Dessos Interviews Chris Mezzacappa of Bitconsult

Hey everyone, I was lucky enough to be interviewed by the man, the myth, the trading legend – @StanislavDessos. He had some great questions and hopefully I had some good answers, enjoy!

StanislavDessos twitter

@StanislavDessos – This is exactly what he looks like in real life

Personal questions

  1. Tell us a little about yourself!

Most Importantly, I’m a dad! My wife Kelly and I have two great little boys, Sammy (3 years) and Will (3 months). I work full time as a Mechanical Engineer/Project Manager for the United States Navy, where I build containers and handling equipment for missiles. I make sure missiles work after 25 years of being transported in trucks, planes, ships, and after being exposed to violent drops and extreme weather. I also work on explosive shielding, ensuring that if one missile detonates that it doesn’t set off a chain reaction, that’s kinda important.

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Me and my fam

I’ve always been interested in finance, so much so that I got my Series 7/66 licenses to work as an Investment Adviser Representative and Registered Rep (Stock Broker). I also sit on an Angel Investing Roundtable that meets quarterly in NYC – think Shark Tank but with all kinds of businesses with many different models. 

I was considering leaving my engineering job for finance, but then I found Bitcoin. I had messed around with Bitcoin a bit in 2012-ish but didn’t take it seriously. It wasn’t until 2016 that I went down the proverbial “rabbit-hole” and started learning everything that I could. At this time, I started my website, bitconsult.co, and my company – Bitconsult LLC. I didn’t necessarily have a plan at this time, I just wanted to blog on technical topics to prove to myself that I knew what I was talking about. This also gave me the benefit of being able to link my friends an article on topics like mining, wallets, futures, etc instead of typing up answers to their questions every time.

Without advertising, I started to get clients during the 2017 bull run. I charge an hourly fee to educate people about Bitcoin. A lot of times, this boils down to saving people from scams (bitconnect, USI-Tech). I also do presentations for groups of investment advisers who are starting to get asked questions about Bitcoin and need some better answers.

Towards the end of 2017, I got very active on twitter and found some incredible accounts (@desantis, @mwilcox, @bronzejaguar). These guys and others gave me an incredible reading list, and now I am down a whole other rabbit hole, and I couldn’t be happier. I’ve met some great people in this twitter group, including @stanislavdessos!

twitter bitcoin @chrismezzz chris mezzacappa bitconsult

Come chat with me on twitter!

I also love photography (here’s my website!), playing sports, snowboarding, poker, video games (rocket league/dark souls/apex right now), hiking and meditation.

  1. What’s your daily routine – work and trading and family? How do you juggle (if you have family and other commitments?

Life is insane right now. My kids and my house keep me very busy. I try to learn with every free second that I have. When I’m driving, I’ve always got an audiobook on. When my work computer is frozen or lagging (pretty much all the time) I try and read a book. I’ve found it useful to always have a book on hand, and default to reading that during downtime, instead of playing with my phone. It works sometimes.

  1. What got you interested in BTC/alts and when did you start trading/following the crypto market. And, why? What tickled your fancy, how/what made you catch the bug?

I heard about Bitcoin from an article about the Silk Road. I thought it was crazy that there was this non-government currency that was being used for payments online. I bought a couple BTC (around $40/btc?) through a wire transfer to Bitstamp and held it in a Bitcoin Core wallet on my desktop. I forgot about Bitcoin for a while and then just happened to check the price sometime in 2013 during the Cypriot Financial Crisis. If you don’t remember, this is when the Bank of Cyprus (a popular offshore safe-haven for wealthy Russians) collapsed. The bank froze withdrawals and gave everyone a 30% haircut off of their balance. During this time, Bitcoin tripled or so to around $120/coin. I ended up selling some and spending more on a PC from newegg.com when they started accepting it.

While I was surprised/happy about the price rise, I still had not fully connected what was going on. A few years later, I started to consider BTC as a gold/offshore-bank alternative, particularly after listening to Andreas Antonopoulos and Trace Mayer. At this time, I thought that BTC should be worth around $66k/coin by 2022, and I started accumulating.

Like many newcomers, after learning about BTC, I started to research alts. I bought some ETH at around $14 (when it got listed on coinbase) and some XRP at a penny. At this time, I thought I was late to the game, as ETH was well above its ICO price. I started to look at BTC closer from a payments point of view, and it wasn’t adding up. Then I learned about coins with faster/cheaper payments and thought they might be good investments. However, it wasn’t long before I realized that decentralization and proof of work hashpower are what make BTC important, and coins like XRP were not interesting. Mid-way through 2017, I still held some alts, loosely. I would sell half when they doubled and let the rest “ride-free” because I couldn’t come up with solid price targets. I was playing the pumps.

  1. What were the biggest mistakes of your trading career and how did you change? And what is the one thing you wish you knew when you started as a trade?

My first real trading experience was with weekly options. I made $40K one year (a whole lot for me) mostly buying and selling stocks I liked. Then, I learned about options. I did well for a couple of months during a stock bull market, then lost about $24K in a single month during an extended pullback. While I had read some good trading books (The Most Important Thing Illuminated, Trading Options), and I tried employing certain strategies, I was really just gambling. I rarely had exit plans and quickly learned that there were many ways to lose and only one way to win with options. You buy a call and the price goes down, stays even, or doesn’t go up enough, and you lose.

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Some good finance reads

My stock trading/investing experience did leave me with some heuristics however (also detailed in my blog):

  1. Buy in thirds
  2. Keep some powder dry
  3. Hold with conviction 
  4. If you don’t have conviction in your purchase, sell half if your position doubles
  5. Don’t artificially constrain yourself with time limits (options). Set you own time horizons, it’s the main advantage we have over traders who have to hit quarterly (or even weekly) numbers.

With Crypto, I wasted a lot of time getting in and out of different alts. In the longer run,  almost every altcoin moved around the same amount. I’m happy with how I traded in the bull market of 2017 and was very conservative, always adding to my USD/BTC stacks from my alts.

Like everyone, I would have liked to sell more BTC at $20K. I didn’t, because it was not yet at my price target, and I thought this might have been the big push towards “hyperbitcoinization”. Looking back, I should have realized the unsustainable parabolic move, and how it was propped up by new retail investment. 

In 2018, I tried to fight the trend too much. While I kept some powder dry, I re-bought back in too early, with most of my funds expended by the time BTC fell to $9K. I didn’t buy nearly enough at $4500.

Finally, I made some money on the ZCL pump before the Bitcoin Private (BTCP) fork/airdrop. Unfortunately, it was barely enough to cover the losses from holding BTCP afterwards. The ICO/Fork/pump formula was exhausted, particularly during the overall market downtrend.

  1. How do you deal with pressure or stressful situations?

I don’t have time for the stress right now. So, I don’t really trade at the moment. I am buying some stocks/crypto on a weekly basis, namely: BTC/BSV/SNTVT/XTO and TWTR/NVDA.

I may buy/sell a bit on massive moves, but I try not to watch the charts too much. My coins are for long-term investment, so I am just accumulating.

  1. Was there a time you wished to throw the towel?

Never. I am in it for the long haul. BTC is still undervalued as a gold/off-shore bank alternative in my opinion. BSV is building the internet of value, and I am super excited for the future, especially with what money button/twetch/handcash are doing.

twetch chrismezzz bitcoin

Twetch is cool, check it out!

  1. What are your top 3 tips for new traders?

Don’t use leverage, don’t trade options. Buy periodically with longer term time horizons. If you trade, read as much as you can, and study under someone, like Dessos. Many people think they can handle volatility or risk of total loss until they go through it.

Here are some of my general finance tips (videos): 

  1. What is your trading philosophy now and how has it changed over the years?

I’m learning every day. I pay more attention to trends and try not to “catch a falling knife”. When I do trade, I emphasize looking for confirmations after signals (like a reversal after a doji).

  1. And while we are on the subject, how has your circle changed (friends, family,

college/University) since you started in crypto?

I’ve met so many great people through crypto/twitter. I feel that I know these twitter folks better than I know some of my friends/coworkers in the meatspace. I’ve made a point to really get to know the people who I spend so much time with online. I’ve now talked to over 30 twitter friends on the phone and even met a few in person. In fact, a bunch of us are going on a ski trip in 2020!

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Lunch with @AdamSussman (At Jose Tejas!)

I have some group chats with my IRL friends, and conversations often revolve around Bitcoin. However, none of these friends have the same conviction/interests as me. Without folks on twitter to talk to, I’d have a huge gap in my life.

What I love most is learning what twitter folks are working on. It motivates me. I’ve met so many amazing people. 

  1. On the Spot: where do you see the crypto market in 6 months? 1 year? Do you expect disruption – if so, what?

My only firmly held target is BTC $66K in 2022. I also believe BSV will move to around 0.15 BTC in the next year or two. In the next 6 months/year, I expect BTC to be around $15k.

Anticipation of the Libra congressional hearings may have disrupted the last bullish push, but overall I think the hearings were good for Bitcoin. I venture to say some folks in Congress and even starting to “get” Bitcoin. I actually think it was good for the price to pullback a bit at $13k rather than exhaust itself a little higher.

  1. How do you feel the general financial markets are catching up with crypto? Do you think this is a “flash in the pan,” or a longer more accepting trend?

I believe in time dilation. Those of us who have been around for years now understand Bitcoin. The public/markets at large will go through the same growing pains/learning as the individual. The commentary on CNBC is even getting better.

While I use BTC as a hedge to the USD, it is mostly because it is unseizable. I don’t think that BTC is a hedge to the USD/stock market *yet* (they’re not negatively correlated) . Near term, BTC will do better in a stock/economic bull market. It’ll be a few years before it is truly a hedge and will rise when the stock market falls.

  1. Are you concerned about high-frequency and algorithmic grading?

I don’t really care if someone jumps in front of my trade in a nanosecond and scrapes some fractions of a penny in profit. However, the BTC/alt markets have very low liquidity. There aren’t many BTC to go around, let alone be traded. The BTC market is fragmented across multiple exchanges and the order books are very thin compared to stocks. It doesn’t take much money/leverage to move BTC. Combine this with markets that are stopped to the teeth and you get extreme volatility. I worry more for new traders who will get eaten alive by the big money.

“Flash Boys” is a great read on high-frequency trading and how financial regulations often produce unintended results. Everything by Michael Lewis is good.

The market at large

  1. What do you regard as the main challenges in to the cryptosphere and What would you like to change in crypto Code/person?

There are very few on-ramps for newcomers in crypto. Many younger people go to reddit, which is an absolutely terrible place to learn. Most posts are price memes. Intelligent conversations are often censored or trolled heavily.

Twitter can be an incredible place to learn, however, you have to start with the right accounts. Even then, you can find yourself in an echo chamber very quickly. Unfortunately, crypto is becoming more and more polarized. Why can’t people appreciate the security and stability of BTC, the products on BSV, and the permissionless innovation on other networks like Tao?

Personally, I found @lopp’s resources to be very valuable when I was new. I suggest all newcomers read “Mastering Bitcoin” and “The Internet of Money”.  Here are some other resources.

Luckily, there’s some level-headed people putting out quality content. Check out @easylivingchief and his interviews as well as @cryptoamerican’s writings!

  1. We are interested in Crypto and employment as a trend: where do you see employment opportunities for traders; likewise, for other market participants, is the market still growing?

The employment market is interesting, and a little disappointing. I got very close to taking analyst/technical writer jobs with Smith and Crown as well as Status. Both companies have had layoffs in the bear market. I am amazed by the amount of projects that ICO’d, raised a ton of money, and are now in financial trouble. Couldn’t they cash out a chunk of ETH to fund their 3-5 year runway? I appreciate that many projects wanted to keep their ETH to support the ecosystem, but we’re talking about raising money and funding a business, not running a charity.

On a similar note, I am blown away by the amount of exchanges that have exit scammed or went bankrupt. Many of these exchanges were founded before the 2017 bull market. They made a TON in fees in 2017, and if they had any crypto investments, they had ample opportunities to take some gains and fund their operations.

I haven’t been that in-tune with crypto news/research (other than twitter), but BITMEX appears to do a good job with their research.

I’ve been asked many times to run a crypto hedge fund. However, I don’t want to take custody of clients money. I would advise against it. If you decide to take the leap, be very clear about the risks and consult a lawyer to properly construct your company. I believe you can operate a hedge fund as a partnership with an LLC as the managing partner, but I’m not sure, I’m not a lawyer.

  1. The one question on everyone’s lips: Libra – what is your view on FB’s impending entry into “crypto” – any predictions, analyses you’d like to mention about this apart from what we have heard already?

I think there are many ways that Libra can succeed. Facebook is a rich, powerful company that can incentivize users to utilize their currency. They can offer in-game rewards on their idle games (like FarmVille) for using their currency. It sounds like a joke, but these kind of incentives are powerful. In addition, PayPal worked strictly because of Ebay. Libra could be huge in facilitating payments in their marketplace.

Beyond that, Facebook could help small companies/charities with taking payments. They can offer apps/devices/customer service, kind of like Square. Merchants usually want to accept as many payment methods as possible, as long as it’s not too big of a headache.

Overall Libra isn’t interesting. It optimizes the current monetary system. It is not decentralized and does not have Proof of Work hashpower. However, I am very excited for the Libra hearings and developments. Congress and the public in general are getting a crash course on money.

Forthcoming action plan

  1. What are your medium / long-term priorities in your role on a day to day basis and how does crypto fit into that going forward?

Crypto forces me to constantly learn, constantly evolve. I will keep accumulating and learning.

Conclusion

  1. What are the biggest challenges you think the cryptosphere will be facing in the medium and long term?

Onboarding and education. Beyond that, the U.S. or Banks shutting down on-ramps to exchanges would be a huge hurdle to overcome. The Wells Fargo bans are troubling, but they also emphasize the purpose of cryptocurrency – I should be able to spend my money how I want. It would be disappointing to see the U.S. attempt to prevent average individuals from investing, while letting “sophisticated investors” in (like in Russia).

  1. Any other points that you would like to highlight, or discuss?

Why can’t we all just get along? There should be a competitiveness between forks/projects/scaling solutions, but not hostility. We’re talking about changing money and rebuilding the internet. It’s important to keep an open mind and keep learning, evolving. 

Last question: what book are you reading currently, how many books have you read in the last 3 months, 6 months and 1 year? – which was your favorite?

I love reading. I’ve probably read/listened to 20 books this year. I’m lucky enough to have gotten some incredible recommendations from @desantis and @mwilcox. Some of the books have been about money or cryptography, but often times they relate to “the Golden Thread”. I can’t really explain what I mean by this, except that these books are deeply intertwined at a symbolic level, usually in relation to money/value/information/meaning/beauty/reality. 

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The books I’ve read in 2018/2019. I love my stacc.

My favorite recent book was “The Razor’s Edge” by Somerset Maugham (a @nondualrandy recommendation). I also loved “Metamorphosis of Prime Intellect” (a @coinyeezy recommendation). Nothing makes me happier than recommending a book, and someone following through, reading it, and talking to you about it. It’s a big commitment and it means a lot.

I am currently reading:

A Clockwork Orange

Diamond Age

Conspiracy Against the Human Race

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Currently reading – yes I could use some bookmarks

I just finished Godel Escher Bach, a very dense text that shows how meaning and even consciousness can arise out of formal systems – and interestingly formal systems designed to prevent meaning and paradox. A lot of very interesting takeaways.

I almost always try to have a money and/or tech book going. I think every crypto investor should read:

Debt – The First 5,000 years

Denationalisation of Money

What Has Government Done to Our Money

That’s it! Thanks for reading, and thanks to Dessos for the opportunity!

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