Welcome to my Not financial advice – March 2022 post!
Sorry… that GIF is a bit much. I think I’m seasick now…
So, ah, things changed a lot in the financial world since I wrote my last post on financial stuffs. Obviously the invasion of Ukraine by Russian forces is horrific and honestly I thought mankind had progressed past these large scale land grabs. It’s been very interesting to see the US, NATO, other countries and multinational companies all try to deincentivise Putin’s actions. I truly hope this united front persuades other countries to not try to take over their neighbours through force.
I do think that there is a really strong chance the financial shock of this invasion will be felt around the globe, and we’ll see a global recession in the next couple of years. To be fair, people have been warning about recessions for a long, long time… but if a pandemic, supply chain issues, invasion and financial sanctions don’t all contribute to a recession then I guess the global economy is invincible?
We saw a flight to safety into Bitcoin on the 24th of February 2022 as Russia invaded Ukraine. I think most big world events will encourage investors to put their money in Bitcoin, gold and the USD when things are particularly uncertain.
As the financial sanctions came down on Russia and their Ruble decreased by 40% we saw lots of regular Russian people buying products and BTC to try and preserve their value somehow.
People and politicians (particularly Elizabeth Warren) did wonder if the Russian Oligarchs were trying to subvert sanctions by buying crypto but I think the Oligarchs probably didn’t need to… they’re professional hedgers (even with countries specifically targeting their assets) and Cathie Wood made the interesting point that there isn’t enough Bitcoin in the world for the Russian Oligarchs and the tremendous wealth they command.
Instead, we’ve seen an absolutely incredible use case for crypto:
$70 Million directly to the Ukraine government to help them defend themselves against the Russian military invasion is just incredible… and the costs in administering those funds was what… nothing?
Personally I think this single use case is the single most positive event for adoption of crypto in the long run. It helps the general perception of crypto from this dark internet ‘subversion of the system’ full of scams to an efficient and inexpensive tool to move value around quickly.
Normally when you donate money to help with a cause you have to donate to a non-profit that is helping in the area, with no real concept of how much of your donation will actually help. To be able to donate directly to the wallets of those that need it is incredible… even if that’s a government.
In the short-term, I think things are going to be wild and I don’t expect investing is going to be easy at all.
I think stocks going to be extremely volatile as the world tries to navigate this invasion and the financial fall out… before we had actually resolved the pandemic and the supply chain issues it caused/highlighted. The other problem with stocks is this:
The entire video is fascinating, and made me think of the Ripple versus SEC case a lot…
The main takeaway though, is that retail investors can not win with stocks.
I always knew that it was hard to win when you were competing with the big players and their fancy algorithms… but I had no idea that the information that retail investors is dealing with is out of date before they ever see it. Unless you’re a massive firm who can pay for the New York Stock Exchange’s private feed, you have no chance.
I still think the adage of ‘time in the market is better than timing the market’ is true… and so if you are looking to purchase stocks then they really need to be stocks you intend to keep for years.
I’d say most investors will move to commodities (oil, wheat, etc) to try and hedge against all the current issues and I think it’s pretty obvious that crypto will cop a lot of volatility and is more than likely to go down in the short term… especially as the USD grows stronger around the defense of Ukraine.
The strength of the USD and of the crypto market are inversely related (except in flight to safety scenarios) so as the USD gets stronger, crypto loses strength… and vise-versa.
As this thread explains:
The USD is extremely likely to strengthen this year for a variety of factors, but the Quantitive Tapering that we’ll see from the US Fed will drive a lot of volatility and uncertainty in the markets with a proper bear market later this year. Eventually that will lead to a worsening of the USD which will be good for crypto markets.
So, in the short term future, this is what I’m thinking…
- Investor money will go into commodities.
- Retail investors in stocks and crypto should just hold… and stake where they can.
- Anyone who tries to trade around this volatility is wild.
The things I’m concentrating on are:
I’ve had a little bit staked in the CUB Kingdoms for a while now…
I basically set it and forget it some time ago. You don’t have to think about it because it automatically ads the interest you earn into your staked amount. You literally don’t have to do anything.
The reason I’m bringing this up now though, is the PolyCUB airdrop:
There is $4 million in airdrop tokens available… which currently means I would earn 85% of the value of CUB I’m holding… but I expect that percentage to drop quite significantly as more CUB gets poured into the platform (which will increase the price of CUB, so win win?)
Tomorrow Koinos will be releasing their 3rd and final testnet… which is incredibly exciting. Being the final testnet, this will be the time to take a full 5 minutes to set it up on your PC and start messing around with smart contracts in any coding language you prefer:
I’m absolutely intending to set it up this week… I’ll be going through the lessons on The Koin Press to see what I can build:
With the Mainnet coming later in 2022, I’m honestly surprised that there hasn’t been more price action:
Not that price action really matters… with the MANA system that the Koinos network will use I can’t see many people actually selling KOIN. It’ll be smarter to use the KOIN to power the smart contracts… or delegate it out so others can power their smart contracts.
Personally though, I’d be surprised if we don’t see an upwards trend in Koinos price action once Mainnet is live and applications are interacting with the network.
The main area I’m concentrating on for holding and staking is the Splinterlands blockchain game.
Splinterlands has so many elements to it, it’s an entire ecosystem just on it’s own.
From a Decentralized Finance perspective… you can currently earn a 29.71% APR on the SPS token that you have staked in the system:
Once again, this is very different from any interest you can earn at a bank. Does anyone even remember when banks had actual savings accounts that you could earn 3% interest on?
Obviously the value of SPS has been taking a beating the last few months:
There’s a lot of factors to this. SPS has not completed it’s 365 day airdrop yet so there is SPS continually adding to the overall supply:
We passed the 7th month on the above release schedule about a week ago. The total supply is currently 606,915,954 which is only 20% of what the total supply will be after 65 months.
Zooming out though, there is only 141 days left of the airdrop. After the SPS airdrop finishes, the only way for people to get SPS will be through staking, purchasing or winning it in tournaments. The reason people might want SPS is because it will be used to vote on development decisions for the game.
The real DeFi metagame within the game is the incentives for pack purchases.
I believe the Alpha, Beta and Untamed packs were originally $2 each, the Plot $14 and the Dice and Orbs could only be purchased with the ingame DEC currency that you win when you win games.
You can see below that the secondary sales of those older packs fetches quite appreciated prices.
Now, the Chaos Legion packs are $3.06 on the secondary market and $4 on the in-game market. The thing is that by buying and holding packs you earn SPS… and by buying ingame you also earn the airdrop cards:
- Doctor Blight – $99 each / $1,008 for Gold Foil
- Baakjira – $9.50 / $132 GF
- Uriel the Purifier – $8.34 / $115 GF
- Lira the Dark – $5.39 / $101.97 GF
- Iza the Fanged – $3.45 / $99 GF
- Grum Flameblade – $10.75 / $140 GF
- Spirit Hoarder – $9.80 / $110 GF
The card airdrops I’ve received thus far (7 of 14) are valued at about 16% of what I’ve spent on card packs… plus I’m getting SPS airdropped for holding the packs (which I can stake as often as I like and earn interest on the interest) and eventually the packs might be worth more than they are now once the Chaos Legion packs have sold out.
Of course no one can guarantee the packs will appreciate in value… all we can say is that all the previous editions (which had significantly smaller numbers and a significantly smaller player base) have all appreciated.
On top of all of that… paying Splinterlands is honestly really fun. You can win DEC and cards and packs daily, and at the end of the season… and strategically it’s somewhat addictive. I’m extremely glad I found this game. It’s incredible.
The last area of interest for this month is the SPK Network airdrop.
The SPK network is a web3 video platform where creators earn tokens, but the people who run the network also earn tokens.
I love this model… the community runs the network and the community all profits from that network. I don’t expect them to take over YouTube anytime soon… but it’s a significantly better model that works better for the consumers, the creators and the people who run the network.
There is an airdrop scheduled for the 20th of March that I believe goes to everyone who has staked Hive on the Hive blockchain.
I’m so curious to see how this will work out, but I’m excited to support it where I can.
I noticed a lot of chatter about the crypto market falling on the news that the US government will enact an Executive Order to regulate crypto currencies…
I honestly wouldn’t be too stressed about this. I don’t think it’s really going to move the needle… and this executive order is most likely to empower government agencies to start researching how crypto and blockchain technologies affect a whole range of things (economics, environment, innovation, etc). It’s going to be an extremely slow process and I don’t expect anything actual concrete to come out within a couple of years… by which point the technology is likely to have changed a lot.
If the US is too restrictive on blockchain technology, the innovative companies will move overseas and innovate elsewhere. I imagine any regulation they bring will be underwhelming at best…. but I guess we’ll see. I wouldn’t let this affect any of your decisions in the short or medium term.
Okay, that’s all for this month…
Thanks so much for reading my Not financial advice – March 2022 post! If you want to check out last month’s post, please click on this ol guy:
Good luck! Please let me know your thoughts or questions in the comments!
Please note : The above post may contain affiliate links.
Below are some product referral links that I love and will benefit us both if you’re interested.
Splinterlands – A super fun blockchain card game that I play almost every day.
Coil – A $5 USD monthly subscription fee provides you access to a ton of content and sites in a way that fairly rewards the creators of that content.
Exxp – The WordPress App to link your blog to the Hive blockchain.
NomadTask – Earn for completing online tasks like following accounts or completing reviews.
MINT Club – Create your own Smart Media Tokens with no coding required.
GALA Games – Gala is creating a whole platform of blockchain games. Definitely excited about Mirandus, Townstar and SpiderTanks.