A FREE Education!

No jokes here— the Looking Glass Education website has a wealth of free information that I highly encourage you to explore. Many facts about the dollar aren’t well known. However, once folks learn these uncommon details, they understand the specifics of Bitcoin much clearer.  The point is— don’t let bitcoin or other cryptocurrencies scare you. Crypto is money, just like US dollars or Euros, and they are all connected by the roots, helping you get from Bitcoin to Dollars or Bitcoin to Euros easily anytime, 24/7/365.

Here is their starting course, and I think it may be all you need to understand how crypto fits into a healthy world economy.  The time when the US dollar is used for all world transactions is coming to a close very quickly. As Jerome Powell put it, “It’s possible to have more than one large reserve currency, and there have been times that was the case.”

Beanie Babies and Money

Imagine this— you bought 100 of the same beanie babies, and there were only 1000 total of that kind.  Now, let’s say the beanie baby company made 3000 more beanie babies precisely like yours, and suddenly your 100 beanie babies are in a pool of 4000 and worth far less than when there were only 900 others.  This depreciation of value occurs because there are more of the same, and yours are instantly less scarce.

This concept also applies to dollars. For example, the FED has printed 13 trillion new dollars since Covid began. In other words, 3 out of every 4 US dollars that exist now were created from thin air in this post-Covid world.

Now, imagine what that does to the dollars you already have.  You still have the same quantity of dollars, but those dollars buy less— less food, less gas, fewer bags of chips.  This result is called inflation, and I view inflation as an invisible Pac-man that eats away at your buying power.

With the additional dollars added to the money supply, inflation is seen everywhere and is massively growing.  This course will teach you the definition of quantitative easing (massive printing of new money), why it is being done worldwide, and how it affects you.  

Basically, anyone with US dollars in a savings account must learn here. Those holding large amounts of dollars in banks have had their buying power depreciate by upwards of 15% over this past year, and, unfortunately, it’s only going to worsen.

As I have stated, there are other types of currency besides US dollars and other paper money.  Cryptocurrencies have had a volatile progression of gains and losses, but really this is in part a reaction to there being 75% more US dollars bidding for the small new asset class called Cryptocurrencies.  The stock market is a whole different animal that I’m just going to ignore for now.  Let’s look at some of the realities of investing in crypto via my bots.

Another Day Full of Restarting…Ugh!

It was bound to happen—BTC marching up and falling—it’s what it does.  I liken this movement to a wave where you get a lot more water in one place. Then the ocean goes up, the water subsides, and then goes down— only to be filled again with more water and another upward motion.

In this case, the water is money, and as BTC gains against stable coins, it’s sucking in new stable coins. Then as it loses against stable currencies, it spits out those gains into the other crypto coins or back into stable coins.

Since this is only one step in the march-up process, I am using it to transition my older bots into infinity bots. Hopefully, I can avoid the most considerable risk I see with a quote-less bot.  Setting a botting range in Kucoin specifically doesn’t trail up, so I need to set a hard top to the grid.  If the price goes above the grid top, it will sell all my base. I believe that transferring the older Kucoin Grid bots into newer Kucoin Infinity bots removes this risk because the purpose of the Infinity bot is to keep the assets botting forever – or until you want to cash them in.  Hopefully, this leads to less of a need to babysit my bot army over the long run. 

As I sat in my chair Monday morning, I wished that I had gone through the bots the night before—as Sunday is usually the lowest point of the week on most of my bots’ markets.  That just means that I’ll need to do more restarts tonight. Oh well— there are worse things I could be doing.

LUNA Rocks!

So, I’ve been bullish on LUNA for a while. I originally bought into LUNA when it was under a dollar.  I always wish I had bought more, but I own enough for now.

I recently moved my UST from Anchor, where it was getting 20% APR into LUNA, to bot with and see if I could get better than a 20% return for a little while.  I believed this was possible because the volume of trading on LUNA was insane for the first part of this year, though it has settled back down again.

The recent downturn of the crypto markets has pushed the trading bots out to the bottom and allowed me to close my bots while getting back my LUNA and earning new USDT and new BTC.

I have been in and out of many bots these past few months and gained USDT and BTC.  I want to describe a few of these in detail, so you have a window into my process.  I tried to do the due diligence to verify the Kucoin numbers on these arbitrary bot statistics screens.

About 21 days ago, I decided to put all my botting LUNA into the same bot and see what happens.;

Here are the results of my big LUNA push.

Kucoin: Spot Grid LUNA/USDT

This bot started with 30 LUNA, and halfway into the botting, I added approximately another 30 to make the Kucoin bot in Image 1.  You’ll see the Entry price is struck through. This marking indicates that I added new assets midstream. When you add into a Kucoin bot, it needs to sell or buy some base. The strikethrough tells people that this amount is no longer the entry price.

Once my bots get a negative Floating PNL on Kucoin, I close them if my botting assets in the sub-account look correct.  I don’t believe I’m losing anything, but instead, I’m cashing in on the gains I received and readying the bag to re-deploy in a new bot.  I could be wrong—so don’t quote me— but I have learned that, unfortunately, the Kucoin stats aren’t founded in an exact science. 

Kucoin: LUNA/USDT Order Details

This shows the open orders when I closed; I finished with 62 LUNA and 1359 USDT.  This example wasn’t one of my baseless bots because I used the kucoin “add investment” feature to add more LUNA mid-stream which changed the entry price and other features.

Consequently, I’m still bullish on LUNA for the long term. And I’m not going to sell…well, sort of.  

I did actually sell a few of the LUNA I bought on Pionex a while ago at $35 for good reason—I couldn’t withdraw it. Some services have locked assets whereby you can buy and sell them on the platform, but you can’t deposit or withdraw them.  LUNA is such an asset on Pionex, and rather than complaining or going back into USDT, I sold it to BTC as my goals are stacking sats and not making new stable coins.  BTC has depreciated, and LUNA appreciated, so I got more BTC for my LUNA than I would have purchased with the original USDT amount.  I also got more BTC for my LUNA than I would have gotten if I initially traded into BTC.

I have since split my Kucoin LUNA into a LUNA/BTC and LUNA/USDT baseless infinity bot on Kucoin. Here’s hoping it’s all up from here!  LUNA indeed does rock! I hope ATOM follows next as I have pushed some of my ATOM from staking into botting.  I have staked ATOM since it too was under a dollar. Here’s hoping it grows some stable coins and new BTC.

Unfortunately, I realize that unless my bots have more than several thousands of dollars worth of assets, the return won’t be quantity rich but might still be a more significant percentage.

That’s okay, though, because I’m not looking to get rich quick. I’m just looking for an easy way to make a living over time. LUNA seems to be a keeper!

MKR was a Surprise—  Hope It Continues!

I have had about a half MKR forever, and I finally spent the ETH gas to move it into Kucoin a few months ago. Although it’s WAY underwater at this point, I thought the volume would be enough to make some good gains now as it goes back up eventually. 

Spot Grid MKR/USDT

This is a screenshot of the bot around its peak price a bit ago. I used my .5 MKR to bot against USDT and made 101 USDT while keeping my MKR balance. I closed out this morning and re-started lower—a few times.

Here’s What a Flash Crash Looks Like To Me

On April 6th BTC/USDT fell from about $45,500 to $43,000, which is a lot of dollars to lose in a single day. However, this amount is only 5% of the price.  In Image 4, you can see the chart where each candle represents one day.  I put a vertical line on April 6th to show how this fits the market movement, but it alone makes for sensational news.  This is the part of the market cycle when you see these news headlines: “Bitcoin is crashing and will go to zero…”

Binance BTC/USDT

This crash isn’t significant for such a new market, even though folks may think it is.  If you zoom out, you can see that this downward movement is just part of natural market development.

Binance BTC/USDT

You can barely make out the results on the daily chart; however, the market is still bullish even as the BTC price fell just below $40k.

This image depicts a bitcoin “crash” rattling around within my bots.  I always tell folks that I make the most sats when BTC goes down. It’s visible in these charts because of the volume and quick movement.

Kucoin FTM/BTC

This is an FTM/BTC bot screenshot from April 6th. As Bitcoin went down, there was a pull against FTM to go down. Then FTM bounced back up because folks were used to paying a specific price in USDT for FTM.  As a result, the FTM/BTC pair saw a push down, then a move up, followed by another slower push down.

FTM/BTC Kucoin

Today I closed the FTM/BTC bot with approx 0.00051 BTC profit, as seen in Image 7 above since it was one of the bots that fell out of the bottom.

April 6th Spot Grid

The same bot screenshotted on April 6th, you can see the impermanent loss as the bot was started with 170 FTM and only had 155 FTM on April 6th, but as seen in Image 7 the full 170 FTM was returned before I closed the bot.  In this case I started with a little BTC as a mistake, but I let it run and I made a 0.000259 BTC worth about $10 today.  It all helps.

The next three shots below show similar activity on other bots with the same date—April 6th circled.

Kucoin KMD/USDT

Kucoin XTZ/USDT

Kucoin REN/USDT

This BTC/USDT volatility echoes throughout the altcoin world and is what gives turbulence to the altcoin/BTC pairs.  These sudden movements of BTC/USDT allowed my bots to make more significant gains during those days.  In no case did the BTC move push my bot into non-profit because these bots have risen from their starting place enough to be trading in profit.  Sometimes bots fall out the bottom due to this swift movement, though not before returning all my base so I can re-open the bot lower.

Pulling my BTC into private storage.

OK, I’m finally readying myself for a future with protected BTC.

Until now, I’ve kept the bulk of my BTC on interest-bearing accounts like BlockFi, Celsius, and NEXO, so my BTC grew in quantity.  That’s called “stacking sats” since “sats” or “satoshi’s” are the smallest unit of accounting in Bitcoin.  I’m currently making an extra $150 in BTC monthly with this practice, but I fear this type of account will end soon or be kyc’d in.

I get this funny feeling that next year will be a pivotal year in crypto privacy.  I predict that over the rest of 2022, there will be oversight put in place and perhaps with a bit of a delayed start or maybe a backward push for compliance.

I’m not a legal person, and I have no intention to read up on all the new laws, but in the absence of federal guidance, the states have taken the initiative to put forward wide-ranged legislation.  Here’s a listing of the current crypto legislation at the state level featuring 153 laws in 40 states.  State regulation isn’t all bad. Some of the legislation is to legalize BTC payments to states for taxes.  Whatever happens, I want to be ready.

I’m a BTC first HODLer, meaning that my main asset is Bitcoin.  The rest are useful for my botting or will eventually be used as utility tokens in future ecosystems but my current focus is on getting more BTC.

I don’t own a ton of BTC, but what I own is still spread across dozens of platforms.  This plan was my initial way of protecting myself because when I got into the crypto industry, there were many setbacks to folks who held a lot of assets on one platform.  Spreading far and wide was my plan during the early stages of my crypto adoption.  This way any one account having an issue wouldn’t wipe me out.

My first clue that this year would be the year of regulatory certainty was when BlockFi got hit with their fine.  They were halted from doing what they do best, offering interest-bearing crypto accounts to US citizens.  They have had to re-focus their entire company and product offerings since.  This restructuring has forced new development and extensive resource commitments from BlockFi.  So, rather than moving the industry forward, BlockFi is stuck “fixing” its platform and business model to work within the still non-existing US regulations.

I had a feeling Celsius and NEXO would be next, and no joke, as I wrote this article, I received “the email” from Celsius stating that “All coins transferred to Celsius by users in the United States before April 15, 2022, will continue to earn rewards. Those existing coins will continue to earn rewards from April 15th and onward as long as they remain in their Earn accounts.  On April 15, 2022, Celsius will be launching a new Custody solution for users in the United States. Your Custody account will serve as the centerpiece of your home for crypto, providing a secure way to navigate Celsius’ products, including store, access, borrow, spend, earn and grow.“

The email is almost verbatim to what BlockFi sent earlier this year. It makes me think the US is attempting to put some vernacular out to standardize this novel Cryptocurrency asset class.  I applaud that and welcome any standardization push.  I just wish it didn’t have to disrupt industry leaders by forcing them to re-think their business strategies and re-develop their platforms to retro-fit whatever abomination is being forced to be built.

Hopeful for a Better Future

So, as I continue the arduous task of pulling my crypto out of these platforms, I’m reminded that this is a real future – let’s hope it’s a better future and not a push backward.  As a result, I have made a few smaller withdrawals each month to take advantage of the free transactions from these platforms.  That won’t last forever.

I now have to pay off my loans in Celsius before I can free my BTC there, but that will come soon. I aim to have the majority of my assets out of these three platforms before the end of this year, though not too soon because the $150 in BTC per month I earn from now until year’s end may add up over the years, especially since I’m earning this BTC as BTC is so low in value.

I started receiving KYC requests when I withdrew anything from Blockfi shortly after “the email” came.  This news confirmed the future I fear, and as I am transferring assets out, I’m assuming there will be an amount of money per transfer that will need to be KYC’d, so I’m moving in chunks under $5k in the hopes that this is the USD value that will be used as a peg for their new KYC requirements to come.  I’m betting that transfers under $5k won’t need to be retroactively KYC’d.  Remember, these platforms hold our crypto, and we won’t get our crypto back unless we abide by these new rules.

KYC In The Crypto Age

KYC is “Know Your Customer” and it defines the process every financial entity needs to go through to allow money to be transacted on their platforms.  It bugs me that the requirements for Crypto traders to KYC are far more intrusive than traditional market participants. It’s not that I’m opposed to KYC, I just don’t like a third party owning enough information to impersonate me.  The traditional investment world has a paper with my personal information written down. In contrast, these KYC platforms take geometric facial readings and pair them with the swaths of provided personal data for nearly everyone involved in crypto.  

This week, John Oliver did an excellent segment that I encourage EVERYONE to watch.  It’s a clear and detailed description of how data brokers work – this is the business of merging and selling our data to the highest bidder.  John Oliver, his show, and by extension HBO, has launched what I believe to be an interesting way of forcing Congress to do something about this industry’s over-reach – I won’t spoil the fun. Watch the clip; it isn’t too long.

For example, it’s not that unrealistic that China eventually steals or buys this KYC data and uses the facial measurements on their nationwide CCTV network to identify and arrest those folks who are known to hold or trade Bitcoin.  China started limiting their citizens with their Financial scoring system and now with their heavily expanded Social Scoring system Chinese citizens are under near total surveillance.  Chinese authorities are already using facial recognition to find and prosecute criminals.  Mind you that these “criminal actions” can be anything, like potentially practicing the “wrong religion”.

I’m also using a fresh BTC address with each transfer, and those transferred assets sit alone even though my wallet shows the sum of all my BTC addresses together.  This method is an essential way to have privacy.  I use the MUUN wallet as this is a native Lightning network wallet.  The Lightning Network is Bitcoin’s level 2 framework where you can send BTC in seconds for a minimal gas fee.  MUUN wallet can create a new BTC address and add it to your wallet with ease and this prevents tipping off the sender how much BTC is in your wallet as a whole.

More Relevant Strategy

I’m moving other assets off as well, but I’m not quite as concerned with them as their value in this market isn’t generally high, so moving them next year will probably still be reasonable.

I do this while the market price is low because I can move more quantity of BTC as it’s worth less USD.  This tactic is vital now as the market is down because once BTC gets over $100,000, the quantity of BTC will be far lower to keep a withdrawal under this arbitrary KYC USD value – which I’m assuming will be $5k. For example, now $5,000 = ​0.125587 BTC, and IF 1 BTC was worth $100,000, $5,000 would be equal to 0.05 BTC forcing me to make more and more transfers later on to move the same amount of BTC…

I also put much of my ETH that I’m holding into ETH 2.0 staking, as that seems logical going forward.  I’m not sure when the ETH migration from proof of work (mining) to proof of stake (staking) will happen, but I know that I’m not selling ETH until it has occurred, so it’s safe to stake it.  I’m doing this with Kucoin and can trade out of the BETH (staked ETH) anytime I want, so it’s not much of a big deal, I believe.