Is it too soon to talk about Crypto yet?

[MinnesotaEric]

Started from nothing, retired at 54. Money I had made in real estate by then, has continued to provide us a comfortable life now 25 years later.

Now we're banking 529 funds for grandchildren.

Maybe I could teach you about money.

I'm a real estate Broker. When I suggested that real estate is a trap, I meant that real estate keeps getting cheaper in bitcoin but more expensive in dollars. Now if you've been turning debt into cashflow through RE, good for you.

Bitcoin is held for generational wealth.

Meanwhile, we continue to cross the desert of nothing happening until we get stablecoin legislation—which if all goes well will be late summer or early fall this year.

 

[ConawayFarms]

I’m with you, Hay Dude. I think a lot of folks are just tired of the same old way of doing things when it comes to investing or saving for the future. Crypto seemed intimidating to me at first, but what pulled me in was seeing how people all over the world can take part without needing permission from a bank or big institution. That feeling of being in control of your own assets, plus the opportunity to get in early on new projects, made me want to learn more.

I started messing around with DeFi a bit on Solana last year and found it pretty exciting, especially the way you can actually get involved with liquidity and trading, sometimes with just a few clicks on your wallet. One thing I wanted to try was to enhance liquidity on meteora decentralized exchange, which is actually not that hard once you look into it—there are even bots now that help with this and can get your tokens noticed faster. It can make all the difference if you want to see real activity on your tokens.

 

[MinnesotaEric]

The FHFA has been ordered to count crypto as assets for mortgages. This will be remembered as a defining moment for institutional adoption of Bitcoin in particular, but crypto in general as crypto recognized as both a reserve asset and collateral by the U.S. housing system.

Why?

Because allowing your Bitcoin and other Crypto assets to count toward a home loan without the need to sell those assets avoids capital gains and allows HODLers to continue to "stack" coins.

As one Dogecoin fan shared....

https://twitter.com/x/status/1938018028203213092

We're also going to see a blossoming of yield products within crypto when stablecoin legislation arrives.

https://twitter.com/x/status/1938273407122215410

On the continuing and on-going development of blockchain technology on Bitcoin, billionaire Tim Draper made the following observation, writing:

There is a gravitational pull toward Bitcoin. All the successful innovations on other platforms are being now ported to Bitcoin. This matters so much more than people realize. All the innovation that started in altcoins (smart contracts, blockchain applications, ordinals) is moving to Bitcoin. I liken this phenomenon to Microsoft in the operating system days. When Lotus 1-2-3 took off, Microsoft created Excel and brought it into the OS. WordPerfect succeeded, so Microsoft built Word. Then Microsoft bought PowerPoint early. All of these applications became standard with Microsoft, while the early startups were marginalized.​

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Bitcoin is worth $1.8 trillion. The next largest token, Ethereum is only worth $250 billion. Bitcoin gets most of the programmers now. They are gravitating toward Bitcoin. The five applications that really matter are being built on Bitcoin—DeFi (Peer to Peer Payments, Trading, Exchanges, financial inclusion etc), Smart Contracts (supply chain transparency and traceability, asset trading and resource tracking) , Ordinals, Runes, and Layer 2 solutions like low cost micropayments. This gravitational pull is accelerating.​

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...Every entrepreneur building on Bitcoin has the entire ecosystem's momentum behind them. Smart entrepreneurs are always building on the platform with the strongest gravitational pull. That platform is Bitcoin.​

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When people ask what Bitcoin will be worth in 5 years, I say it will be worth one bitcoin. It may be infinite against the dollar as the dollar continues to inflate into nothingness.​

 

[quicksandfarmer]

I’m with you, Hay Dude. I think a lot of folks are just tired of the same old way of doing things when it comes to investing or saving for the future. Crypto seemed intimidating to me at first, but what pulled me in was seeing how people all over the world can take part without needing permission from a bank or big institution.

Interesting. I like my investing and saving to be boring.

 

[MinnesotaEric]

While we wait for stablecoin legislation here in the USA, let's think about what stablecoins are used for these days.

Stablecoins are primarily used by countries with unstable fiat currencies and companies doing international business for quick transactions and lower processing fees. For USA-based companies whatever country fiat currency (or crypto) is collected is then converted into stablecoins and then the stablecoins are then wired home and kept as the stablecoin or converted into dollars or something else as store of wealth. Doing this lowers bank and processing fees while greatly increasing efficiency. Even now Visa and Master Card are integrating stablecoins into their business model to increase transaction speed and bypass international bank fees.

Tether is the current monster in the stablecoin business and pegs itself to the dollar. The (smaller) fees Tether collects are used to buy more US Treasury debt thereby expanding the total amount of Tether stable coins available for commerce with each coin worth exactly one US dollar. Moreover, through the purchase of Treasury debt, dollar pegged stablecoins like Tether help strengthen the dollar's purchasing power relative to other currencies throughout the world by creating demand for dollar denominated debt.

The trouble is that Tether is ALSO buying Bitcoin as a reserve currency and this is a problem for the strength of the dollar.

Why?

Because the dollar is powered by debt and as debt expands, the purchasing power of the dollar is diluted through inflation. While buyers of treasury debt strengthen the purchasing power of the dollar, when moneys are siphoned off from buying dollar denominated debt into Bitcoin (which has a fixed supply) and the value of Bitcoin continues to increase in dollar denomination through the mechanism of dollar inflation, at some point the stable coin that is pegged to the dollar breaks upward because the underlying Bitcoin is worth more and more in dollars.

By breaking upward, this means that one Tether stablecoin, because of the value of the Bitcoin Reserve, is now worth more than just one dollar. When (not if) that happens, then the strength of the dollar as the world's global reserve currency decreases as Bitcoin's importance as the world's reserve currency increases.

Adam Livingston explains how the process unfolds at the following link on X.

https://twitter.com/x/status/1940491043276743084

 

[MinnesotaEric]

Yesterday, anticipating the passing of the Genius and Clarity acts, the entire crypto sector started to front run bidding up just about every token in the sector. Of course, if the market is disappointed, either through a failure to pass the legislation or a delay in passing the legislation, I expect a pullback as bears pile in with a sector-wide bear raid.

The current Bitcoin spot price is $117,667.20

Meanwhile, the broader domestic market continues to climb walls of worry mixed with bedwetting as prophets of common sense like Ray Dalio explain the history of economic collapse of empires that became too indebted to be able to pay off their debts.

https://twitter.com/x/status/1943691362928414830

 

[MinnesotaEric]

Looks like it will be a fun week.

 

[MinnesotaEric]

With Congress passing a motion to advance the Clarity, Genius, and anti Central Bank Digital Currency (CBDC) act in 215 to 211 vote this afternoon, I felt very confident having purchased more more Bitcoin, Cardano, XRP, and for fun, Dogecoin over the summer.

In an IRA, more IBIT (Blackrock's Bitcoin ETF), MetaPlanet (a Japanese-based bitcoin treasury company trading under the ticker MTPLF ISIN #JP3481200008 SEDOL #B03BJ91), Cantor Equity Partners (a special purpose company currently trading under the ticker CEP, that will merge and become Twenty One Capital, Inc and eventually trade under the ticker XXI as a Bitcoin treasury company), while letting my existing equity in MSTR continue to buck.

For his part, Jim Chanos (the guy who famously shorted Enron), has been a very vocal critic against bitcoin treasury companies and is actively shorting at Strategy (formerly known as MicroStrategy) while buying Bitcoin, thereby shorting the spread.

Meanwhile, if the crypto and stablecoin legislation is passed, there is going to be a tsunami of moneys roaring into the space from banks, financial transaction companies and conservative funds. Even without legislation, fund managers like Ric Edelman (who manages $300B) have gone from no allocation to 40% allocation in Bitcoin.

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