This week was especially eventful.
Item #1: Bitcoin crashes intraday on Friday on news of a possible DOJ investigation into Tether:
As you can see, BTC crashed.
My bitcoin shorting method specifically shorts Bitcoin when the stock market is open. This takes advantage of the tendency of whales to liquidate, and for bad news or rumors to drop during market hours.
The U.S. government always drops bad news on the weekdays, when the stock market is open. They are not going to drop bad news on the weekends, when offices are closed. This asymmetry of bad news allows my method to profit. Government and hedge funds also take advantage of the increased liquidity during market hours to sell, also when government offices are open. The FTX bankruptcy also occurred when the market was open and I profited from that as well when Bitcoin plunged 10% intraday and I was short. (I figured all this out over a year ago. When people say IQ does not matter, point to this.)
The nice thing about my method is that the actual price of Bitcoin is irrelevant; I profit from the differential of having shorted it at the open and closing the position at a lower price at the close, whether at $60k or $20k. I think long-term it still goes to $20k, but I will likely profit even if it goes to $70k. Good news can also drop, but there is a major asymmetry favoring bad news and liquidations, and consequently sudden drops of the Bitcoin price.
It also shows why Bitcoin is an inferior investment compared to tech stocks, in which investors do not have to worry about these regulatory risks (except for antitrust, which is a slow, drawn-out process and this can be mitigated with diversification). QQQ has far outperformed Bitcoin even as far back as 2020.
Item #2: Tesla stock surges on earnings.
Tesla stock rocketed 25% in the span of just 2 days on earnings. I still own Tesla stock, specifically a leveraged ETF tied to it, so I made a lot of money on that, but my stake is not as big as it was last year, as I sold some to replace with other tech stocks like Nvidia and Meta.
Item #3: A big week for Elon and Trump.
Elon and Trump are leading America to the future. This is along with Zuckerberg, Bezos, and other billionaires, but Trump and Elon are in the spotlight now. This agree with my thesis about the era of billionaires, as filling the void the decline of cultural and government institutions. I argue that this turning point occurred around 2010 with Obamacare, the last wide-sweeping social program. Trust in governments and cultural institutions are at all-time lows.
People can relate to Trump and Musk, who are perceived as more effective, competent, and extemporaneous/unscripted, compared to Harris, who cannot even give an interview or a townhall meeting unless the questions are pre-screened. For example, last night Trump went on a 3-hour interview with Joe Rogan.
Speaking of relatable, it’s weird, but in a good way, reading some account on Twitter and then seeing a reply by Musk as if he’s a normal person just dropping in, only it’s also the richest person in the world and the owner of the site. It reminds me of the days when you could literally email Bill Gates or Steve Jobs at their respective domains and get a personalized response. Elon has the pulse on some of the rationalist or heterodox communities. He is familiar with all the bigger names like Moldbug, but also smaller ones. This seems like a huge opportunity that if anything is being underutilized.
Item #4: DJT stock keeps going up: right again.
What a perfect v-shaped recovery off the lows, similar to Meta in early 2023:
As I said in my last week article, when DJT was at $30, DJT benefits from free advertising and instant adoption just from Trump existing. He can launch a platform or service and then instant adoption, with nearly 100% gross margins. This is confirmed by the 10-Q which shows that Truth Social has gross profits of around 100%:
What is remarkable is how I am able to predict so many concurrent trends, even when they are at odds with each other, like DJT rising and Bitcoin falling. The assumption has been that DJT and Bitcoin are highly correlated due to the latter presumably benefiting from a Trump win, but we can clearly see that they have diverged, with Bitcoin crashing this week and DJT stock keep going up. This is consistent with my thesis that Bitcoin is a worse investment and that DJT benefits from free advertising, independent of Trump’s odds.
Even if Trump does win, he won’t do much to help Bitcoin. Elon and Trump think crypto is a joke, but are happy to accept your crypto donations. Trump signaling being ‘pro crypto’ just pandering for votes and donations. Existing crypto regulation will stay in place or tighten regardless of who wins.
I got into a debate with someone on Motte last week about DJT. The topic was that DJT had lost $19 million last quarter to develop a streaming service and on legal expenses, but upon closer inspection, these are one-time expenses (or it’s reasonable to assume they will not be recurring).
It’s not like DJT is expected to develop a new streaming platform every quarter, or have to pay the same legal expenses every quarter. The streaming platform is the second major product unveiling since Truth Social, which is already 2 years old. The legal expenses are related to Trump Media’s merger, which is also likely not a recurring expense. If this were $19 million in advertising to promote Truth Social, then this would be a much worse situation, as it’s understood to be recurring. Similar newly-public tech companies such as Twitter and Uber also had large legal expenses after going public, but these proved temporary even if a lot of money at the time.
Item #5 Weight-loss drugs didn’t curb health costs within two years:
Over the two-year period, the analysis found “no reduction in obesity-related medical events,” such as heart attacks, strokes and diagnoses of type 2 diabetes, or use of prescription drugs for hypertension and high cholesterol, compared to the control group.
This agrees with what I wrote earlier. Universal GLP-1 drug coverage is effectively double-spending: first for the drugs, and then the usual health expenses on top of that. They do not sufficiently reduce the incidence of disease to recoup their cost. I fully support GLP-1 weight-loss drugs as a personal choice to lose weight, owing to the poor success rate of dieting. But they are not a panacea to healthcare spending as widely touted, or at least not until they go generic.