Résumé
Competition, the drive for efficiency, and continuous improvement ultimately push businesses toward automation and later towards autonomy. If a business can operate without human intervention, it will minimize its operational cost. If Uber can remove the expense of a driver with an autonomous vehicle, it will provide its service cheaper than a competitor who can't. If an artificially intelligent trading company can search, find, and take advantage of some arbitrage opportunity, then it can profit where its competitors cannot. A business that can analyze and execute in real-time without needing to wait for a human to act, is a business that will be able to take advantage of brief inefficiencies from other markets or businesses.
This trend following a thesis that is based on 100 years of proven economic theory. Short-wave economic cycles, those 5- to 10-year cycles, are driven by credit but the long-wave economic cycles, those 50- to 60-year cycles, are driven by technological revolution. We've had 5 cycles over the past 200 years with the last wave, the Age of Information & Telecommunications.
We've seen evidence that a new cycle has begun. Technological revolutions come by way of a cluster of new innovations. About a decade ago, you started to see AI, robotics and IoT (sensors) delivering on automation. That's been powerful, but not transformational. It does not force businesses to fundamentally change how they do business. The last piece of the puzzle was cryptocurrency because it allows us to process and transfer economic value without human intervention. Soon, there will be a global race to build autonomous operations. Businesses and organizations without autonomous operations simply will not be able to compete with those that do because ... autonomy is the ultimate competitive advantage.
Crypto is the mechanism that will accrue value from being the infrastructure for the next digital financial revolution. Crypto Asset Investing lays out a case that we've begun a new technological revolution similar to the Internet Age of the 1990's. Artificial intelligence, the Internet of Things, robotics and cryptocurrency are converging to deliver on a new age, what I call the Age of Autonomy. Understanding the transformation that's taken place before anyone else can yield enormous investment opportunity. In this book, you'll learn how and why to invest in crypto assets.Acknowledgments
Author's Note
Comp: Please update folios
Introduction - Why This Book and Now
We Are Marching Toward Two Worlds
Where We Are in the Current Economic Cycle
Investing in the New Technological Revolution
The Push Toward Autonomy
Innovations That Make the Age of Autonomy Possible
The Age of Autonomy - Welcome to the Future
The Ideal Investment Profile
Investing in Crypto Assets in the Age of Autonomy
Putting It All Together
Part I: The History of Economic Cycles and Monetary Policy
Chapter 1: The Fed and You, A Brief History
How It Was versus How It Is
Monetary Policy - The History of the Federal Reserve
The US Dollar as the Global Reserve Currency
Sovereign Currencies Are Now All Fiat Currency
Chapter 2: Understanding Economic Cycles
Terms and Definitions
The Economic Cycle
Deleveraging - Understanding a Debt Crisis
Where Are We in the Long-term Debt Cycle?
What's Outside the Economic Cycle Definition
Current Cycle Comparison to Past Cycles
Chapter 3: The Long-wave Economic Cycle
The Kondratieff Cycle
Spring - The Start of Inflation
Summer - Runaway Inflation
Autumn - Disinflation
Winter - Deflation
Technological Revolutions - Building on the Long-wave Cycle
The Past Long-wave Cycle - The Age of the Internet
Moving in Cycles 00
Chapter 4: Safe Is the New Risky 00
The Problem - Historical Truth, Contemporary Fallacy 00
US Treasuries Are a "Risk-free" Asset 00
Owning a Stock Was Always Owning an Asset 00
There Is No Counterparty Risk to Owning Gold 00
Savings Accounts Are Safe 00
The News Is News 00
Okay, Boomer 00
Conclusion 00
Chapter 5: Credit and Commodity Currencies 00
The Purpose of Money 00
Commodity Money (Sound Money) 00
Periods of Sound Money Policy 00
Bi-metal Periods 00
Credit Money (Unsound Money) 00
Problems with Credit Money 00
Periods of Unsound Money Policy 00
Chapter 6: The Fall of Credit Money and the Rise of Multicurrencies 00
The Fall of Credit-based Currencies 00
The Ever-increasing Size of Bubbles 00
The Federal Reserve's Modern Policies and Positions 00
Unintended Consequences 00
Modern Global Monetary Policy - Money Printer Goes Brrrrr 00
The Decline of the US Dollar as the World's Reserve Currency 00
The End of a Sovereign Debt Cycle 00
The Future - A Multicurrency World 00
Part II: The Rise of Blockchain and the Age of Autonomy 00
Chapter 7: A Digital Commodity: Bitcoin as Digital Gold 00
A Primer on Bitcoin 00
What's Unique About Bitcoin 00
Triple-Entry Accounting
Bitcoin as a Hedge Against Global Monetary Policy 00
Bitcoin as Sound Money 00
The Bitcoin Halvening Event 20
Scarcity Value and the Stock-to-Flow Model 00
Other Ways to Value Bitcoin 00
Chapter 8: Blockchains 00
Blockchains: The Basics 00
Blockchain Properties 00
Primitives of Blockchain 00
Vulnerabilities 00
Use Cases 00
Conclusion 00
Chapter 9: The Age of Autonomy 00
Long-wave Economic Cycles -?100 Years of Economic Theory 00
Blockchain - ?The Last Piece of the Puzzle 00
A Brief History
The Age of Autonomy: What's Possible 00
An Example of the Future Decentralized Autonomous Corporation 00
The Knowledge Doubling Curve 00
The Case Against a Continuation of the Old Technological Revolution 00
Conclusion 00
Chapter 10: Clusters of Innovation in the Age of Autonomy 00
Parallels to the Internet Technological Revolution 00
Blockchain Infrastructure for the Age of Autonomy 00
The State of Artificial Intelligence 00
The Intersection of Blockchain and AI 00
The Intersection of Robotics, AI, and IoT/Sensor Data Technologies 00
Ephemeralization 00
Chapter 11: The Case for Investing in Crypto Assets 00
Old Fiat Money Regimes Are Dying 00
Possession Is 9/10ths of the Law 00
Old Investment Strategies Are Becoming Antiquated 00
Risk Management Favors Antifragility and Ephemeralization 00
Seizure-Resistant Assets Have a Premium 00
Blockchain Immutability Solves Information Integrity
The Gold versus Bitcoin Argument 00
A Set of New Innovations Is Affecting Everyone 00
Revolution in the Means of Production 00
Invest in Scarcity
Public Financial Infrastructure 00
Innovation Creates Asymmetry 00
Crypto Assets: A New Asset Class 00
Part III: Crypto Investment Strategies 00
Chapter 12: A Primer on Crypto Asset Investing 00
What Are Crypto Assets? 00
Crypto Classification: Security versus Commodity 00
Passive Investing and the Crypto Index Fallacy 00
Value Accrual - Value Creation and Value Capture 00
Investing from First Principles 00
Investment Vehicle Options for Crypto Investing 00
Chapter 13: Quantitative Analysis Frameworks 00
Fundamental Valuation Using On-chain Metrics 00
Global Macro Risk Management Models 00
A Model for Fundamental Analysis 00
Interpretations of the Model 00
Summary of Other Valuation Models 00
Token Models and Tokenomics 00
Token Mechanics 00
Conclusion on Models and Frameworks 00
Chapter 14: Understanding Crypto Asset Classes 00
Reserve Crypto Assets 00
Cryptocurrencies 00
Platform Crypto Assets 00
Utility Tokens 00
Governance Tokens 00
Security Tokens 00
Asset-backed Tokens 00
Crypto-Commodities 00
Appcoins/DApps (Decentralized Apps) 00
Nonfungible Tokens (NFTs) 00
Stablecoins 00
Other Approaches 00
Conclusion 00
Chapter 15: Investment Themes 00
Sound Self-Sovereign Money 00
Decentralized/Open Finance 00
Decentralized Governance 00
The Age of Autonomy 00
Web 3.0 - Own Your Own Data 00
P2P Commerce - Disrupting the Disruptors 00
Digital Collectibles (Nonfungible Tokens)
Fixed Income 00
Chapter 16: Building an Investment System 00
Portfolio Construction 00
Advanced Risk Management Concepts
Asset Selection 00
Using Technical Analysis 00
Event-Driven Portfolio Management 00
Investment System Summary 00
Thresholds 00
Portfolio Asset Allocation Thresholds and Event-Driven 00
Putting It All Together 00
Risks and Disclosures
Conclusion 00
Notes
Further Reading and Resources
Books 00
News Sites 00
Articles and Blogs 00
Services 00
Crypto Funds Blogs and Newsletters 00
Appendix
IndexJAKE RYAN is the Chief Investment Officer at Tradecraft Capital, a crypto asset hedge fund. He holds a degree in computer science with a specialty in artificial intelligence from the University of Texas at Austin, and has his early work cited with over 700 Google Scholar citations. He went on to become a software entrepreneur and investor in traditional markets, building a multi-million-dollar software services firm and continuing as a successful angel investor before focusing on the crypto asset investment.
