📟 Disclaimer
I am not a financial advisor, and nothing I say in this substack is financial advice.
This is all educational content you can use as a starting off point for your own research initiatives. I’m just another random individual who started a substack ‘cause I think I have something to share with you all’. 🤷
That said, if you’d like to know a bit about me and are wondering why you should listen to me, read this intro post I wrote 🙌
👛 Wallet Review
This wallet review is a recurring post. The aim is to post an official update every Monday and see how far I can grow this little stash by week 52.
As of February 6th, 12:00 UTC this tiny stash of mine sits at a modest value of $1485 USD, dubbed week 19 closing balance & week 20 opening balance.
Week Zero(0) Opening Balance Was: $450
I won't be going through all of my investments in detail in order to keep this review succinct, engaging, and free of repetition. I will only be covering my activity over the last week!
I advise you to review the posts from the previous week and evaluate how this "experiment" is going.
⏪ Recap: 25Bps Rate Hike & Disinflation
The Federal Reserve has raised its key interest rate by a quarter-point, its eighth consecutive hike since March, due to continuing high inflation levels.
The Fed has signaled that further rate hikes may be necessary, but it is also starting to believe that the disinflationary process has started.
The economists expect that the days of any hikes greater than 25 basis points are over for this cycle and the focus is now on the "extent" of future increases.
The economy is at stake, with two possibilities - a relatively short and shallow recession or a deeper and more painful one. The current chairman, Powell, says that he doesn't foresee cutting rates this year, but the market is not as optimistic and some believe inflation could reignite.
The job market reports are mixed, with private payrolls growing slower than expected and manufacturing contracting for the third straight month.
Here’s What I Adjusted In My Portfolio?
I withdrew my Radiant and ETH Liquidity Position from Radiant Capital and claimed all of my outstanding rewards.
One interesting aspect of the user experience is that the rewards earned from staking Radiant tokens were in Radiant Native tokens, such as rUSDC, rWBTC, and rETH. These tokens are automatically considered as part of the Lending Pool and accrue interest.
Upon claiming the rewards, I noticed that my portfolio on Debank updated these tokens as part of the lending pool, which means my reward is now earning additional rewards.
Compared to its competitor AAVE (with a market cap of 1.23 billion, which is 32 times larger than Radiant's market cap), Radiant Capital offers this unique fee accrual feature and a sophisticated transaction user experience.
It's important to note that this is not financial advice and I am not affiliated with Radiant Capital or Radiant DAO in any way. I came across this project last November and have been experimenting and sharing my findings ever since.
I conducted thorough research on the project, conducted hands-on testing, and made an informed decision to allocate a portion of my ETH profits, approximately $90 USD, into this project on January 14th. The transaction log can be verified to confirm the validity of my investment.
Since my initial investment, I am pleased to report that the value has appreciated by 400%. In light of this impressive return, I made the decision to secure my initial investment and realize a portion of my profits, which amounted to approximately $137.44 USD.
When I initiated my LP position, I had allocated 650 RDNT and .02 ETH from my existing holdings. As the price of Radiant tokens increased 5-fold, the pool continued to sell RDNT and acquire ETH to maintain a balanced 50:50 ratio between the two.
In hindsight, this may not have been the best strategy as I could have potentially made more profit by simply holding onto my RDNT tokens. However, my plan was to sell approximately 40% of my RDNT holdings to secure my initial investment and realize some profits from day one, so I am not regretful of this "opportunity cost".
As for the remaining 1190 Radiant tokens, they will remain staked and earn me additional RDNT, USDC, WBTC, and ETH. Currently, I am interested in observing how things unfold.
💰What Did I Do With Profits?
I converted $125 of my $137 in profits to Synthetic USD, and transferred it over to Optimism to add to my existing lending position on Sonne Finance.
I am currently striving to maintain a 30% cash position in my portfolio.
The primary purpose here is to increase my "Dry Powder" which can be used to benefit from market downturns by averaging down on my existing investments.
⚗️Next Catalyst
The Consumer Price Index (CPI) data for January 2023 will be released on February 14, 2023 at 8.30am ET. The data is crucial as inflation has a significant impact on the Federal Reserve's (Fed) decision on interest rates.
Inflation has declined from its highs in mid-2022, but the Fed still has concerns about inflation not reaching its 2% target as soon as expected.
Nowcasts suggest that inflation in January could be higher than expected. The key data point to watch in the report will be the core inflation, which is the inflation excluding food and energy costs.
The Fed is particularly concerned about core inflation as it has not fallen much despite a decline in headline inflation.
Housing costs make up the largest component of CPI inflation and declining housing costs in the report could bring inflation closer to the Fed's 2% target. However, nowcasts for January's inflation data are not too optimistic and housing costs actually rose in December 2022.
The Fed is looking for persuasive data that inflation is coming under control and February's CPI report could prompt the Fed to stop hiking rates sooner in 2023. However, if the report doesn't show continued material declines in inflation, the Fed may add more rate hikes in 2023 than expected. The markets expect the Fed to hold rates steady as soon as May 2023, but if the data is not encouraging, markets may have to revise their expectations.
🪤 Outro
Of course, it goes without saying but bears repeating that nothing I say or share here is financial advice. I’m just another random individual starting a substack ‘cause I think I have something to share with you all’. 🤷
Also, like many individuals who are doing this for a living I also am a humble penniless fool. So, if you are a kind, bountiful, and gifted individual who has benefited from this S#!t Postery and wish to buy this S#!t Poster of yours a coffee, Some drip money would definitely be appreciated and will help to keep my fingers going on this mechanical keyboard of mine.
Disinflation Process Has Begun