Tuesday, June 27, 2017

Crypto Bloodbath

ETH is down like 20% in the last 24 hours. Since it hit $420 about 2 weeks ago, it's been just sliding all the way, now down about 45%.

Given that most crypto currency traders are boys between the age of 16-22, I think it's about a good time for the bigger boys to come in and graciously help them unload at losses.

My account with Gemini is up, but I think a bank transfer is going to take 2 days to credit, so probably by Thursday morning. I'm not sure how quickly I can receive my funds and take some shots at this situation, hopefully this FUD in the market lasts for a while.

Normally, I would be expecting a slow death to this entire space that will last about 1-2 months, but given the ridiculous speeds in crypto, I wouldn't be surprised if the window of opportunity to pick up some good stuff is NOW.

But to be fair, this space is serverly overheated. I actually hope we can properly shake out all the weaklings who are investing purely based on technical analysis. Personally, I think TA is almost worthless in the crypto space. I'm looking to pick up stuff which I think are both good technology and good value.

Monday, June 26, 2017

Kraken Exchange: Part 1

Kraken is a well known exchange in the crypto world. On top of being one of the few big well-known names that does coin-crypto conversions, they have a lot more crosses (cryptos) that can be traded.

I thought that a Kraken account would take some time to verify. I read that it could take up to 4 weeks. It took just 10 days for me to reach Tier 3 verification!

I wasn't too shocked that my account was verified for basic Tier 1 (crypto-only) trading after 3 days. However, I was pretty surprised to it took only 2 more days to get Tier 2 verification ($2000 deposit limit) and even more surprised that 4 days after that I got Tier 3 verification ($25,000 deposit limit). Good job Kraken.

The MAIN plus point about Kraken is the large amount of crosses available to trade. Let me give some comparisons:

Coinhako (2): BTC/SGD, ETH/SGD
Coinbase (3): BTC/SGD, ETH/SGD, LTC/SGD

As for Kraken? HUGE. It has the obvious BTC/USD, ETH/USD and BTC/ETH crosses that Gemini has, but on top of that it has support for a lot of currencies in either BTC or USD as the base currency. This gives you direct access to some of the better, but less accessible currencies, such as:

DASH, ETC, LTC, XMR, ZEC and even DOGE. Yes, even DOGE.

This means that quite often you would be able to trade USD directly for these less popular cryptocurrencies, instead of going through an additional step and changing it into BTC.

While I am a long term believer of cryptos, I still prefer pricing in fiat, such as USD or SGD as compared to BTC. This is because I find that BTC is itself too volatile and just looking at BTC/whatever is not a good gauge for someone to decide if they should change more fiat into cryptos to take advantage of price weakness.

Kraken does have one particular issue which I am not sure how to get around. To fund them in USD, you need to send USD to their bank in Japan. I'm not sure how to do this properly and if remit will work, since the country is NOT USA, but Japan instead. I have a feeling that because of this, I will not be able to send over USD without incurring the normal extra charges for cable fees and such.

I will be trying to think of how I will tackle this, but this limitation seems like it will make Kraken not as useful as I thought it would be, especially if the only way I can fund it is through BTC from another exchange like Gemini. Or through USD, if I can figure out the exact charges that I will be having to pay. Kraken does looks like it would have no problems trading out the major cryptos into USD and then cashing out the amount in USD back to me.

While I will be thinking of where exactly Kraken will fit into my strategy, I am still happy to have it. It is always good to have extra options, especially in terms of cashing out. Most likely I will be using Gemini + Bittrex if there are no screw-ups by Gemini to receive money.

I'll be posting a part 2 when I eventually use Kraken for something, haha.

Does anyone have experience funding Kraken? How did you do it? I'm quite curious about the cash and work flow of other users when buying, trading and selling cryptocurrencies. Let me know in the comments below, or send me an email if you prefer!

Friday, June 23, 2017

Gemini Exchange: Part 1

As recommended by a reader, I went to read up about the Gemini Exchange.

It looked pretty good, and it's actually has very decent volumes. The three nicest things about them is that:

1) They explicitly accept Singapore customers (source)
2) They have zero transfer-in fees (source)
3) They have no deposit or withdrawal limits (source)

So far, so good, yeah?

I registered an account with them, was greeted with a nice clean UX and proceeded to do the verification process. 

I was expecting the verification process to take a few weeks, but I was pleasantly surprised that within a week I was notified that my account has been verified and that I'm good to go.

In preparation for possibly using US exchanges to buy digital currencies, I have opened by a DBS eMCA account (which took less than 6 hours to be approved!). However, I have since realized that I could also send USD directly from SGD just as easily and cheaply without an eMCA account. I suppose the main difference is that I get an extra step in between the transfer, which means that I don't have to immediately convert at spot rate, but I could "time" my SGD-USD conversions and possibly save a bit extra. A bit.

Anyway, today I remitted a small sum of money to test out the DBS remit function and also to test and see if the US exchange will be able to receive the USD without any problems.

Step 1: In Gemini, create an inward Wire Transfer transaction
Step 2: In DBS, remit money to the details shown in Gemini, not forgetting to put the memo
Step 3: Wait

The DBS rate compared to the mid market spot rate on XE was 0.67%. If everything is what I think it is, there should be no fees anywhere else, in which case 0.67% is very acceptable.

DBS claims same-day transfer if the transfer is made before 5.30pm (when I called up their hotline), while Gemini says same day or next day crediting if funds are received before 3pm ET, which is roughly 3am SG time.

Based on my hypothesis, since I have completed the transaction on DBS before 5.30pm, I am hopeful to be credited the amount in my Gemini account from 10pm onwards (slightly after the start of regular working hours) until 5am. In the worse case, it ought to be credited by the end of the next business day on their side, which is unfortunately Tuesday early morning, 5am. 

When the money gets credited, I'll execute trades and also withdraw the cryptocurrency. I'll post about that when it happens.

Thursday, June 22, 2017

Why GMGH Gives The Best Advice

Skepticism and independent thinking is dead.

I have recently joined several cryptocurrency chat groups on Telegram and 80% of the people are sheep following the 20% who bark out buy/sell orders and attach a picture with some shitty technical charts.

The amount of people not knowing what the flying fried fishsticks that they are doing is mind-boggling, amusing and scary, all at the same time.

Yes, you can make a shit ton of money from cryptos. Or stocks. Or bonds. Or whatever. You can also win a shit ton of money from winning the lottery.

But remember, nothing is without risk. Just because you don't see a risk, doesn't mean that there aren't any risks. Don't be an Ostrich.

Oh, and just because I have the opportunity to chip this in, don't forget to follow your dreams! Who knows? You might be the next Taylor Swift! /sarc

Tuesday, June 20, 2017

Investor's Insanity: Argentina's 100 Year Bonds

Argentina has joined the prestigious ranks of countries to issue 100 year bonds.

They just sold $2.75b USD worth of 100 year bonds at a 7.125% rate, and their subscription was 3.6X subscribed. 

Why is this considered insanity?

Because, HISTORY.

Let's see when and how many times Argentina has defaulted on bonds, and how much time between the last bond default, shall we?

(Source: Economist)

#1 - 1827 - no prior
#2 - 1890 - 63 years
#3 - 1951 - 61 years
#4 - 1956 - 5 years
#5 - 1982 - 26 years
#6 - 1989 - 7 years
#7 - 2002 - 13 years
#8 - 2014 - 12 years

Average time to default: 26 years
Median time to default: 13 years

(Source: World Economic Forum)

If we aren't at the cusp of madness yet, I am more than willing to be entertained to see what will top this insanity.

You don't need to trust me to know that this is not going to end well.