Surf Report: Open Secrets
Issue 45: 08.01.2021 (Free Version)
INTRODUCTION
August 1, 2021
Hi everyone—I’m so glad to have you here. What a week.
Recently I was asked to pen a guest article about cryptocurrency for an investing newsletter, and it just dropped on Friday. It’s aimed at traditional investors who aren’t familiar with bitcoin as an asset class, why it’s useful, or how value it. Have a read and let me know what you think!
An Investor’s Case For Bitcoin
My article arrived in a week that also saw a prominent US Senator rail against the crypto industry as being excessively nefarious like some technicolor cartoon villain:
By the way, you can buy your shadowy super-coder merch here.
Her take is unfortunate for two reasons:
Bitcoin in particular is an open, transparent, completely decentralized (i.e. leaderless) ledger that can be audited and analyzed by anyone, anytime. It’s the opposite of shadowy.
She makes no mention of the institution it was designed to replace: central banking. The US Federal Reserve is a cartel of unelected bankers that has never been successfully audited. (It’s been tried before, to no avail) Yet they effectively rule the economy of the country issuing the global reserve currency and artificially propping up markets as they see fit. Super shadowy.
Bitcoin isn’t the problem, it’s the solution. It’s not the bubble, it’s the pin.
I think Senator Warren will come around once she decides to learn more about it. There’s a good chance she’ll realize that we’re on the same side fighting the same injustices when it comes to fair and equitable banking practices. Right now she’s just confusing the hero for the villain. Calling for more regulation of the Fed, given their leading role in driving the nation further beyond the pale in terms of debt and manipulation, would make a lot more sense.
Meanwhile the solution is hiding in plain sight. Hiding in plain sight is a tried and true tactic for outwitting opponents and gaining traction in an adversarial environment. But why?
So often in life it turns out that what we’re looking for simply isn’t where we’ve chosen to look for it.
We make up our minds that something is the answer, when the actual answer sits within reach but unnoticed. It’s not that the thing is hiding, it’s that our own attention makes us blind to it.
This is one reason why I constantly advocate people return to first principles and reason up from facts. Question everything, and don’t take other people’s word for it. Don’t trust, verify.
This is especially true of investing. If you read my guest article above you may have noticed I left a lot of things out.
I made no mention of all the legendary investors who have chosen to hold bitcoin, or the institutions and multi-national corporations who are adding it to their balance sheet
I didn’t point out that an entire country has adopted it as legal tender
I didn’t reference popular models like the stock-to-flow ratio or technical analysis of historical price movements
I didn’t talk about the importance of personal sovereignty or the the history of money or the shelf life of global reserve currencies through the ages
And that’s because those things don’t need to matter to an investor. Just because something encapsulates an ideal or is beloved by rich people with a solid track record should not factor into an assessment of whether or not it is a good investment for you. Just because other people are buying something shouldn’t in itself be a reason for you to buy it too.
The important thing is to understand the properties of the underlying asset, the problem it solves, and the subjective value it provides—and will provide—to people who may or may not include you. How does it work? Why does it work? What is its growth potential? What are the bull and bear cases? What am I missing?
We need to think for ourselves. Do our own research. Build our own understanding. You should never outsource your thinking to someone else, and that’s especially true in matters of money.
The goal of my guest essay was to introduce people to the fundamentals of Bitcoin and some rationale used to justify a non-zero allocation to it in a diversified portfolio. It’s up to the reader to learn more and decide for themselves. That will take time, effort, and maybe the humility to listen to that tiny voice we all have in our head that sometimes whispers to us in times of confusion when things aren’t making sense: “I might be missing something…”
There are no secrets here, no shadowy conspiracies. The information necessary is freely available to everyone. But knowledge isn’t given, it’s taken.
We can’t learn something we’re not interested in learning, and we can never know something we’ve decided isn’t important to know.
“We live in the age of Alexandria, when every book and every piece of knowledge ever written down is a fingertip away. The means of learning are abundant—it’s the desire to learn that is scarce.”
—Naval Ravikant
Until next time 🤙,
“When buying and selling are controlled by legislation, the first things to be bought and sold are legislators.” —P.J. O’Rourke
Breaking News 🌊
📈 S&P 500 ekes out another record as investors gear up for big earnings [CNBC]
🏦 U.S. Fed reverse repo volume hits record $1 trillion as debt ceiling looms [Yahoo Finance]
💸 Fed balance sheet hit another all-time high; total assets rose by another $39B to $8.5T, equal to 37% of US GDP [Bloomberg]
🍎 Apple sells $6.5 billion of bonds, adding cash for buybacks [Bloomberg]
👾 On a quarterly conference call, Mark Zuckerberg declared his intention for Facebook to transition from a social media company to a “metaverse company” [The Verge]
✈ American Airlines warns about fuel shortages around the country, asks pilots to conserve [CNBC]
Bitcoin News 💱
₿ The Senate Shoves a Dangerous, Last-Minute $28B Crypto Provision Into the Infrastructure Bill [Coindesk]
₿ Elon Musk’s Tesla Holds Its $1.3B Bitcoin Position in Q2 [Coindesk]
₿ Wealthfront will enable customers to allocate up to 10% of their portfolios to Grayscale Bitcoin Trust; Wealthfront customers have $25 Billion on the platform, which could see up to $2.5b flow into GBTC [Bitcoin Archive]
₿ Paypal plans to launch Bitcoin buying options in the UK next month, and is close to launching a wallet with features such as early access to direct deposit funds and high yield savings [Bitcoin Magazine]
₿ The first publicly available Bitcoin mutual fund in the United States has been launched by ProFunds, a $60 billion fund manager [Coindesk]
₿ Singapore's Bitcoin adoption is now reaching near half of the entire population, with 90% of citizens having heard of it and 40% owning some. [Independent Reserve]
From The Tweetbox 🐦
“The bond market is confusing right now, even to Fed Chair Jay Powell” [Thread + article]
"I'm concerned about stagflation," said DiMartino Booth, CEO and chief strategist at Quill Intelligence. "That toxic combination of slowing growth and rising prices is a real risk here." There was a whiff of stagflation in the latest housing numbers. [Tweet]
“Almost $120M in shorts were liquidated in an hour during the Bitcoin rally today. According to Glassnode insights this largely confirms that a short squeeze is the primary driving force behind the spike” [Tweet]
“Fed's Powell: Inflation could turn out to be higher, more persistent than expected.” YOU DON’T SAY. [Tweet]
For The Pros 😎
How To Learn Stuff Quickly (Link available to Pro subscribers)
UI patterns & design inspiration from real products. Gain insights, explore trends and understand competitors and best practices. (Link available to Pro subscribers)
10 principles from psychology to master marketing (Link available to Pro subscribers)
Worth A Read 📃
“Occam’s Razor: The simplest explanation is often the best one. Central banks will never extract themselves. Whether they ultimately end QE is besides the point. They won’t reduce their balance sheets. They can’t. Powell’s “performance” yesterday was not an accident. He’s been running on the same theme of offering absolutely zero specifics. Why? 3 reasons: 1. There are none as there is no plan. 2. To maintain flexibility and not to be held accountable or anything 3. To not upset markets.”
Out of control and rising: why bitcoin has Nigeria’s government in a panic
“As leaders around the world grapple with cryptocurrencies, what happened when the African country tried to ban them?”
Watch This 🎥
"Proof of Work is a waste of energy" "Proof of Work is bad for the environment"
Is that really the case? Understand its profound importance 👇
PNGs 🖼
At exactly 1:15pm on Friday July 30, the NY Fed reported that for the first time ever, 86 counterparties parked over $1 trillion in reserves at the Fed's Reverse Repo facility for overnight 'safekeeping,' collecting a yield of 0.05% representing hundreds of millions in free money.
Pods & Schools 🐬🐠
Recent podcasts + books I highly recommend, and upcoming courses + seminars that look promising
🔊 Lamar Wilson—Black Bitcoin Billionaires, Monetary Rights & Potluck Capitalism, on the Bitcoin Matrix Podcast
“It still pisses me off that they have these rules & regulation around ‘we need to protect the small investor. No! You don’t protect us from consumerism. You don’t protect us from the lottery. You’ll let the small guy put money into anything else outside of investments.”
📄 The latest report from NYDIG: “The Impact of Bitcoin’s Reward Halvings—Research + Insights”
“Given the changing investor base of bitcoin from retail to institutions, there is reason to believe in the secular bull case for the asset, despite its apparent cyclical nature in the past.”
🏫 Saylor Academy has partnered with Saifedean Ammous to offer an open course in Austrian Economics with a free certificate of completion: ECON103: Principles of Austrian Economics I
“The Austrian school of economics has for a century and a half maintained a rich tradition and a unique methodological approach to economics, which sets it apart from other traditions. Unlike other economic schools of thought, the Austrian School acknowledges that there are no constants in human action.”
📚 Economics in One Lesson: The Shortest and Surest Way to Understand Basic Economics, by Henry Hazlett (1946)
“The bad economist sees only what immediately strikes the eye; the good economist also looks beyond. The bad economist sees only the direct consequences of a proposed course; the good economist looks also at the longer and indirect consequences. The bad economist sees only what the effect of a given policy has been or will be on one particular group; the good economist inquires also what the effect of the policy will be on all groups.”
Tools of the Trade ⚒
Products I use to make money
Swan. I recently became an official Swan partner because I love them so much. So if you're like me and just want an easy, automated way to buy bitcoin on the regular with the lowest fees in the game, head to https://swanbitcoin.com/Mulvey to get $10 for free ✨
Fold. Earn bitcoin on everything. You can win up to 100% back on every purchase, and every swipe is a chance to win a whole bitcoin. I use my own Fold card to pay for almost literally everything. If you use this referral link you get 5,000 sats free ✨
StockCharts. I easily make back the small monthly subscription fee with the superpowers it gives me.
Carrd. I use card for all my landing page needs. Use this link or referral code 892PYX69 to start your own web empire.
Disclaimer
Nothing in this email is intended to serve as financial advice. Do your own research.