Wednesday, May 11, 2022

A LUNAtic is born !


Yesterday morning, the other Dr Wealth Crypto trainer messaged me on FB and told me of the depegging event for UST. I checked Yahoo Finance, and yes indeed, the worst has come to pass in the Cryptocurrency landscape. 

One of the most viral stablecoins UST has lost it's peg to the USD !

This depegging of UST from one USD is possibly the biggest event in crypto as it proves that algorithmic stablecoins are not exactly stable over the long term. I assessed the damage to my holdings. I lost about $5k from the entire depegging process in my $30k cryptocurrency account. It's a drop in the ocean because I was only ready to hit 1% of my assets in Crypto by the end of the year, so I have little skin in the game as of now.  While most of these losses are in UST Anchor protocol, it was my liquidity pools which took most of the damage. 

But there are reasons to celebrate:
  • A 30% drop in stablecoin value is no big deal compared to what tech investors are experiencing as of late, as a product of Singapore's education system, I know it's not important how well you fare, but also how badly others do.  No point in choosing to be a millionaire surrounded by billionaires.
  • Amazingly, collateral-backed stablecoins like USDT and USDC remained stable these few days, so at least the strategy of diversifying across stablecoins worked to mitigate losses for my students. I even expect some students to miss out on Anchor protocol because setup is so complicated.  
  • The third reason is LUNA :
When I backtested LUNA, I did not like what I saw because it was highly volatile, so formally, I don't teach my students to buy LUNA. Even if they do, it will be part of a bespoke index I build using software tools involving the largest non-stable coins. None of the software tools would have supported a buy since my first course was run in April. 

But, at the back of my head, I witnessed LUNA turn pals into multimillionaires because they got in at the right time. LUNAtics are the Insane Clown Posse of the crypto world, the crazies who follow Immortan Joe in Mad Max. Not everyone likes them in the crypto world because they can be quite religious when it comes to investing. 

LUNA is now trading below $15 when it was close to $100 weeks ago, so this morning, I took the plunge to become a LUNAtic myself! Of course I did not hold the LUNA as LUNA per se, I invested it into a bLUNA-LUNA pool for 80+% a year and a even put in spare change for a LUNA-UST pool for 1,060% p.a.

Want to go retard, go full retard all the way!

I bought about $1,000 worth of LUNA. If LUNA drops further to $5, I will buy $5,000 more. Of course, I will only buy LUNA with my dividend payouts from my REITs, and I will not sacrifice earned blood money on this. My trainer revenues will only be put in a diversified stablecoin portfolio.

At the end of the day, the entire algorithmic-based stablecoin regime may end in a few days time. Maybe after this, no one will back an ecosystem like Terra anymore, but there is also a reason to believe that even a salted fish can resurrect itself. I have no idea how the UST peg will restore itself, or whether LUNA will even climb back to $20. 

If it happens, it happens, and I will possibly make a decent amount out of this.

My crypto course will conduct a preview tonight. I hope to have a fun discussion about my latest moves on UST and LUNA. 

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