Metacoin

Covering Bitcoin, the Blockchain, Altcoins, and Fintech

Bitcoin

Crypto: Down. Stocks: Down. Inflation: Up. So What Do You Buy?

Here’s yet another post with a couple blatant caveats: (1) THIS IS NOT INVESTMENT ADVICE and (2) NOBODY KNOWS WHAT’S GOING ON.

We’ve had a couple weeks here in CryptoLand. You name it, it’s down. Take our 2022 Growth Portfolio: a hypothetical $10,000 investment with $1,000 each in ten different crypto assets. Thank God it’s only hypothetical.

Screenshot from May 20, 5:30 a.m. CDT

It was a bloodbath. It still is kinda sorta a bloodbath, in that nobody knows if BTC saw the bottom, or if ETH’s move to Proof of Stake (known colloquially as “The Merge”) is going to be all that, or if stablecoins will stabilize.

And whether or not you’re better off throwing darts.

At Least the Stock Market Is Okay, Right?

Let’s answer the question in the meme with a screenshot.

Stock market, one-month performance.

The problem, though, is that to keep propping up the stock market, The Fed is going to need to thread the needle on interest rates. Too much of an increase and the stock market tanks. Too little of an increase and you can’t catch up with inflation.

So you’re painted into a corner because the stock market is so important to everyone’s 401(k) plan and the inflation rate — which is caused, DUH, by ALL THAT PANDEMIC MONEY PRINTING — is so important to everyone’s standard of living that it really REALLY stinks to be Jerome Powell right now.

Now, Let’s Talk Inflation. Cue Karen Carpenter…

“We’ve Only Just Begun…”

As David Stockman — President Reagan’s former Budget Director, native Midwesterner (shout-out to Michiana!), and future guest on my YouTube channel (call me!) — told us on Doug Casey’s Dispatch a couple weeks ago, we are collectively screwed. And it’s mostly thanks to central bankers.

That part about J-POW having a rough job is not an understatement; the corner we have been painted (printed) into is troublesome. Investors don’t know which assets to invest in, and the average Joe is more worried about real-life things like gas prices or the cost of food.

So…What DO You Buy?

We follow a few financial people on Twitter, on YouTube, and elsewhere. We’re nailing Jell-O to a tree here.

Here’s Joe from Heresy Financial, telling us (SPOILER ALERT) that Treasurys might be the way to go. Here’s another YouTuber — one we found from typing in “where to invest 2022” into the YouTube search bar, then going with the first one we found from the month of May — suggesting individual stocks. And here’s CNBC, taking a break from its “How This [NUMBER] Year-Old [JOB DESCRIPTION] Made [LARGE AMOUNT] By [ZAGGING WHEN EVERYONE ELSE ZIGGED AND/OR INHERITING MONEY]” template (shown here) to give us a whole host of ideas of where to invest in an inflationary environment.

Feel free to grab any of these ideas and batten down the hatches, right?

We’d refer you back (AGAIN) to our series called SHTF. Volume 1 is here and Volume 2 is here. But these are *mostly* crypto-related ideas (with a break for some precious metals and cash on hand). And that isn’t even guaranteed, if the last few weeks are any evidence.

TL;DR: See Elmo

Elmo Fire

Buckle Up. Good Luck.

Help With Crypto Doom Scrolling

If you’re looking for a bright spot, any bright spot, where do you look? Darn good question. We don’t know, either. But here are a couple things to help. Maybe.

It’s Not as Bad This Morning as It Was Overnight

Our 2022 Crypto Growth Portfolio

Behold, the numbers from the 2022 Crypto Growth Portfolio. The columns next to price are (first) 1-hour change and (second) 24-hour change.

Sell in May and Go Away has been replaced by “buy stuff an hour ago, watch it go up 5% on average, then sell it all and buy some foodstuffs.”

BTW, your $10,000 investment in the 2022 Growth Portfolio is now…$6702.

At Least You’re Not LUNA or UST

(If you are holding one of those or you’re part of the teams behind those…scroll on to the next subhead. Trust us.)

Here’s a chart of what happened overnight to UST.

This is after yours truly thought they had somewhat kinda righted the ship after sorta kinda having one of those weird days the other day.

Still, this is a coin that is pegged to the US Dollar and uses something called “an algorithm” to keep its price at $1.00 Or so we thought; but, as a wise man once told me, sometimes the quants get it wrong.

One year of UST

360 days of being thisclose to $1 each. And then the rug gets pulled. It’s Soros-level market manipulation (Learn more about that here: Soros.) It’s not done.

Below you’ll find a 24-hour price chart for $LUNA, which backs $UST.

We’re being nice. Could have shared the 1-year chart.

Then There’s $COIN

Oy. Coinbase is having a rough go of it, eh? Much will be discussed about the company’s growth — whether too much too quick or the post-IPO blues — but it’s really a yikes moment.

Not a good look.

(We won’t even mention the infamous “Jim Cramer Albatross” rating the stock a buy all the way up to $475.)

Carnage, Carnage Everywhere

The bubbles are popping left and right; not just in crypto. Used-car marketplace Carvana has laid off 12% of its staff. While you’d *think* this has something to do with inflation and used-car demand, you’d be slightly right but actually way wrong.

Read the thread, short the stock.

This is about that “Irrational Exuberance” that the Fed warned us about back before they became a meme.

At Least Inflation Is Better, Right?

Narrative highlights tell you it’s not so bad.

The narrative machine has kicked in already: it slowed (from 8.5% last month, but that’s year-over-year) but it actually went up (0.3% month-to-month). And Gasoline isn’t bad because the index fell, but energy prices went up year-over-year.

Now What?

“RETVRN” is a common cry among trads on Twitter. Better days ahead if we go back to what better days were like before. Or something like that.

Good luck.

Inflation.

18 months ago, right before the Presidential election, we wrote a two-part series that got a little bit of attention. In it, we discussed a strategy for when things get pretty bad.

Part One (go here for more: SHTF Part One) is probably more endemic to today’s news of an inflation rate that has the risk of spiraling out of control than Part Two.

But, to be honest, we didn’t think, even back then, that we’d see 7.9 percent year-over-year inflation. In the United States.

(Thanks to tradingeconomics.com for the chart; month-by-month figures going back to Jan. 2017.)

The U.S. Dollar Is…Get This…An Inflationary Asset!

To paraphrase George Costanza’s risk management tapes from the show Seinfeld, “in order to understand ‘inflation’ we must first define ‘inflation.'”

When you print way too much money, you get inflation. “Inflation is, always and everywhere, a monetary problem,” according to Milton Friedman. You can throw blame at whichever President or Congress you’d like (they’re all guilty, as we learn in this balanced piece from the website The Balance), or whichever crisis you’d like (though, to be fair, the Federal Government printed a metric crapton during COVID).

Don’t Believe The (Putin) Hype

Listen to Chuck D.

Don’t listen to Joe B.

The seeds were sown ages ago — like, probably three or four Fed Governors and Presidential Budget Directors ago — and the reality is that Vladimir Putin is a mere scapegoat. Gas prices are rising, but they’re not totally his fault; and the rise in food prices to come will be due, in part, to Putin’s war.

But you could get into a host of academic arguments and ask who bears the most responsibility and it won’t solve the problem.

‘Bitcoin Solves This!’

Yes, and no. And maybe.

As Putin’s War Machine and his “Evil Cronies” are learning, if you can’t use the global financial system that exists — if you’re shut out of traditional banking — you have to make do. In Putin’s case, that means calling China. In your case, that means…well, that means a few things.

First up, you’re not Putin, planning on invading another country. But you don’t know if or when you will fall out of favor with the traditional banks. (See “Trudeau, Justin” for an example of just how that could happen to you.) You also don’t know exactly how bad this inflation stuff will get — and you could find yourself using the black market (WHAT???) before you know it.

Seriously.

Venezuelan Black Market Finance

If you live in Venezuela, you have been dealing with this sort of thing for a while. There’s an official exchange rate, then there’s an unofficial black market rate. And there’s always the risk of the government revaluing the currency.

Zimbabwe had to do this, too, creating a 100 Trillion Dollar Bill back in the day.

And on and on…

Upshot: Get In The Game

You don’t know when the time will come where you need some of that stuff in the post — Cash, Precious Metals, some BTC through Coinbase or Crypto.com, and some ETH too (THOSE ARE AFFILIATE LINKS OVER THERE, WE COULD BE COMPENSATED IF YOU SIGN UP THROUGH THEM) — and you don’t know when it might…hit the fan.

But standing on the sidelines, now, is not an option.

NGMI: Why You Should Sell It All And Become A Monk

You don’t really think we’re gonna make it, do you?

Internet sub-cultures are a wonderful thing. Sometime last year, a combination of NFT purveyors and OG crypto traders started to adopt the phrase “gm” as a means of wishing each other “Good Morning.” It’s really a fine line here. Do it right — simply use the two letters, don’t use capitals, don’t repurpose the General Motors logo — and you’re part of the crowd. You’re Shiv and Tom in the screenshot below. Happy. Complete. Enjoying a good time. Celebrating life.

Do it wrong and you’re Kendall Roy, the punch line of the joke everyone but you is in on. (Watch the video. Cringe with us.)

Shoehorning a Succession reference into a blog post notwithstanding, “gm” evolved and “WGMI” was added shortly thereafter — at least by my measurement of the timeline, which could be off a hair, don’t hold me to it, DYOR and all that — to underscore the optimism that the crypto and NFT communities bring to the world. We’re Gonna Make It.

OR “Ain’t No Stopping Us Now,” as both McFadden and Whitehead reminded us sometime around 1979*.

We’re Gonna Make It! The optimist is on board: crypto is the future! NFTs are adding value to the economy and giving artists new life!

The pessimist reads the asterisk below.

* IIRC, the song was adopted by the 1979 Baltimore Orioles as their answer to the 1979 Pittsburgh Pirates’ choice of “We Are Family” by Sister Sledge. The Pirates came back from a 3-1 deficit to defeat the Orioles in the 1979 World Series; I won 50 cents off my Dad.

Which Brings Us to Our Point: NGMI

Shortly after either learning about the WGMI acronym or reading about the untimely demise of Messrs McFadden and Whitehead, new lingo was created: NGMI. Not Gonna Make It.

How Bout That Portfolio?

Egads! That kinda stinks, right? We launched the Growth Portfolio a couple weeks back on this here site and our goal was to give you, Gentle Reader, a basket of those coins that can give you the best opportunity for potential success. Big coins, mid-sized coins, up-and-comers that are taking advantage of the NFT-based web3 economy: it’s all there!

And it’s getting pummeled, as is everything else.

The Biggest Dogs

BTC is below $40,000, ETH has dropped below $3000. The end is nigh!

This Blog Post’s Title Is Tongue-in-Cheek

We really don’t know how to make sense of this market the past couple weeks. Our own holdings are down nearly a third since the beginning of the year. We won’t even begin to call a bottom, or else we’ll look like this guy.

Or we could guess that this guy (below, Fed chair Jerome Powell) will bring new people to crypto writ large through the Fed’s (possible) creation of something called “digital cash:” this is one of those “CBDCs” being bandied about in other countries.

We also *could* start talking about new NFT developments — seems like everyone is getting in on the action, right? — and see that the challenges to OpenSea from Crypto.com and Coinbase probably say we’ve only just begun.

Our Point: Don’t Give Up Just Yet. Or Do Give Up.

In any event, here are a couple concepts to embrace:

  • Do Your Own Research. “DYOR” is one of the acronyms we use often around here. Don’t rely on us to tell you what to do. Sniff out a few other folks, check into CT (“Crypto Twitter”) and find out what people are talking about.
  • Experiment. We’ve gotten in early on a couple coins. We’ve also blown it on a couple, too. (Our stake in this one, for instance, was purchased when the price was about 80 cents each.) And we’ve created a series or two (or three) of NFTs, with limited success. But, again, we’re not afraid of experimentation.
  • Enjoy the Ride. The main reason yours truly is involved in this space is because he finds it bloody fascinating. Not every project is going to be eye-catching to you, not every token launch is going to make sense, and not every bit of lingo is going to be clever. If it’s not fun, then maybe it’s not for you?

gm

Keep at it. Or become a monk.

We’ll be here either way.

The 2022 Crypto Growth Portfolio

It started with a tweet, shared in response to an epic Twitter thread.

First, the thread:

Then, my tweet:

The thread from Adam is LONG, so you’ll need to devote some serious time to studying it, or you’ll want to keep referring back to it a little at a time (that’s my plan; Adam shares some great info but it wasn’t until one of my Twitter friends referred to a specific recommendation when I started reading chunks in detail).

My tweet, however, was meant to start some conversations around a simpler potential portfolio you could put together to play this new new new NEW economy of web3 and whatever else is going on.

We present our 2022 Growth Portfolio in the same spirit as past HYPOTHETICAL portfolios: Do Your Own Research, Not Investment Advice, and, well, here’s an interesting way to track what’s going on in Crypto.

What’s Here (vs. What Was in the Tweet)

Caveats first: I made a couple changes to the December 30 post; I decided, to be direct, that $UNI and $CRV didn’t fit with the portfolio. So $AVAX and $SUSHI were inserted instead. The “Rank” column on the left-hand side is taken from this morning and all prices (both 1/1/22 and 1/5/22) were from CoinGecko.com.

Also, I created the list, did the whole price thing, and then…”#BitcoinCrash” or whatever, the afternoon of January 5. So I had to recalibrate based on pricing the afternoon of the 5th. (Hopefully the bloodbath is over.)

The idea goes like this: take a hypothetical $10,000 investment and divide it equally among ten coins. Past portfolios used fewer coins (BRED used just 4) but this might be the best way to spread the risk.

Bitcoin and Ethereum

The first two choices may be obvious: Bitcoin ($BTC) at nearly $900m at this writing and Ethereum ($ETH) at $400+m right now are the Big Two; third-place (by market cap) coin $BNB is 1/4 the size of $ETH. Bitcoin may or may not BE the crypto market, but a coin that is 1/3 the size (roughly) of Apple is probably a force to be reckoned with.

Ethereum is rather formidable in its own right, and, for the purposes of having an entry point into the rest of the coins through something like Metamask, you want some $ETH.

(SIDEBAR: Metamask has ONLY 21 million users? You want to get some $ETH and start using Metamask *if only* for the possibility of an airdrop, a la $ENS.)

Avalanche

Avalanche ($AVAX) traded at (GASP) $3.67 on January 1, 2021. So it’s up nearly 30x in one calendar year. Is it done?

We don’t think so; of course we’re kicking ourselves for being late to the party but it, as a platform, is pretty stellar and may have plenty of room to grow. (Could it pull back? Yes. $24B market cap might seem a little pricey. But $100B isn’t out of the realm and, let’s be honest, if you could 4x a piece of your portfolio, you’d probably be willing to risk a little.

Shiba Inu

Yes, we’ve seen the stories about the kid somewhere who invested a few hundred dollars in Shiba Inu ($SHIB) and now owns his own island. This one, for us, is the last of the famous international meme coins. You’re speculating that there’s a chance the $SHIB community can get this thing to a tenth of a penny, which would mean roughly 30x growth from here. (It would also mean that its value dwarfs the current value of $ETH, so yeah that’s a tall order.)

Realistically, though, expect a couple more bullish cycles of this highly volatile meme coin. Worth taking a chance on.

Crypto.com

You can’t go anywhere without seeing BRAND SPONSORSHIPS IN CRYPTO. FTX has an arena, as does Crypto.com; Crypto.com has Matt Damon, so advantage $CRO, its coin.

AND HERE’S A CLEARLY MARKED AFFILIATE LINK: We can both get a little something if you use this link and sign up and make a qualifying purchase.

This is probably the best way to play “pure retail crypto,” if that’s what you call a brand that pays big bucks to have Matt Damon on board.

Sushi

We pulled out Uniswap specifically and replaced it with Sushi ($SUSHI). We like the platform better and, while Sushi has ebbed and flowed and zigged and zagged — $3.32 on 1/1/21, then a high of $23.38 in March of 2021, and today at $7.76 — its one-stop-shop of Pooling and Staking and Farming is pretty nifty.

DeFi Kingdoms

$JEWEL is the token behind DeFi Kingdoms, which our buddy @TxdoHawk on Twitter talked about yesterday.

If you’re playing the DeFi-meets-Gaming-meets-NFTs space, there are worse places to do so.

Ethereum Name Service

$ENS is the governance token behind the Ethereum Name Service, and it was airdropped in November to users; we did a deeper dive on the site a couple weeks back. We still like it a ton.

Treasure

We talked about this one yesterday, too; $MAGIC is the coin and it is on a roller coaster this year already. (And today, dropping from an all-time high of $4.75 to its current level at $3.61 a token.)

The part above about DeFi Kingdoms playing the intersection of a couple of categories applies here: $MAGIC could very well be a ten-bagger this year (and that would put it just above $1B market cap).

What’s Next?

We plan, as we did in past years with the BRED Portfolio, to keep tabs on this one, with an update at least at the beginning of each quarter. It should be fascinating to see unfold.