They say things come full circle, and my journey through crypto – dictated by rapidly changing circumstances - has done just this…to a very happy position, that I look forward to holding for the rest of my investment career!
When I started investing in Bitcoin in January 2016 (excluding the ONE BTC I lost at Mt Gox), I believed ONLY in Bitcoin. I had learned hard lessons in the Precious Metals industry over nearly 15 years, of the dangers of mining stocks versus bullion, and was not about to repeat it here.
To wit, I gave up mining stocks for bullion, after a mostly down rollercoaster ride starting in 2002, in summer 2011. The reward/risk profile, I had learned, was clearly better for bullion; and in crypto, there weren’t even any material alts (other than Litecoin) to speak of. So, those who read my articles then – in January 2016 to August 2017, whilst still Marketing Director of Miles Franklin; and September 2017 on, upon launching CGC; knew me to be as close to a maximalist as one could get.
I was never against altcoins per se - and as early as September 2017, said trillions of dollars would enter the crypto space, perhaps half in altcoins. However, with the exception of the 5% position in Litecoin I took in Spring 2017, I never owned an altcoin until I received FREE Bitcoin Rhodium in its January 2018 airdrop. And FYI, I very publicly sold the Litecoin the day Bitcoin Segwit locked in in July 2017 – when I realized LTC was no longer needed as a “testnet,” nor would ever receive cryptodividends like (as was coming at the time) BCash.
Though not on the Bitcoin Rhodium team, I became well-known for marketing it – because I BELIEVED it had found a viable, defensible niche in the crypto store-of-value space. I put my heart and soul into it for two years, and met some fantastic people in the BRhodium community. This, whilst I still held all my Bitcoin – with BRhodium being a high potential, but low value coin.
Everything about crypto is novel - and often, as we learned this month, scary. Thus, given my personal reward/risk situation, I took the prudent action of selling my BTC - again, well publicized – when the Hoffman Line (then, $6,000) broke in November 2018, leaving me with only my BRhodium position and a lot of cash.
My experience building BRhodium’s community was difficult and terrifying, but several times during 2019 it appeared to be gaining momentum – three times rising to a market cap above $30 million, the last during the big summer 2019 altcoin echo-bubble.
However, through crypto’s subsequent bear, bull, bear, bull, and now bear market phases, it became increasingly clear an XRC network effect wasn’t going to be achieved. Thus, I sold my position in late 2019, and helped everyone I could to do the same.
At the same time, I was slowly rebuilding my BTC position; as after seeing how it reacted after I sold it – let alone, with the halving approaching; I felt renewed confidence in its future. This, as I spent most of my time marketing MWC, a promising coin that was the ONLY one I accepted an invitation to work with.
When MWC launched in November 2019, I was very proud. Roughly 1% of the BTC community had claimed it (including, no doubt, Trace Mayer) – and during the initial post-airdrop dump, I and clients bought massive amounts for next to nothing. I couldn’t be more excited about MimbleWimble technology, or MWC’s future.
Then, the mixed blessing known as “airdrop luigi” entered, buying up every MWC he could find - and supporting mining through the early hash rate attacks that nearly shut the coin down, and caused so much damage (and STRESS) at HotBit. Which, I might add, is an excellent exchange, that was not ready to deal with a coin that was maliciously attacked four times in its first two months of existence.
Luigi not only provided windfall profits to everyone in the coin, but did so whilst aggressively bidding up the price. To this day, I don’t know why he employed such a reckless, wasteful strategy – be it to convince others the coin was valuable, or because he thought it the only way to build a position significant enough to generate alpha for the crypto fund he clearly represented.
Either way, particularly given the coin’s increasingly dangerous hash rate situation (which remains today), I was not about to look a gift horse in the mouth. Such gift horses rarely occur in the financial world – let alone, in tiny altcoins, during an altcoin bear market. Thanks to Luigi, I fully rebuilt my BTC position, and generated huge profits for all that followed my advice – as I ASSURE you, once he stops buying (which I believe he is in the process of doing now), liquidity will drop to nearly zero; and likely, the price, too.
In BRhodium’s case, its team did everything the RIGHT way; as opposed to MWC, whose team followed the marching orders of its Wall Street funded leader. BRhodium’s organic attempt to build community failed miserably, whilst Luigi’s attempt to BUY network effect is already fading – and once he stops supporting its price (he easily owns 35% of supply; hash rate (he’s bought significant future production from miners); and policy (he forced the devs to change the emission rate) 24/7; as he has since day one - MWC will likely fade into oblivion, too.
However, unlike XRC, its holders will have been rewarded for the FREE MWC they received; or next to nothing MWC I told them to buy early on; with perhaps 2,000+ BTC of Luigi’s fund’s money, at comically exorbitant prices!
As I wrote in my “Altcoin State of the Union” earlier this month, ONLY coins with defensible use cases, decentralization, liquidity, and network effect will retain value during the coming, Bitcoin-focused crypto bull market. Not that this is something I haven’t said MANY times before. However, given what I have personally experienced, particularly through my involvement in XRC and MWC, I believe this more strongly than ever.
To that end, I no longer believe ANY coin can succeed as a “store of value” alternative to Bitcoin – though there will always be a handful of useless coins with modest valuations, like Litecoin…which at least is decentralized and liquid, with a sustainable network effect.
As for MWC, Lead Dev Chris Gilliard believed from day one it could be a monetary asset - which Trace Mayer mirrored when shamelessly pump his free airdrop coins last month. However, despite my strong belief in MimbleWimble technology - given its superior scalability, privacy, and fungibility to current blockchain protocols - I never agreed with this view; instead, considering MWC a technology play with the potential to hedge Bitcoin holders against the possibility of MimbleWimble disruption.
Today, I more strongly than ever disagree with Chris’ assertion – particularly now that MWC has been taken over by ONE investor, with no liquidity, hash rate, or network effect. Nor do I believe MimbleWimble can ever disrupt Bitcoin – which itself will become more private and fungible on its own; and potentially scalable, if the Lightning Network ever reaches its full potential.
Moreover, Bitcoin doesn’t NEED to scale to Visa levels, as it is primarily a store of value asset – and frankly, if investors are THAT interested in privacy, Monero is better than MimbleWimble, and already has liquidity and a network effect. Again, if one is principally focused on privacy, scalability matters not – and the likelihood a tiny, centralized MimbleWimble coin grows larger than Monero are slim to none.
As for the other MimbleWimble coins, I have made it clear that Grin is uninvestable, and Beam the superior coin. All have been destroyed in the recent crypto purge, so I view Beam (and yes Grin, too) as having extremely strong reward/risk profiles in the current environment.
However, when I saw the Coronavirus panic start to spread earlier this week, it dawned on me that even Beam’s strong liquidity paled relative to my personal financial needs. This, atop my increasingly strong view that MimbleWimble will NOT disrupt Bitcoin in any way, led to my selling it earlier this week for BTC; thus, bringing me full circle, to a fully-restored, 100% BTC position.
Once the current liquidity panic subsides – as put beautifully last night by Anthony Pompliano - I expect a raging crypto bull market catalyzed by the Bitcoin halving…which may or may not feature rising Bitcoin dominance.
https://twitter.com/Andy_Hoffman_CG/status/1238279425365405697
- Andy_Hoffman_CG
Either way, after all I have been through, I am thrilled to have come full circle to Bitcoin. Not only am I better positioned than BEFORE I sold in November 2018, but my experiences since have solidified my instincts about Bitcoin’s absolute value, and value relative to altcoins.