Turning $495 Into Almost $20K in a Single Day

Welcome to our first weekly digest!  

This is a new concept I’m trying out as we embark on this era of Field Notes and the Global Intelligence Letter.  

In these letters every Sunday, I plan to offer a summary and some updates on the letters I sent to you during the previous week; discuss some tidbits from the news that captured my attention recently; and give you an update on what’s coming up in our publications.  

These won’t be complete stories or fully formed ideas, as with my Field Notes dispatches and the monthly Global Intelligence Letter. 

Rather, think of them as my way of providing you with a behind-the-scenes look at what we’re thinking about, talking about, and planning to bring to you in the Global Intelligence world in the weeks and months ahead. 

With that introduction out of the way, I want to kick off this inaugural edition of the Weekly Digest by telling you about a website called PolkaStarter. It’s where new projects for a cryptocurrency network called PolkaDot get their public bootstrapping—the early funding they need to get off the ground. Think of it as a version of Wall Street’s seed-capital round of investing or, maybe, an IPO. 

This Wednesday, I tried but failed to get into bootstrapping for the Kylin Network (KYL). (Getting in is a lottery—there are more applicants than available spots.) But get this: The folks who made the whitelist of approved early buyers were able to buy a max of $495 worth of KYL at $0.05 per coin. Then, the coin hit $2 in early trading. So, let’s do a quick bit of math: Spend $495…make $19,800 in less than a day. That’s a return on investment of 3,900%!  

I’m pointing this out not to claim that such returns happen with every bootstrapping effort; they don’t. I’m pointing this out because I want you to feel excited about what’s going on in crypto and to embrace this once-in-a-species financial revolution before it truly goes mainstream.  

Crypto is so much more than bitcoin. And that other side of crypto—a side that has untold numbers of commercial, consumer, and financial uses—is racing higher at a pace far, far faster than bitcoin. That side of crypto is our future taking shape. It is going to change our world, as surely as the printing press, the lightbulb, the automobile, and the internet did. That was the topic of my Tuesday mailing to you. As I noted in that letter:  

I write to you a lot about crypto these days, and I do so for an important reason: Wealth preservation and the opportunity to build financial freedom into your many tomorrows. Crypto is here to stay and, like Dr. Strangelove, the sooner you stop worrying, the sooner you’ll learn to love the bomb. And crypto is definitely going to bomb your landscape. 

While crypto is an investment opportunity (albeit a risky one, depending on what you own), there is so much more at stake: The future of, well, just about everything.  

Bootstrapping in the crypto realm is a topic I’ll be talking about more in the months ahead. In the meantime, I hope you found my Tuesday mailing helpful in getting a handle on the crypto space, and don’t worry if you still find all of this a tad mind-boggling.  

Right now, I’m also working on a project to create no-nonsense guides to buying bitcoin and earning 8% to 10% interest on completely safe, stable cryptos—something called decentralized finance. Stay tuned for those… 

*** 

Speaking of digital currencies, the electronic version of the Chinese yuan is now being tested by members of the public in Beijing, Shanghai, and other major cities.  

China began testing the currency last year in smaller cities. The expansion of public testing to its major financial centers marks a bold new step in the digital yuan’s development. Participants in this new round of testing won a lottery to get some of the national digital currency, receiving 200 electronic Chinese yuan, or e-CNY, to spend. That’s about $30. They were able to spend it by opening an app on their phone and showing clerks at stores a QR code, like a barcode, which is simply scanned to deduct payment. 

China is further along than any other world power in the creation of a national digital currency. And that’s more important than it might seem. A successful digital currency could very well help China gain a much larger slice of the reserve currency market globally. That’s because a digital currency does away with all the fees and time hassles and whatnot that exist when trading fiat currencies like the regular dollar, euro, and yuan. And it simplifies trade immensely, which would, again, give the e-CNY a leg up on the greenback. 

It’s little surprise really that China is leading this race, given its propensity to want to closely monitor everything its citizens do. National digital currencies, including those planned in Europe and the U.S., will be centrally managed, unlike cryptocurrencies like bitcoin, which are designed to be decentralized so no government or individual can control them. So, digital currencies would allow governments to record every single financial transaction its citizens make. In the years ahead, we won’t be able to buy so much as a coffee without our government knowing about it. 

Whatever you think of this Orwellian-sounding future, this is the way money is moving, which is why I like having some of my cash outside of the mainstream financial system in bitcoin, et al. 

*** 

It may not be making headlines, but the Reddit-powered uprising against Wall Street is far from over. 

Quick backstory: On Reddit, a social media-style news aggregation site, there’s a thread called WallStreetBets, or WSB. For various reasons, WSB began attacking Wall Street’s short-sellers, the investors who bet that a company is going down for legitimate reasons ranging from over-valuation to failing business models. WSB members did this by pouring money into heavily shorted stocks. The big early targets were GameStop and the AMC cinema chain, with the former rocketing over 1,700% thanks to this retail investor revolution. 

Short-sellers are some of the smartest investors on Wall Street. And yet the shorts, as they’re called, got schooled by a bunch of millennials and Gen Z investors. Two hedge funds nearly collapsed. 

Well, this week, the target for these insurgent investors was Rocket, the parent company of Quicken Loans. Between the end of last week and the middle of this one, shares surged 28% and trading of the stock was halted several times due to its extreme volatility. 

I have two big takeaways from this: First, this kind of “manipulation” is difficult, if not impossible to stop given the ways our markets operate, so my feeling is that we’re at the beginning of something much bigger. What will happen if—or more likely, when—this practice of mass-targeted retail investing evolves beyond a group on Reddit? (I used quotes on “manipulation” because this is basically the same thing big funds have been getting away with for generations.) 

Second, it highlights the need to have some of our wealth in alternative assets. The market is untethered from reality right now, and not just because shorts are getting schooled by Redditors. We’re entering a period of high volatility fueled by lunacy. So, the smart strategy is to put part of your nest egg in gold, cryptos, and safe-haven currencies.  

*** 

On a completely different topic, the other big thing on my mind this week is expat life.  

As I am (probably too) quick to point out, I absolutely love living in Prague, and particularly at this time of year. Call me perverse if you like, but I adore the snow, and lately the city has been a winter wonderland of brilliant white.  

 
Prague in winter… 

The snow is not the reason I’m particularly pleased with expat life at present, however. That’s my taxes. Like you, I’m in the midst of tax season, but thankfully, as an expat, it’s not the source of stress it used to be.  

Since I live overseas, I benefit from the Foreign Earned Income Exclusion that allows me to exclude about $108,000 of my earnings from my personal taxes in the U.S. Overall, living in the Czech Republic, my taxes are significantly easier to file and my tax bill is vastly lower than in the U.S., something I wrote to you about last Saturday.  

The other reason expat life is on my mind is International Living’s upcoming Ultimate Escape Overseas Event. 

I’m a regular speaker at IL’s events, and honestly, I love taking part. My role is discussing the nuts and bolts of managing your money when you’re living abroad, sharing insights about earning overseas, and spotlighting the best destinations for digital nomads. 

To be frank, preparing for these events is no picnic. I can tell you from experience that I and the other speakers put in a huge amount of work behind the scenes to ensure all the information we provide is as clear and up-to-date as possible…no simple task in a world where visa options are constantly in flux. Just recently, for instance, Argentina and Croatia announced new one-year digital nomad visas. (Check my mailing on Thursday for my take on Argentina’s new offering.) 

If you have an inkling that you might enjoy the expat life, I invite you to check out the details of the event. I learned from firsthand experience that navigating the initial stages of the expat experience can be tricky, but I also know the incredible benefits—both emotional and financial—that the expat life can bring once you traverse that early, bureaucracy-filled phase of moving overseas. I mean, just this past week my local accountant emailed me my completed tax returns. I owe money, but I actually smiled because it was so much less than I was paying in the States. 

I encourage anyone reading these words to follow in my footsteps by moving overseas, even if it’s only for a year or two. You won’t regret it. More likely, you’ll love the experience so much that you want to make it permanent. 

That brings me to the conclusion of this inaugural edition of our Weekly Digest. I hope you found it helpful and if you have any feedback on the format, send me an email anytime at jopdyke@globalintelligenceletter.com.