Living in the Wild Wild West
Those who have been in cryptocurrency for several years understand that crypto markets are much like the legendary wild west. There are few, if any rules and regulations, and the territory of Cryptopia can be dangerous for new-comers and the inexperienced. In addition to the inherent dangers of losing your passwords or seed phrases, there are also some rogue operators or bad cowboys.
Some of the bad guys are easy enough to recognise, like the stereotypical villains in a 1950’s movie. The random text messages or emails which tell you to “click here to verify your crypto account” may as well be wearing a black hat and a dark handlebar moustache.
The problem is that sometimes, the villains may be wearing a grey hat, or even a white one. If you have missed the news, we first had billionaire Elon Musk embracing bitcoin: he purchased BTC inside of his company Tesla, and announced that Tesla would accept bitcoin as payment for its cars. This mainstream adoption lead to a surge in the price of bitcoin and other cryptocurrencies.
Weeks later, Musk recanted, claiming that bitcoin mining was inefficient and may be damaging to the environment. Due to many bitcoins being mined in China, a notorious user of coal power, Musk later claimed that bitcoin did not align with Tesla’s “clean green energy” mantra, and the company would not accept BTC as payment. Bitcoin prices then dropped back down.
As many have pointed out, the bulk of bitcoin mining is actually run on renewable power, bitcoin uses far less electricity than traditional banking networks, and the Chinese buy up to 30% of all Tesla vehicles, presumably charging them with coal-fired power. Yet Musk does not back up his values by refusing to sell Tesla cars into China. Is he genuine or is he duplicitous?
We are not casting aspersions, just asking questions. The pandemic in 2020 was great for Jeff Bezos, as hundreds of millions of people did more shopping from home. His wealth increased by $24 billion, but that is growth of only about 20%. Millions of people started working from home, using Microsoft products. Bill Gates made money, increasing his wealth by again around 20%. There are just over 2000 billionaires in the world, and on average, they each increased their wealth by 12-13% last year. During the same year, Elon Musk increased his wealth from $30 billion to $174 billion: a growth factor of over 400%. Does that seem freaky to you?
One can only speculate that Musk’s crypto comments may have been moving markets for his own gain: buying before he pumped prices, and selling before he dumped. If Musk had made similar comments about stocks, he would probably have been charged with insider trading or market manipulation and be sent to prison. Luckily for Musk, there are no such laws in Cryptopia… yet.
Get the heck out of Dodge
At the same time as he was pumping up BTC prices, Musk was also pumping the price of DOGE. DOGE, which started as a joke meme-coin, is almost the antithesis of bitcoin. Bitcoin, like gold, is deliberately scarce, with only 21 million bitcoins ever to exist. DOGE has no market cap, and supply increases by 10 000 new DOGE every single minute. This means that an additional five billion DOGE are made every year. Anyone with a Beanie Baby knows that if you create billions of anything, it becomes essentially worthless.
Despite being arguably worthless, Musk continued to spruik DOGE to ever higher prices, before appearing on Saturday Night Live (SNL) and calling DOGE “a hustle”. DOGE prices crashed after Musk’s appearance on SNL, yet he later spruiked it up again. Fool me once, Elon, shame on you. Fool me twice, well… We hope that an eccentric billionaire is somehow capable of feeling shame.
For the record, in addition to being ridiculously inflationary, DOGE is also ridiculously centralised. The blockchain may be pseudo-anonymous, so we cannot know the names behind the wallets, however, we can see all the transactions. Around 100 wallets control almost 73% of the available DOGE coins, so it is hardly a fair and equitable market. It would be quite easy for a rogue operator to talk the price up and then make billions of dollars by dumping worthless coins onto an unsuspecting market.
There are still many scams and dodgy coins in crypto markets, which is why we encourage you to share the four-step COIN protocol with your friends. Choose your investments wisely, do not click on links in emails or texts that claim to be from your bank, your crypto platform or even your streaming service. Always go directly to their website and log in safely to check for any notifications.
In the past week alone, we have been notified by two friends about a combined $400 000 worth of crypto being stolen. One friend was a new investor, whereas the other was a sophisticated investor with decades of experience. Scams can happen to anyone, so continue to be alert. If in doubt, ask someone with more experience than you, or feel free to contact us at any time. Be safe, spread the word and help your friends to stay safe.
Meanwhile, some good news
Despite some wild fluctuations in crypto markets this month, the puppy pack stayed strong. Due largely to our fundamental diversification, when bitcoin dropped 41%, BostonCoin only went down 28%. Zooming back out for the year, bitcoin shows a healthy 350% growth, and BostonCoin made 553% over the same period.
When we started, it was never our intention that Bostoncoin would outperform the grand-daddy of cryptocurrency; we just wanted to provide safer returns with less volatility. Mission accomplished. This is the part where we could tip our hat, and ride off into the sunset, but we intend to stick around, and bring some more deputies into Cryptopia.
The rumours are true that the Bostoncoin will soon be joined by the DARTcoin and the POLLYcoin. Different people have different needs and investment aims. Whilst BostonCoin may be suitable for people with a moderate risk profile and an investment timeframe of 3-5 years, this may not suit everyone.
DARTcoin (Digital Asset Risk Targeted) will offer the potential for higher returns from a more aggressive portfolio, and is suited for investors who wish to invest for 5-7+ years.
POLLYcoin (Primary Outcome Lateral, Low Yield) will operate more like a traditional term deposit, with a stable coin price and up to 8% pa income. This fund is more suited for investors with a 1-3 year timeframe.
For more details on the new investments, launching in June, please contact us.
BostonCoin: out standing in the field
Winners this month include:
Celsius up 14 339%
ChainLINK up 2 237%
XYO up 1 707%
LivePeer up 794%
Elrond Gold up 491%
PolkaDOT up 488%
Cardano up 464%
Origin up 405%
ThorChain up 307%
BAT up 251%
We continue to scour the prairies, seeking opportunities that are safe, solid and fit in with our risk parameters. Cryptopia can be wild and scary sometimes, but we are here to protect you and guide you. Tell your friends: crypto has a new Marshall, and his face is furry but friendly.
See you next month
BOS NAV at 29/05/2021
BOS price 168.756268
MOM down 28.68%
YOY up 553.62%