enforce discipline to prevent it from happening again. It's a death of a thousand cuts inching towards your doom over a few generations. I think you have to believe the system is broken AND/OR have a willingness to stand out from the pack. Hardcore/deep value interesting prepared me to buy what is unpopular and unloved and Bitcoin has been that basically its entire existence. It will change, and perhaps is starting to, but it took someone willing to look dumb and be different from their peers to buy it for the last 15-years. When it clicked for me, I did an immediate 180⁰ and bought that day. I didn't mind that meant I was the only one in my group of peers to own it. I didn't mind that my girlfriend at the time didn't see much value in it. I didn't mind that I would now be grouped with "magic internet money moon boyz" or that men talking about their crypto portfolios is now a popular meme that paints a negative view of a population that now includes me. I have a willingness to stand apart and stand out and I find most people are more comfortable being wrong if it means they remain part of the pack.

There is already the opportunity for this. Anytime can open a brokerage account with minimal upfront and buy the S&P ETF commission free. I am skeptical it will help anyone except the well connected and political elite. Norway find itself in an enviable position, but it's not real 'wealth' if you don't control it. IMO, this is a much better idea and a program easily affordable by US govt compared to other social safety net services. Just have to make the money untouchable until 18 - ideally even longer. Maybe 25 or 35.

Gotta be careful to be a bit balanced with the fitness though. I was working out 3-4 times a week and working primarily on big compound lifts for full-body efficiency in minimal time/reps. My bench/squat/deadlift combo was ~1,100 lbs (I'm 180) and my left shoulder/neck/shoulder blades constantly hurt and had tension. I always thought it was related to a shoulder injury from snowboarding ~10 years ago where I completely tore 2 of the 3 muscles in my left shoulder. Only recently found it was due to underdeveloped mid/lower traps vs my upper traps from deadlifting. A single exercise targeting mid/lower traps thrown into the routine eliminated ALL of my neck and shoulder tension/pain after a single day.

I'm not opposed to the US government getting equity stakes when taking equity like risk. I'm also not opposed to that being put into some collective vehicle like a sovereign wealth fund. Though my preference would be for the govt not to be involved in bailouts at all and for this vehicle to be unnecessary. IAM opposed to the US government printing money to buy stakes in public companies to then use that ownership/printed money to exert political influence on private entities. I'm very concerned that this is what it will become - under Trump who clearly has a disdain for independent organizations not directly under his control or by Democrats pushing social agendas. It is odd to me that this somehow fits the Republic narrative of a smaller/less involved government.

Yes. It was. And had traded at just $1,000 3-years prior. So a 5x in 3-years, even after a 75% drawdown to COVID lows, is BTC going to zero? Even while the Fed was engaged in QT during 2018 and 2019? It seems clear to me your "Fed Quantitative easing is the only thing keeping BTC above $0" model is broken - seeing as the last two times the Fed did QT, BTC was still significantly higher than 2-3 years prior.

Perhaps. Is just another way of saying Bitcoin dominance is rising. It's right around 61% which isn't historically unprecedented.

The Fed has been engaged in quantitative tightening since mid-2022. Bitcoin has gone from ~$40k at peak Fed balance sheet to $100k today. Where is the drop to 0 coming from again? And why would it be different than the last 30 months?