Markets

While this post focuses on crypto, the underlying market principles are part of the framework discussed in my Withering Trader’s Illustrated Primer. longer form thoughts on crypto. Lots of bearishness. I remain bullish. Why: If Trump is elected, all bets are off - SEC runs on a skeleton staff, Gensler is fired, he intervenes in the Fed to cut rates. Odds are at least 50% Trump wins. Any concern about Trump’s stance towards crypto should be dismissed by his NFT sales and appreciation galas for NFT holders (haha). Concerns about Biden admin and crypto have been de-risked. ETF is likely going to be approved. Blackrock (and even VanEck) would be radio silent about it otherwise. CZ would not have agreed to come to the US to face trial if he had not cut a deal (conceptually about the sentence). He is not SBF. He would not have bull tweeted while he was awaiting sentencing if it were to be dire. Furthermore, the CIA and FBI would not have been onboarded onto Tether recently nor would the DOJ have thanked Tether for collaborating with investigations on its website if it were about to get raided or were running a Ponzi scheme. Crypto natives likely underestimate the extent to which Tether keeps institutions from buying crypto assets. There is 34B or more of unrealized call option PNL sitting in Stonks (specifically NVDA,TSLA and SPY options yolos) from the Fed Pivot. This is speculative $ itching in brokerage accounts - which is already rotating into highly speculative asset. Stocks like Carvana are up 80%+ in the last month. This removes any concern I had about demand for the spot Bitcoin ETF when it launches. Putting this in perspective - $34b of dry powder is about 7x the cumulative purchases of MSTR. There is a reflexive dynamic with Coinbase’s debt. If Coinbase were to default it is unclear what would happen to customer deposits. Coinbase 2026 bonds have traded from a low of 52 to 88 currently - implying a default probability of only .24%. Concerns about Coinbase removing its customer deposits to expunge debt are now a long shot, which should encourage deposits. Other reflexive debt dynamics are at play removing forced sellers from the market. Microstrategy debt, and those of Bitcoin miners has staged a similarly outrageous rally. MSTR debt has rallied from 30 cents on the dollar to 83 cents on the dollar. El Salvador has staged a monstrous rally from 28 cents to 94 cents on its 2025 bonds. The people who could have had egg on their face from buying / legalizing Bitcoin, have made a lot of money. This will encourage others to do so. Accounting changes no longer require corporates to mark crypto asset purchases on balance sheet at the low of the quarter. This previously discouraged crypto buys as it would depress earnings per share which is typically a factor in management compensation. Rampant gold demand. On a y-t-d basis, central banks have bought net 800t of Gold, 14% higher than the same period last year. Central bank gold demand is near decade highs. Unfortunately Russia owns $150b of Gold reserves, which it began accumulating after being partially de-dollarized for its actions in Crimea in 2014. Any claim that crypto finances terrorism is small in comparison to gold’s role in financing Russia’s invasion of Ukraine, which is viewed by many Central Banks as an explicit terrorist action. This is the misunderstood bull case of Crypto here - which is that Coinbase and Blackrock will serve as references for sovereigns to conduct spot purchases. Social proof. The success of projects like Celestia- led by Bain Capital, as well as PTJ and Stan Druckenmiller talking bullishly about Bitcoin are what you need to get large institutions and central banks excited about the asset. It’s no longer crypto natives with huge gains - which is important for getting comfort with the space’s more toxic traits. Revitalization of the “metaverse” story with the Apple Vision Pro. At the end of the day ETH supply has not grown since September of 2022, even with lots of competition and not much usage. This allows for a real digital scarcity argument to be made, in an environmentally friendly backdrop – which is also necessary for getting many institutions involved. Increasing possibility of distributed compute, storage, or artificial intelligence applications using blockchains. New technologies such as modular blockchains, or ZK roll ups which will be widely deployed later next year We’re in an uptrend. Crazy, I know. But crypto trends. In short, you have massive technical validation of the space, regulatory hammers removed, reflexive debt dynamics unwound, and gluts of speculative capital on the sidelines. We live in a tech enabled world - where public equity market caps are driven by software, internet and AI. This world supports a $13 trillion gold market capitalization which does not interface with the new economy. I think Crypto is a $5 trillion + asset class over next 2 years and prefer to position myself long with opportunistic shorts in mega caps that aren’t delivering on their roadmaps. ...

My investment philosophy is a direct extension of my broader life philosophy, which I call The Blackprint. It’s about applying a systematic, algorithmic approach to markets. For a more detailed, practical guide on how I apply these ideas in trading, see A Withering Trader’s Illustrated Primer. My Investment Philosophy as Best as I can explain. dfuq do I actually do A lot of people think I’m “insane” or “on drugs”, per Twitter discourse .I want to explain what I do for a living and how it all fits together. ...

My analysis of the super bubble is based on the trading framework I outline in A Withering Trader’s Illustrated Primer. George Soros wrote a book more people should read, “The New Paradigm for Financial Markets: The 2008 Crash and What It Means”. I’ll summarize the salient points here and apply it to what’s happening with my own interpretation. Soros thought that his “Theory of Reflexivity” was a good way to make money in markets but might not have any broader application to society. That is until 2008 when he came out of retirement to manage his own money during the Crash. ...

This post explores a specific philosophical path that is highly relevant to the core ideas in The Blackprint. AI Good. Fiat Bad. What’s your plan, anon? What Is The Left Curve Most internet denizens know this meme by now… but, for reference It pays to keep it really simple. The Morpheus Bull A crypto bull market is arriving. It’s time to dial down the spiritual thought, the hobbies, the relationships. The meditations on what it means to be human. And focus on making money. ...

This manifesto contains early ideas that were later refined and expanded in The Blackprint. Why am I doing what I am doing? A direct summary of all the esoteric garbage I’ve produced. Dumbing it all down I’ve written a lot on this blog. I want to dumb it down. Speak in 10th grade English. Below I’m going to talk about what I think the dominant life strategy is, and why. Basically - it’s trying to make as much money as possible, at the intersection of crypto AI and capital markets, while living in Puerto Rico. This is - of course - extremely specific, and exactly what I’m doing. But this is my personal blog so - I suppose it only makes sense that this is deeply personal. Deal with it. ...

“The Mo” is a core concept in my personal philosophy, The Blackprint, and a key part of my trading strategy. channeling momentum, mojo, reading the universal mosaic Below I explore the idea of “the Mo” - or being in tune with the universe, in a useful way that allows you to take larger risks and do better work - but only in short bursts. Famous fund manager Stanley Druckenmiller has stated that the most fundamental job of a trader is knowing whether or not he has a “hot hand”. When you have a hot hand, you size up. When you are cold, you size down. It’s human nature to do the opposite - so there’s edge - sure. But what is a hot hand? Is it just a winning streak or is it something more? ...

This is a deep dive into crypto market structure, building on some of the core ideas from my Withering Trader’s Illustrated Primer. Escaping the socio-spiritual prison from the starting position of a speculator Sidepots in the Asylum When I started trading, I was in it for money and pride. My father lost a lot of money starting a hedge fund and we lost our house when I was a kid. I got into trading as some kind of redemption arc. ...

This post outlines my vision for the future, which is built upon the ideas presented in my core philosophical documents, The Blackprint and The Binary Ark. The market implications are explored further in A Withering Trader’s Illustrated Primer. A hypothetical exploration of the world we are heading towards There have been 3 major technology shifts since 2022. The market has weighted one much higher in terms of valuation - Artificial Intelligence. But a second, more subtle shift was the launch of the MetaQuest Pro and improvement of visual tracking in Virtual Reality. A third, and final tech change is the rise of ZK technology in cryptocurrency enabling highly scalable, verifiable and largely anonymous currency transactions. ...

This primer is a distillation of the market-related aspects of my personal framework, The Blackprint. For a deeper dive into the principles that guide my trading, you can read my investment philosophy. A core concept I frequently apply is understanding market momentum, which I call The Mo. the Last Samurai, Darth Vader, the world of entertainment bleeding into the world of things I want to tell you about something I’ve noticed. “There are only two industries. This has always been true….There is the industry of things, and the industry of entertainment….After people have the things they need to live, everything else is entertainment. Everything.” ― Neal Stephenson, The Diamond Age: Or, a Young Lady’s Illustrated Primer ...

Understanding and overcoming retrofixation is a key psychological component of the philosophy outlined in The Blackprint. naming negative nostalgia. exploring clarity in a world with infinite RAM Naming the Culprit A single concept applies to bad investing, bad decision making, and bad feelings. The idea is living in the past. I began exploring this concept by speaking to my friend Kyla about nostalgia, and its role in Brexit, the election of Donald Trump, guys who only eat meat, luddite behavior, and economic desperation. She recorded a video about it here ...