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How we made 600% returns in a spooky market

Dude… where’s my dollars?

Scary things and spooky money, part one

Many strange things occurred in October 2021, even before the ubiquitous and crazy Halloween decorations and costumes broke out across the USA. Facebook crashed in early October, which was amusing for those who prefer Twitter. The fun part was that the Facebook crash did not just affect the Facebook website; it also took down the Facebook app, Instagram, WattsApp, Messenger and more. Facebook employees were locked out of their smart offices, with some locked inside the building.

This sad Facebook story should also produce schadenfreude smiles in those who enjoy decentralisation. Because Facebook is so centralised, one small crash took down many apps, businesses and even real estate. Perhaps the people who create decentralised computers, decentralised exchanges, decentralised finance and de-cent money are actually smarter than Herr Zuckerberg?

The more you think about Murphy’s Law and single-point-of-failure, the more crypto makes sense. But wait, there’s more…

What is the most centralised system in the world? Hmmmm, open your wallet. If you see a $US, then you are looking at the central point of failure for the IRS, Federal Reserve, Wall Street stock markets, oil markets, gold markets and many other interconnected and interdependent systems.

Could the $US crash? To paraphrase Bill Clinton, the answer depends on what you mean by “crash”.

It is unlikely that the $US value will drop by 30-50% overnight, as rogue stock markets sometimes do. However, the US Federal Reserve seems happy enough to devalue the dollar by 30-50% in a year, because, allegedly, a slow-motion train-wreck is not as scary as a quick one.

Endless fiat currency printing has increased USD M1 cash supply by 30-50% and it does not take a rocket surgeon to figure that when you increase supply, you decrease value. Hyperinflation does not only affect third world countries.

Yes, the S&P500 stock market index is up by 199% since the March 2020 downer when the pandemic started, but US gas (fuel) prices have also increased by 350% over the same period. You can check prices on steel, lumber (timber), copper, coffee, and many other goods to see inflation unfolding in real-time.

In all likelihood, your income, cash in the bank and other assets have not increased in value by 200-350%. Hopefully, you have some crypto…

Scary things and spooky money, part two

This “spooky” month the US government also came close to defaulting on their debt, as the divisive Senate could not agree on lifting the debt ceiling. When your mother and father are fighting over taking out a third mortgage, it may be time to wake up and realise that it is not just the relationship that is in trouble.

The USA will either default on its debt, or increase its debt level to astronomical levels. (Perhaps, like Clinton, they will redefine what “default” means?) Either way, it is bad news for those who hold USD or assets denominated in USD.

Luckily, if you are reading this, you already know, or hold, the solution.

Digital scarcity is arguably superior to physical scarcity. New physical mining brings additional 2-3% gold to the market every single year. In the next 30 years, there will be twice as much gold as there is now. Emerging artists bring new supply of art to the market. We can recycle timber, paper, glass bottles or tin cans, but, even with a trillion-dollar computer, we cannot create new bitcoins. This means that, despite volatility, BTC price will increase over time.

Diversification is your friend (fools are not)

If you have been in crypto for more than eleven minutes, you will have had a well-meaning friend (or enemy, or relative) say to you, “It’s good that you’re up 35% or whatever, but what will you do when Bitcoin crashes?”

Your friend (enemy; fren-emy?) wishes to look concerned when they ask this question, as if they care about you, but they always seem to look a little bit smug, as if they actually want you to fail.

Traditional investors who have not yet gotten into crypto will often feel jealous of you, but are not willing to show it, as jealousy is an ugly emotion. Smile sweetly and just say “It’s cool. I’m diversified.”

There is a million to one chance that bitcoin could go to zero; just as Apple, IBM, Microsoft, Amazon or any other company could potentially go bust. This is why smart investors and wise fund managers diversify into other areas.

If one company goes down, it creates huge opportunities for others. The death of dinosaurs made room for mammals, monkeys and mankind. The death of MySpace made room for Facebook, and so on. As long as you are invested into a variety of different areas, you will not panic when one goes down, as the others go up, and balance things back out.

The Bostoncoin portfolio is invested into Bitcoin, as well as Ethereum, as well as other cryptocurrencies. Some of these assets perform very well when the two majors go down or have excess volatility.

“Oh, yeah?” your fren-emy asks, “But what if ALL the crypto goes bust?”

We answer the same way: “It’s cool. I’m diversified”

There is a billion to one chance that all the crypto disappears; but if it did, it would likely take down the entire worldwide internet. Companies such as Facebook, Amazon, Google, Netflix and millions of others would then be worthless, communication would be by carrier pigeons, and society may go back to the agrarian Dark Ages.

The Bostoncoin portfolio also holds some traditional stocks, in traditional businesses, which hold physical assets. Even in a dystopian post-apocalyptic Mad-Max society, you can still have some wealth preserved. Could your no-coiner frenemy make the same claim? If their money is not likely to survive World War Three or a zombie apocalypse, then why the heck are they so worried about yours? Move on; it’s time to get some new supportive friends. (But remember where they live, in case you want to give directions to the zombies).

What else happened this month?

People who used to ride the pump-and-dump wave of useless joke-coin DOGE suddenly turned their attention to another meme-coin, Shiba Inu (SHIB).

The news media (who do not comprehend blockchain or crypto) reported that SHIB had gone up 64 million percent, and seemed to suggest that if you did not have any of it, that you would be crazy. Upon deeper investigation (by people who understand blockchain), it seemed that anyone who did own it was crazy.

Most people have not yet cottoned onto the fact that SHIB is not only a worthless joke meme with zero real-world use-case, and possibly a scam.

On the blockchain, we can see that an anonymous wallet paid $8000 for a bunch of SHIB, which, due to hype and lies, increased in price (not value) to over $5 billion. The problem is, the lack of market depth means that if that person tried to sell their (alleged) $5 billion of SHIB, the price would spiral down with each subsequent sale, and the seller would only receive under $150 million. The remaining tokens could only be sold to people who believe that their tickets on the Titanic or Ansett airlines may still be valid with a current vaccine passport.

As you can see from the wolf picture above, the meme skills of the Bostoncoin team are definitely sub-par. We cannot make cool pictures or co-ordinate a sophisticated viral meme pump-and-dump scheme (scam). But at the end of the day, memes come and go, whilst icons endure forever.

Some day, many decades from now, a millennial will regret having paid decent money for a tattoo that says “Free PewdiPie” or “I heart Gangnam Style”. The thing that will survive time, rust and rot, is that which adds value.

Congratulations to you, dear reader, for recognising the value that transcends time. Thank you for being with us. Know that we will always be with you. Big love from the puppy pack.

Winners & Losers this month

It should already be already evident that the only losers will be those who hold cash (something which billionaire Michael Saylor called “a melting ice cube”, due to 30% central bank QE devaluation), or anyone who is willfully ignorant of the upcoming hyperinflation. Tell your friends to spend an hour at and learn something from the marvellous selection of free education, otherwise, your friends are not allowed to sit with you at lunchtime.

Winners this month include:

Obviously, the biggest winner is YOU, if you are an existing Bostoncoin investor. The flagship Bostoncoin portfolio has again out paw-formed Bitcoin, and had some exciting standout results.

ETH up 1104%

SCRT up 3034%

THOR up 3190%

CAKE up 4022%

XYO up 10 413%

SOL up 13 358%

MATIC up 13 550%

It is great to see Ethereum (ETH, always the bridesmaid) getting some love, as the company focuses on increasing speed, decreasing costs and various other network improvements. Whilst ETH has long been seen as number two to Bitcoin, there are some newcomers nipping at their heels, and we are proud to have some of them in the portfolio as well. Solana (SOL) and Polygon (MATIC) have a long way to go to oust Ethereum, but this is a marathon, not the quarter-mile, and anything can happen.

We continue to monitor the markets to identify promising newcomers, investigate early opportunities and jump onto market irrationalities. Do as the cool kids do: follow us on Twitter, and let us know if you see anything interesting which you would like us to run the slide-rule over (just not SHIB).

The latest performance on the chart shows Bostoncoin outperforming Bitcoin, with less volatility (when BTC drops, we don’t drop as much, and when BTC goes up, we go higher). This is good news. See you next month.

at 29/10/2021

BOS NAV 280.855912

BOS price 308.941503

MOM up 30.36%

YOY up 688.68%