Every story has a beginning. Be it the Palaeolithic Era, a prelude or the number zero. A starting point is always needed.

Welcome to the first edition of The Outlier, a bi-weekly newsletter where I’ll share money lifehacks, crypto commentary and my favorite links from the web.

Continuance isn’t my approach. I’ll try keep things insightful and quirky.

By Neel Popat



Visibility Bias

Social media is back (did it ever go away?). More time at home has led to a surge on socials. LinkedIn’s loss is TikTok’s gain but perhaps more alluring is David Hirschleifer’s suggestion of behavioral links between social consumption and money.

Hirschleifer coined the term ‘visibility bias’, which explains how increased awareness of what other people are doing not only makes us spend more, but lures us into incorrect assumptions about our own financial position. Knowing more about lives & homes of others increases exposure to wealth-signalling effects (a fancy desk setup or a Peleton bike). The result: an increase in wealth consumption at the expense of saving. Getting into good habits now is more important than ever, so don't underestimate the value of putting away $10/day for 3 months.

Bread and Butter

It’s interesting to see how consumption habits are evolving during social distancing. The fastest growing online purchasing category is disposable gloves (no surprise), but perhaps some of the less obvious trends are around increased sales of bread machines and power generators.

It’ll be interesting to see which of these trends remain post-Corona. Amazon, Instacart & HelloFresh are adding thousands of jobs, although forced adoption may cause temporary bubbles. Q1 2021 earning season will be interesting.

Buying The Dip

I often get asked “what should I do️ with spare cash?”. John Bogle famously coined the term OYAIB (Own Your Age in Bonds), though investable asset classes are rapidly evolving. Crypto for example allows for newer kinds of portfolio construction including virtual land or digital Air Jordans. Bogle’s wisdom is up for debate, I wrote a short piece on the current situation a few weeks back.

DeFi Recovers

Decentralized finance (or DeFi) is Ethereum’s biggest application. It offers a parallel financial system of bank-less smart securities with popular use cases including earning real time interest on assets (Compound) or entering into no-loss lotteries (PoolTogether).

The entire ecosystem felt the recent macro tsunami with a 20% drop of ETH locked into the system. However, levels have now rebounded with ETH locked into DeFi showing resilience at 95% of pre-slump levels (2.77M ETH from 2.92M ETH).

Not Making It Easy

Following a 30% fall in ETH on 9 March, MakerDAO, which is the entity behind the stablecoin Dai, suffered a $4M liquidation loss. An unprecedented number of loans in the Maker system taken out against ETH became undercollateralized, which allowed one liquidator to buy $4M ETH for 0 Dai.

Maker has been undercapitalized since then and DeFi’s “central bank” held a $5M auction to cover the losses last week. Paradigm (ex-Coinbase founder Fred Ersham’s fund) came out as prime saviour. Separately Maker, a self-labelled decentralized stablecoin and governance system, also added a centralized USDC to it’s books. Centralized assets do not render Maker itself centralized, argues Christensen (Maker’s founder), but this does put into question whether a fully decentralized system can actually work.

Half Time

The Bitcoin halving is anticipated in May. The number of BTC entering circulation every 10 minutes known as “block rewards” will drop to 6.25 from 12.5. It happens every four years and previous halvings have been following by pricing spikes.

Past performance is never an indicator of future, so for those in the pattern recognition game there are lots of theories either way. No one knows what will happen, but one things is for sure: plenty of media hype.

The wrong ZOOM has gone up 700%

DeFi explained in 50 words

How crypto is linking Trump & Maduro

It took 10 years but Bitcoin has finally been wiped out

The best virtual museum & art tours



You made it! Thanks for reading the first edition of The Outlier. If you enjoyed it, please share the vibes with 2 friends :)



See you in a couple of weeks.



Neel