Most are underexposed to crypto
173: As banks collapse, has the safe haven emerged?
Morning guys - hope everyone had a solid weekend.
I put so many degenerate parlays on for March Madness my brain is still spinning. Fairleigh Dickinson gave me the Dickinson on my 8 leg parlay but it’s okay since our magical orange computer coins are worth way more.
Back in 2017 I heard about a new asset class - crypto - from one of the senior traders I worked with one slow afternoon. I remember trying to conceptualize the theory of crypto and Bitcoin in my head but I was skeptical.
But — everyone was piling into Bitcoin and what were known as alt coins with the hopes of benefiting from this new and mysterious asset class that seemed to be skyrocketing left and right.
I ended up buying the top and holding (until now) learning many lessons about hype and market cycles but the key principle and benefit of Bitcoin and select cryptos stuck with me.
Freedom over your money and the opportunity to accumulate wealth in a new and revolutionary sector that could potentially replace historical money systems and stores of value.
Since 2017 Bitcoin and crypto have trended and pumped, dumped and fallen out of public focus but the most recent recovery we have seen is both promising and highly interesting considering the larger macro backdrop.
Critics of Bitcoin and other crypto assets showing strength in the midst of the last two weeks are scared and they should be.
Because the reality is those that take too long to get on this train are likely going to miss out on one of the largest wealth transfers in history — and we really do believe that — it’s happening before our very eyes as fiat systems and legacy institutions falter from greed, excess, and lack of oversight.
Over the last two weeks we have seen a ripple effect in traditional finance institutions, markets, and infrastructures. Blow ups, irresponsible bets, bad loans, greed, and more all revealed with the failures of Silicon Valley Bank, Signature Bank, Silvergate (pro crypto) and the sketchy bail outs of Credit Suisse, First Republic, and more.
Somethings up — and it looks like the banking and political elite are using their powers to simply put a band aid over the leaking hole in the dam that is the US dollar, inflation, and unsustainable levels of debt.
It is clear to us that the larger issues we believed were present in our modern financial system could be worse than we imagined. Even if you think things wont go bust for years you cant deny that there are some highly concerning trends in the moment with traditional legacy financial institutions and central banks centralizing power, government influence, and control over the majority of wealth in the US.
Goldman Sachs announced on Monday that "we expect the FOMC to pause at its March meeting this week because of stress in the banking system.... We think Fed officials will therefore share our view that stress in the banking system remains the most immediate concern for now."
So the Fed’s supposed hard mandate to tackle inflation may be slowing down as a much larger crisis pulls into town.
There will be more blow ups and chaos — that is not, as the kids say these days, cap.
Question is are you prepared? Or are you going to get blindsided?
Value and relative worth is changing. The concept of money is changing in a world where inflation is sky high and governments are vying for control over how money is made, distributed, managed, and accessed.
The wealth gap is growing at a staggering rate.
Most people can’t even afford a home these days.
Now banks are imploding and inflation is becoming more and more entrenched — making it harder to alleviate and crushing most working people.
Today’s post is a comprehensive overview of our current crypto and Bitcoin holdings, allocations, as well as the investing strategies we have used to anchor a solid long term portfolio that will outperform assets that end up suffering from hyperinflation, government nationalization, or a falling dollar value.
Most people make several basic mistakes when they trade or invest in crypto. To make matters worse most people are also highly underexposed to the asset class that could facilitate the largest transfer of wealth in human history as we watch legacy financial institutions rattle from leveraged blow ups, bad loan practices, and sky high inflation.
If you are just starting in crypto and want to learn more about why it is pumping so hard, or if you’re a historical skeptic I highly suggest reading today’s post. The information we outline here will give you the chance to get involved in one of the only potential hedges against all the intense fuckery we are seeing play out.
Even if you’re a crypto vet we will synthesize the last week into an easily digestible peace that will add conviction to your current exposure.
Don’t be the guy who loses access to his money or ends up holding the short stick when crypto potentially sky rockets — your net worth should be more important than your ego.
In today’s post for premium subs we will cover the following:
Why crypto is pumping so hard
How we are positioned
How you should position yourself to potentially make life changing money
The most bullish catalysts we’ve identified
Why crypto may be one of the only ways to “make it”
While we put out a free Arb Letter each week we have an archive of over 175+ posts that thousands of finance professionals, hedge fund PMs, analysts, veterans, bankers, traders, salesman, crypto gurus, tech folks, and more subscribe to in order to ensure they are getting differentiated and honest commentary on markets and global news — something that is becoming more and more rare these days and something we will expand on in our upcoming podcast.
If you enjoy the market and global news updates we put out each week consider upgrading to paid to get our market deep dives, interviews, and more extensive commentary — we’ve kept it priced relatively low so most can access.
Let’s get it.
“its mere existence is an insurance policy that will remind governments that the last object the establishment could control, namely, the currency, is no longer their monopoly. This gives us, the crowd, an insurance policy against an Orwellian future.”
—Saifedean Ammous, The Bitcoin Standard
Crypto
We’ve always advocated for a relatively conservative approach to allocating your capital for exposure to Bitcoin and crypto. Had you followed our basic principles you’d likely be in the green even right now. The key is avoiding the noise and volatility of alts during big corrections.
It starts with averaging into Bitcoin and Ethereum as a basis. These are the two largest crypto “assets” and they are also the most adopted and known globally. Bitcoin is proving to be the strongest performer demonstrating impressive resilience and growth during a time when even professional money managers can’t effectively navigate the market.
If you’re an institutional investor or major money manager you can’t ignore Bitcoin’s strength and decoupling from traditional equity markets and other assets. It’s movement recently is a massive middle finger to it’s strongest doubters.
We’ve added to our Bitcoin and Ethereum holdings on occasion throughout this broader downtrend and are now happy with what we have accumulated for the time being. We hold two major “alts” with negligible amounts of random ones like Cardano, Tron (TRX), Graph, PolkaDot etc.
Right now here is what our crypto portfolio is made up of: