C'mon, man

Thursday October 5th, 2023 - Issue # 51

(Any views expressed below are the personal views of the author and should not form the basis for making investment decisions, nor be construed as a recommendation or advice to engage in investment transactions.)

Good morning!

It has been a full month since my last note. My sincerest apologies to those that have been waiting on the edge of their seats the past few Friday mornings to no avail…I was actually going to get this out last night but the Jays completely threw me off. Pulling Berríos after he was absolutely locked in combined with Vladdy getting picked off at second base? I was way more rattled than I should’ve been.

I guess, maybe, there’s something to take away from this though. Analytics driving over-management can be counterproductive. Based on the Twins batting lineup, Jays management felt that it made sense to take the right handed Berríos (who was absolutely dealing) out of the game and bring in the lefty Kikuchi because they were playing the percentages.

Oh man, I hope I can figure out how to bring this around full circle…

I guess, when you’re feeling the pressure to make a move, you have to try and block everything out and deeply understand the position that you’re in given years of experience, and remember why you’re in the position that you’re in, in the first place. Think for yourself, take ownership — all that good stuff. The Jays signed Jose Berríos to a $131 million contract over 7 years because they believed he would be a franchise starting pitcher. Two years later, the Jays decided to take him out of the most important start of his life after 47 pitches of shutout ball.

If you’re reading this it’s because you own or are at least interested in owning Bitcoin. You’ve always been and are increasingly concerned that the US and other global powers are losing control. In case you needed some extra motivation to hold or increase your position, over the last few years you’ve watched Bitcoin respond to:

• government’s insanely stimulative and draconian response to covid

• the Fed announcing publicly that inflation was just “transitory”

• the Fed changing their mind and going on the most aggressive rate hike cycle in history leading

• a banking crisis

• a bailout for SVB and others

• the Fed announcing the BTFP program to save the US banking system (not QE, QE)

• the Treasury announcing that they need to borrow nearly $2 trillion during the second half of this year

…and you’re contemplating selling your Bitcoin or you’re sitting on the sidelines in cash with Bitcoin off 60% from its highs to invest in the US or Canada for 5.5% because all of a sudden these muppets are preaching responsibility and chanting “higher for longer!”

Powell is not Volker — not even close. If he was, he would’ve stepped aside and let everything work itself out, for better or for worse. Instead, he intervened at every opportunity he was given and showed his true colours when the Fed paused at the last meeting. It’s going to get worse, something is going to break and my bet is that they’re going to pivot hard.

Timestamp: 7:16 am EST 05/10/23. Click the picture above when you get this and I bet the US has tacked on another billion or two.

I’m not sure I exactly brought the whole Blue Jays debacle all the way around but I guess what I’m trying to say is don’t let yourself get shaken off your trade.

I’m so fired up after writing all that I just bought some more.

Anyways.

Since you last heard from me, I took the longest flight in the world (19 hours 20 min non-stop) to Singapore for Token2049 — crypto’s biggest conference of the year. It was interesting to say the least. Firstly, Singapore is a remarkable city. It is incredibly clean, modern/high tech, everyone is friendly, and the food is great.

Here are some pics:

The conference itself was awesome. There was over 10,000 people at this place and it was absolutely buzzing. To get that many people traveling to Sing in a bear market with two other prominent conferences going on at the same time — Permissionless and Mainnet — is astonishing, really. There were a ton of side events and parties which were full to the brim — quite literally on at least one occasion.

Yes, I was there. No, I did not climb over any walls.

There were a ton of booths in the exhibition area. I can only imagine how much a booth would cost (guessing $20k-$250k depending on size) and there were hundreds.

I met a bunch of very smart, forward thinking people who are building and investing toward the future. The majority of the people I met have been in the crypto space for many years or joined more recently after finding success in the off-chain world. I’d say that the most interesting topic that came up frequently was real world assets (RWAs) and the rise of stablecoins.

I think the key takeaway for me was that we’re no longer as infrastructure constrained as we think we are. Yes, we need to continue pushing to make sure infra is as robust as possible but I think this next cycle will be focused more on the application layer. This is the best bear market of all time. The arc of progress in crypto has moved forward materially in that if you want to build something on the blockchain you have an order of magnitude more capability than you’ve ever had.

Happy Thanksgiving!