Since no one from BitBays.com or MixCoins.com support is returning my emails and their address in London is a real estate company, I have no choice but to conclude that MixCoins is a scam and BitBays was a scam. If anyone from MixCoins/BitBays can come forward and explain why it isn’t a scam and provide me with access to the Bitcoins I have (or had) on there site, I am willing to make other considerations. As of now I have to conclude that the fraction of a BTC I had on BitBays is lost.
Unfortunately I wrote about BitBays and later Mixcoins.com previously and put some Bitcoin on their site to take advantage of their arbitrage fund. I first personally deposited Bitcoins there in July of 2015 and was able to successfully deposit and withdraw. My last successful withdraw was in April of 2017.
On September 4 of 2017 I received the following e-mail:
In hindsight this was a big warning sign. Around this time MixCoins also implemented a Know Your Customer or “KYC” requirement. However, since I was still able to login using my existing username and password to MixCoins.com I didn’t think too much of it.
With the more recent rise in Bitcoin this year, I decided to look into this more. I contacted MixCoins.com about doing KYC and received no response after several weeks of trying. At this point the alarm bells were ringing.
I have contacted Mike Gropp on LinkedIn. On his profile he is the “Co-Found & Chief Compliance Officer” of Bitbays from July of 2014 – July of 2016. I contacted him in June of 2020 and he advised he hasn’t “been involved in BitBays/MixCoins for years” and that he isn’t “sure what they are up to these days.”
He provided me with an email address, which I contacted, but received no response as of writing this.
So having been burned by BitBays, what lessons can I learn?
1. If It seems to Good to be true, do your Due Diligence
I think the old adage “if it seems too good to be true then it is” is helpful, but it could cause you miss out on opportunities. I was skeptical of the arbitrage fund on BitBays that claimed to pay out 10.96-12.96%. However, it made sense to me and in my testing it worked. I also messaged back and forth with one of the purported co-founders, Mike Gropp. BitBays was also featured on Forbes’ website.
But despite my reasons for believing that BitBays.com were legitimate, I didn’t do enough due diligence to prevent me from getting scammed and losing the Bitcoins I left on their site.
2. Stay diversified
One thing I did reasonably well is I didn’t keep all my BitCoins at BitBays. I kept my position there small. While it still stings to lose some BTC, especially with it making new highs, it could have been much worse.
3. A trusted custodian is worth a lot
There are other more established Bitcoin exchanges like Coinbase that don’t offer an arbitrage fund. If you’re going to entrust an organization with money you need to ensure they are worthy of trust.
I try to avoid being political on this site or at least be apolitical. For example I did not endorse either United States presidential candidate. However, government and politics has so permeated nearly every aspect of our lives in the United States it is impossible to discuss finances and the economy without being at least somewhat political.
Voting outcomes in key swing states are left unknown. But there are a limited number of outcomes with respect to who controls the government. If one party controls the house, senate and presidency, that party (or team) has the opportunity to make sweeping changes to the legal and regulatory framework of the country, with some check on what they can do enforced by the judicial branch/supreme court.
The current balance of power in the United States house of representatives is 232 blues to 197 reds with one libertarian and five vacancies.
Although the results are not finalized we know the blue team will retain control of the house of representatives with something like 227 members (218 are required for a party to control the house). Net the red team will have picked up some seats. Some of the elections are still in counting limbo but those numbers will not change by more than 2-3 seats. So until the next election cycle in 2022 the blue team is guaranteed to continue to control the house.
The current United States senate party division breaks down at 53 red, 45 blue, and 2 independents aligned with the blue team. In other words effectively 53 red 47 blue.
Current senate race results show 48 red and 47 blue. Current forecast predict a 49-49 split with one toss up and one runoff. 51 seats are required to have control of the senate. In the event a vote in the senate is tied, the vice president is the deciding vote. So if the senate does come down to be a 50-50 split, whichever party controls the White House will also control the senate.
Of course there is also the presidency which is up for grabs. I’m inclined to believe that Biden will be declared the next president, regardless of who was actually elected because I think the blues are probably better at “counting” votes. But Trump could still win. Either way this leaves just a few possible scenarios for control of the government.
Remember, if the senate is 50-50 splite, which is possible, control of the senate would go with the team with people in the White House.
Scenario 1: Trump Presidency with Red Team Control of the Senate
In this case there will continue to be a lot of gridlock. There will be a small(er) stimulus bill and some legislation but for the most part not a lot will change. This is the scenario we’ve been in for the past 2 years. Trump could still pull off a victory if he wins Georgia and then if lawsuits could uncover enough voter fraud to turn the right combination of Michigan, Wisconsin and Pennsylvania back to him. It isn’t looking good for Trump but it is also possible that Arizona or Nevada, if they ever finish counting votes, could go to Trump.
Scenario 2: Trump Presidency with Blue Team Control of the Senate
I think this would result in even more gridlock. Congress would not have enough votes to override presidential vetos because that requires a 2/3 vote in both houses. So there would be a lot of back and forth of the blue controlled congress blaming and vilifying Trump and vice versa.
Scenario 3: Biden Presidency with Red Team Control of the Senate
In this scenario Biden is president (at least ceremonially) and Harris is VP. The red team would need to have at least 51 seats. I think this is the most likely scenario but it is by no means certain. Even though at this time I think Biden will be declared president (or if you’re feeling romantic elected) Trump could still pull off some type of upset.
In the senate, to get to 51, the red team would need to win Alaska (seems likely), and one of the Georgia seats (which also seems likely). Then, they would need to win the Georgia run-off on January 5 of 2021, which seems possible.
Note: Explanation of the Georgia run-off can be found here.
North Carolina is being called as a tossup or advantage red team (depending on the source), the red team candidate is currently in the lead by over 96,000 votes with 97% reporting.
If NC does go to the red team candidate and both Georgia seats do as well the red team could get to a 52-48 majority in the Senate.
I think there would be moderate gridlock because Biden was a senator for many, many years and has relationships with the senators and I think the red team senators are much more likely to compromise and go along with the blues. Not only that, but the blues would only need one or maybe two reds to come over to their side and then Vice President Harris could vote to break ties.
Scenario 4: Biden Presidency with Blue Team Control of the Senate
I think this is the second most likely scenario. Again we’re assuming a Biden/Harris administration. Biden would be president but I’m not sure who would be the de facto president in this case.
Blue team would need to win Arizona (seems likely), North Carolina (which is listed as leaning that way). These two would get them to 49, then they’d need to win the Georgia seat (which is listed as a toss-up, although the red is up by over 90,000 votes). This would get them to 50, plus Vice President Harris gets 51. They could also win the Georgia run off election which would get them to 51 even without Harris.
In this scenario the blue team would have the power to implement lots of changes. They could implement the green new deal, raise taxes, increase regulations, expand the affordable care act, provide medicare for all, restrict gun ownership and anything else really. They would probably be limited only by their fear of voter backlash in the next congressional election cycle.
A blue government might be limited in some instances by the supposedly conservative Supreme Court (which is 5-4, since Roberts tends to side with the liberal Justices). However, they could try to implement their plan to stack the supreme court and appoint as many new justices as needed to prevent having their laws struck down as unconstitutional. I don’t know enough about this to have an opinion if they would be successful or not.
What it all might mean
If what I estimate to be the most likely scenario does indeed come to pass the US will face a Biden presidency with a blue controlled house and red controlled senate.
The president has a lot of control over foreign policy. Doubtless the US will be cozier with China and Iran and markets don’t seem to like trade wars, so that would be positive for stocks. However, when there were trade wars, the Federal Reserve has stepped in to be accommodative and the markets love stimulus.
Although purportedly neutral, the president appoints the head of the Federal Reserve and in my opinion (despite protestations of neutrality) the Federal Reserve will do what the president wants for the most part.
While bad for the economy, artificially set rates are great for presidents because they goose asset prices and the stock market is used as a proxy for how the economy is doing.
I doubt there will be a stock market crash, as fiscal stimulus will be used to prop up asset prices. I do expect deficits to continue to grow unchecked and I think gold and the right foreign stocks will do well.
Worst Case Scenario
With a Biden presidency and blue team ruled congress a lot of socialist policies will be implemented. Higher taxes, a stricter COVID-19 response, wealth redistribution and increased government regulation. I think this will be negative for the economy with the middle and lower classes hurting the most. Alternative energy companies and select industries would do well in the US, but gold and foreign stocks would also benefit.
Depending on where you get your news you might think the fossil fuel industry is going the way of the dinosaur. This combined with other factors have made investments in oil and gas companies like Exxon Mobil (XOM) and Royal Dutch Shell (RDSB) unpopular.
I’m long XOM and RDSB and I think these companies are undervalued and will produce solid returns over the next 10-20 years.
Why would I invest in these companies when oil and gas industry are dying?
The fact of the matter they aren’t dying. The demand for oil and gas is increasing. You might not guess that from the price of oil and natural gas.
Natural Gas prices have cratered over the last 10 years Oil prices have also trended down from the 2007 high of 140
The reason for these price declines is because the supply of oil and gas is so robust. The reason I know that is because as prices are falling, consumption of oil and gas continues to increase. When supply increases faster than demand prices will fall.
It is important thing to understand the world continues to consume more and more energy. 2009 was an exception to that rule and 2020 will be as well but the long term trends over the past 10 years and going back as far as I have data is that energy consumption keeps going up. Oil and gas consumption keeps going up as well on an absolute basis.
But the lockdown induced economic slowdown of 2020 will not last forever. Eventually the world will learn to live with the virus and the demand for energy will continue the long term trend of growth.
So what technology will be used to meet that demand? The trend has been an increase in energy coming from solar and wind. But they remain niche players on the global scene. As of 2019 Solar accounts for 1.11% of global energy consumption and wind accounts for 2.18%. These small industries have indeed been growing dramatically. The amount of terawatt-hours (TWh) of energy provided by solar went up 1,937.5% and wind went up by 292%.
On an absolute basis since 2010 the largest source of growth has actually been natural gas. Gas also had the largest increase on a relative basis, growing from 22.49% of energy consumption to 24.23%. However, coal and oil still remain the largest sources of energy and while they are shrinking on a relative basis they are both still growing on an absolute basis.
Date Source: https://ourworldindata.org/grapher/energy-consumption-by-source-and-region?stackMode=absolute&time=earliest..latest
The biggest loser since 2010 has actually been nuclear power. Nuclear has declined on both an absolute and relative basis. Nuclear provided 5.14% of global energy as of 2010 and has dropped down to 4.27%. On an absolute basis it has dropped from providing 7,219 TWh of energy and as of 2019 is down to 6,923 TWh. But even though nuclear energy consumption is declining, nuclear still provides more energy than solar and wind combined.
I think these trends will continue over the next 10 years. Solar and wind will continue to grow on a relative and absolute basis. But I think the relative growth they pick up will largely be from coal and perhaps in small part from nuclear unless the attitude towards nuclear technology changes. I believe natural gas will continue to grow on a relative and absolute basis. I further believe oil will continue to increase on an absolute basis but may stay relatively flat to downward on a relative basis. Coal will continue to decline on a relative basis and might even start to decline on an absolute basis as well.
Wind and solar are definitely in more of a growth mode, as you can see from those huge numbers, than the oil industry. But gas is also in growth mode. I do like alternative energy companies like Next Era Energy (NEE). While NEE is in the wind and solar space they also provide power using natural gas and nuclear. I’m looking for a buying opportunity and looking for value in the alternative energy sector as well.
But that doesn’t change the fact that oil and gas stocks are trading at steep discounts and oil and gas consumption is still in an uptrend. As billion hypocrite Warren Buffet once said be “fearful when others are greedy, and greedy when others are fearful.”
There is a lot of fear in the oil and gas industry so it might be time to be greedy.
My first value stock pick is Exxon Mobil (NYSE: XOM). Exxon has been beaten down. Demand for oil as collapsed as a result of the 2020 lockdown crisis and resultant economic contraction. It is trading near it’s March 23rd low (which was $33.11) and is currently trading at $33.50 as of writing.
I believe the demand for oil will return eventually. The oil industry is at risk from political movements in the west calling for a move away from fossil fuels but realistically oil will be used to meet global energy needs for decades to come both in the west as well as India and China. Given the metrics I think XOM is a good long term stock to own.
TTM XOM had free cash flow of -1.65 billion. In 2019 it was 5.36 billion. So while right now XOM fares very poorly when the demand for oil returns it should perform well there.
Currently 10.42% which is great. However, it is likely XOM will cut its dividend. So I’m not buying XOM for the dividend. If they keep it great but if not that is okay too.
Here is Exxon Mobil (XOM) compared to Chevron (NYSE: CVX) and Royal Dutch Shell (NYSE: RDS.B). While the other oil giants fare better on some metrics XOM has not bounced back from the march lows the way the others have.
An investment XOM is a bet that the global demand for oil rebounds. XOM is currently a good value. While it could go lower I think at a price of $33.50 it is attractive.
As always you should do your own research and make your own investment decisions. This article is not a recommendation to buy or sell a security.
As a disclaimer I own shares of XOM and could buy more in the future.
My second value stock pick will be shared with subscribers of my email newsletter.
You can look at the performance of my past stock picks.
I was watching a video the other day by a famous YouTuber. He specializes in “modern homesteading” and I find some of his videos informative and entertaining.
However, he went off the rails with one of his comments.
He mentioned someone asked him if they should buy gold and he pointed out that you can’t eat gold.
I’m rather tired of this silly cliché. So I’ve decided to give this line of thinking a name.
Batteries are not edible. Please do not eat batteries.
The “Can I eat it?” School of Investing
The “Can I eat it?” school of investing is simple. People trained in this method rule out any investment or purchase they can’t eat.
For example, if someone were to ask, “Should I buy a car?”
Answer: “Well, you can’t eat a car, so what is the point?”
“Should I buy stock in Netflix?” “You can’t eat Netflix, so no.”
To be honest I‘ve never heard anyone make the “You can’t eat it” argument for any other investment or purchase decision. But for some reason when it comes to gold people think it is important to be able to eat it.
The notion that you have to be able to eat something in order to want to own it reminds me of small children at that developmental stage where they tend to stick everything in their mouth.
It seems like a fair number of people don’t understand the purpose of gold and so they revert to that childlike instinct of sticking in in their mouth.
I Buy some things knowing I Can’t Eat Them
As it turns out, there are many useful things that people might want to own that in fact can’t be eaten.
Some people have decided that it makes sense to allocate a portion of their savings to physical gold as a way to “store value” (Austrian economists: please don’t take that phrase too technically) and protect purchasing power against inflation and dollar devaluation.
Of course it only makes sense to own gold after you own a lot of other basic necessities.
But if you really must be able to eat an investment for you to be able to consider it–I give you the following dish which uses edible gold leaf as a garnish.
This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish.AcceptRejectRead More
Cookie Policy
Privacy Overview
This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.
