Doc's Daily Commentary

Mind Of Mav

Bullish On Bitcoin; Bearish On Fiat

 

People often ask me why I’m so bullish on crypto (which I am) but it’s not just that. I am also bearish on Fiat money. There are two sides to every coin (pun intended). Bitcoin is going up in value, but at the same time, Fiat is going down.

First of all, in case you are not familiar with the term, Fiat money is any currency that it’s not backed by anything, i.e. the US dollar, the Euro, or the British Pound. Some would argue that Fiat is backed by the government, but that’s meaningless. The only way a state can support its currency is by printing more of it, which is counterproductive. And that’s exactly what they are doing right now.

What happens when money is printed like it’s going out of fashion? Let’s have a look.

Inflation

 

Governments are in denial. They claim inflation will be kept low despite printing Trillions every other month. I’m no expert, but that doesn’t sound right to me. When you have too many of anything, it loses value. There is a reason why diamonds are expensive and sand is not: scarcity.

The trick to keep official inflation down is to cherry pick a few basic products that traditionally have stable prices and use them to calculate the consumer Price index, then ignore the rest.

Some call this cheating. They have a point.

When you go to the supermarket, pay your utility bills, your mortgage, petrol, and everything has gone up 25% in a few months, it’s hard to swallow the official inflation of 1%.

Here are some examples:

 

Source: Charlie Bilello, CEO @ Compound Capital Advisors

Do you still believe the official version?

Governments all over the world are in deep shit at the moment and the last thing they need is to admit the real increase in the cost of living and then having to raise salaries and pensions accordingly.

Most experts agree that real inflation is going to be between 10–20% for the next ten years. That means your fiat money will lose 80% of its value during that period.

Let that sink in.

Are you still happy to keep your dollars in the bank?

Me neither.

Alternatives

In a high inflation scenario, the worst thing you can do is to keep cash. Use it, invest it, or burn it, but don’t hold it, it would be like trying to hold water in your hands — you’ll end up with nothing.

Bitcoin, Ethereum, real estate, and stocks are just some alternatives for your hard earned cash. Anything that can protect you against inflation is a good option.

Venezuela

Until very recently Venezuela was a rich country with a booming economy. They have oil after all. So what happened? How did they get there?

By printing money.

Traditionally, high inflation economies like Argentina, Zimbabwe or Venezuela have resorted to the U.S.$ as a stable currency to use for everyday transactions. But what happens when the $ gets inflated as well?

People turn to crypto.

We are now in a bull market and everybody and his cousin is willing to buy Bitcoin, but even when BTC wasn’t so popular, these countries have been keen on any deflationary asset — something like BTC or Ether that instead of losing 15% a year, it goes up 200% annually on average.

When I visited Argentina I had 2 options to get my pesos. Either I could change euros at the official rate in a bank or I could buy my pesos on the street. The rate on the street is much better so most of the exchanges are done in improvised casas de cambio. Almost every other shop has a corner dedicated to buy your dollars, pounds or euros.

The situation in Argentina is 1 million times better than in Venezuela, but still, they’ve been living for decades with high inflation and have become experts on how to survive it.

Some of the tricks they use are converting into dollars asap, investing in property, moving money out of the country, never holding any savings in pesos and more recently investing in crypto.

I think we have a lot to learn from Argentinians.

Bans

Recently the Turkish government has decided to ban Crypto. The lira is imploding and people are trying to move their cash into safer investments. Some are buying property, some are exchanging it for euros and many are trying to invest in Bitcoin.

People are not stupid and can smell a rat from a mile away. The trust in Fiat money is dwindling, meanwhile BTC keeps growing in popularity.

Could this ban happen in Europe, the US or Japan? Hopefully not but, just in case, it would be a good diversification strategy to move your eggs into a different basket i.e. one that isn’t broken beyond repair.

Crypto is also either banned or heavily restricted in two other countries: China and the US. Guess which countries hold more Bitcoin? Precisely.

Banning a decentralized currency doesn’t work, there is nothing they can do to stop people from trading it. If anything, they are increasing demand since the ban shows lack of trust in their own currency.

I bet Turkish people are extremely bullish now on BTC and will buy all they can get hold of. All you need is an internet connection and perhaps a VPN to circumnavigate the restriction. Even China couldn’t stop its citizens from expending billions on Crypto.

Let this serve as a cautionary tale for how bad things can get when SHTF. Perhaps it’s time for plan B.

Banks

Are you happy with your bank?

Then, congratulations, you are a unicorn. The low interest rates on deposits, the extortionate commissions, the bureaucracy, and the extremely slow transfers.

If you want to send money to Japan, it’s faster and cheaper to tie it to an anvil and send it through Fedex rather than trying your luck with an international swift transfer.

Somebody should inform the banks that we are in the 21st century and not in the middle ages. Electronic transactions don’t need 5 days to clear! FFS!

As you can see, I’m not so fond of banks, but, what are the alternatives?

Exchanges

Crypto exchanges and wallets work, in some ways, like a bank, only better. KrakenCoinbaseBinance or Celsius are crypto exchanges where you can store your cash, get interest for it, invest it, borrow and move it around. They even offer credit cards for their customers.

In some ways they are not ideal, fees can be high, your money is not insured and they still lack some flexibility, but I find them much better than banks once the money has been converted into crypto.

But there is something even better.

Decentralized Exchanges (DEX)

All the aforementioned exchanges are centralized — there is a company that offers custody, transactions and interest for a profit — but there are also Decentralized Exchanges.

Decentralized Finance is a way of dealing with money that doesn’t involve intermediaries. The transaction is handled by a smart contract automatically and it’s fast, secure and immutable. DEX is still in its early days and some bumps are to be expected but I reckon that decentralization is the way forward.

Some of the most popular DeFi exchanges are: MDEXUniSwap or 1Inch and they offer investment and trading opportunities no bank can compete with. For example, you could put your money into a liquidity pool that offers 1000% interest. Although that comes with a lot of risk.

Conclusion

FIAT money has been ok-ish only in a handful of countries and only for a few decades. But even so, the dollar and the British pound, to name two of the top ones, have lost 97% of their value since they were created. If that happened to the almighty American and British empires, imagine what’s going to happen to all these money they print in developing countries. It’s not even worth the paper it’s been printed off.

Crypto is risky, for sure, but compared to what? The dollar?

At 1.9 Trillion being printed as we speak, I doubt it.

Nobody knows the future, but just in case, you should start questioning some of your assumptions about the systems you rely on.

Start building a nest egg that protects you and your family from failed economic policies and start investing your cash in assets than don’t lose value. Nobody is coming to save you, this time you are on your own.

Do it now. Later, it might be too late.

 
 

The ReadySetCrypto "Three Token Pillars" Community Portfolio (V3)

 

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The “Three Token Pillars” portfolio is democratically proportioned between the Three Pillars of the Token Economy & Interchain:

CryptoCurreny – Security Tokens (STO) – Decentralized Finance (DeFi)

With this portfolio, we will identify and take advantage of the opportunities within the Three
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possible.

The Second Phase of the RSC Community Portfolio V3 was to give us a general idea of the weightings people desire in each of the three pillars and also member’s risk tolerance. The Third Phase of the RSC Community Portfolio V3 has us closing in on a finalized portfolio allocation before we consolidated onto the highest quality projects.

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What is the goal of this portfolio? 

The “Top Ten Crypto” portfolio is a democratically proportioned portfolio balanced based on votes from members of the RSC community as to what they believe are the top 10 projects by potential.
 
This portfolio should be much more useful given the ever-changing market dynamics. In short, you rank the projects you believe deserve a spot in the top 10. It should represent a portfolio and rank that you believe will stand the test of time. Once we have a good cross-section, we can study and make an assessment as to where we see value and perhaps where some diamonds in the rough opportunities exist. In a perfect world, we will end up with a Pareto-style distribution that describes the largest value capture in the market.
 
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SoV/money == BTC, DCR
Platforms == ETH, XTZ
Private Money == XMR / ZEC / ZEN
DeFi == MKR / SNX and stablecoins
 
It is the most realistic way for us to distill the entirety of what we have learned (and that includes the RSC community opinion). We have an array of articles that have gradually picked off one by one different projects, some of which end up being many thousands of words to come to this conclusion. It is not capitulation because we all remain in the market. It is simply a consolidation of quality. We seek the cream of the crop as the milk turns sour on aggregate.

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