Two Minute Crypto – Not Your Keys, Not Your Crypto

Please click the link to listen to the 61st episode of my weekly crypto podcast ‘Two Minute Crypto.’ These are intended to be short, single-topic ramblings on some aspect of the cryptosphere. Consider dropping a like and or a review on iTunes or Podbean if you enjoy the podcast. Comments and critiques welcome.



Not Your Keys, Not Your Crypto

Welcome to Two Minute Crypto. This week’s episode examines the key concept of ownership or possession (the same thing) in the cryptocurrency space.

If you’ve spent any time at all focused on cryptocurrencies then you’ve very likely encountered the statement, ‘Not Your Keys, Not Your Crypto.’ However, this truth bears repeating, reflection and if necessary, action.

A Few Caveats

If you only have a small position in crypto amounting to less than 1% of your liquid net worth then parking it on an exchange doesn’t really matter.

In addition, if you are a frequent trader a certain percentage of your assets are inevitably going to be locked up in orders and open positions. Of course, if that’s more than roughly 10-15% of your trading account -you’re exposing yourself to unnecessary counter-party risk.

Also, if you are not currently tech-savvy enough to move your funds off an exchange – take some time, seek some help and move your crypto as soon as you are comfortable doing so (the sooner the better).

‘Not Your Keys, Not Your Crypto.’

Getting your hands on crypto is rarely easy, it is a friction-rich experience. There are many steps to take before you can even claim to own any cryptocurrency. Research, signing up to an exchange, going through KYC, learning to navigate an order book, setting up a wallet, backing up that wallet, sending your first transaction, trying not to freak out when you see the words ‘unconfirmed’ and on and on it goes.

Many people seem to make it only as far as an exchange. They buy but don’t take possession. While this takes some of the friction out of the user experience, it also critically undermines the whole appeal of crypto.
To be absolutely clear – the cryptocurrency on an exchange is not under your control – it is simply an IOU by a third party. The balances you see are entirely under their jurisdiction. Indeed, your very access to those balances is something they may choose to cut off if, and when, the exchange deems it in their own interest to do so.

At any time, their circumstances may change – they may go out of business, be hacked, simply exit scam you, or be shut-down by some regulatory authority. Were any of these to occur you are likely out of luck. Sure, large exchanges such as Binance and Coinbase are more robust than their lesser peers but the fundamental reality of the IOU nature of their relationship with their customers remains the same.

This helplessness is highly ironic given the incredible freedom possession of an asset like Bitcoin imparts. You are essentially forfeiting the trustless, uncensorable quality of BTC for what exactly….oh yeah the false comfort of a third party holding your asset for you…like a bank might do…except crypto exchanges are much more unstable than even their banking counterparts…here today, gone tomorrow.

Not your keys, Not your crypto. Not simply a slogan but a fact.

Thanks for listening.

Natural Gas Analysis Report 11/6/19 – Yep The Bottom Is In

The last time I talked about natural gas was two months ago,

Natural Gas Analysis Report 9/5/19 – A Bottom Has Been Put In

There was this huge base at $2.00 on the monthly chart going back 18 years.  In September, I noticed a monthly hammer candle had formed in August.  If you are aware of the common candle stick patterns, a hammer candle usually occurs at the bottom of a down trend.  However, what confirmed the end of the downtrend was on the daily chart, price has formed a demand zone, on top of a demand zone.  I call a zone on top of a zone, a level on level and is one of the most powerful formation when trading supply and demand zones.   Thus, the chart suggest to go long a pull back to the daily demand levels and go long with a target at $2.700.

Please note, there are typically two seasons for the U.S. gas market: Summer (April-Oct) and Winter (November-March). Gas is injected into the ground in Summer and gas is withdrawn in Winter to meet demand that rises well above production.  Please note, today is November 6th.

Natural gas prices surged higher on Monday climbing nearly 4% after rising 5.25% for the week. Short-covering by funds should continue. The weather is expected to remain cooler than normal through most of the eastern portion of the United States over the next 6-10 and 8-14 days.

Hedge fund traders reduced some of their short position in futures and options and added to longs, but remain exposed to a short-squeeze. According to the most recent commitment of trader’s report released for the date ending October 29, 2019 managed money reduced short position in futures and options by 21.5K contracts while increasing long positions in futures and options by 11K contracts. The current net short position at 299K contracts is nearly 3X the open interest that is short futures and options, providing the backdrop for a short-squeeze.


Overall, the Smart Money is still net short natural gas, but are being forced to recover the positions due to being short squeezed.  In this case, the short squeeze is occurring because of the excess in demand for the contract and lack of sellers.  Since price has moved up rapidly, the short sellers are covering to preserve some of their gains and/or cap their losses, resulting in additional buying, which is causing price to move higher.

So where are prices headed next, the chart suggests price is heading to the weekly supply at $3.100.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.