Friday, June 23, 2017

Gemini Exchange: Part 1

As recommended by a reader, I went to read up about the Gemini Exchange.

It looked pretty good, and it's actually has very decent volumes. The three nicest things about them is that:

1) They explicitly accept Singapore customers (source)
2) They have zero transfer-in fees (source)
3) They have no deposit or withdrawal limits (source)

So far, so good, yeah?

I registered an account with them, was greeted with a nice clean UX and proceeded to do the verification process. 

I was expecting the verification process to take a few weeks, but I was pleasantly surprised that within a week I was notified that my account has been verified and that I'm good to go.

In preparation for possibly using US exchanges to buy digital currencies, I have opened by a DBS eMCA account (which took less than 6 hours to be approved!). However, I have since realized that I could also send USD directly from SGD just as easily and cheaply without an eMCA account. I suppose the main difference is that I get an extra step in between the transfer, which means that I don't have to immediately convert at spot rate, but I could "time" my SGD-USD conversions and possibly save a bit extra. A bit.

Anyway, today I remitted a small sum of money to test out the DBS remit function and also to test and see if the US exchange will be able to receive the USD without any problems.

Step 1: In Gemini, create an inward Wire Transfer transaction
Step 2: In DBS, remit money to the details shown in Gemini, not forgetting to put the memo
Step 3: Wait

The DBS rate compared to the mid market spot rate on XE was 0.67%. If everything is what I think it is, there should be no fees anywhere else, in which case 0.67% is very acceptable.

DBS claims same-day transfer if the transfer is made before 5.30pm (when I called up their hotline), while Gemini says same day or next day crediting if funds are received before 3pm ET, which is roughly 3am SG time.

Based on my hypothesis, since I have completed the transaction on DBS before 5.30pm, I am hopeful to be credited the amount in my Gemini account from 10am onwards (slightly after the start of regular working hours). In the worse case, it ought to be credited by the end of the next business day on their side, which is unfortunately Tuesday early morning, 5am. 

When the money gets credited, I'll execute trades and also withdraw the cryptocurrency. I'll post about that when it happens.

Thursday, June 22, 2017

Why GMGH Gives The Best Advice

Skepticism and independent thinking is dead.

I have recently joined several cryptocurrency chat groups on Telegram and 80% of the people are sheep following the 20% who bark out buy/sell orders and attach a picture with some shitty technical charts.

The amount of people not knowing what the flying fried fishsticks that they are doing is mind-boggling, amusing and scary, all at the same time.

Yes, you can make a shit ton of money from cryptos. Or stocks. Or bonds. Or whatever. You can also win a shit ton of money from winning the lottery.

But remember, nothing is without risk. Just because you don't see a risk, doesn't mean that there aren't any risks. Don't be an Ostrich.

Oh, and just because I have the opportunity to chip this in, don't forget to follow your dreams! Who knows? You might be the next Taylor Swift! /sarc

Tuesday, June 20, 2017

Investor's Insanity: Argentina's 100 Year Bonds

Argentina has joined the prestigious ranks of countries to issue 100 year bonds.

They just sold $2.75b USD worth of 100 year bonds at a 7.125% rate, and their subscription was 3.6X subscribed. 

Why is this considered insanity?

Because, HISTORY.

Let's see when and how many times Argentina has defaulted on bonds, and how much time between the last bond default, shall we?

(Source: Economist)

#1 - 1827 - no prior
#2 - 1890 - 63 years
#3 - 1951 - 61 years
#4 - 1956 - 5 years
#5 - 1982 - 26 years
#6 - 1989 - 7 years
#7 - 2002 - 13 years
#8 - 2014 - 12 years

Average time to default: 26 years
Median time to default: 13 years

(Source: World Economic Forum)

If we aren't at the cusp of madness yet, I am more than willing to be entertained to see what will top this insanity.

You don't need to trust me to know that this is not going to end well.

Monday, June 19, 2017

Change App: What really has changed?

On my newsfeed, this article from the Change blog was shared and that led me to visit the Change site.

While I initially thought to myself, "Ooo, what's this cool idea?", I realized that I had actually stumbled upon this before, and I thought it was rubbish.

I only realized it again after I visited the webpage and thought to myself again that it was rubbish.

So what is this.. "challenger bank" thingy? You know me, I love market disrupters like Uber and Grab. Let's see what this thing can disrupt...

Open an account in 5 minutes, okay that's not bad. I already have banking relationships with 5 banks thought. I don't know a single person who doesn't have a bank. Maybe if I read on I will figure out why we need them to be our bank?

Top security. I don't really feel like any of my banks are lacking security, but top security is a good thing, just not anything special that I don't already have.

Convenience. Expense tracking and recommendations? This is a bit of a useless overlap?

Mobile wallet. With all the different -Pay apps (Apple, Samsung, Google), why do we need another one? At least with those cards, the value proposition is that you can still get benefits from using those cards.

"A Door to Investment Opportunities". This seems like the only thing that they have. However, if you look closely at their screengrabs, they just seem like a broker or feeder service into other actual investment services, such as Smartly. Why would I need someone else to invest into Smartly for me, when I can just do it directly myself?

Cryptocurrencies?! Okay, this one caught my attention. If they do allow cryptos, that would probably be their only edge. But, FYI, the spreads between the SGD buying price of cryptos compared to the actual market prices in USD, even after taking into account exchange rates, it is still a freaking big gap. I highly doubt it would be practical to purchase cryptos after taking into account the huge price gap.

Hey wait a minute. That's it? Where is the hassle-free banking experience, better returns and lower fees that was in the marketing spiel from the blog post? Non-existent, I suppose...

Conclusion: This app is nothing more than a prepaid mobile wallet, with options to "invest" with your funds within the app. Calling

This is fintech in Singapore?! This is nothing.

If you want to see a real fintech company in Singapore that is going to make changes, keep an ear out for TenX. If they can deliver on their product, paying in FCY will cost less than 1%, compared to what we have today which charges between 1.8% - 3.5% fees (Source 1, Source 2).

Sunday, June 18, 2017

June 2017 Weekend Ramblings

There's been a lot on my mind lately.

It is no help that the cryptocurrency world is moving so fast! ICOs are popping up left and right, but the good news is that I'm rapidly learning, so I am able to get a feel of how good or bad an ICO is going to be. I think this is particularly useful if bullets are limited and accuracy becomes more important.

One of the problems that I am having is finding a good way to convert SGD into cryptocurrencies.

In my latest post here on the quick and easy (not best and cheap) way to convert SGD into cryptos, I ranted how Coinhako is charging 8% over spot. That means that if I had USD on another exchange, I could probably execute trades 7.5% cheaper than Coinhako. 8% spread is freaking enormous. As you can tell, I am highly displeased.

I am currently thinking that the most sane method of getting in now involves changing SGD into USD, following by wire transferring that money onto a foreign exchange, and then buying cryptocurrencies off the exchange in USD.

Still, my options are not plentiful. Citibank needs $10k USD. DBS is $3k SGD, but it's waived until 29. UOB is $1k USD. SCB is $2k. CIMB is $1k USD.

I guess I've no choice but to go with DBS. It seems like it should be pretty easy to fund it in SGD, convert to USD and send it to where I need it to go. Looks like conversion fee would only be less than 1% if my math isn't too bad (instead of the ridiculous 7% by Coinhako).

Actually, I also realized that instead of creating a USD account specifically to send money to an exchange, I can use the modern fintech solutions to do cheap FX transfers. I need to find out if the exchange I am thinking of using will accept transfers from companies like Transferwise. HMMM. I think this is actually the best and cheapest solution.

Alternatively, I could use this Transferwise (or any other 3rd party payment solution) to fund Uphold...

Ah, I definitely need to research a lot more options. 8% is definitely NOT a long term solution. I hope to find a better long term solutions to change SGD into cryptos. I'll definitely share my findings.

Option 1: Fund an exchange account with 3rd party payment processor
+ no need to open multi currency account
+ no need to pay bank cable fees
+ ~0.5% funding fee
- more counterparty risk
- 3PPPs and exchanges might not be able to accept this arrangement

Option 2: Fund an exchange account with multi currency account
+ more control
+ less counterparty risk
- more fees (~0.8% conversion fee + $25-35 SGD + $10 USD... so on a $10,000 SGD transfer, it would be ~1.3% total fees)
- extra micro management

However, from my quick look around, most 3rd party payment processors do not transact to exchanges. And most exchanges do not accept transfers from 3rd party payment processors as well, since they are not able to match the inward transaction to the account's name.

It is most likely that I am going to open an eMCA account with DBS, manually convert to USD and transfer to the exchange in USD, followed by making whatever trades and then sending back cryptos off the exchange to myself.

It sound's like a damn leychey roundabout way, but I would be looking at savings of about 6.5%. If it was a $10,000 that I'd be transacting, that's a good $650.

I'm actually currently thinking of starting a full cryptoportfolio. I'm considering something along the lines of $5,000 or $10,000 initial starting money, followed by maybe $300-500 every month.

This sounds like a lot to some people, especially for something which seems like a "fad" or even just outright stupid, but every logical fiber in my body is screaming at me to go even BIGGER. I'm trying very hard to control myself and not let myself throw in the kitchen sink into cryptos. Blockchain technology is revolutionary. I am certain that in the future, many mainstream applications would be using blockchains without users even know. It's like how users of the internet have no clue about internet protocols, DNS, servers etc. While very interesting to know, it is not necessary knowledge. I believe that blockchain will end up being like that as well.

For what it's worth, I still believe that most traditional asset classes are ridiculously overvalued. Since my first priority is getting my own place, I still need to make sure that I am heading towards my downpayment goal. I can't forget my focus and jump into cryptos and get my money locked up in there while the good bargains and deals that I have been so so so patiently waiting for finally appear.

Since I started playing a bit in cryptos since the start of June, my returns has been mindblowing. However, I am not fooled. This move looks extremely bubbly and the way that you can tell is that pretty much anything that isn't nailed onto the ground has risen up in value tremendously. At these price points, not many cryptos are that attractive.

Anyway, to summarize:
All exchanges in Singapore sucks. Looks like I need to bring my business elsewhere.
Cryptos are in a bubble. You can tell because some stupid coins still have a sizable market cap. People aren't buying based on anything other than hype and technicals. Fundamentalists will have an edge here by staying clear of the crap coins.
I might start a cryptoportfolio soon. Maybe I'll update it monthly, like how I'm supposed to do it with my SGX portfolio (but I haven't been, haha)