Coinstory Returns!

It has been quite some time since the last post almost 2 and half years ago! As I was approaching to release my book Coinstory, my writing stamina was slowly getting depleted. For long I knew that I was going to have a break before I resume with writing again, and that when I do the format and content of my newsletter will change as well.

The new Coinstory newsletter will have a more loose format, and in terms of content, it is still going to be focused predominantly on the events and news from the world of cryptocurrencies while branching out also in a broader realm of technology and economics. You can expect it roughly once a month. And this one is likely a little longer than the future ones as it contains also a quick update on the developments in my life since the last issue.

Likely it will also occasionally reflect some of my other activities related to nomadic life, global opportunism, and things that catch my attention. Still most of the things have something to do with the story of coins, the good (crypto) and the bad ones (fiat). I have decided also to share my portfolio allocation to make it more interesting for you. (Looking for feedback there!)

So quick update on the last almost 3 years in my life. First of all. The Coinstory book has been published! I am grateful that the godfathers on the release were two of my favourite authors — Juraj Bednár who meanwhile published a nice and inspirational book of Cypherpunk Visions, while the other Godfather Robert Chovanculiak started to publish on Substack a great newsletter on Economics & Education (in Slovak).

The feedback from the people who read it so far has been amazing and it made me really happy to see such a reactions. You can read it for free online here. You can buy the physical and digital copy here. Or lately also on Amazon here. I appreciate a lot any reviews and feedback you may have! Also, now you can listen the summary of the 1st chapter on my Youtube too! More coming soon!

Meanwhile, I left my role of a Board Member at Fumbi and setup my residency in Paraguay, and my new company in the United States. I am happy to help with both of these endeavours to my readers so do not hesitate to reach out. I still spend a lot of time also in Europe, and while recently living in Asia, I started my PhD in Law in Paris at Sorbonne Law School. Indeed my focus is on intersection of law and cryptocurrencies. I still also teach Cryptocurrencies at the Slovak University of Technology, some of my talks (in Slovak) you can see here. In the meantime I also advise to the Central Bank of Slovakia in implementing MiCA regulation, and some other projects too. I will touch more on these topics in the future newsletters.

If you speak Slovak, you may want to check or recommend to some newbies my new courses on Intro to Crypto, and Ethereum, DeFi, NFTs & Metaverse which gained hundreds of students since published only a few weeks ago.
That should be all from me. Let’s dive into what is new in the story of coins.

After a week of trading, the top 3 ETFs have approximately 26B under management. The top 3 gold ETFs have about 80B under management (only 3x more). Yet gold has a market capitalization 10x larger than Bitcoin. I expect we will be gradually closing this gap. Also, ETFs now represent 10% of all Bitcoin trading volume. I can easily imagine it could be 50% within a few years. For some ETFs will be a gateway drug to the self-custody. But to be honest, self-custody will be more of a niche application in the future, the big money will use ETF as their main avenue.

Another indicator of an ever-vivid Bitcoin market is the peaking hashrate. The new ATH reached 500 Exahashes/second and exhibits no sings of slowing down.

Lest we forget that in roughly 3 months the Bitcoin block reward will halve for the fourth time in the history. The miners will soon get only 3,125 BTC per block, and the annual inflation rate will drop below 1% for the first time.

Of course, JPMorgan and alike are gonna hate 🍆. But you should not pay much of attention to their trashtalk. JPMorgan has paid more in criminal fines, settlements and violation charges than has been laundered using bitcoin. Also, in regards to Bitcoin, they rarely put their money where their mouth is. And, indeed, they too make sure to benefit of the Bitcoin rise.

If you have doubts than I suggest to look also at the James Lopp's annual Bitcoin review. Even though, some metrics declined in the last year. That is not unprecedented, and the overall health of the ecosystem is very strong. Lyn Alden, on the other hand, took a look at Health of the Bitcoin Network from the monetary perspective.

And if you are still doubtful just zoom out and look at the monetary track record of USD. If you want to dive deeper into this then I definitely recommend you to read Broken Money by Lyn Alden.

As the US public debt reaches an astonishing all-time high of 34 trillion dollars, entering the exponential rate of growth era, it becomes increasingly evident that currency debasement may be one of the few, if not the only, viable solutions to this economic dilemma. And the latest FED’s pivot is pushing the prices higher as well.

Things are definitely happening also outside of Bitcoin. All eyes are now on SEC and their not-so-unlikely approval of Ethereum ETF. The final deadline will be in May. This is happening while Vitalik and others are working hard to make Ethereum Cypherpunk again. I love the irony.

RWAs (Real-world-assets) are catching the breath and we have seen 6x increase in US treasury issued on-chain in the last year. This will very likely continue in 2024. It is not so surprising since exposure to yields that have no connection to traditional crypto sources may be an interesting proposition even to Degens.

To make RWAs viable in the blockchain, more compliance is needed. The latest effort in this is ERC-3643 token standard that establishes programmable agreements for assets under its jurisdiction, and contains legal mechanisms to govern the tokenization of assets. Even Larry Fink, the CEO of BlackRock, the largest asset manager in the world, is shilling it.

If you are interested in the general trend predictions in crypto, and you haven’t yet, you may want to read the comprehensive outlook for 2024 in the crypto realm by Coinbase. I personally favour more the one from Messari.

There is no doubt that DeFi is going to grow further in the coming years. For so many reasons. Amongst others, the developers activity is a good indicator. While some of the newcomer developers left the industry, the experienced ones are staying and growing their numbers. The promise of democratizing the financial system lures in many folks, and looking at the regulatory tendencies in the western world, we surely will need the freedom and innovation empowered alternative financial system.

In fact, the increasingly more present risk-averse mindset in the western world that is reflected in the policies adopted may be more tangible than you think, as depicted on the graph below. The compound effect of these policies has been also increasingly catching up, as new centres of power and innovation have been forming up outside of the west world. The west is worried and sacrificing freedom for safety. The rest of the world is much more brave and agile.

While this is by no means a financial advise. As I get so many questions regarding my investments. I’ve decided to share with you my crypto portfolio allocation, and occasionally also other investment opportunities that will catch my attention. I do invest mostly in crypto. I don’t see much of a sense in discussing my other investments here like real estates, gold, and art (I do recommend to check Masterworks though). In crypto, over the years I believe I have become more conservative, but when I was putting together the list of coins I own, I was surprised myself about the number of 💩coins I still own :) Even though it’s only a fraction of my portfolio.

Still, the majority is in BTC & ETH. In the last years I suffered quite some heavy losses, and even hacks, that definitely massively impacted my portfolio. The price I paid for being LUNAtic was indeed high, even though I am probably one of a few who made multiple X profit there. But the sheer size of unrealized profits still hurts. I believe my painfully learned lessons could be beneficial for you, and prevent you from getting burnt.

So here we go 🤘:

Majors: BTC - 50%, ETH - 40%, AVAX - 2,5%, MAID - 1,2%, DYDX - 1,1%

Sub 1% Coins: RUNE, REN, MINA, CANTO, ATOM, TIA, FXS, GF

0,1% Coins: RBX, MATIC, NYM, SWISE, SCRT, TORN