Cryptocurrencies

[Castanza]

 

[rkbabang]

16 hours ago, Castanza said:

 

 

 

I don't trust tether and wouldn't hold any.  The good news is that if/when tether blows up there will be a real buying opportunity in the entire crypto space.  People like changegonnacome will rule public opinion for a while, articles/blogs will be screaming about how they just knew it was all a fraud and pessimism will be at its max....  aaand in 3-5 years the tether blowup won't matter to crypto any more than the whole "The DAO" fiasco matters to Ethereum today.  Just growing pains in an entirely new asset class.

Edited May 28, 2021 by rkbabang

[Spekulatius]

And here comes the long weekend dump, LOL:

Edited May 28, 2021 by Spekulatius

[fareastwarriors]

1 hour ago, Spekulatius said:

And here comes the long weekend dump, LOL:

Will add in the low 30k's and more in 20k range

[TwoCitiesCapital]

20 minutes ago, fareastwarriors said:

Will add in the low 30k's and more in 20k range

I too was hoping for a retest of the low 30s upper 20s. My expectation is that we'll bounce again, around 30-32k where I hope to buy, and then start a more sustained uptrend again - hopefully to new highs once confirming this bottom. 

Obviously I could be wrong and this could just be the start of a long "crypto winter" a la 2018 - 2020, but I don't think this bull market is done yet - definitely some frothiness to valuations vs network utilization but still very shy of prior crypto peaks. 

Edited May 28, 2021 by TwoCitiesCapital

[Gregmal]

Eh 2-3 year "winters" to accumulate while out of favor to sell at 5-10x higher prices when its in favor seem like a reasonable IRR...not that this is what I am forecasting, but if you remain bullish on this thats probably what you want to see. 

[fareastwarriors]

Newbie questions.

What are the "best" places to buy some stablecoins? Easy to use site or app and relatively "secured."

 

U.S.-based investor

[Spekulatius]

1 hour ago, fareastwarriors said:

Newbie questions.

What are the "best" places to buy some stablecoins? Easy to use site or app and relatively "secured."

 

U.S.-based investor

The bigger question is why would you want to deal with a stablecoin cryptocurrency at all? It seems like you take counterparts/ collateral risk and inflation risk at this same time. Why not stick with USD? Seems to work perfectly as a means to exchange goods and services.

[Fly]

9 hours ago, fareastwarriors said:

Newbie questions.

What are the "best" places to buy some stablecoins? Easy to use site or app and relatively "secured."

 

U.S.-based investor

Coinbase, Kraken, Gemini are the big 3 in the US. Also look into BlockFi as a way to buy stable coins and produce some yield in one spot. Currently 8.6% APR:

https://blockfi.com/rates/

[TwoCitiesCapital]

10 hours ago, Spekulatius said:

The bigger question is why would you want to deal with a stablecoin cryptocurrency at all? It seems like you take counterparts/ collateral risk and inflation risk at this same time. Why not stick with USD? Seems to work perfectly as a means to exchange goods and services.

It's fairly difficult to get traditional fiat into and off of DeFi rails. Stablecoins that exist on the ethereum network help fix this. If the digital currency that the US gov't creates is compatible with the ethereum network, this would also fix this - but I doubt that it will be. 

11 hours ago, fareastwarriors said:

Newbie questions.

What are the "best" places to buy some stablecoins? Easy to use site or app and relatively "secured."

 

U.S.-based investor

In most cases - you can't "buy" stablecoins with fiat. Most of them are issued to institutional investors similar to ETF creation/redemption. 

You can open an account on an exchange like Coinbase and buy Ethereum (or some other ethereum based token) and immediately sell it for stable coins that exists on that exchange (USDC for coinbase). 

There are also other financial intermediates like BlockFi that accept fiat deposits and automatically convert it to stablecoins (GUSD in the case of BlockFi). 

Within the DeFi space, there are DEXs where you can transact tokens into stablecoins (UniSwap for instance) or trade between stable coins (Curve). 

Edited May 30, 2021 by TwoCitiesCapital

[fareastwarriors]

On 5/29/2021 at 9:54 AM, Spekulatius said:

The bigger question is why would you want to deal with a stablecoin cryptocurrency at all? It seems like you take counterparts/ collateral risk and inflation risk at this same time. Why not stick with USD? Seems to work perfectly as a means to exchange goods and services.

All good points. For me, I just need to have a bit of money in the "game" before I can actually follow it and start doing the work. Before buying BTC and ETH last year, I hardly ever looked at anything crypto-related. These are still small allocations but I'm learning a lot more now. 

It's just how I work.   

[Gregmal]

2 hours ago, fareastwarriors said:

All good points. For me, I just need to have a bit of money in the "game" before I can actually follow it and start doing the work. Before buying BTC and ETH last year, I hardly ever looked at anything crypto-related. These are still small allocations but I'm learning a lot more now. 

It's just how I work.   

Well said. I try to look at 200-300 investments a week. If I dont own it, I won't be able to follow it.

Frankly, the cost, assuming one even loses money(I've found more often than not you end up making money/breaking even, even if you had no idea what you're buying just cuz the market is bonkers) pays for itself when you incorporate the research and knowledge you've acquired through ownership. Between the filings, internet sleuthing, occasionally chatting with analysts, other shareholders or NEOs, looking at peers...you're likely getting more value for less than it would cost to outsource the work to a subscription service or hiring analysts. Of course I am assuming you are sizing starter positions appropriately...IE 25 bps or less...which for the average person is like $5-10k....which again, if you buy it, look into it, and dont like it....what maybe it went down 30%....like I said, a few grand which is easily worth the knowledge acquired in the process, which also compounds, the more stuff you look at, and makes you a better investor.

[thepupil]

1 hour ago, Gregmal said:

Well said. I try to look at 200-300 investments a week. If I dont own it, I won't be able to follow it.

Frankly, the cost, assuming one even loses money(I've found more often than not you end up making money/breaking even, even if you had no idea what you're buying just cuz the market is bonkers) pays for itself when you incorporate the research and knowledge you've acquired through ownership. Between the filings, internet sleuthing, occasionally chatting with analysts, other shareholders or NEOs, looking at peers...you're likely getting more value for less than it would cost to outsource the work to a subscription service or hiring analysts. Of course I am assuming you are sizing starter positions appropriately...IE 25 bps or less...which for the average person is like $5-10k....which again, if you buy it, look into it, and dont like it....what maybe it went down 30%....like I said, a few grand which is easily worth the knowledge acquired in the process, which also compounds, the more stuff you look at, and makes you a better investor.

y'know just your everyday guy with $2-$4 million bucks taking $10K starter positions measured in bps 

[Gregmal]

LOL yea maybe tone deaf a little. Figure at least on sites like this, amongst investors there s a higher standard for "everyday guy". Lets say you have just a mil. $2500 into something you're genuinely interested in. If that forces you into a crash course education on that type of investment...I'd say its entirely worth it even assuming you lose every penny. Knowledge is powerful when investing. Or so Ive found at least. Tricking yourself into buying that knowledge while also having an investment to go along with it is a cool little way Ive been able to significantly expand my comfort zone. 

[TwoCitiesCapital]

Yearn.Fi released their first quarter report. Made over $5 million in Q1.

30% more than the entirety of 2020 in a single quarter and are still launching more vaults/strategies.

Think of Yearn vaults as mutual funds that aggregate investors' capital to lower fees (transaction fee to move $20 is the same to move $20 million and significantly less than 1 million people each moving $20).

This puts Yearn token at a P/E of like 100x (total capitalization/annualized Q1), but how many years do you need to grow as at 4-6x before that becomes reasonable? 1-2. And 2 weeks ago you could've had it for 40% less. 

DeFi is blowing up.  

Edited June 3, 2021 by TwoCitiesCapital

[RichardGibbons]

2 hours ago, TwoCitiesCapital said:

Yearn.Fi released they're first quarter report. Made over $5 million in Q1.

30% more than the entirety of 2020 in a single quarter and are still launching me vaults/strategies.

Think of Yearn vaults as mutual funds that aggregate investors' capital to lower fees (transaction fee to move $20 is the same to move $20 million and significantly less than 1 million people each moving $20).

This puts Yearn token at a P/E of like 100x (total capitalization/annualized Q1), but how many years do you need to grow as at 4-6x before that becomes reasonable? 1-2. And 2 weeks ago you could've had it for 40% less. 

DeFi is blowing up.  

This is pretty interesting, because according to this, so far in Q2 they've made over $12M.

It's not clear to me that one can just annualize that 12M, because I don't understand that well how they make their money, so it could've been an aberration. I've been mining for a few years, and, for part of the last few months (when the transaction fees for ETH were high) I was making $16-18/day (using a 3070), while more typically--and for the last few weeks--it's been in the $4-5 range.

But, if you could annualize the $12M to $72M, then Yearn's P/S (which is pretty close to its PE, since it doesn't have many expenses), is in the low 20s, which seems stupidly low. It makes me wonder if I'm misunderstanding something since I've only stared at this for an hour or so.

They plan to use the profits to buy back tokens and potentially ETH for the treasury (though apparently not for cancellation.)

[DeepSouth]

Another interesting defi coin that can be analyzed fundamentally is MKR.

My limited understanding is this is similar to an unregulated bank issuing their own stablecoin currency (DAI) for overcollateralized loans. There is discussion on the lack of diversification in collateral, shifting towards USDC. They do have some interesting early stage work in bringing real world assets on chain, which is certainly a very heavy lift, and creates more risk to liquidate assets, but a massive opportunity if successful. The recursive nature of Defi speculation is also a key risk in my opinion (does this have any current use other than leveraging/speculating on other coins of potentially dubious value?).

DAI outstanding has 2X over past 3 months and 30X over the past year.

Earnings flow partially into a surplus buffer (retained earnings) and into repurchasing and retiring/burning MKR tokens. 

At current run rate, the protocol is doing $143MM in profits, which equates to a 4%+ buyback yield.

Not sure if I'm thinking about this correctly, but looks kind of like a 3% ROA ($143MM/$4,700MM), 357% ($143/$40MM) ROE bank (pre-loan losses I think, but overcollateralized on chain assets, rare to have losses), growing at a breakneck speed, and trading at low 20X P/E. 

https://makerburn.com/#/

Happy to be corrected if I'm off here. It's way outside of my traditional wheelhouse.

[TwoCitiesCapital]

https://www.wsj.com/articles/bitcoins-reliance-on-stablecoins-harks-back-to-the-wild-west-of-finance-11622115246

 

A fairly critical piece in the WSJ on stablecoins. Honestly - I agree. 

 

Stablecoins exist today out of convenience since there are no easy/quick on/off ramps to fiat. Digital currencies backed by CBs may change that (if ERC-20 compatible - or compatible with whichever smart contract chain dominates), but it is worth noting that crypto is STILL reliant on fiat stores of value. 

Maybe that changes once BTC becomes less volatile and wrapped BTC can replace stable coins - or some other alternative comes up - but it is an interesting reminder at the irony of the existence of stablecoins pegged to fiat. 

[TwoCitiesCapital]

https://finance.yahoo.com/news/el-salvador-plans-bill-adopt-034739503.html

 

El Salvador looking to legalize BTC for payments and potentially add it to the countries' reserves. 

 

Small country for sure. But this is how it starts. 

[Fly]

3 minutes ago, TwoCitiesCapital said:

https://finance.yahoo.com/news/el-salvador-plans-bill-adopt-034739503.html

 

El Salvador looking to legalize BTC for payments and potentially add it to the countries' reserves. 

 

Small country for sure. But this is how it starts. 

 

I thought this was an interesting take and would be curious if anyone thinks this is really feasible, or just hopium:

 

[TwoCitiesCapital]

7 minutes ago, Fly said:

 

I thought this was an interesting take and would be curious if anyone thinks this is really feasible, or just hopium:

 

 

I'm not a tax professional, but I'd imagine the IRS doesn't care how other countries' treat it. 

 

Maybe it goes to court and some judge comes down on them, but I doubt they'll change their taxation policy or the taxable nature of crypto transactions as a result of anything El Salvador has done. 

[TwoCitiesCapital]

On 5/13/2021 at 1:17 PM, TwoCitiesCapital said:

I've said it before, and I'll say it again - if you want to remain anonymous with your transactions, having a public ledger of every single one of them is a very poor way to do it.

Each payment sent/received is then a node for potential security failure with the entity receiving money from you, or sending money to you, and security risk in identifying you  when the authorities come knocking. 

All it takes is a single break and all of your transactions ever made from that wallet become  identifiable and linked to you. This far less useful than using physical cash for anonymity purposes and I'm growing really tired of hearing people make it out as argument against crypto. 

If regulators can work through vast webs of corporate shell entities and electronic accounts to identify individuals committing tax fraud and terrorist funding - they can do the exact same thing with crypto. I'd even hazard a guess it's easier. 

 

On 5/14/2021 at 11:00 PM, TwoCitiesCapital said:

And as if to prove my point...

https://finance.yahoo.com/news/bitcoin-wallet-used-darkside-ransom-195933543.html

The wallet used for the BTC transactions in the pipeline hack have already been identified, the techniques for laundering the cash supposedly unveiled, and the potential to identify the individuals exists. Oh, and they were hacked themselves because ALL of this is on a public ledger....

 

And now for the 3rd chapter of this story:

 

U.S. Recovered Millions in Ransom From Colonial Pipeline Hackers https://www.bloomberg.com/news/articles/2021-06-07/doj-to-discuss-ransomware-attack-on-colonial-pipeline-on-monday

 

Can we put to bed the "BTC is GREAT for criminals" narrative now?!?!?

 

Why anyone believes having a public ledger identifying all of the wallets criminal proceeds go into - and where that money is spent - is good for criminals hasn't put any thought into what that means for the criminals enjoying their proceeds.

 

USD Cash is still WAY better for criminal activities so maybe we should drop the 'disgusting' and 'evil' USD for something that is morally superior? Or at the very least we can stop bringing back this intellectually dishonest argument against BTC.

Edited June 7, 2021 by TwoCitiesCapital

[TwoCitiesCapital]

22 hours ago, TwoCitiesCapital said:

https://finance.yahoo.com/news/el-salvador-plans-bill-adopt-034739503.html

 

El Salvador looking to legalize BTC for payments and potentially add it to the countries' reserves. 

 

Small country for sure. But this is how it starts. 

 

Paraguay legislative leader has hinted at some form of policy adoption towards Bitcoin today on Twitter. 

 

Using my Google translate skills, basically says innovation bis necessary and Paraguay will lead the world with this innovation. **laser eyes**

[Spekulatius]

On 6/6/2021 at 8:39 PM, TwoCitiesCapital said:

https://finance.yahoo.com/news/el-salvador-plans-bill-adopt-034739503.html

 

El Salvador looking to legalize BTC for payments and potentially add it to the countries' reserves. 

 

Small country for sure. But this is how it starts. 

It should be noted. that El Salvador is one of the few countries, who doesn’t have it‘s own currency any more, they dollarized their economy 20 years ago.

I don’t recall why, I think their own currency was so trashed, that it became unviable.

[Fly]

1 hour ago, TwoCitiesCapital said:

 

Paraguay legislative leader has hinted at some form of policy adoption towards Bitcoin today on Twitter. 

 

Using my Google translate skills, basically says innovation bis necessary and Paraguay will lead the world with this innovation. **laser eyes**

Add Panama to the list: