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Mark HelfmanSEC Retreats From Ripple But Gensler’s Right About Crypto
Yesterday, the US Securities and Exchange Commission (SEC) dropped two more charges against Ripple for selling its XRP crypto the wrong way. The score stands at Ripple 3, SEC 0. Ripple isn’t the first crypto business to defeat the regulators. SEC Chairman Gary Gensler seems to lose, like, half of the crypto cases that go to trial. That’s an abysmal record for a US government agency, but I can’t object to Gary’s interpretation of US securities law. Legally speaking, he’s right. Under US law, s...
Mark HelfmanTwo Truths and a Lie About Altcoins
You’re hearing a lot about altcoins from bitmojis, analysts, and commentators. None of them are experts, but they’ve picked up some insights along the way. Since the market’s going up, they seem legit. Read on for two truths you might not realize and one lie you might believe.Truth #1—altcoins are $200 billion worth of crapAltcoins are a $400 billion asset class. At least $200 billion worth of that market cap consists of altcoins that suck, do nothing, and will bleed value forever. Some of th...
Mark HelfmanLike a Cockroach, Bitcoin Will Survive a Nuclear War
Since its creation, people have searched for a “use case” for Bitcoin. It seems the world has no use for money that you can send to anybody, anywhere, anytime, in any amount, without restriction, without revealing your sensitive personal information, without putting your property in another person’s control, with certainty that your transaction will go through and confirmation that every payment you receive is authentic and valid. Nor do they care about having a way to conduct finance that wo...
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Mark HelfmanSEC Retreats From Ripple But Gensler’s Right About Crypto
Yesterday, the US Securities and Exchange Commission (SEC) dropped two more charges against Ripple for selling its XRP crypto the wrong way. The score stands at Ripple 3, SEC 0. Ripple isn’t the first crypto business to defeat the regulators. SEC Chairman Gary Gensler seems to lose, like, half of the crypto cases that go to trial. That’s an abysmal record for a US government agency, but I can’t object to Gary’s interpretation of US securities law. Legally speaking, he’s right. Under US law, s...
Mark HelfmanTwo Truths and a Lie About Altcoins
You’re hearing a lot about altcoins from bitmojis, analysts, and commentators. None of them are experts, but they’ve picked up some insights along the way. Since the market’s going up, they seem legit. Read on for two truths you might not realize and one lie you might believe.Truth #1—altcoins are $200 billion worth of crapAltcoins are a $400 billion asset class. At least $200 billion worth of that market cap consists of altcoins that suck, do nothing, and will bleed value forever. Some of th...
Mark HelfmanLike a Cockroach, Bitcoin Will Survive a Nuclear War
Since its creation, people have searched for a “use case” for Bitcoin. It seems the world has no use for money that you can send to anybody, anywhere, anytime, in any amount, without restriction, without revealing your sensitive personal information, without putting your property in another person’s control, with certainty that your transaction will go through and confirmation that every payment you receive is authentic and valid. Nor do they care about having a way to conduct finance that wo...
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In last month’s post, I discussed the fundamental reason we’re in this market and the difference between financial freedom and financial liberty.
This month, I address some misconceptions about where we stand in the “market cycle” (however you define it) and what you need to think about now.
Unless something crazy happens, the crypto market has entered Act 3, the final act of the crypto story.
Act 1 sets the scene. May 2022. A collapse of lending platforms, major protocols, and market makers. Despair and capitulation. A small group of stalwarts persist. Can they survive? Will they recover?
Act 2 confronts those stalwarts with obstacles. November 2022. FTX failed. US regulators sued every crypto business they could find. Central banks tightened lending amid a collapse of stock and bond markets. Crypto prices started to recover. US courts shut down regulators. Prices start to go up.
Now, we move to Act 3. Those stalwarts—the bear market warriors—have gained the upper hand. Victory is in sight! The audience believes they can succeed. The question is, how?
The story moves to its climax and denouement.
We are the stalwarts, the bear market warriors, the heroes and heroines.
Mark, there’s no way we’re in Act 3. The bull market just started!
If bitcoin’s price stays above $15,600, the bull market started almost 14 months ago. On-chain and technical metrics suggest the psychological bottom came in June 2022. Under some projections, the bull market might reach its peak in early 2025.
Don’t worry about it! We won’t know how long Act 3 will take or when the climax will come.
Like those of a novel or movie, these acts mark an emotional and psychological journey. They relate to your feelings, not crypto prices or timing. Similar to the Wall Street Cheat Sheet.
Some people love data models and cycle theories. They’re polished, professional, and persuasive.
As I discussed in Predictions, Models, and Narratives, they also disagree with each other.
I’m all about feelings. How you act depends on how you feel. Reflect on your emotions as much as you reflect on any data model or cycle theory.
If this is Act 3, remember how you felt in September: despair, sadness, and doubt.
Think about how you feel today: hope, elation, and relief.
Next time the market drops, you’ll feel like you did in September.
Imagine going through that cycle of emotions every three months for the next year or two. That’s how Act 3 will feel.
The market zooms, your portfolio balloons, some of your altcoins go up 2-3x almost overnight, and you feel the urge to put more money in. You can barely hold yourself back. You feel like you missed out. You had a chance to buy more at a lower price, but you didn’t!
The market crashes, bitcoin drops 30% (50-80% for altcoins), and you feel the urge to sell before it goes lower. You can barely hold yourself back. You feel like you got too greedy. You had a chance to take profits, but you didn’t!
To steal a phrase from poker players, crypto’s a lot of boredom punctuated by moments of terror and ecstasy.
How do you manage those moments of terror and ecstasy? That will mean as much for your success as any trading plan or on-chain metric.
The first step?
Define success.
What do you want to get out of this market? Durable wealth? Quick profits? A stake in the financial networks of the future? Income and cash flow? More of your government’s money? Lambos? Financial security? FU money?
What risks are you willing to take to get what you want?
What about taxes – do you know how much you will pay? Are there tax advantages you can incorporate into your planning? Are there tax issues that you need to plan around?
Your answers to those questions matter more for your success than anything I or any other content creator can give you.
For example, my trade from February.
If you put $100 in that trade, you now have $70 plus $100 worth of bitcoin. That’s a 70% gain so far.
Amazing stuff. Better than every fund manager on earth. A stellar performance by any objective measure.
What would have happened if you had HODLed that $100 in bitcoin?
You would have an 83% gain.
That’s a better return than the trader, but you have less of your government's money.
Who got the better deal?
Mark, don’t be an idiot! You can sell that bitcoin and come out ahead of the trader!
You don't know that.
Bitcoin's price may drop 20% from when I write this post to when you read it.
This is a volatile market! While that doesn't make it any more risky than any other market, it does mean you have to accept a wide range of outcomes.
This market is crazy. Senseless, sometimes. Plain facts seem impossible to believe.
For example, in 2022, bitcoin’s average price was $28,100. In 2023, bitcoin’s average price is $28,800. You got a better deal in 2022.
In fact, if you bought crypto on any random day in 2022 and put cash into a money market fund for 5% in 2023, you came out ahead of everybody who put cash into a money market fund for 3% in 2022 and bought crypto on any random day in 2023.
Yet, if you ask your average person which year was the best to buy bitcoin, they would tell you 2023. They’d say the smart investors held cash in 2022 and bought crypto in 2023. “Only idiots bought in 2022 and held cash in 2023.”
It feels that way, but the facts say the opposite—just like the $57,000 target on the February trade alert felt impossible back then but realistic now.
The trade target didn’t change. Nor did the take-profit levels along the way. Circumstances and conditions changed, but not in any way that makes $57,000 more or less realistic now than it was in February.
Yet, here we are.
Ending the year at $50,000 seemed crazy when I made up that prediction for Luckbox Magazine last year. We’re not so far off, are we?
The bull market feels like it just started, when it’s already almost 14 months old.
(Assuming bitcoin’s price stays above $15,600.)
What will you do if bitcoin's price drops to $24,000 by April? If this happens, altcoins will go down 80% or more.
Will you see that as an opportunity to buy more at a discount, or see that as a failure because the value of your crypto went down? Will you sell and guarantee a loss, or will you buy and guarantee a gain?
How will you feel if bitcoin’s price goes up to $70,000 before falling back to $32,000 toward the end of 2024?
Ask yourself the same questions as I mentioned above. You can read my portfolio strategy if it helps.
Hopefully, my market updates have enough insight and analysis to help you see the circumstances for what they are, not what they feel like. Use that information to get the result you’re looking for.
As always, I’m happy to consult. Connect with me on Superpeer or Tealfeed.
Also, make sure you have my plan. Three lines tell you when to buy and two metrics tell you when to sell.
For every dollar you put into the crypto market, you get, on average, 30% more with my plan than you do for dollar cost averaging. You also beat most traders.
Today, you’re up as much as 670% or down as much as 18% at the extremes. Most likely, you’re up 70% with cash to spare.
All you need to do?
Keep setting aside fresh cash when bitcoin’s price goes above my buying zone. Put money into the market when bitcoin’s price goes into the buying zone. Sell only when the market forces you to do so.
Most people do the opposite. They wait until the market goes up, then buy at higher prices than they need to. Worse, they get less value with each additional purchase. Then, when the market drops, they sell.
It feels better at the time—until a year or two later, when they see their results.
Today, my plan says not to buy. Tomorrow, who knows? This market changes all the time.
The biggest question I’ve gotten in recent weeks:
“How much money should I hold in cash vs. crypto?”
Only you can answer that question.
What does cash mean to you? How much do you value cash?
What does crypto mean to you? How much do you value crypto?
With cash, you get a source of wealth that’s protected by your government.
With cryptocurrency, you get a source of wealth that’s protected FROM your government.
Why not split the difference? A little cash, a little crypto. Best of both worlds!
What about other assets?
Bonds offer predictable cash flow. Stocks give you an asset you can sell for a higher price than you paid.
A business or job gets you more of your government’s money. Staking rewards pay you crypto. Debt allows you some flexibility in how you manage your finances.
Each of these assets responds differently to changes in economic circumstances. When one asset’s down, you put money into it. When that asset goes up, let it run and put money into whatever asset’s down. Repeat forever. You win no matter what happens in the wider economy (the “macro,” as the experts call it).
If that sounds hard to manage, use Empower to make your life easier and more profitable. They have a free dashboard, asset tracker, financial planning tools, and the option to hire them as your financial advisor.
Use my referral link to get a small reward when you sign up. The platform is free. The advisor is optional!
Your fortunes could change. You could lose your job. Your business could have a bad quarter or year.
Your crypto wallet could get hacked. The crypto market could crash. Your altcoins might fail.
Financial experts are telling you to buy long-term US treasuries because “the Fed will cut rates,” “inflation is under control,” and either “the economy will go into recession” or “the economy will have a soft landing,” depending on their bias.
Let's hope they're right. Otherwise, your bond yields may not keep up with inflation and the face value of your bonds may go down. Not what you want to see from a “low-risk” asset.
Then again, you could put cash into a money market fund. You get the same yield as short-term bonds with no lock-up period. If you stash your cash in an MMF while you wait for bitcoin’s price to go back into the buying zone, your government will pay you to buy crypto at lower prices.
Not a bad deal!
Or, you could buy a US treasury bond and use the interest to cover the cost of financing new crypto purchases. Or just take out a loan to buy crypto.
Of course, you still have to protect yourself against counterparty risks and other contingencies. Life events may force you to sell your bond or crypto before realizing the full benefits. You’re on the hook for the money you borrowed. The value of your crypto may go down.
How do you quantify those risks?
You can’t. Nobody can!
Fortunately, if you have a clear vision of success, you can match those risks with the specific outcomes you want to get.
Traders always want more of their government’s money. Investors always want assets that go up in value or throw off cash (ideally both). You can’t trade and invest with the same money. You’re playing for different outcomes.
If you only care about making more of your government’s money, trade. Use my content to make better decisions. Follow traders and learn how to read charts.
I know a lot of traders have posted a lot of wins. Some have done much better than me, and they will continue to do so. Most can’t beat my plan. They can’t even get the consistent returns necessary to beat dollar cost averaging. You’ll hear about their wins, never about their losses.
They feel good because they get money out of the crypto market. Mission accomplished!
They’re hustlers, for sure. I’m a tortoise. Slow and steady wins the race.
Cryptocurrency is a marathon masquerading as a sprint. Social media glorifies the sprinters. Marathon runners can do all right, too.
Until the legacy financial system catches on to what's happening with crypto, we don't need to hustle. Time is on our side. We just need to wait for opportunities and act accordingly.
Do you want some good news?
The legacy financial system is far from catching on to what we're doing. They're still stuck in the grief cycle.
At a Congressional hearing earlier this year, Federal Reserve Chairman Jay Powell wondered why any cryptocurrency has a price higher than zero because none of them have any intrinsic value.
What will he say when he realizes no financial asset has intrinsic value?
Stocks have no value at all!
The businesses have value. Those businesses create jobs, profits, revenue, goods, services, and wealth.
Your stock certificate entitles you to none of that. You make money if the company gets sold or the board decides to pay dividends or buy back shares. None of those things are guaranteed.
Meanwhile, corporate officers and insiders dump their shares all the time. You are a source of liquidity. Stocks are pieces of paper.
You can’t even redeem them for anything! When you don’t want them anymore, you need to find somebody to buy them from you.
If you want cash flow, buy bonds.
At least with bonds, the business has to pay you. If the business goes bankrupt, you get your money back before the people who own stock get their money back.
(With government bonds, you’re out of luck if your government goes bankrupt. But if that happens, you’ll have bigger things to worry about!)
Mark, you’re forgetting about dividends!
Yeah, I know. Without dividends, the stock market trails the rate of inflation. It’s a guaranteed money-loser. Everybody knows that. There's no need to get into it here.
It's probably not a big deal if dividends went up over time. Sadly, they don’t.
In fact, dividends went down this year. They’re lower today than they were a year ago and nowhere near pre-COVID levels.
But Mark, buybacks!
Good point. You benefit when a business manipulates the market to inflate the price of your shares.
Buybacks are arguably the most compelling reason to own stock. They cost less than dividends, get more favorable tax treatment, and pump your portfolio.
That might sound good, but it reveals a sad truth about stocks. They only do three things:
Give corporations a cheap source of funding.
Give corporate executives an easy way to manipulate the public’s perception of the company’s value.
Give shareholders a way to game the tax system.
If that’s the case, Microstategy does it best. The company lost money for more than a decade and barely breaks even now, but it figured out a secret:
People think equity has value, but it doesn’t.
Microstrategy trades that equity for bitcoin—an asset people think does not have value, but does.
Microstrategy’s, er, strategy, depends on selling equity for bitcoin and waiting for its price to go up.
The best part of that plan?
It doesn't matter what Microstrategy’s business does. As long as bitcoin’s price goes up, they can run their business into the ground. People will still buy shares of MSTR because of the book value!
At some point, Microstrategy will have to sell or trade its bitcoins. Its core business loses money most years. It can only sell so many shares before investors switch to Coinbase or bitcoin ETFs.
Unless Microstrategy finds a reliable source of profits, it can't HODL forever.
If bitcoin's price goes up a lot, shareholders will sue Saylor for HODLing instead of selling for profit and investing in the business (as is his responsibility to shareholders).
If bitcoin’s price drops a lot, people will not buy MSTR. Microstrategy will lose a vital source of funding and won’t have enough profits to make up for it. It will go out of business. Creditors or trustees will sell the bitcoin as part of the bankruptcy process.
You might say that’s the whole point—sell bitcoin for dollars!
The US dollar is backed by the US government. Something about the military-industrial complex or oil, treaties, international agreements, laws, courts, etc. They say you can’t eat a bitcoin or a share of Microstrategy, but you can eat dollars!
Your government spends a lot of money to make sure its money is worth something.
In the US, the average taxpayer pays 20% or more of his or her income for the full faith and credit of the US government. Almost $1 trillion goes to buy those aircraft carriers and treaties. Your country does something similar.
Bitcoin backs an $800 billion financial network. Do you know how much the average taxpayer pays for that?
Nothing. Bitcoin funds itself.
You pay a transaction fee to use the network. Sometimes, that fee is less than your payment app charges its merchants. Bitcoin’s protocol rewards miners to run the network for you—no aircraft carriers needed.
Maybe that's why bitcoin does not need backing. Its protocol works. Its network grows. As a result, you can trust bitcoin will secure your wealth.
The US dollar needs aircraft carriers and treaties. It needs US taxpayers. Otherwise, it’s worthless.
Go into a Federal Reserve bank and ask them to redeem your $20 bill for the full faith and credit of the United States government. They’ll give you a 10 and two fives and ask you to leave the building.
They won't even give you a piece of an aircraft carrier!
Worse, if you don’t have access to the US financial system, you can’t even get dollars. At least, not legally.
You can, however, get the next best thing: stablecoins.
Boomers that say you can't trust them. Conspiracy theorists say they're all scams. Your elected leaders say they’re tools for money laundering.
Long-time subscribers know my thoughts about stablecoins. To simplify a more nuanced view, stablecoins solve a problem with the legacy financial system, with one catch: you have to trust the entity that issues those stablecoins.
You can trust the US dollar because the US government forces its taxpayers, treasury, and military to use dollars. It also forces banks to accept dollars as payment for debts and uses treaties and laws to force other countries to use dollars in certain circumstances.
As long as that’s the case, you know your dollars will always have value.
With stablecoins, you do not get any of that. You only get a business (or sometimes, a protocol). That makes them shadier.
Or does it?
Let's examine more closely, with USDT as our example.
Yes, that Tether. Shady AF. US regulators say it’s a criminal enterprise. Tether gets caught up in a lot of shenanigans.
At the same time, it’s been around longer than any other stablecoin. It has processed 100% of withdrawals without any halts or delays, even in the most stressful of market conditions. Its attestations show it has 100% reserves (just not where the reserves came from or where they’re kept).
Sure, at one point Tether had only 77% of its customers’ money, but that’s a lot more than your bank does.
Let’s play a drinking game. You choose whether the statement applies to Tether, the US military, or both.
Will collapse if the US dollar fails.
US military.
Tether loses a profit center but has non-USD stablecoins to fall back on and can create more products if necessary. While its reserves will collapse, so will the need for reserves (because the US dollar will be worthless, therefore redeemable for nothing).
Has never passed an audit.
Both.
Tether has never even had an audit.
The US military has failed all its audits. In fact, for its most recent audit (2022), the US military couldn’t account for 61% of its spending.
The world order would fall apart if it disappeared.
US military.
If Tether disappeared, people would use a different USD stablecoin.
Responsible for the deaths of millions?
US military.
We don’t know how many people Tether has killed. I’m guessing it’s a lot less than millions. Probably 0.
Props up dictators and autocrats?
Probably both.
The US military, for sure. We know this because it’s public information and part of US foreign policy.
Tether? We don’t know, but you’d have to assume so. North Korea used USDT as part of its FDI-as-theft fundraising policy. Does that count? If not, we have to assume other despots used USDT for something or other.
Responsible for the overthrow of sovereign governments?
US military. Tether doesn’t mess with that.
Shall we try some other comparisons?
US military: run by one guy who is unaccountable to the public and does whatever his boss (the President) tells him to do.
Tether: run by three guys who are unaccountable to the public and do whatever their customers tell them to do.
US military: vital for the security of Western governments and their friendliest partners.
Tether: vital for the liquidity of global financial networks and the people who use them.
US military: a secretive, opaque entity that does terrible things with US dollars in pursuit of US policy outcomes.
Tether: a secretive, opaque entity that does terrible things with US dollars in pursuit of profits.
Tether and the US military dominate their respective fields, get a lot of support and praise, and face withering, sometimes-valid criticism.
With one big difference:
The US military can't pump the crypto markets (yet).
Stablecoins can—and have.
That’s what led to 2023’s crypto resurgence.
Every pump this year started with stablecoin shenanigans. I covered this at length in updates for premium subscribers. Capo was right!
In January, somebody used a huge amount of BUSD to buy a bunch of crypto from miners who were affiliated with Binance. Bitcoin’s price spiked upward.
In March and June, somebody used a huge amount of TUSD to squeeze traders. This forced a bunch of people to buy into the market, pumping prices again.
I can’t say it was intentional market manipulation, but if somebody wanted to pump the market and then sell the inevitable rally, they would do exactly what the on-chain evidence suggests they did.
(We will never know.)
The October pump started with an infusion of stablecoins, too, but unlike the other times, we saw genuine speculative enthusiasm follow. HODLing patterns, bitcoin movements, and miner behaviors suggested that sellers were mostly gone.
The stablecoin market started growing for the first time in almost two years. Bizarre coincidences with technical indicators and on-chain metrics from 2016 played out perfectly.
As expected, the market zoomed.
Ideally, I would prefer a natural rise, not a series of FOMO-inducing stablecoin pumps. But here we are.
Let’s hope the pumpers have already dumped so we don’t get any nasty surprises on the way to $1 million.
Then again, the crypto experience is one constant stream of nasty surprises.
Like any good story, this market keeps you on the edge of your seat. You can’t take anything for granted!
I’ll continue to look at the larger context, go beyond the day-to-day, analyze the market from many dimensions, and point out new behaviors or shifts in trends so that you have a clear picture of what’s going on and what to look out for.
YouTube, Reddit, and Twitter will give you charts and facts that make the outcome of this market seem certain. It’s anything but. Many of these charts and facts are wrong, incomplete, or lacking context. Each of these charts and facts fills a small piece of the puzzle.
That puzzle will never be solved. We will never have all the pieces of the puzzle. Only in hindsight will we know what to do. By then, we no longer have a chance to do anything about it.
That’s the beauty of this asset class and this investment opportunity: the uncertainty.
It’s the only reason we can take a small amount of money and turn it into an outsized stake in the financial networks of the future. Once the market knows who wins and loses, the opportunity will disappear.
Embrace uncertainty. Treasure doubt. Act with conviction, not in the belief in any one outcome, but in the belief that you have a sound strategy and realistic expectations.
Know what you truly want to get out of this market and use that as your guide.
This newsletter will help you make the best decisions about how to do that. Make sure you take advantage of everything you get with Crypto is Easy.
To paraphrase a US Civil War general, “Some people say crypto is all glory. I assure you, it is all hell.”
If crypto has to be hell, we can at least make it easy.
Relax and enjoy the ride!
In last month’s post, I discussed the fundamental reason we’re in this market and the difference between financial freedom and financial liberty.
This month, I address some misconceptions about where we stand in the “market cycle” (however you define it) and what you need to think about now.
Unless something crazy happens, the crypto market has entered Act 3, the final act of the crypto story.
Act 1 sets the scene. May 2022. A collapse of lending platforms, major protocols, and market makers. Despair and capitulation. A small group of stalwarts persist. Can they survive? Will they recover?
Act 2 confronts those stalwarts with obstacles. November 2022. FTX failed. US regulators sued every crypto business they could find. Central banks tightened lending amid a collapse of stock and bond markets. Crypto prices started to recover. US courts shut down regulators. Prices start to go up.
Now, we move to Act 3. Those stalwarts—the bear market warriors—have gained the upper hand. Victory is in sight! The audience believes they can succeed. The question is, how?
The story moves to its climax and denouement.
We are the stalwarts, the bear market warriors, the heroes and heroines.
Mark, there’s no way we’re in Act 3. The bull market just started!
If bitcoin’s price stays above $15,600, the bull market started almost 14 months ago. On-chain and technical metrics suggest the psychological bottom came in June 2022. Under some projections, the bull market might reach its peak in early 2025.
Don’t worry about it! We won’t know how long Act 3 will take or when the climax will come.
Like those of a novel or movie, these acts mark an emotional and psychological journey. They relate to your feelings, not crypto prices or timing. Similar to the Wall Street Cheat Sheet.
Some people love data models and cycle theories. They’re polished, professional, and persuasive.
As I discussed in Predictions, Models, and Narratives, they also disagree with each other.
I’m all about feelings. How you act depends on how you feel. Reflect on your emotions as much as you reflect on any data model or cycle theory.
If this is Act 3, remember how you felt in September: despair, sadness, and doubt.
Think about how you feel today: hope, elation, and relief.
Next time the market drops, you’ll feel like you did in September.
Imagine going through that cycle of emotions every three months for the next year or two. That’s how Act 3 will feel.
The market zooms, your portfolio balloons, some of your altcoins go up 2-3x almost overnight, and you feel the urge to put more money in. You can barely hold yourself back. You feel like you missed out. You had a chance to buy more at a lower price, but you didn’t!
The market crashes, bitcoin drops 30% (50-80% for altcoins), and you feel the urge to sell before it goes lower. You can barely hold yourself back. You feel like you got too greedy. You had a chance to take profits, but you didn’t!
To steal a phrase from poker players, crypto’s a lot of boredom punctuated by moments of terror and ecstasy.
How do you manage those moments of terror and ecstasy? That will mean as much for your success as any trading plan or on-chain metric.
The first step?
Define success.
What do you want to get out of this market? Durable wealth? Quick profits? A stake in the financial networks of the future? Income and cash flow? More of your government’s money? Lambos? Financial security? FU money?
What risks are you willing to take to get what you want?
What about taxes – do you know how much you will pay? Are there tax advantages you can incorporate into your planning? Are there tax issues that you need to plan around?
Your answers to those questions matter more for your success than anything I or any other content creator can give you.
For example, my trade from February.
If you put $100 in that trade, you now have $70 plus $100 worth of bitcoin. That’s a 70% gain so far.
Amazing stuff. Better than every fund manager on earth. A stellar performance by any objective measure.
What would have happened if you had HODLed that $100 in bitcoin?
You would have an 83% gain.
That’s a better return than the trader, but you have less of your government's money.
Who got the better deal?
Mark, don’t be an idiot! You can sell that bitcoin and come out ahead of the trader!
You don't know that.
Bitcoin's price may drop 20% from when I write this post to when you read it.
This is a volatile market! While that doesn't make it any more risky than any other market, it does mean you have to accept a wide range of outcomes.
This market is crazy. Senseless, sometimes. Plain facts seem impossible to believe.
For example, in 2022, bitcoin’s average price was $28,100. In 2023, bitcoin’s average price is $28,800. You got a better deal in 2022.
In fact, if you bought crypto on any random day in 2022 and put cash into a money market fund for 5% in 2023, you came out ahead of everybody who put cash into a money market fund for 3% in 2022 and bought crypto on any random day in 2023.
Yet, if you ask your average person which year was the best to buy bitcoin, they would tell you 2023. They’d say the smart investors held cash in 2022 and bought crypto in 2023. “Only idiots bought in 2022 and held cash in 2023.”
It feels that way, but the facts say the opposite—just like the $57,000 target on the February trade alert felt impossible back then but realistic now.
The trade target didn’t change. Nor did the take-profit levels along the way. Circumstances and conditions changed, but not in any way that makes $57,000 more or less realistic now than it was in February.
Yet, here we are.
Ending the year at $50,000 seemed crazy when I made up that prediction for Luckbox Magazine last year. We’re not so far off, are we?
The bull market feels like it just started, when it’s already almost 14 months old.
(Assuming bitcoin’s price stays above $15,600.)
What will you do if bitcoin's price drops to $24,000 by April? If this happens, altcoins will go down 80% or more.
Will you see that as an opportunity to buy more at a discount, or see that as a failure because the value of your crypto went down? Will you sell and guarantee a loss, or will you buy and guarantee a gain?
How will you feel if bitcoin’s price goes up to $70,000 before falling back to $32,000 toward the end of 2024?
Ask yourself the same questions as I mentioned above. You can read my portfolio strategy if it helps.
Hopefully, my market updates have enough insight and analysis to help you see the circumstances for what they are, not what they feel like. Use that information to get the result you’re looking for.
As always, I’m happy to consult. Connect with me on Superpeer or Tealfeed.
Also, make sure you have my plan. Three lines tell you when to buy and two metrics tell you when to sell.
For every dollar you put into the crypto market, you get, on average, 30% more with my plan than you do for dollar cost averaging. You also beat most traders.
Today, you’re up as much as 670% or down as much as 18% at the extremes. Most likely, you’re up 70% with cash to spare.
All you need to do?
Keep setting aside fresh cash when bitcoin’s price goes above my buying zone. Put money into the market when bitcoin’s price goes into the buying zone. Sell only when the market forces you to do so.
Most people do the opposite. They wait until the market goes up, then buy at higher prices than they need to. Worse, they get less value with each additional purchase. Then, when the market drops, they sell.
It feels better at the time—until a year or two later, when they see their results.
Today, my plan says not to buy. Tomorrow, who knows? This market changes all the time.
The biggest question I’ve gotten in recent weeks:
“How much money should I hold in cash vs. crypto?”
Only you can answer that question.
What does cash mean to you? How much do you value cash?
What does crypto mean to you? How much do you value crypto?
With cash, you get a source of wealth that’s protected by your government.
With cryptocurrency, you get a source of wealth that’s protected FROM your government.
Why not split the difference? A little cash, a little crypto. Best of both worlds!
What about other assets?
Bonds offer predictable cash flow. Stocks give you an asset you can sell for a higher price than you paid.
A business or job gets you more of your government’s money. Staking rewards pay you crypto. Debt allows you some flexibility in how you manage your finances.
Each of these assets responds differently to changes in economic circumstances. When one asset’s down, you put money into it. When that asset goes up, let it run and put money into whatever asset’s down. Repeat forever. You win no matter what happens in the wider economy (the “macro,” as the experts call it).
If that sounds hard to manage, use Empower to make your life easier and more profitable. They have a free dashboard, asset tracker, financial planning tools, and the option to hire them as your financial advisor.
Use my referral link to get a small reward when you sign up. The platform is free. The advisor is optional!
Your fortunes could change. You could lose your job. Your business could have a bad quarter or year.
Your crypto wallet could get hacked. The crypto market could crash. Your altcoins might fail.
Financial experts are telling you to buy long-term US treasuries because “the Fed will cut rates,” “inflation is under control,” and either “the economy will go into recession” or “the economy will have a soft landing,” depending on their bias.
Let's hope they're right. Otherwise, your bond yields may not keep up with inflation and the face value of your bonds may go down. Not what you want to see from a “low-risk” asset.
Then again, you could put cash into a money market fund. You get the same yield as short-term bonds with no lock-up period. If you stash your cash in an MMF while you wait for bitcoin’s price to go back into the buying zone, your government will pay you to buy crypto at lower prices.
Not a bad deal!
Or, you could buy a US treasury bond and use the interest to cover the cost of financing new crypto purchases. Or just take out a loan to buy crypto.
Of course, you still have to protect yourself against counterparty risks and other contingencies. Life events may force you to sell your bond or crypto before realizing the full benefits. You’re on the hook for the money you borrowed. The value of your crypto may go down.
How do you quantify those risks?
You can’t. Nobody can!
Fortunately, if you have a clear vision of success, you can match those risks with the specific outcomes you want to get.
Traders always want more of their government’s money. Investors always want assets that go up in value or throw off cash (ideally both). You can’t trade and invest with the same money. You’re playing for different outcomes.
If you only care about making more of your government’s money, trade. Use my content to make better decisions. Follow traders and learn how to read charts.
I know a lot of traders have posted a lot of wins. Some have done much better than me, and they will continue to do so. Most can’t beat my plan. They can’t even get the consistent returns necessary to beat dollar cost averaging. You’ll hear about their wins, never about their losses.
They feel good because they get money out of the crypto market. Mission accomplished!
They’re hustlers, for sure. I’m a tortoise. Slow and steady wins the race.
Cryptocurrency is a marathon masquerading as a sprint. Social media glorifies the sprinters. Marathon runners can do all right, too.
Until the legacy financial system catches on to what's happening with crypto, we don't need to hustle. Time is on our side. We just need to wait for opportunities and act accordingly.
Do you want some good news?
The legacy financial system is far from catching on to what we're doing. They're still stuck in the grief cycle.
At a Congressional hearing earlier this year, Federal Reserve Chairman Jay Powell wondered why any cryptocurrency has a price higher than zero because none of them have any intrinsic value.
What will he say when he realizes no financial asset has intrinsic value?
Stocks have no value at all!
The businesses have value. Those businesses create jobs, profits, revenue, goods, services, and wealth.
Your stock certificate entitles you to none of that. You make money if the company gets sold or the board decides to pay dividends or buy back shares. None of those things are guaranteed.
Meanwhile, corporate officers and insiders dump their shares all the time. You are a source of liquidity. Stocks are pieces of paper.
You can’t even redeem them for anything! When you don’t want them anymore, you need to find somebody to buy them from you.
If you want cash flow, buy bonds.
At least with bonds, the business has to pay you. If the business goes bankrupt, you get your money back before the people who own stock get their money back.
(With government bonds, you’re out of luck if your government goes bankrupt. But if that happens, you’ll have bigger things to worry about!)
Mark, you’re forgetting about dividends!
Yeah, I know. Without dividends, the stock market trails the rate of inflation. It’s a guaranteed money-loser. Everybody knows that. There's no need to get into it here.
It's probably not a big deal if dividends went up over time. Sadly, they don’t.
In fact, dividends went down this year. They’re lower today than they were a year ago and nowhere near pre-COVID levels.
But Mark, buybacks!
Good point. You benefit when a business manipulates the market to inflate the price of your shares.
Buybacks are arguably the most compelling reason to own stock. They cost less than dividends, get more favorable tax treatment, and pump your portfolio.
That might sound good, but it reveals a sad truth about stocks. They only do three things:
Give corporations a cheap source of funding.
Give corporate executives an easy way to manipulate the public’s perception of the company’s value.
Give shareholders a way to game the tax system.
If that’s the case, Microstategy does it best. The company lost money for more than a decade and barely breaks even now, but it figured out a secret:
People think equity has value, but it doesn’t.
Microstrategy trades that equity for bitcoin—an asset people think does not have value, but does.
Microstrategy’s, er, strategy, depends on selling equity for bitcoin and waiting for its price to go up.
The best part of that plan?
It doesn't matter what Microstrategy’s business does. As long as bitcoin’s price goes up, they can run their business into the ground. People will still buy shares of MSTR because of the book value!
At some point, Microstrategy will have to sell or trade its bitcoins. Its core business loses money most years. It can only sell so many shares before investors switch to Coinbase or bitcoin ETFs.
Unless Microstrategy finds a reliable source of profits, it can't HODL forever.
If bitcoin's price goes up a lot, shareholders will sue Saylor for HODLing instead of selling for profit and investing in the business (as is his responsibility to shareholders).
If bitcoin’s price drops a lot, people will not buy MSTR. Microstrategy will lose a vital source of funding and won’t have enough profits to make up for it. It will go out of business. Creditors or trustees will sell the bitcoin as part of the bankruptcy process.
You might say that’s the whole point—sell bitcoin for dollars!
The US dollar is backed by the US government. Something about the military-industrial complex or oil, treaties, international agreements, laws, courts, etc. They say you can’t eat a bitcoin or a share of Microstrategy, but you can eat dollars!
Your government spends a lot of money to make sure its money is worth something.
In the US, the average taxpayer pays 20% or more of his or her income for the full faith and credit of the US government. Almost $1 trillion goes to buy those aircraft carriers and treaties. Your country does something similar.
Bitcoin backs an $800 billion financial network. Do you know how much the average taxpayer pays for that?
Nothing. Bitcoin funds itself.
You pay a transaction fee to use the network. Sometimes, that fee is less than your payment app charges its merchants. Bitcoin’s protocol rewards miners to run the network for you—no aircraft carriers needed.
Maybe that's why bitcoin does not need backing. Its protocol works. Its network grows. As a result, you can trust bitcoin will secure your wealth.
The US dollar needs aircraft carriers and treaties. It needs US taxpayers. Otherwise, it’s worthless.
Go into a Federal Reserve bank and ask them to redeem your $20 bill for the full faith and credit of the United States government. They’ll give you a 10 and two fives and ask you to leave the building.
They won't even give you a piece of an aircraft carrier!
Worse, if you don’t have access to the US financial system, you can’t even get dollars. At least, not legally.
You can, however, get the next best thing: stablecoins.
Boomers that say you can't trust them. Conspiracy theorists say they're all scams. Your elected leaders say they’re tools for money laundering.
Long-time subscribers know my thoughts about stablecoins. To simplify a more nuanced view, stablecoins solve a problem with the legacy financial system, with one catch: you have to trust the entity that issues those stablecoins.
You can trust the US dollar because the US government forces its taxpayers, treasury, and military to use dollars. It also forces banks to accept dollars as payment for debts and uses treaties and laws to force other countries to use dollars in certain circumstances.
As long as that’s the case, you know your dollars will always have value.
With stablecoins, you do not get any of that. You only get a business (or sometimes, a protocol). That makes them shadier.
Or does it?
Let's examine more closely, with USDT as our example.
Yes, that Tether. Shady AF. US regulators say it’s a criminal enterprise. Tether gets caught up in a lot of shenanigans.
At the same time, it’s been around longer than any other stablecoin. It has processed 100% of withdrawals without any halts or delays, even in the most stressful of market conditions. Its attestations show it has 100% reserves (just not where the reserves came from or where they’re kept).
Sure, at one point Tether had only 77% of its customers’ money, but that’s a lot more than your bank does.
Let’s play a drinking game. You choose whether the statement applies to Tether, the US military, or both.
Will collapse if the US dollar fails.
US military.
Tether loses a profit center but has non-USD stablecoins to fall back on and can create more products if necessary. While its reserves will collapse, so will the need for reserves (because the US dollar will be worthless, therefore redeemable for nothing).
Has never passed an audit.
Both.
Tether has never even had an audit.
The US military has failed all its audits. In fact, for its most recent audit (2022), the US military couldn’t account for 61% of its spending.
The world order would fall apart if it disappeared.
US military.
If Tether disappeared, people would use a different USD stablecoin.
Responsible for the deaths of millions?
US military.
We don’t know how many people Tether has killed. I’m guessing it’s a lot less than millions. Probably 0.
Props up dictators and autocrats?
Probably both.
The US military, for sure. We know this because it’s public information and part of US foreign policy.
Tether? We don’t know, but you’d have to assume so. North Korea used USDT as part of its FDI-as-theft fundraising policy. Does that count? If not, we have to assume other despots used USDT for something or other.
Responsible for the overthrow of sovereign governments?
US military. Tether doesn’t mess with that.
Shall we try some other comparisons?
US military: run by one guy who is unaccountable to the public and does whatever his boss (the President) tells him to do.
Tether: run by three guys who are unaccountable to the public and do whatever their customers tell them to do.
US military: vital for the security of Western governments and their friendliest partners.
Tether: vital for the liquidity of global financial networks and the people who use them.
US military: a secretive, opaque entity that does terrible things with US dollars in pursuit of US policy outcomes.
Tether: a secretive, opaque entity that does terrible things with US dollars in pursuit of profits.
Tether and the US military dominate their respective fields, get a lot of support and praise, and face withering, sometimes-valid criticism.
With one big difference:
The US military can't pump the crypto markets (yet).
Stablecoins can—and have.
That’s what led to 2023’s crypto resurgence.
Every pump this year started with stablecoin shenanigans. I covered this at length in updates for premium subscribers. Capo was right!
In January, somebody used a huge amount of BUSD to buy a bunch of crypto from miners who were affiliated with Binance. Bitcoin’s price spiked upward.
In March and June, somebody used a huge amount of TUSD to squeeze traders. This forced a bunch of people to buy into the market, pumping prices again.
I can’t say it was intentional market manipulation, but if somebody wanted to pump the market and then sell the inevitable rally, they would do exactly what the on-chain evidence suggests they did.
(We will never know.)
The October pump started with an infusion of stablecoins, too, but unlike the other times, we saw genuine speculative enthusiasm follow. HODLing patterns, bitcoin movements, and miner behaviors suggested that sellers were mostly gone.
The stablecoin market started growing for the first time in almost two years. Bizarre coincidences with technical indicators and on-chain metrics from 2016 played out perfectly.
As expected, the market zoomed.
Ideally, I would prefer a natural rise, not a series of FOMO-inducing stablecoin pumps. But here we are.
Let’s hope the pumpers have already dumped so we don’t get any nasty surprises on the way to $1 million.
Then again, the crypto experience is one constant stream of nasty surprises.
Like any good story, this market keeps you on the edge of your seat. You can’t take anything for granted!
I’ll continue to look at the larger context, go beyond the day-to-day, analyze the market from many dimensions, and point out new behaviors or shifts in trends so that you have a clear picture of what’s going on and what to look out for.
YouTube, Reddit, and Twitter will give you charts and facts that make the outcome of this market seem certain. It’s anything but. Many of these charts and facts are wrong, incomplete, or lacking context. Each of these charts and facts fills a small piece of the puzzle.
That puzzle will never be solved. We will never have all the pieces of the puzzle. Only in hindsight will we know what to do. By then, we no longer have a chance to do anything about it.
That’s the beauty of this asset class and this investment opportunity: the uncertainty.
It’s the only reason we can take a small amount of money and turn it into an outsized stake in the financial networks of the future. Once the market knows who wins and loses, the opportunity will disappear.
Embrace uncertainty. Treasure doubt. Act with conviction, not in the belief in any one outcome, but in the belief that you have a sound strategy and realistic expectations.
Know what you truly want to get out of this market and use that as your guide.
This newsletter will help you make the best decisions about how to do that. Make sure you take advantage of everything you get with Crypto is Easy.
To paraphrase a US Civil War general, “Some people say crypto is all glory. I assure you, it is all hell.”
If crypto has to be hell, we can at least make it easy.
Relax and enjoy the ride!
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