Price is down. It sucks. But ultimately I'm in this space because crypto is one of the great experiments in human history and I don't want to miss a second of it.
It may sound unrelated, but last time I felt a magical moment like that was in 2001 when China joined WTO.
I was in school and went to a party at a professor's where we gathered to watch the WTO ceremony on TV.
I remember biking back to dorm after midnight in freezing wind of Beijing winter, yet didn't feel cold at all cuz I was running on the high of having just witnessed history.
China took off soon after and became one of the greatest economic miracles in modern time.
Why am I telling you this?
Cuz it may seem that most analysis I write on crypto is quite cerebral. But TBH my conviction mostly doesn't come from logic, which has no imagination.
It comes from the intuition deep down that I can't articulate, yet it somehow knows something is world changing way before my small left brain can pick it up.
The analysis etc only comes after.
If you're feeling depressed about ST market movements, I suggest you look for your own magical epiphanies.
Either that, or take the left-brain approach--do extensive research to arrive at your own conclusion about the space.
Cuz at the end of day your conviction has to build on something deeper than an up-only price history or some influencers' propaganda on twitter.
Otherwise you'd likely buy/sell at the worst time.
There're a lot of shit, scams, fads, and stupidity in crypto. And being world changing is not for the faint of heart. It'll be a bumpy road. And if you don't create your own conviction, you're not gonna enjoy this ride.
And quit looking to some crypto gurus to give price predictions. Those are no more than comfort food for your scared inner child.
Those people don't know more than you if you put in the time to learn. It's a new space. There's no experts.
If countries are stocks, which ones should you long & which to short?
I used machine learning to grade the industrial health of 190 countries over 30 years. Here’re results on China, US, India & more.
See which countries I’m bullish & bearish about for the next decade 👇
First, a word on how this is done.
My coauthor (Xuege Zhang of Carnegie Mellon) & I used ML algorithm to figure out which products each country should export, given the country’s unique combo of traits. (full paper linked at the end if you’re curious).
We then check if a country is indeed exporting what it should. Each country gets a “health score” of their export portfolio every year. It measures the similarity btw actual exports and algorithm’s recommendations:
People angry about a jpeg 🖼 selling for $1 mn fail to see the big picture.
If you understand the nature of assets & long-term macro backdrop, it’s easy to see why NFTs will grow exponentially.
Here’s a simple framework to help wrap your head around this new asset class.
WHAT ARE ASSETS?
They are instruments to transfer ownership of value across time and space.
Your Amazon stock is ownership on Amazon future earnings. Your ounce of gold is ownership of $1830 (today’s gold price) worth of economic output— you can use it to claim a share of today’s GDP by, say, using your gold to buy some groceries.
If you mint a NFT based on a physical asset, e.g. a 💎 , how much should it be worth?
It seems a complex question, but is actually easy to answer w/ classical asset pricing principles.
Let’s see how to set a floor price for my diamond NFT & learn some asset pricing methods 👇
For background, I’m doing a destroyed-diamond NFT experiment, where I buy a real diamond—> create an associated NFT—> destroy the diamond—> sell the NFT.
So I tried to convince my mother (accountant w/ 30 yr experience) that NFT is a better asset than diamond.
Did I succeed? Let’s find out 👇
First off, if you’re out of loop, this all started b/c I’m doing an experiment inspired by all the brilliant comments people made on this tweet of mine:
I decided to buy a real diamond, create an associated NFT, destroy the diamond, and see if the NFT retains value. I told my mother about this on the phone. Like everyone else, she immediately went— this is crazy.
Ok, you've all convinced me this is an experiment that needs to be done. So here's the deal.
I'm going to buy a real diamond--> create a NFT for it--> list it on @opensea--> destroy the original diamond. I'll ping this tweet on my profile so you can track progress.