3rd November 2021 > > SQUID and XTZ.

tl;dr

The CCC was spot-on about SQUID, and XTZ too.

Market Snap

Market Wrap

That’s a big move for the perpetual futures funding rates. The screen is a sea of red.

This does not mean that prices are about to tank. But if there was to be a sell-off today (and we must be due one soon) it will be exacerbated by the avalanche of forced liquidations from the leveraged children.

I wish someone would simply send them to bed to let the adults get on with normal life.

Occasional Series – Insulate Britain

I know I have poked fun at the lack of diversity at Insulate Britain.

I know I have poked fun at the hypocrisy demonstrated by key leaders of this protest group who have admitted on live TV that they have not insulated their own homes.

In the interests of balance, I have got to say that this is surely one of the most surreal interviews I have ever had the pleasure of watching:

https://www.bbc.co.uk/news/business-59129466

Growing concrete. Well there’s an idea.

Curious Cryptos’ Commentary – SQUID coin based on Squid Games

Following news of the Squid Game rug pull leaving the coins worthless, I quote the CCC from 30th October 2021:

“If anyone is tempted by the 75,000% return (yes, seventy-five thousand percent) on the new SQUID token derived from the Netflix series Squid Games in the last week, just don’t.

You can buy for wrapped BNB on DeFi platform Pancake Swap, but it’s a scam. Anyone can set up their own token on any DeFi platform. Their website does look professional, but that isn’t hard to do these days.

There will be no bid, and any theoretical profits you make will remain just that – theoretical.”

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Remember, the CCC is always ahead of the game.

Curious Cryptos’ Commentary – Not lending stablecoins

I think there are probably many people in the crypto world who would be disappointed in my lack of enthusiasm for lending stablecoins. It is a very popular pastime.

In response to my comments I received a fair question from someone – what should you do instead?

Obviously, the CCC provides no investment advice – merely commentary about issues and developments in the crypto world. But in this context, I think I can share one particular strategy which has worked to my advantage.

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Two years ago almost to the day, I made an initial foray into Tezos (XTZ). XTZ is a Layer 1 blockchain with the functionality of smart contracts using Proof-of-Stake (POS). You can easily read more about it if you wish, but that’s the top line description from me.

My initial investment was based upon an expectation of capital growth. The price today is over 6 times higher than when I first bought, which is the same price performance, give or take, for BTC over that period.

But there is an added wrinkle which works in my favour.

As a POS coin, block validators are chosen at random depending upon the size of their stake. In the case of XTZ one can delegate one’s stake to what are known as Bakers (note that delegating doesn’t mean you lose control or possession of your coins – it is a book-keeping entry only). In return, you will receive a share of the blockchain validation rewards.

In the two years since I first bought XTZ, the baking rewards – which you can think of as an interest income stream - I have received are the equivalent of my initial investment. As of today, each year I receive 50% of my initial investment as baking rewards.

If the price doubles from here, then I will receive my full investment back each year.

As ETH has a market cap 100 times greater than XTZ – which is a direct competitor - I have an expectation that price rises in the future will be many, many multiples of the current price.

Note also that if you don’t cash in the baking rewards they are automatically delegated too. This allows the eighth wonder of the world – compound interest – to turbocharge your capital gains.

POS delegation is the gift that keeps on giving.

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For me, this is a way more attractive proposition than lending stablecoins at 8%.

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NONE OF THIS IS INVESTMENT ADVICE – MERELY FOR COLOUR AND DISCUSSION.