A selloff is currently hitting cryptocurrencies, and one, in particular, is beginning to look like an emperor with no clothes. TerraUSD, a so-called "stablecoin," because of its purported peg to the dollar at 1 to 1, has lost around half its value overnight. The loss was so great, according to industry analysts, that it could even enter what's known as a "death spiral." According to The Wall Street Journal, TerraUSD uses " financial engineering to maintain its link to the dollar." Does that sound very "stable," to you? Caitlin Ostroff and Elaine Yu explain the breakdown, writing: The … [Read more...]
DIGITAL GOLD? Bitcoin-Stock Correlation Heightens, Frightening Investors
Your Survival Guy is no fan of cryptos especially with actors like Matt Damon cashing in where you invest, but they win. Now the price of bitcoin has dropped below $40,000 as it becomes increasingly correlated to the performance of tech stocks. The Wall Street Journal's Caitlin Ostroff reports: It is becoming a more common occurrence: When stocks fall, so does bitcoin. Bitcoin, the world’s largest cryptocurrency by market value, fell below $38,000 Friday to its lowest dollar value since August 2021, according to CoinDesk. It later regained some ground and was trading at $38,705.70, down … [Read more...]
Where Will Bitcoin Go Next? The Moon, or the Basement?
Your Survival Guy is not in the predictions business. Trying to calculate what someone else will pay for an asset at a future date is something best left to oracles and seers. Buying something and hoping someone else will buy it at a higher price is speculation, not investing. But you're asking me about Bitcoin, so I'm watching it, though not with the intention of buying. I like the blockchain technology that underlies cryptocurrencies, but am wary of the currencies themselves. Here's what Patricia Kowsmann wrote about the recent plunge in bitcoin prices in The Wall Street Journal: Bitcoin … [Read more...]
BLACKROCK’S BITCOIN-ESG PARADOX: You Can’t Have It All
You know that you can't have it all. You can't say one thing and do another. That's the fastest way to break the trust of the people around you. You know BlackRock has been selling environmental, social, and governance (ESG) funds, promising investors they'll change the world by lowering greenhouse gas emissions. It's all a game to charge higher fees for funds, and to drive the EGOs of those in charge. But what you won't see anything about in the glossy ESG brochures is BlackRock's investments in bitcoin mining. That's because mining bitcoin is energy-intensive, generating massive amounts … [Read more...]
THE NEXT BIG SHORT: Paulson Predicts Crypto Will Go to Zero
You may remember hedge fund manager John Paulson from the movie The Big Short. He was the one that couldn’t believe what was happening in the real estate market and believed the system would implode. He was right. Now he’s dead against cryptocurrencies, much like Your Survival Guy. In a recent interview with Bloomberg's David Rubenstein, Paulson described cryptocurrencies as "a limited supply of nothing." He also predicted the speculative asset would go to zero. The NY Post reports: Hedge fund manager John Paulson made $20 billion predicting the downfall of the US housing market in 2008. … [Read more...]
The Biden Administration is Coming for Crypto Freedom
The Biden administration, led by SEC Chairman Gary Gensler, and cheered on by progressives in the Senate like Liz Warren, are beginning an assault of crypto-currency freedom. The Wall Street Journal's Dave Michaels and Alexander Osipovich report: Securities and Exchange Commission Chairman Gary Gensler this week declared war on what he called the Wild West of crypto trading, promising a vigorous attack on fraud and misconduct. But progress is likely to be more piecemeal and incremental than wholesale and sudden. Mr. Gensler outlined his desire to regulate digital assets such as bitcoin and … [Read more...]
Boom! Bitcoin, Cryptos, Value, You, & Big Money
You’re asking me what I think of bitcoin and cryptocurrencies. I’m telling you, I love the idea of blockchain. But what about value? That’s more a function of what someone’s willing to pay. Not me, of course, but it’s somewhat irrelevant. How big can cryptocurrencies get? I don’t know. Big, I guess. But I don’t need to be the first one at the party. I certainly won’t be the last, or the last one to leave. Let this play out. Remember the Gold Rush? A lot of money was made investing in the rush itself and not just the yellow metal. I like the idea of utilizing the benefits of the new. In … [Read more...]
Gov. Ron DeSantis Stands Up Against Big Tech Censorship
Florida's Governor Ron DeSantis has signed a bill into law that will protect Floridians from deplatforming and censorship by social media networks and other big tech companies. The Wall Street Journal reports: Florida Gov. Ron DeSantis signed a bill on Monday aimed at making big tech platforms more accountable for their content decisions, a move with political overtones that appeared likely to draw legal challenges. Mr. DeSantis, a potential GOP presidential contender with ties to former President Donald Trump, said the legislation could help conservatives defend themselves from unfair … [Read more...]
Mark Cuban and the Bull Case for Blockchain
In the Wall Street Journal, Andy Kessler interviews Mark Cuban, owner of the Dallas Mavericks, a "shark" from the reality TV show Shark Tank, and a self-made tech billionaire. Kessler, whose work I have been reading for years, takes Cuban through an examination of cryptocurrencies and blockchain, and of where the value lies. Kessler writes: “Weather insurance (Arbol is a great example). With a smart contract I’m soon going to be able to have the Mavs buy weather insurance where using a smart contract I pick the temperature and precipitation thresholds and the smart contract checks the … [Read more...]
Volatile Plunge Reveals Weaknesses in Crypto Speculation
Cryptocurrencies took a nasty plunge yesterday after Chinese authorities cracked down on their use. That institutional response, shortly after Elon Musk revealed that Tesla would no longer be using bitcoin in transactions, was a double whammy that took the wind out of cryptocurrencies across the board. Since the drop, crypto prices have recovered some of what they lost, but nowhere near all. The Wall Street Journal reports: The recent price fall has accelerated after three Chinese entities published a statement that financial institutions shouldn’t accept virtual currencies for payment or … [Read more...]