Metacoin

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Ethereum

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.

A Month Later: Is $ENS the Perfect* Web3 Token?

If you were lucky enough to grab some $ENS, the token from the Ethereum Name Service project, congrats! (If you haven’t but think you may be entitled to some, there’s still time. Go here: ens.mirror.xyz and take a look.) The token dropped into wallets on November 8 and it’s been nearly a month to watch it unfold, so we thought we’d examine a little further.

The price chart has been a thing to behold: if the average user got a couple hundred $ENS tokens, and those are now trading in the low $40 range, an $8000 or $9000 payday is nothing to sneeze at. Pick out your Christmas gifts — so long as they’re not negatively impacted by the supply chain — and rock on!

Not Bad for Playing on the Internet for Three Years

But, long term, is $ENS all it’s cracked up to be?

First, the Background

We actually talked about this in our post from June 2019 called “Playing the Long Game.” Back then, we didn’t really see the prospect of an airdrop coming, we were just looking for a combination of Ethereum Cybersquatting and Finding A Cool Domain Name.

You can register a bunch and they only cost about $5 a year; we registered several and use one of them as our principal registry.

In theory, we could use one of the ones in our stable, like “jamiedimon.eth,” and set it up to give and receive tokens. (Or you could try to sell it to JP Morgan Chase, which the owner of the above coin appears to be doing.) (Note that it doesn’t take an internet super sleuth to figure out that the author of this post owns jamiedimon.eth.)

If you think of these dot-eth domains as your portal to Web3, the metaverse, AND your crypto holdings…that’s a pretty good way to look at it. Now, let’s do a little analysis.

‘I Promise, It’s Perfect.’

That was the tagline from a golf club that was sold in the early 2000s. Called “The Perfect Club,” it could get you out of trouble, like tight lies, and suggested that mere mortals like me (with my handicap of…well, let’s say it’s not pretty) could use it on shots from about 190 yards out and drop the ball on the green with minimal effort.

I don’t remember seeing an asterisk — * — like the one in the headline of this blog post, but it should have come with one. Especially when the announcer himself said “I Promise, It’s Perfect.”

But the question at hand, and where the asterisk leads us, is whether or not $ENS *may* be the Perfect* Web3 token.

Here are a couple reasons — and yes, this is not financial advice and you should DYOR (Do Your Own Research) and we’re not responsible for your gains or losses — why $ENS could be the on-ramp to Web3.

The Analysts Are Taking Note

Van Eck is kindof a big deal. One of their analysts did a pretty solid analysis of what’s going on with Ethereum domain names, the bread-and-butter of the ENS entry point to the rest of the investment world.

We’ll link to Matthew Sigel’s post here, and we found it more than a little interesting (in a good way) that Sigel compares the ENS domain business to Verisign. (We also didn’t realize Verisign was such a stud.)

Van Eck’s Sigel summarizes the dot-eth trend better than we could right here:

Plus the Airdrop Means Fewer People “Heading for the Exits”

Here’s another aspect to look at: when you have projects that make people rich very early — not just crypto or Web3, but IPOs, too — you always run the risk of a “cut and run.” For instance, a Junior Software Developer signs up for a gig at a startup, is given some options, and the startup IPOs. Whenever the lockup expires, the developer gets bored, has high-six or low-seven figures in cash, and heads straight for the exit.

Because of an airdrop that didn’t end up with tons of rich people, and with no VCs taking part, the result is that nobody (aside from the founders, who are in this for the long haul) got super rich. The lack of “F*** You Money” makes this a potential winner.

AND…It’s a DAO

This would be the third reason this is so huge: governance.

DAOs are Decentralized Autonomous Organizations. Simply put, they’re designed to run with limited involvement from management, delegating votes on a variety of governance issues to a team. To collect your $ENS tokens you had to vote on a series of proposals and select a delegate to vote on your behalf.

They’ve built a black box and the management of that black box is in the hands of the team of delegates, but proposals to change the way the black box functions take a majority. And some of it is immutable — like the DAO can’t really go out of business — so they’re definitely looking at this with a decades-long time horizon.

Should You Buy at This Price?

Again, this is not financial recommendation, and do your own research.

But the token itself is right around the top 100 in market cap and it’s just north of $1B. Compare and contrast that with tokens like $SHIB (~$19B market cap as of this writing) and take a look at the functionality of $ENS in comparison with other tokens ($SHIB has a cult-like following and has rocketed upwards, but is it really THAT valuable?).

$ENS might not be a bad bet in the grand scheme.

Good luck.

What Hath (The First Six Weeks of) 2021 Wrought?

We’re a few weeks past the GameStop Short Squeeze Apocalypse. Bitcoin has gone from $28,000-and-change on New Year’s Eve to north of $40,000. Altcoins seem to be flying off the shelves. Decentralized Finance is also on fire — if you pick the right one, natch — and the “degenerates” might be having their day.

So…what next?

Here’s some potential calm for the coming storm: a few ideas that, while they’re not financial advice and you need to DYOR (Do Your Own Research), could help you successfully hedge against the coming storms.

1. Just Buy and Hold Bitcoin

We’re reminded of a couple of conversations we’ve had recently with this little nugget of advice; both of the convos centered around “how do I get started?”

Bitcoin is…well…Bitcoin. If it’s not the centerpiece of a portfolio, that’s fine; but it’s also the core concept behind every single coin anyone uses. Without it, no crypto.

Ignore the fact that there’s a guy with a Twitter handle of “@russian_market” and somehow he got a blue checkmark — which gives him some sort of authority, right? — and take a look at his Bitcoin prediction for 2021.

Also consider the fact he may be smoking something.

[TIME FOR A CLEARLY MARKED AFFILIATE LINK: Get some BTC, or other crypto, on Coinbase here. We’ll both get a bonus with a qualifying purchase.]

But, if our Russian friend thinks Bitcoin is doing a 5- or 6x this year, shouldn’t we look down the list and…and…

2. Ethereum Is on Fire

If you’ve followed this space for a few years, one of the things you have learned is this: without Ethereum, crypto apps don’t work. In addition to being a currency unto itself — and one that’s trading at around $1800 as of this writing — on pretty much any of the app-centered parts of crypto, you absolutely have to have “gas” to operate. That gas is ETH. Without ETH, no trades on Uniswap, no liquidity pools on any other #DeFi app, and no yield farming to speak of.

Chart from CoinGecko, Graphics from Metacoin.co

Even if you don’t understand any of that previous paragraph — and, let’s face it, most of that is Greek to the everyday Joe — realize this point: Bitcoin’s market cap is inching towards $1T, and BTC is four-and-a-half times that of ETH; ETH is NEARLY TEN TIMES AS LARGE as the next crypto coin (Cardano, ticker of $ADA). Ethereum is big, it’s very important to the crypto economy, and it is not going away.

3a and 3b. #DeFi Building Blocks

We’ve made a few mistakes here — without a “warts and all” approach, we don’t think this site would have lasted, actually; we’d rather you read up on the $50 we blew on some crypto app than invest in it yourself and lose your own money — and a couple of those mistakes are related to two trades we made with Decentralized Finance (“DeFi”) coins that have caught fire.

First, item 3a. Yearn.finance is $YFI and, defying logic (er, “DeFi-ing logic”), had you gotten in on the ground floor — or, more accurately, the basement; only really truly early adopters got this price — you could conceivably have turned a grand into $1.4M.

Wait, what?

A more accurate description of the “woulda, shoulda, coulda” factor here is that you may have gotten in on perhaps the first or second floor of this high-rise. Our own experience had us taking a chance (by “taking a chance” that means a hundred bucks or so) on YFI when it was priced at $2000 to $3500. So we’re still doing okay. But…

3b.: Uniswap. $UNI. This beaut was an airdrop. Last year, the UNI team decided that the best way to get users on board with its coin was to gift it to ANY account that had used the platform. The airdrop gave 400 coins (or so, as one of ours got a few more than 400) that were valued at around $3 each. We hodled some, sold some others, and it has turned out nicely, hovering above $20 for most of this week. (TBH, though, the fact we sold some a couple weeks ago does irk us more than a little.)

4. Take a Chance on These?

We added a question mark because — AND AGAIN DO YOUR OWN RESEARCH — you are more likely to lose your entire stake in any of these coins than you are to make mad bank (as the kids say).

If you want a couple ideas, though, here goes:

Sushi ($SUSHI), which forked from Uniswap, has done well this year (currently trading in the low teens).

Dogecoin ($DOGE) is the love of folks like Elon Musk; it’s also projected by the Russian guy up there to go up at least 10x this year.

Kimchi ($KIMCHI) was thought to be dead — and may actually BE dead, in that there don’t seem to be any active developers still working on the project; this is called a “Rug Pull” and we explain it a little more in this post — but it is still throwing off triple-digit APY.

N.B. on pools such as KIMCHI: not only are pools like these highly risky, these interest rates will fluctuate wildly; you’re betting that KIMCHI stays stable (it has been ranging from $0.0002 to $0.0004 for the past few months) and that you don’t get totally whacked with growth of the other coin you pool it with. If one of the coins goes way up while the other stays at roughly the same value, you’ll be kinda okay; if one goes up and the other goes way down, you’re going to have some “impermanent loss” from the coin that doesn’t grow. We explain more here:

A lovely YouTube video from Dave

And A Final Few Notes:

We hope this post gives you a few ideas about how to maximize your investments. We need to share a couple other things here:

  1. Past performance (DUH) is not indicative of future results.
  2. DO YOUR OWN RESEARCH.
  3. None of this is financial, legal, or tax advice.
  4. Of the coins mentioned above, we own small positions in the following: $BTC, $ETH, $UNI, $YFI, $SUSHI, and $KIMCHI.

The SHTF Portfolio*, Part One

If you’ve watched any prepper television shows — you know the ones, where they have a bugout bag and a 1976 Chevy Nova parked somewhere in the wilderness, then they plan on driving across the border and into another country, likely Mexico, but possibly Canada, and you can tell we’ve watched too many of these shows — you are aware of the SHTF acronym.

If you haven’t, let’s just assume it stands for “things get really bad.”

Watching the news, you might think the world is going to heck in a handbasket, but…well, all is not bad, because at least the car insurance ads tell you you can save tons by switching.

We’re here today to give some ideas — not advice, not counsel, see disclaimer below — and maybe these can help you if…well…you know.

This advice is culled from a few places, plus our own crypto experience. YMMV is another acronym and THIS one we can define for ya: “Your Mileage May Vary.”

So we need to tell you we don’t provide investment advice, and your experience may vary, and that we’re not responsible for success or failure. We hope you get rich, but, more importantly, we hope you stay safe and take care of yourselves.

*And…about that asterisk. This may NOT totally be a “portfolio” in the traditional sense. We’re not suggesting retirement money here, we’re suggesting different investments and platforms that can put you in the position to cut your losses when…well…when the SHTF moment happens.

Portfolio Idea #1: Cold, Hard Cash

You need it. If you’re in the USA, that means the greenback. If you’re in another country, your own currency may suffice, but (for now) the greenback is essential.

Recommended: $1000. That’s your emergency fund. Hide it somewhere, don’t tell anyone except the others in your house that need to know.

The inimitable Dave Ramsey recommends this amount as your emergency fund — this is the first of his “baby steps” which can help you get out of debt and right the ship.

However, in a super duper emergency like the one that necessitates the SHTF portfolio, getting out of debt might be the least of your worries.

Portfolio Idea #2: Precious Metals

These are the most fungible when they’re in smaller denominations. Recommended: a few hundred dollars to a few thousand dollars worth. Small units of gold, like 1/10 or 1/5 ounce, are great. Silver bars and coins and rounds — an ounce each — will get you by when the crazies come out. Hey, how much for that bag of groceries? How bout two ounces of silver? Great!

Gold and silver prices from the morning of Oct 22, 2020. Thanks, Apmex.com.

Now, a note about precious metals as an investment: your guess is as good as mine. There are analysts who follow gold and silver, and the stock prices of miners that get the stuff out of the ground; these people will tell you that they can only go up in price because of supply and demand and the inflation of the US Dollar. Great.

There are others, like the inimitable Dave Ramsey (referenced above) who think gold and silver are dumb.

Portfolio Idea #3a: A Coinbase Account

THIS PART INCLUDES A CLEARLY MARKED AFFILIATE LINK: Coinbase Affiliate Link. If you use that link to sign up and buy your crypto, we can both get a bonus after a qualifying purchase.

One reason you want to get on Coinbase if you haven’t already: ease of use. You will need a tool like this to move amounts of your crypto out of their wallets and into an actual bank account.

Another reason: some of their tutorials can pay you money. Here’s a list of a few, and, again, THESE ARE AFFILIATE LINKS:

We’ve used Coinbase for the past couple years and, if you need to move coins lickety-split, it’s one of the best ways to do so.

Portfolio Idea #3b: Crypto.com

HERE’S ANOTHER CLEARLY MARKED AFFILIATE LINK: Crypto.com. Our experience with this platform isn’t as long as ours with Coinbase, but we’ve gotten a decent ROI from a couple things.

One is the staking — which, in this #DeFi economy, is quite profitable, since platforms are paying interest in order to recruit people. You can get a percentage return — ours was about a 30% bump from when we bought in — just by parking your coins on their platform for a few months.

The other profitable angle: staking led to a bonus of $50 into our account, and $50 into the referrer’s account, too. (So yeah you can build a little empire if you want.)

Big, also, is the debit card from Crypto.com. Here’s the Black Card, which is slick. Ours is burgundy, and equally slick but took us less money to get started. It’s authorized by a US-regulated bank.

Crypto.com Black Card.

Portfolio Idea #4: Get Some Ethereum — ETH — Now!

We recommend two things here: a few hundred dollars of Ethereum, and a Metamask wallet.

WHY ETH and not BTC?

Simple: over the past couple years, while Bitcoin has ebbed and flowed, the use case — other than being the big 800-pound gorilla of the crypto universe — has been meh. Ethereum, however, has more of a use case, in our opinion, than XRP, which hoped to displace SWIFT for bank settlements.

Who cares about bank settlements, we think, when all of the #DeFi developments going on in 2020 rely upon ETH to make the transactions.

Sure “gas” prices could be high (that’s the amount of ETH needed to transact), but there are few alternatives that make sense.

Ethereum is still relatively cheap, down 72% from its all-time high of $1444. (That’s after a healthy morning bump to over $400.)

Recommendation: buy some — a few hundred dollars if you can spare that money — and score the Metamask wallet here: Metamask link.

Coming in Part 2…

Next post will look at a few specifics: some random coins, some basics, and some ways to potentially monetize right now if you need to. (And we’ll include ways that link back to the first part…)