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This is the way. I'll zoom in one layer further: *DO* - hentai pfp - wolf, duck, penguins (not pudgy tho) - Turing, Euler, any of the OG cryptographers - names that reference classic game theory problems like the Byzantine General problem. Entropy related ones good too. - Pinned post that are educational but needed an hour to study and decipher. (Just use Chat-GPT these days) *DON'T* - multiple emojis in name, overly busy profile blurbs with links to groups, newsletters, or partnerships with exchanges or shitcoins - bitboy - unless you know the King frogs, avoid most frogs. They're more interested in social status and simping to UHNWI. Toxic. - 500k+ followers. Even 250k is borderline. Think quality, not quantity. Mid to high 5 fig accounts. - Laser eyes (BTC maxis) and to a lesser extent .eth (ETH maxis). Avoid. Biggest lesson I learned is that TRADERS v. INVESTORS have almost polar opposite strategies, signals, social/public motivations and goals. Know which one you are or wish to be. If you consume both equally, you'll end up paralyzed. Eg. Traders are looking for setups via price action (PA). They will take large momentum based positions, with leverage and proper risk mgmt (if they're pros). They're long at $60k looking to add at the next technical level, say $64k. While investors are looking to reduce risk and take some profit, *to rotate into another investment.* Investors want to accumulate assets at painfully low prices and build long time wealth in various assets (while taking profits as they go to reduce risk). They're looking for a CAGR over years, whether 8% or 18%. When an investor sells, they have a place to put those dirty dollars to keep earning a return at the very least above inflation, usually considered the risk-free rate. They don't want to ever hold investable cash in their bank. The bank is where the money from your job or business goes to pay living expenses. Their investing accounts are always invested in something, even if it's cash equivalents that earn RFR. It's no different conceptually if crypto is your main avenue - but you should def be aware that taking profits into USDC on chain and self-custodied or to an exchange carries risk in itself that a highly regulated TradFi brokerage does not have. For this reason I've learned to take all altcoin profits into BTC or ETH. If I want to sit on some cash, it's not worth it to hold USDC on Coinbase at 1.5% APY when Fidelity pays 5% APY, virtually risk free, while you plan your next move. Otherwise, I'm selling into ETH or BTC. Traders, while they all have spot bags, are mainly looking for the opposite - cash cash cash. When they buy and sell, it's derivatives, paper, contracts., synthetics. They close risky speculative short term bets into cash asap. Very profitable if risk is well managed (few do). They're paying their bills trading. It's their job, their income. Very different mindset than an investor building wealth over the long term. While you don't have to be just one or the other, you should know which type is your main one. Investors BTFD , Traders don't catch falling knives. Investors buy low, relative to their basis, and sell percentages in tranches, but do not aim to sell 100% into cash (unless rotating into a better investment). Traders buy high and sell higher, w 10x leverage. Or sell low and buy lower. This may be obvious but in real-time during the mania of a bull market, it's a mind fk. Trying to follow both is recipe for disaster unless it's your full time job that actually pays your bills month to month for at least one year consistently. It's not your job until it does. In the meantime, make sure you know which type you are so you don't follow strategies anthesis to your goals. Oh and, this time it's different. It's not, but it is. Crypto has existed (realistically) from 2011 - 2021 top with ZIRP only. 10 years of risk-on "up only". This is the first time it's in an era of 4.5% - 5.5% risk free yields, a skittish Fed, and President Powell. It's bullish, it's recessionary, it's bearish, it's expansionary. I've no idea. Mind your risks and watch for the rotations. Cheers
Nah, I'm making a point about financial assets. They're all in perfect balance with their counterparts. You pay interest on a short because you're borrowing cash at the risk free rate. But you also pay interest on a long position because you're also forgoing the risk free rate. An identical long position would require you to pay the RFR to borrow money to purchase the long position. There's nothing unique about short positions that make them a more expensive position to hold. You just often dont realize it because you dont think about paying interest because you have the cash and dont expect to pay yourself interest for your cash
>All investments want to at least make the RFR (or why not just buy t bills) when taking on any risk I am pretty sure Tether used CAPM modelling. They haven't gone all in the Risk-free assets, but they also have holdings in the real estate markets and risk-on markets. I don't think they have considered making the RFR on every investment, because it won't be possible for them to calculate the exact rates of risk assets they are holding. What I meant is, they have kept a portion of their portfolio in the risk-free assets, even if it is giving them negative RFR. They compensate it by investing in markets having a bit high side of volatility. That's the reason they are not comfortable to publicly disclose their holdings. Can you point me the exact comment of the guy you are referring?
>n't depend on the t-bill, as much it depends on the external factors. But, negative t-bills or 0% t-bills I think the idea the guy had with suggesting borrow rate / t bill is just accounting for the risk free rate. All investments want to at least make the RFR (or why not just buy t bills) when taking on any risk so this accounts for the moving of the CAPM line maybe.. not too sure
Sure. Back in the early 1970s a a trio of economists interested in how various factors affected european options prices. Fischer Black, Robert Merton, and Myron Scholes. (Scholes, btw was involved with the collapse of Long Term Capital Management much later). Merton & Scholes won a Nobel Prize for it. Anyway... there's lots of math in there, though it's not especially hard. More interesting to crypto folks might be Merton's Capital Asset Pricing Model. CAPM is oriented to equities, but I am morally certain there are smart guys and gals at Chicago and MIT and so forth who are (or have) adapted it to crypto. (It's also easier to understand than Black-Scholes there being only 3 inputs and high school level math: Risk Free Rate - use the 2 year treasury rate (RFR) Investment Beta - how much riskier the investment is than the market as whole (IB) Market Risk Premium - market as whole return minus risk free rate. (MRP) Investment Return = RFR + IB(MRP) The problems with this are coming up with reasonable values for MRP and IB. What are the markets we compare to? FX? Crypto as a whole? Equities? Precious Metals? They'll all give wildly different results. And the key problem is this: in the overall scheme of things the total market value of all the crypto in the world is tiny by comparison to the traditional markets. It's right around $2 Trillion. The global equity market is about 55 times that, bonds about 60 times, etc... (gold is about 6 times).
It's hard to defend banks, even using excuses like RFR when they constantly get bailed out, and the real risk would be held by the people that actually owned the money if they were not. These guys are flooded with cash, mostly from consistent abuse - always at the expense of the average person or even sometimes the entire economy. People aren't advocating for high savings rate, they're advocating for more fairness and transparency from banks.
[ETH RFR contracr](https://twitter.com/0xbunnygirl/status/1413980492639178755?s=21) This seems like a horrible idea
I just want to swap my fucking refereum (RFR) to ETH or anything and metamask hits me the "best we can do is $200 pawn stars type shit".
I have like 500 or so RFR and it went to $0.00. I dont even think they are a project anymore. I cant delete it, send it anywhere or do anything to get rid of it. It just sits there laughing at me every time I look at that wallet.
This was great! Where is a good place to but those smaller market cap coins like RFR or MVL?