Inflation, crypto bank run and investment updates

I am finally back again after a 3 months blog hiatus. Not crushed or lost in space. I have started lately on a regular 35-hr work week and on my rest days I was preoccupied with taking care of family, household chores, going out with friends, reading novels and basically chilling. No inspiring topic here, just some quick updates.

Inflation

Despite most impacted by the rise in food prices, in terms of household expenses inflation, my family managed to get by comfortably enough on tingkat and homecook food.

My next highest personal expenditure, after transportation, is meal-out with friends. With my regular work hours, income level has improved with slight sacrifice in terms of energy level. So I figured it justifies having those $20-per-pax dinners occasionally. 

I am made poorer too by my favourite eat-out food that have gone up in price by 10% or more! Mcd FOF meal $5 --> $5.80, Stuff'd chicken burrito $7.30 -> $8.10, Subway value meal $5.90 -> $6.50. T.T

Currently going on overseas trips is out of picture for me as my family can't travel. This would be forced savings for me till the situation changes. Thus as of now my saving rate has not been much affected (earn more, spend more).

Crypto bank run


After the Luna crash event and seeing that enough media talked about it, I don't see any need for my further analysis on why it was inherently doomed to fail. The ideal of an algorithmic stablecoin was good, the chain was good, but eventually it chose to open up its encapsulated "economy" and ironically gave rise to an exploit opportunity. The moment its main pillar of support (UST) collapsed, the downward spiral began and we saw the fall that shook the whole crypto space, leaving bitter taste for all its stakeholders.


Even though I wasn't impacted by that, little did I expect that this earthquake's ripple effect caused many crypto lending institutions to run into such a bad cashflow crisis (either from bank run or funds mismanagement) that they have to resort to freezing their depositors' withdrawal. The latest one being Hodlnaut. Celsius has filed for bankruptcy a couple of months back and left much uncertainty for its depositors. Many depositors' woes are seen on the court docket. Actually from Celsius first announcement of its bankruptcy, it should have rung the alarm bell on what other institutions might be getting into.

For Defi, at least things are relatively transparent on-chain, as long as we understand how the protocol works. Once crypto goes into a Cefi fund, everything becomes murky as we don't know what these people are actually engaging in behind the scene, how the fund gets deployed and the true balance sheet. There's no annual report, audit or any official accountability for the crypto funds handled by these firms , which should have been a big red flag. License to operate = license for assets management? No, they are not regulated like banks although in principle they function almost like one.

Here's a reply I got from Stretto when I enquired about how I can file for claims regarding my deposits.


That is almost half my crypto assets in write-off state until further notice. Looks pretty hopeless.

Investment updates

My crypto portfolio (investments to Cefi savings turned wrong) suffered a major dent as a result of the above. US stocks and options trading which was profitable at the start of the year took a downturn as I made some bad trading decisions amidst unstable market swings, I changed my strategy to slowly recuperate. Endowus investments are flops too, even the cash smart funds are currently in red, so I have stopped my DCA.

The only lovely green is my SG portfolio, which fortunately is my biggest investment portfolio. The main purpose of building it is to receive regular dividend payouts. I am waiting to divest some rotten eggs, hopefully before recession hits.

I am not sure whether I should classify SSB as an investment or saving. I have recently restarted contributing to it. Last month it sees a record high rate of 3% and this month is 2.8%, beating banks' FD rates. A quick tip - redeemed SSB is counted as Income category in the DBS Multiplier account.

Risk management

A relook at my previous post here, I literally stepped on my own toes because I have 1) failed to harvest enough in the bull cycle driven by greed and 2) failed to diversify enough in terms of platform risk. 

Yeah painful lesson learnt. 

The saying "not your key, not your crypto" is not to be lightly taken. My vigilance to danger had been lacking here, I was over-confident that things would work out. Although I have always been skeptical on all those shillings and recommendations, I have not dug deep enough.

Still, I think crypto is not a lost cause. But given the current climate it will take time for confidence to restore and innovation in the space to re-ignite. All eyes on upcoming Ethereum merger.



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