Messari Daily Brief Feb. 3, 2021 - The Penalty for Envy is Higher Taxes

I'm a big fan of Berkshire Hathaway’s Charlie Munger, and you should be, too. His witticisms offer a gold mine of insights for investors (crypto skepticism not withstanding), and I’ve written about Poor Charlie’s Almanack before. There’s also a Twitter bot with some of his best Mungerisms, and it spit out a great one yesterday:

"The idea of caring that someone is making money faster [than you are] is one of the deadly sins. Envy is a really stupid sin because it's the only one you could never possibly have any fun at. There's a lot of pain and no fun. Why would you want to get on that trolley?"

Timely! And it reminds me of one of crypto’s most famous NYT headlines from the last bull market: “Everyone is getting hilariously rich and you’re not.” With alts rallying by multiples in mere weeks, Ethereum breaking all time highs, and seed valuations getting bid up ridiculously, it’s easy to start flitting between trades, and lament your mere 100% returns last quarter.

Don’t.

I’ve learned three things from living through multiple crypto market cycles. 1) We’re all going to make it, fam. 2) A lot of dipshits are going to make a lot more money than you with much less effort, and no one cares. 3) Envy will make you do stupid things like trade out of good positions and realize ordinary gains. Which means that even when you make money gross, you lose money net. Best to keep a cleanly segregated reserve (BTC), high yield account (ETH), and speculative portfolio (alts), and ramp up holding times unless you are a professional trader. And to track your accrued tax liabilities trade-by-trade.

The penalty for crypto envy (and frequent trading) tends to be much, much higher taxes, and shorter stacks.

Headlines that matter:

• INTEL: Ren, Balancer, Celo, Cardano, Flow, YFI, Synthetix (+ 20 updates)
• Visa launches API Pilot with Anchorage targeting bank bitcoin customers (CoinDesk)
• Capital markets-focused Axoni raises $31 million from Deutsche Bank, UBS (The Block)
• Jeff Bezos letter to employees: "It remains Day 1." (Amazon)
• The Ren development team is joining Alameda
• A CBOE exec lays out the likely path to a bitcoin ETF (The Block)
• Balancer v2: Generalized AMMs
• Goldfinch: Crypto loans without collateral
• NYMag profile on FTX’s Sam Bankman-Fried (NYMag)
• Daily Shade: Someone will always be getting richer faster than you. This is not a tragedy.