but its the only reason bitcoin is going up right

I've done the same. Didn't sell to buy a dip or anything. Just sold about 25% because I didn't think I could ride it down the black hole again. When I was in the black hole I wondered how the hell I ever let myself give it all back and had I just cashed it out, I wouldn't be grinding poker for chump change. I told myself if I ever got back to that point, it makes no sense for me to let so much ride.

So here I am again. This time taking profits. The main thing that keeps me from selling more is the lack of places to put the money. Everything I own is paid for including the house. Taxes is another reason I don't like selling. Trying a little play where instead of selling another 20-30% right now, I'm actually shorting that amount and collecting funding. APR on funding is 15-20%. So it's essentially the same thing as selling and collecting that amount of interest on my next investment.

This is another reason an ETF would be useful. It would provide easy access to options. If you're long term bullish but want to protect yourself from a >50% drop you could just buy puts to hedge instead of having to sell and deal with taxes.

More developed regulated derivatives markets would be nice. As it turns out, the presence of those markets of significant size outside the SEC's jurisdiction is one of the prime reasons why ETF applications have such a tough time getting approved. No doubt lots of improvement since the last wave of apps (BitMEX is smaller, CME futs are larger, more professionalized market making TradFi operations are in the mix like Jump and SIG), but Binance/FTX/OKex/Bybit/BitFinex/Huobi/Deribit et al are still quite large as a whole.

The other major problem is fork resolution. It's an interesting thought experiment what would have happened if ETHE existed in 2016 during the DAO fork that created ETC. Barry Silbert was the biggest proponent of ETC, and he notably chose the correct fork in UASF/S2X times for GBTC in 2017 (selling BCH and keeping BTC). Had ETHE been around and Barry sold ETH for ETC, the entire trust would be REKT. All sorts of OpSec issues around potentially exposing private keys to even claim a fork. It's not a simple situation, and another good reason the SEC has to say no to ETF applications.

Also, as long as the GBTC premium is +- 5%, there's even less reason an ETF is needed (conventionally, ETF good because it prevents retail from getting rekt by funds/HNWI capturing the premium).

Ultimately, it has become extremely politicized within the agency and it will get approved when that situation changes enough via turnover. Clayton being out is a good start.

Oh I dont think its so dramatic? I made the post because most ppl are still expecting "number go up", 500k, whatever and a few of my crypto friends said I was a lunatic for selling so "early" after holding and all the wars ive been through. so I made the post just trying to show a different perspective and try and convince people its ok to let go of some of your future EV if it means personal and mental health gains.

I already own a decent amount of stocks, have a retirement acct etc. Mostly the money will go to buying a condo in cash. The rest will go to a small personal endeavor, and I will keep about some in cash as emergency/general use/whatever and pile the rest back into stonks. I'm definitely not going to let it sit in my bank acct.

For me personally its just the right time. I'm early 30s and just want to realize some gains and say "yeah I accomplished that and here are my fruits". If I was still in my early 20s I dont think there is any chance I would sell, that's why I hodled and went Allin on crypto because I knew that was my edge over everyone else to get "rich".

as I said earlier I'm really only selling about 60-70% of my btc holdings. My crypto portfolio will still be the overwhelming majority of my net worth once I am done selling. the biggest difference is that I am not looking to trade these profits back to crypto or whatever. its just going straight to my condo. I'm about ~50% completed to my target (in usd) and just slowly offloading some everyday or so. There are some sells above 50k, there are some sells below 50k. I'm not too twisted about it now but I did have trouble setting the first limit sells but tbh its just time... unlike 2018 when I was happy to reinvest my sells back into crypto It's not going to happen this time.

Aggo and Onemoretimes,

When you guys are deciding to sell instead of post collateral and borrow, is it because you no longer think we will still see significant price increases after the next halving, because you are too worried about counterparty risk with blockfi/nexo/Celsius/aave, or because you are too worried about such a large crash that you wouldn’t be able to recollateralize and risk liquidation?

The cap gains tax will be brutal and I’m assuming you explored the lending route, I’d love to hear why you decided against it.

I harp on this nonstop but you should basically always put your risk management ahead of your assessment of whatever your edge is because:
1) you might be wrong
2) there's an ~optimal band of how much stress you should be under where you can make the best decisions. If you're too overexposed your decisions will generally suffer as a result of too much stress, and conversely, you will get bored/unmotivated if betting too little.
3) being overly aggressive with your roll generally leads to going broke, even if you're skilled (this should be easy to understand on a poker forum)
4) unforeseen exogenous events can always f you
5) diminishing marginal utility of money -> most people have ~log(wealth) utility fcns so safety > wealth maximizing

In the same spot where I've taken a lot of profits this year for risk management purposes and taxes, shopping for a house, bought my dream car already, but I'm still grinding like I need another 10x. I find DeFi/farming to be genuinely interesting and challenging work, and I believe DeFi+ethereum has the power to create massive societal gains if done right. The majority of my net worth is still sitting in smart contracts.

I suffered a pretty severe drawdown in 2018 crash where I took some profits near the top, but not nearly enough relative to what my net worth was at the time and never planned to make the same mistake again. Continued to stack via winning BTC+ETH playing poker during the bear and fair to say it eventually worked out.

@IrieGuy
Unrealized cap gains are a liability any way you slice it. If you accept that you have to sell some eventually, you might as well do it. Esp if you've been holding as long as aggo, can get that lower LTCG rate.

I get what grinding in poker would mean. Running sims/putting in work at the tables/skype groups.

But when you say you are grinding Defi what does that actually entail. A day in the life would be appreciated. I would love to start "grinding" this space but have no idea where to start.


pretty sure others would be interested in your process too. I have found it rather challenging to separate the signal from the noise in defi/crypto world.

The main reason for selling is if I'm at or near my number that other investments could more safely let me live the rest of my life without working, there's not a ton of reason to keep holding a large amount of a super high risk asset. I'm not quite at that number, but close enough to not want to risk it all. Emotionally it's very draining holding a bunch on bad days just wondering if it's all going to go bye bye and I'll be beating myself up hardcore if it does.

Posting collateral and borrowing isn't really selling, so your still subject to the downswing if BTC crashes. I'm assuming that's how it works anyway.

I've recently loaned some to blockfi, however I am always super cautious of 3rd party risk and I won't be surprised if some day it ends up being a big mistake.

In the end, the right play seems to be to take enough off to set myself up nicely for the future, and let enough ride that I still have some skin in the game but won't be too upset if I lose it all. If it goes up, great.

I do think long term crypto still seems like a great investment. As of right now though, the risk reward has changed a lot for me and I'm acting accordingly.

There's practically an infinite amount to learn because it's the intersection of crypto and finance/trading. The foundation is that you need to understand intimately how ethereum works. Once you're there, there's so many different things you can pursue and so many different projects with new ones popping up all the time. Some things I spend time on:
-researching token projects, taking some time to think about them, if the project has merit, and if so, if I want to try to acquire enough of the token to care. The earlier stage the better because it's easier to obtain a larger % of the tokens. If it's later stage, looking at what kind of cash flow it is creating or may create in the future and deciding if it's investable.
-building or making use of monitoring tools/dashboards to analyze aggregated onchain data (Dune Analytics helpful for this) as well as monitoring specific accounts, contracts, etc (Parsec is useful for this)
-trying to create a better funnel for new project discovery
-coming up with investment and trade ideas. There are some trades I just do, some manual, some automated, but always looking for new sources of edge. The possibilities are endless from longterm fundamental, short term event-driven, quant strats, farming/carry trading, market making via AMMs.
-maintaining tracking NAV accurately for better risk management/position sizing. This can be tough when there are always new contracts popping up that are not immediately tracked by zapper.fi/debank/zerion type sites.
-a shitload of reading (project medium posts, following discords to the extent possible, or just anything I can find on the internet to improve/refine my knowledge base in relevant areas)
-talking with others about all of the above to refine/sanity check my ideas and the way I think about the space as a whole. I've managed to build a great network within crypto of really smart/successful people whose opinions I value.

It can be hard to figure out where to start, but luckily for me I was working on DeFi stuff in 2017 already and followed along + had a great network. It is really tough for a relative novice to catch up these days because there is just so much to learn and too many people who already know what you don't-- and new projects launching all the time making it even harder to keep up, sometimes with dependencies. Good recent example -- Alchemix just launched, and it makes use of a Curve metapool and Yearn DAI vault. If you don't know about Curve or Yearn then you can't even begin to understand what Alchemix is.

2 for mod

.

I'm familiar working with real time trading screens such as from Interactive Brokers, along with their Java API to collect tick data amongst other things. Does anything exist yet for ETH contracts and/or the DeFi marketplace? Is this an opportunity for somebody to develop one?

Fork handling has been quite detailed in recent ETF applications and I don't think it has been a significant factor, if at all, in any of the recent ETF denials. But handling of forks is certainly something all participants need to think about, especially those who launch securities and other asset backed tokens, eg stablecoins.

Crypto grinding is a full time job, but it's fun. You really just need to immerse yourself. Podcasts, twitter, reddit, news sources, telegram, discord, dextools, etc.....very long list. Form your own network of people to bounce ideas of and share alpha. And once you have a group if you can get into any pre-sales to stuff lots of free money there. It's a crazy world and the pre-pre-sales and all the crap really bother me, but that's how it is.

And just go for it. You'll probably lose money to start. Especially on ethereum with high gas prices. BSC might be a good place to try out and probably get rugged a couple times.

Would you mind expanding on this a little bit? When you think of the liability you carry with unrealized cap gains are you just talking about risk-on assets or anything at all in your portfolio that has increased in value (like home equity?)

Why do you have to accept that you have to sell some eventually? It seems like individuals exist who never sell anything and just perpetually bank. I definitely understand what you are saying about risk management, I guess I'd just like to hear you elaborate some more.

You can only kick the collateral can down the road so far before you have to dish out some cash.

This is why I like shorting less then 50% of your stack. Using the coins as collateral. You get to collect the funding and if prices rise, you can always cover the increased required margin because the coins you hold are worth more. I'm still working this through my head and am wondering if I'm missing something. If someone sees an error in the thinking, let me know.

My basic thoughts are. If you have say $2 mil in BTC and funding remains on average .01%. You could short $1 mil worth and have $100k/year locked up in interest.

If the price goes up or down, you still have the same principle amount and you continue to collect funding. What am I missing? Besides the obvious 3rd party risk.

There seems to be contradictory theories of bitcoins scarcity and use

Before we get in to walls of text, everyone agrees that there is a ceiling on the price of bitcoin if they don't increase the number of denominations? It also becomes useless transactionally if the denominations aren't low enough right? If you can always buy a denomination of bitcoin for a dollar etc, is there really any scarcity?

I no nothing about these markets but if they became liquid like stock options I would be buying a lot of bitcoin on a crash and selling out of the money calls against my position (covered call). With the volatility of bitcoin you would be raking in premium with no risk to the upside

You can start to calculate life in fractions of a trillisecond and you realize that life isn't short at all!

I hate to belabor this because it feels like a derail and it's sort of an argument over semantics. But again this misses the point about the perception of scarcity with regards to BTC. There are "only" 21 million bitcoins that will ever be produced. Or, "only" 2.1 quadrillion satoshis. Since it is created in cyberspace out of nothing, the number of decimals in what is called a "bitcoin" is completely arbitrary. Nakamoto could just as easily have called a satoshi a bitcoin and deemed there would only be 2.1 quadrillion ever produced. It's still a limit, sure, but perhaps it would not be perceived as being as scarce. Had he done that, it is almost impossible to say whether the total market cap of BTC would be exactly the same as it is today, because perception has an impact on the price of an asset, especially one that has no intrinsic value.

Put more simply, if you can say the price of a bitcoin will go up because there will only be 21 million, you can make the same exact argument that the price of a satoshi will always go up because there will only be 2.1 quadrillion. Or 2.1 quadrillion squared, or any number.

The other, probably more relevant factor, is that BTC is one of an infinite number of crypto coins that can be created. So even a limit is not really a limit. BTC has nothing special or unique that cannot be duplicated or improved upon by those infinite future alternatives.

I'm not going to read your whole message.

Good day, 2+2. Time for another break from this place.

It has been established that the role and effect of divisibility of Bitcoin is a highly advanced mathematical concept understood only by a lucky few. Take advantage of this and position yourself accordingly.

There can indeed be an infinite number of tokes that can be generated. If you can figure out exactly what technological advancement will result into this superior token and what economical forces will drive people to swarm into it, you can safely go all-in during the pre-pre-presale of this token and retire!

the number that it is limited to is not what matters. Its just the fact that it is limited. All other commodities before bitcoin came along were not limited in supply. If the price of gold goes up, it becomes more profitable to mine gold and so supply of gold also goes up. If more people eat pork, the price goes up and farmers will decide to raise more pigs and so the supply of pork will go up as well. Same with the current fiat money supply. IF there is more demand the supply will adjust.

Bitcoin is the first commodity where if the demand goes up, the supply is still fixed and so the price will increase a lot more. Same for if demand goes down which helps to explain why it is so volatile.

If the limit was 21 quadrillion instead, all of the above would still be true.