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🧠 If you’re a regular reader of Market Meditations, you might remember this quote:
“Charlie has the best 30-second mind in the world. He goes from A to Z in one move. He sees the essence of everything before you can even finish the sentence.” - Warren Buffet
It describes Charlie Munger, the vice chairman of Berkshire Hathaway, and one of the most successful investors in the world. He attributes his mental acuity to his mental models. We’ve discussed these in Part 1 and Part 2 of this series. Today, we share 3 more models.
🔥 We also share the hottest crypto market news, analysis and insights.
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⏰ In A Rush?
Here’s 5 things you need to know about the crypto markets today:
🇹🇷 Turkey’s crypto bill ready for parliament, says Deputy Minister of Finance
The legal draft places a minimum capital requirement for crypto businesses operating in Turkey.
🇺🇸 Biden Accuses Chinese State Actors of Ransomware
"Hackers with a history of working for the PRC Ministry of State Security (MSS) have engaged in ransomware attacks, cyber enabled extortion, crypto-jacking, and rank theft from victims around the world, all for financial gain," a White House press release said.
📹 Ethereum documentary featuring Vitalik Buterin raises $1.9M in 3 days
Slated to premiere in winter 2023, the film will approach Ethereum as an “infinite garden,” laying out its blockchain as a “decentralized ecosystem with soil, plants, and insects.”
🕹 Grayscale is launching an institutional-grade DeFi fund and index
Digital asset manager Grayscale Investments is launching a DeFi Fund and index, according to Grayscale CEO Michael Sonnenshein
🔥 Binance Burns Almost $400 Million Worth of BNB
One of the most highly anticipated events in the Binance community is the quarterly burn of Binance Coin (BNB). This time around, the company burned almost $400 million worth of it.
Our Market Meditations are longer format educational segments. Each letter features a Market Meditation which will deep dive and analyse a relevant crypto event, theme or tool.
💡 Mental Models: Part 3
1️⃣ Independent Thinking.
In a world where incentives rule, it is critical to think independently. Other people may not be incentivized to protect your best interests. In particular, you should always fear professional advice when it is good for the advisor. Your favourite twitter account may criticise a project but perhaps you should view that criticism with caution if you know they are a founding member of a competitor project. It suits them to turn you against a competitor! In investing, independent thinking is often referred to as contrarianism. It is the best way to protect yourself. Curiosity was praised when we were younger. We always asked: Why? This is the most important question of all. It is relevant to the entire human experience. It’s time to ask why again! Do not just believe what you hear or read.
We come across many people who believe they require extreme skill or knowledge to do well in investing. Actually, sometimes a simple buy and hold strategy can outperform an elaborate and time consuming scalping schedule. The degree of difficulty varies but sometimes the reward doesn’t! To quote Munger: “if our predictions have been a little better than other people’s, it’s likely because we make fewer of them”. It is sufficient to take a simple idea but take it very seriously. For instance, create a simple DCA strategy but stick to it very strictly.
3️⃣ Opportunity Costs.
Resources are finite. Therefore whenever you decide to spend time or money on something, you are forgoing other opportunities. Not all choices are equal and sometimes your resources are better used elsewhere. When it comes to investing, Munger imagined a ‘measuring stick’. A baseline return he could obtain from an investment. Every new investment opportunity that didn’t meet that baseline was disregarded. For instance, imagine you have found a passive income strategy where you earn 5% APY a year. Why then, would you consider a more risky investment than only yields 4% APY? Your money is finite and your opportunity cost is an extra 1% APY. Always be aware of the opportunities at hand and the sacrifices that come with every decision you make.
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🤫 Anthony Di Iorio is Leaving Crypto
Late last Friday, it was reported that Anthony Di Iorio, co-founder of Ethereum, would be stepping away from crypto partially due to safety concerns.
Though Ethereum is most closely connected with Vitalik Buterin, Di Iorio was actually one of the original 5 co-founders. Di Iorio proceeded to his own project -Decentral - which he is currently selling. Decentral is an innovation hub and software development company, which also serves as a wallet and crypto service that was founded in 2014.
Some are questioning whether or not Di Iorio is truly leaving the crypto space as a whole or whether he is simply taking a back step from being in the limelight.
When he mentioned that he was selling Decentral, he also said he was selling it for fiat currency or a stake in another business. This leads us to believe that he is in fact leaving crypto, at least for the meantime.
🌐 What does this mean for Ethereum? Probably not too much. Vitalik Buterin carries confidence with regards to the quality of the team behind the project. As for the prospects of ETH itself, the planned EIP-1559 upgrade excitement far overshadows any FUD from this headline.
👉 For more on assessing the quality of a team, check out our letter: Project & Financial Metrics
👉 For more on the EIP-1559 update and what it means for Ethereum investors, traders and HODLers check out last week’s newsletter.
On Mondays, our ‘Scan The Week’ section is designed to show our community what events and headlines we will be keeping an eye on.
Monday 19th July
Tuesday 20th July
Wednesday 21st July
🤫 “The B Word” Launch
The B Word is a Bitcoin focused initiative that aims to demystify and destigmatize mainstream narratives about Bitcoin, explain how institutions can and should embrace it, and raise awareness around areas of the network that need support. Featuring speakers such as Cathie Wood and Jack Dorsey.
🌐 Ethereum Classic Magneto Upgrade
Magneto is inclusive of the Ethereum Berlin upgrade which contains a series of EIPs optimizing gas and transactions which have implied security enhancements important for the network.
Friday 23rd July
🏆 REDeFiNE TOMORROW 2021
2-Day Global DeFi & Blockchain Virtual Summit featuring speakers such as Sam Bankman-Fried (FTX), Changpeng Zhao (Binance), and Anatoly Yakovenko (Solana)
Not financial or tax advice. The content in this newsletter is for informational purposes only. Nothing in this email is intended to serve as financial advice. We are not financial advisors. Every investment and trading move involves risk. Do your own research when making a decision. See our important security disclaimers here.
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