Company Insight: Proterra

Proterra (Ticker Symbol: PTRA) is an electric transit and EV technology solutions company for commercial transport applications. The company is headquartered in Silicon Valley, California.

Jack Allen, Chairman and Chief Executive Office; Dustin Grace, Chief Technology Officer, Amy Ard, Chief Financial Ofiicer; Ryan Popple, Co-founder & Director

Canoo (Ticker Symbol: GOEV): At first look, seems like the Canoo is in really early prototype phase of their product platform. They are using contract manufacturing partner for building their vehicles to reduce capital expenditures. They have vehicles for both in B2C (Sports/Lifestyle) and B2B (last-mile deliveries) segment and business model revolves around TaaS (Transportation as a Service). They have developed their own BMS to work with their vehicles and battery packs. See more details in their investor presentation.

Hyliion (Ticker Symbol: HYLN) : Hyliion offers Class 8 Hybrid Truck kits with on-board Natural Gas-fueled electric-generators as range extenders, which can be integrated with OEM chassis ranging from Freightliner, Kenworth, Perterbilt, Navistar International & Volvo. They also have hybrid truck kits with Diesel & CNG-fueled generators. The battery packs are based on cells using LTO and NMC chemistry. I was not able to find information about the battery cell supplier and form factor being used on their site. They have also developed their own BMS to work with their battery packs based on Li-Ion Chemistries with Hybrid or BEV. They don’t seem to have any offerings for buses yet and seem more focused on class 8 trucks.

Arrival (Ticker Symbol: ARVL): I have a hard time finding any evidence of real products on the roads. But on paper they have a really good concepts of products.

Nikola (Ticker Symbol: NKLA) FCEV trucks. I have still have my doubts if Nikola really has a product to show.

BYD : BYD has the advantage of having their vehicles collecting more miles than any of the other BEV-brands.

Tesla (Ticker Symbol: TSLA): Tesla with it lead in battery packs and information they have collected from their cars is a formidable competition and can become a leading player in the commercial vehicle market as well.

Proterra’s IP advantage
A first look on the Patent Portfolio of Proterra shows that the company has lot of patent applications which are still in the process. A lot them seem to be in the cell packaging and BMS.

Assumptions of future growth
I think that there are lot of assumptions which need to turn out true for reaching the level of revenues projected for 2025.

Flexibility of Battery Packs
From 35 kWh for small delivery van to 113 kWh for paratransit van to 6 MWh for rail applications. In my view, that is an advantage and expands their TAM (Total addressable market)

Energy Density of Batteries
Proterra has moved to the latest 2170-form factor for Li-Ion Cells from 18650-form factor cells, which has allowed them to increase the energy density in their battery packs.

In general, I feel that the current energy density of batteries would mean limitation in BEV applications for long haulage of goods or inter-city transport of people. For these applications in my view, we would need to use a combination of battery modules with range-extenders with Fuel Cells or ICE. Ryan Popple, Co-founder & Director of Proterra, mentions in the interview, that he sees BEVs being used more widespread for local transport and FCEVs for more long distance transport during the coming decade.

I also feel that the latest agreement between Komatsu and Proterra for supply of battery packs for the construction and mining equipment reinforces the confidence in Proterra’s technology.

Integration in to EV Supply Chain
Prottera sources the Lithium Ion battery cells from LG Chem and Panasonic, who are considered to be one of the best battery cell manufacturers in the industry. For an EV, most crucial performance factor is battery management system (BMS) apart from the cell chemistry.

Unlike Tesla which plans to have integrations upstream all the way to Cathode Manufacturing to even mining & processing of Lithium, or Chinese EV manufacturer -BYD, I think Proterra would not have the scale to go in to that kind of upstream integrations and would be dependent on supply chains. And that I would see as a risk going forward for a company which has all the product line-up based on pure battery powered vehicles.

Technical Analysis
There is not a lot of trading history to go on when it comes to Technical Analysis. On the weekly chart it seems the price of the stock is still moving sideways bounded between 20 USD and 13 USD. The trend in my view looks neutral.

Weekly Price Candles for Proterra Inc. Stock

The daily chart shows a similar picture with a neutral trend and MA curves criss-crossing each other indicating no clear up or down trend.

Daily Price Candles for Proterra Inc. Stock

Disclosure: I have a position in the company and may or may not increase/decrease my position within the coming weeks and months.See my complete portfolio here.Please read the disclaimer before acting on the information provided on the website. Some of the links in the post may be affiliate links.


  1. Our Story | Proterra
  2. The Proterra Battery Platform | Proterra
  3. Battery Supply Chain for Electric Vehicles with Simon Moores and Vivas Kumar – YouTube
  4. Armageddon 🔥📛! The Coming Battery Metals CRISIS! Benchmark Mineral Intelligence – YouTube
  5. Lithium-ion battery technology development & investment opportunities | Vivas Kumar | Energy Seminar – YouTube
  6. Patents Assigned to Proterra Inc. – Justia Patents Search

Personal Investment Process: Cryptos

Note: This is the process I use for every Crypto token except Bitcoin (which I consider as a “Storage of Value” Asset). Also, I would like to see myself as an investor in a crypto project and not as someone trading in & out of a project-based solely on the technical analysis. I value peace of mind and my sleep more than the quick gains that can be made sometimes in trading.


I usually get my tips from friends and social media channels mainly twitter but even substack and medium. I also look at the coinmarketcap & crypto exchanges for top-five cryptos being traded by volume and others signs of narratives building up.

I quickly check if it is possible to buy the tokens on FTX or Binance or any other DEX, Uniswap, Pancake Swap or TerraSwap etc.

Small Buy-Ins

I then go on to buy a very small dollar amount of the token so it is on my watchlist. My watchlist at this stage has almost 20-30 different projects (I intend to not add & keep more than ten projects to my core portfolio at the end of the process).

Note to myself: Diversification doesn’t helps with shit-coins ! 😛

Fundamental Analysis

  1. Read the whitepaper for the project
  2. Check the people behind the project, Quality of the team, Is the team public or anonymous?
  3. Check other sources about the project
  4. Value Proposition of the Project. What problem is the project solving?
  5. Use Cases & Why is the project important for the cryptocurrency ecosystem?
  6. If it is a Native Blockchain Protocol:
    1. Speed: Transaction Per Second (TPS)
    2. Scalability: Average Cost per Transaction; Time to Transaction Finality 
    3. Security:  How is the network being secured? Is it audited?
  7. Understand the Tokenomics
    1. What is the utility of the tokens on the protocol ?
    2. Why should the token accrue value?
  8. Market Cap/Dominance of the token in Crypto Market.
  9. Is there a moat ? Are there any potential or existing competitors ?

Technical Analysis

  1. Check the Token/USD and Token/BTC Candle-stick chart.
  2. Use Week as the higher time frame and 1D as the lower time frame.
  3. Check the historical volumes and trend.

Use Technical Analysis for guidance. On a Token/BTC Chart, If the token’s candlesticks are not able to keep above the MA 10 (1 week timeframe), it is better to invest in BTC

Note to myself: Create an one-page investment thesis at the end of this step.

Take “skin-in-the-game” position in the project

At this stage, I usually buy the “skin-in-the-game” position in projects which are green on most of the aspects of the investment thesis.

Periodic Review of the Investment Thesis

  1. Are the fundamentals still sound?
  2. Is the project keeping its Roadmap?
  3. Is the number of users on the protocol increasing?
  4. Are developers still positive about the project?

Dollar-cost averaging & Pyramiding

For those which pass most of the checks in the “Periodic Review”, I would use either Dollar-cost averaging or Pyramiding to build my position in the holding.

NOT FINANCIAL ADVICE: This article does not constitute financial advice or a recommendation to buy in any way. Always do your own research and never invest more than you can afford to lose. Investing in cryptocurrencies is high risk, and you could lose 100% of your investment. The article should be treated as supplementary information to add to your existing knowledge.See my complete cryptocurrency portfolio here. Please read the disclaimer before acting on the information provided on the website. Some of the links in the post may be affiliate links.


Step-by-Step Guide: LP Staking on Anchor Protocol

Anchor Protocol is a credit and lending platform built on the Terra Blockchain Protocol. ANC is the native token of Anchor Protocol and LUNA is the native staking token of the Terra Blockchain Protocol.

This post will show you how to stake ANC-UST Liquidity Pool (LP) Token on Anchor Protocol to earn a three-digit annualized staking returns, as well as, take the advantage of the three digit distribution APR (as on 20th of March, 2021). Let us begin then:

Step 1: Buy LUNA (Terra Protocol Token) on your favorite exchange.
I usually use Binance for buying cryptocurrency (it is possible to buy luna on other exchanges as well see Tera Exchanges for a complete list). Search for “luna” in the spot markets and select the pair you want to use. On Binance, there are two trading pairs available: LUNA/BNB and LUNA/BUSD. For this post I will be using BNB in my wallet for buying LUNA. Incase, you do not have BNB or BUSD in your wallet, you can buy them using your fiat currency in the wallet .

Step 2: Create a Terra Station Wallet (Skip this if you already have one)
The easiest way to get a Terra Station Wallet is downloading the Terra Station Extension for your Chrome browser and add it to your browser.

Install the Terra Station Extension to your chrome browser

Once the installation is complete, start the Terra Station Wallet Add-on and select “new wallet option” and create a password for the wallet. Make sure to save the wallet seed at a safe location.

Step 3: Deposit LUNA to you Terra Station Wallet
In your Binance Wallet, click on the “Withdraw” to take you to the withdraw page.

Enter the your Terra Station Wallet address in the “Recipient’s LUNA Address” and the amount of LUNA tokens you wants to transfer and the press “Submit”. Note: Binance will take 0,02 LUNA token as the withdrawal fees. In the Security verification window, enter the codes and press “Submit”. In the “Withdrawal Request Submitted” window click on “View Withdrawal History” to see the status of the transfer. The LUNA tokens should arrive in your Terra Station Wallet in a couple of minutes. You should get a notification to your registered email address from Binance when the transfer is completed.

Step 4 Use TerraSwap to buy some UST with your LUNA
Before we bond our LUNA tokens to bLuna you would need some UST to pay for the transaction fees. You can use Terra Swap to buy some UST tokens with your LUNA Tokens in your Terra Station Wallet.

Step 5 Mint your bLUNA from LUNA using Anchor Protocol
Once you have enough UST for the transactions, it is time to bond our Luna Token to BLuna token. For doing this go to the “Bond” tab and then to the “Mint” sub-tab in Anchor Protocol web app and enter the amount of Luna to be bonded. For every Luna token you get one bLuna token. Next select the validator of your choice from the drop-down list and press the “Mint” button. To confirm the transaction enter the your password in the Terra Station Wallet app and press “Submit”. Press “OK” in the completion confirmation window.

Step 6: Loan UST using your bLUNA as Collateral.
Now move to the borrow-tab on the Anchor protocol app. If you go to the bottom of the page, you see the “Collateral List”, click on the “Provide” button to collateralize your bLuna to loan UST.

Select the amount of bLuna you want to provide as collateral and the press “Proceed” button. You will have to confirm the contract by entering the password in the Terra Station Wallet and press “Submit” and after successful transaction you would be take back to the “Complete!” success page on Anchor Protocol.

You now have the possibility to loan unto 50% of the collateralized bAsset but to safeguard against the liquidation of your bAsset, I would highly recommend that you to take 35% or less of the collateral asset (bLUNA) as loan to be on the safe side (or 75% of maximum possible to loan).

Select the amount you want to loan and then click on “Proceed” and confirm the transaction in your Terra Station Wallet. The loaned UST is added to your Terra Station Wallet after completion.

Step 7: Swapping UST to ANC
Take half of the USTs you have borrowed to buy the ANC on Terra Swap. If this is the first time you are using Terra Swap, you would have to connect your Terra Station Wallet by clicking on the “Connect” button

Step 8: Create the ANC-UST LP token

Govern – Anchor Protocol

Go to ”Govern” tab on Anchor Protocol and then ”Pool” sub-tab & in the ”Provide” enter the amount of ANC and UST you want to add to the LP Token Pair and click on ”Add Liquidity” button to create the ANC-UST LP Token.

You will have to confirm the transaction contract by entering your Terra Station Wallet password and then submitting it. After this you should be redirected to the transaction completion window back in Anchor Protocol. Press OK button to proceed.

Confimation message after creation of ANC-UST LP Token

Step 9: Staking ANC-UST LP tokens
After you have created your ANC-UST LP token, it is time to “Stake” them for earning the staking returns. Click on ”Stake” sub-tab in the governance tab and then select the amount of LP tokens you want to stake and press then ”Stake” button.

ANC-UST LP Token Staking

Before you can stake the LP token, you would be then take to your terra station wallet confirmation window where you need to enter your wallet password and click on the “Submit” button. Hold your breadth and wait for the completion window to appear !

Confirmation of the ANC-UST LP Stating completion.

That is it ! Now you can enjoy looking at the rewards at the bottom of the “Governace“-tab while sipping your coffee :

Rewards panel at the bottom of the Governance Tab.

Disclosure: I have a position in ANC, UST & LUNA tokens and may or may not increase my position within the coming days, weeks and months or sell off all my holdings without any notice. See my complete cryptocurrency portfolio here. Please read the disclaimer before acting on the information provided on the website. Some of the links in the post may be affiliate links.

1. Anchor Protocol Homepage: https://anchorprotocol.com/#
2. Anchor Protocol Whitepaper: https://anchorprotocol.com/docs/anchor-v1.1.pdf
3. Terra Blockchain Protocol Whitepaper: https://terra.money/Terra_White_paper.pdf
4. https://docs.terra.money/ecosystem.html


Bitcoin is in a bubble waiting to burst !

I was reading the transcript of the interview by Dr. Prannoy Roy of Prof. Raghuram Rajan and others, where they talk also about Bitcoin. And you can relax, Bitcoin is not in a bubble and it is not going away ! 🙂

When asked by Dr. Prannoy Roy about Bitcoin being a in a bubble, Prof. Raghuram Rajan replies, “Well, so, I think there are two versions of bubble. One is a pure bubble, which is what the economist version is, is something which is valued only because other people value it. There is no fundamental baseline value.”

Well, that is true for everything and not just about Bitcoin. Someone is willing to buy one kg of Onion in the “Sabzi Mandi” or vegetable market for 28 rupees because they value it worth more than the 28 rupees. The price of the onion is not linked to the cost of cultivating and transporting it but rather the exchange ratio the market accepts for its utility. What is the intrinsic value of Onion ? To a non-Onion eater close to zero and for a willing Onion-eater it is 28 rupees. And by the way, what is giving the fiat currency any value whatsoever ?

Prof. Raghuram Rajan: “I mean, think of Bitcoin. It’s very hard to even spend Bitcoin, remember we’re spending a nation’s worth of energy to try and keep track of Bitcoin, right? It’s a very inefficient asset. The amount of computing power that has to go on to maintain Bitcoin transactions is huge. So, in the longer run, it doesn’t seem to me that this is a viable means of transacting, means of payment. If you take away the means of payment from Bitcoin, it really is an asset with no intrinsic value. It’s a digital asset, which has claims on nothing. So, people value Bitcoin, only because other people value Bitcoin.”

Bitcoin’s value proposition right now is an asset for “Store of Value” and less as “medium of exchange”. And it is not harder to spend Bitcoin any more than Gold and speed of final settlement on bitcoin, the payment network, is faster than any fiat currency payment network. Regarding the very tired argument against Bitcoin that it is “a very inefficient asset” which consumes lot of computing power and electricity, there is an utility in the consumption of the computing power for “Proof of Work” consensus mechanism and in also making bitcoin a hard money which is integral part of the Bitcoin’s value proposition (read more about mining in what is bitcoin?). The PoW dis-incentivizes the miners from including invalid transaction in their blocks as they would not receive the block subsidy. And the predictable hard coded schedule for block subsidy reduction or halving makes Bitcoin the only truly deflationary hard money. As long as consumers of energy are willing to pay the price of the electricity and computing power for mining bitcoins (making bitcoin decentralized) & maintaining bitcoin network (making bitcoin ledger distributed) and it makes perfect business sense to them and creates value for the Bitcoin users, then it is completely worth it ! What is wrong with it ? The onus of supplying clean energy is on the energy suppliers and not the paying consumers of the energy.

Yes and it is absolutely right, “People value Bitcoin, only because other people value Bitcoin”. The people buying and holding bitcoin value bitcoin for it’s utility as an asset for “storage of value”. It is the irresponsible dilution of the purchasing power of Fiat Currency by the governments that is increasing the value of Bitcoin. If the Reserve Bank of India switches from “Fiat Currency” to a “Hard Currency” people would value the “Hard Currency” as “storage of value” and the utility of bitcoin will go down.

Prof. Raghuram Rajan: “When Elon Musk tweets positively about Bitcoin, Bitcoin values go up. But it’s not as if there’s some nirvana down the line when Bitcoin will become the means of payment everywhere. In fact, it’s sort of programmed not to become that. So, this leads to the question, why are people valuing Bitcoin? I mean, the reason is, they are valuing it because others are valuing it. And that is part of the reason why it’s volatile. One day, Elon Musk tweets, it goes up in value. Another day, somebody says this is heading towards disaster, and it falls.”

Yes, Bitcoin is too volatile to be “medium of exchange” in short run. But volatility is not equal to risk. The risk of Bitcoin going to zero is not bigger than the risk of any of the top world religions disappearing and way less than the risk of purchasing power for a fiat currency going to zero.

Prof. Raghuram Rajan: “Now, there are some financial assets like that, some of the high-tech companies, which aren’t producing anything right now, maybe of that kind. But broadly I would say that asset prices are high. I wouldn’t say it’s a bubble everywhere. I think there are, certainly in every country, a fair number of assets, which are fairly priced. But low interest rates are lifting everything, perhaps some beyond what their true value is.

“A fair number of assets, which are fairly price” please enlighten us. Bitcoin is an asset that is increasing in price because of the freewheeling printing machines at the central banks and Bitcoin is the asset “fairly priced” in fiat currency.

You might also be interested in reading more about what is bitcoin?

Disclosure: I have a position in the Bitcoin and may or may not increase my position within the coming days, weeks and months.See my complete cryptocurrency portfolio here. Please read the disclaimer before acting on the information provided on the website. Some of the links in the post may be affiliate links.



Quickstart: How to buy Cryptocurrencies & tokens ?

The easiest way it to buy cryptocurrencies is through a cryptocurrency exchange. Here are the ones I use:

FTX Cryptocurrency Derivatives Exchange
My Favorite Centralized Crypto Exchange (CEX)
  • FTX: My favorite exchange. I like the simplicity, speed of the site & has the lowest fees among the exchanges I am using. Almost all the functions are available on both the website and the mobile app. The platform allows daily one free BTC withdrawal and at Tier 1, even one ERC20 withdrawal token if you stake 25 FTT tokens (see below).
  • Binance: Binance is the biggest crypto exchange and I love Binance for the simplicity of the UI and lot of new projects get listed on the platform.
  • Bitstamp: One of the earliest exchanges for Bitcoin. Really robust UI but higher fees compared to Binance.
  • CoinBase: Extremely easy UI and wide-range of Cryptos available. Plus high-liquidity

Step 1: Open an account in a exchange of your choice.
Step 2: Login and complete your KYC.
Step 3: Buy crypto using the Credit/Debit Card (you incur card & currency charges ranging from 3 % to 6%. Read the fine print before buying with cards) or do a SEPA (Single Euro Payment Area) transfer from your European Bank account to your Exchange Fiat account wallet. For me SEPA is the easiest and cheapest way to move Fiat to the exchange although it takes at the least 24 hrs from initiation to completion of the transfer.

Disclosure: I have a positions in the cryptos and may or may not increase my position within the coming weeks and months.See my complete cryptocurrency portfolio here.Please read the disclaimer before acting on the information provided on the website. Some of the links in the post may be affiliate links.

Chart Updates Week 31: Proterra Inc.

In the last post about Proterra (see Company Insight: Proterra), I mentioned the stock price being range-bound and moving sideways without any clear trend. After the earning report, the price has broken the support at 13.25 USD and seems to be consolidating inside the range between 10.5 & 12 on the 1D timeframe chart. The volumes are much better than the last period of consolidation between the beginning of March and mid-July. Moving averages, MA100 and MA50 curves show a downward trend, while the MA 10 seems to be flattening out indicating a consolidation.

Proterra Inc, 1D Chart

On the weekly chart, as mentioned there seems to be a downward trend on an MA10 curve.

TradingView Chart Snapshot

In conclusion, I would wait for the earnings report later in August (11th Aug to be precise) to see how the business is performing and wait for the price to break out before building any further position in the stock.

Disclosure: I have a position in the company and may or may not increase/decrease my position within the coming weeks and months.See my complete portfolio here. Please read the disclaimer before acting on the information provided on the website. Some of the links in the post may be affiliate links.

Asset Insights: Bitcoin

What is Bitcoin ?
Bitcoin is both currency and a payment network or electronic payment system which runs on blockchain. Bitcoin network is Open Source Code Full Consensus Distributed Ledger also called the blockchain.

Bitcoin network allows people to transfer value to each other using the internet (point to point) without any intermediaries (decentralized). The transaction can be done using the Bitcoin Client or a service provider (although that defeats the purpose of decentrilization but more about it later). The Bitcoin blockchain handles the problem of double spending by using validation of transactions by miners on the Bitcoin Network.

Privacy just like cash. Pseudonyms are used instead of real world names for transacting so Anonymity is not exactly there as some of the drug dealers found out mixing use of Pseydonyms to anonymity.

Bitcoins value propositions are:

  • Decentralisation: Decentralisation means that there no need for a third-party like a bank to do the transaction. The bitcoin network handles the confirmation and addition of the transaction to the ledger. And these ledgers are distributed on all the nodes in the network.
  • Security: The block on chain in bitcoin network are secured using a hash function which makes it impossible for the rogue nodes to alter the transactions on the chain frauduelently. Every account has to keys public and private, the public key is used to make deposits and the private key is needed for making withdrawals.
  • Predicatable monetary policy: On Bitcoin network, it is already fixed that the maximum number of bitcoins that can come in existence is 21 million. Also, there is fixed schedule for the reducing “block reward” for securing the network and would be “zero” year 2140.

What is Bitcoin the Blockchain ?

The process starts with a bitcoin transaction being added to a pool of unconfirmed transactions. Next, the unconfirmed transaction picked from the pool and then placed in their own transactional block by millions of computers (miners or nodes) on the Bitcoin network. When one of the computer qualifies (by solving/computing an extremely difficult math problem or mining) to put it’s block of “validated transactions” on the chain and gets Bitcoins as reward (value) in return. At this point, all the other computers then throw away the transaction back to the pool of unconfirmed transactions from their own block and take a copy of new block on the chain and update their ledgers.

Happy Flow of a Bitcoin Transaction

Soft forking
It might happen that more than one computer is able to solve the math problem at the same time and this is called Soft fork. And when this happens all the computers add both blocks on the chain to their ledgers. But because of the different network speed different computers recieve different blocks first and instructed to add a new block chained to the block they recieved first. The tie is broken when on the computer is able to solve the math problem and its block gets added to chain. And the longest chain wins. The block on the other fork gets discarded from the chain and transactions get pooled again to be picked up by the computers on the bitcoin network.

“Soft forking” is the main reason the system must be slowed down on purpose via the math problem. If the system was instant it would be forking everywhere, all the time, & there would be no consensus. No one would have any idea of which ledger is the correct one, and every computer would be busy building a different block to create yet another fork.

Use Cases for Bitcoin

Bitcoin as a Medium of Exchange:

Use Case: As a currency for everyday transactions

Firstly, The decentralization or distribution of the ledger on a bitcoin network means that the clearance of transaction take much longer time than if it was done by a centralized server. On bitcoin network, a block of transactions is added on chain every ten minutes. Also, the size of the block is limited to 1 MB and together with average time for adding a new block on the chain of ten minutes means that the maximum transactions that can be processed is limited to an average 4,7 transactions per second making the Bitcoin Network not so scalable for huge numbers of small transactions. It takes time to achieve consensus and reaching confidence requires atleast 6 blocks. So a single confirmation of transaction takes ten minutes and increased certainity of transaction is achieved with atleast six blocks added on chain which can take upto an hour to happen. For a comparison, Visa‘s payment network has the capacity to process more than 65 000 transactions per second. This can be solved by using a payment network similar to Visa, MasterCard or Lightening network to have the transactions off-chain and the final settlement on-chain. So Bitcoin network can be seen more as an alternative to inter-country or inter-financial institution settlement network for large transactions.

Secondly, the transactions added to the blockchain are immutable. That means once the transaction is confirmed, the buyer cannot reverse the transaction if the seller doesn’t delivers the promised product or service according to the agreement. Again, this can be solved by a second layer payment network with a “dispute period”.

Bitcoin as an Asset for Storage of Value

The maximum number of Bitcoins that can ever come in to existence is capped to 21 million and this limit is immutable. That makes Bitcoin the scarcest monetary asset which cannot be diluted by anyone and has an predictive monetary policy. So as long as there is demand for the bitcoins the value of bitcoins would increase in dollar terms preserving the purchasing power at the very least if not increasing the purchasing power of the bitcoins. So bitcoin is a better alternative to storing value than keeping cash, which is diluted by the States in collusion with central banks without any kind of predictably.

Conclusion: Bitcoin is in my view digital gold which gives the holder its soveriegnity plus all the advantages that come with it being digital, secure and decentralized. Bitcoin being scarcest thing in itself doesn’t makes it valuable. The value of the Bitcoin comes from others valuing it to be valuable just like some think gold is valuable. You cannot use DCF or other valuation models to come a value of Bitcoin as there are no cash flows associated with this asset just like Gold. Also, equating Bitcoin to a stock of a growth company is totally is wrong on lot of levels and is like comparing Apples to Oranges.

I don’t believe that Bitcoin will be the only currency or asset that will survive the eventual crashing of Fiat Currencies. And I am unsure of the scenario that will ultimately play out but if there is one percent chance that Bitcoin will endure the test of time as the store of value then it deserves at the least one percent of my Net Worth (and if I feel the probability is 50 % than it would get 50% of my Net Worth). I intend to keep saving a part of the spare fiat cash in to Bitcoin spread over time (Dollar Cost Averaging).

Disclosure: I have a position in the Bitcoin and may or may not increase my position within the coming weeks and months. See my complete cryptocurrency portfolio here. Please read the disclaimer before acting on the information provided on the website. Some of the links in the post may be affiliate links.


  1. The Bitcoin Standard: The Decentralized Alternative to Central Banking: Ammous, Saifedean: Amazon.se: Books
  2. lightning-network-presentation-time-2015-07-06.pdf
  3. IGFX_Inside-Visa_v09082017_abridged_digital
  4. https://drive.google.com/file/d/1FAfhOAU9g5DJ2E1KlZYMqd543hPZbZ-8/view

Company Analysis: Lemonade

Lemonade (Ticker Symbol: LMND) is Manhattan headquatered public-benefit company in the insurance business and is disrupting the insurance business by being able to keep their adminstrative costs to minimal by using AI to evaluate the risk premium for the insurances and claims. They are currently operating in US and Germany. They have offices in New York, Amsterdam and Israel. Lemonade currently offers Homeowners, Renters, and Pet Health Insurance in US, France, Netherlands and Germany.

Management Team: CEO Daniel Schreiber; COO Shai Wininger; Chief Behavioral Officer Prof. Dan Ariely; CFO Tim Bixby; Chief Insurance Officer John Peters,

Lemonade’s Business Model Canvas:

Lemonade: The Business Model Canvas


Arguments in favor of Lemonade

Loss Ratio Decreases
Lemonade is doing this in part by changing the normalised policy holders attitude towards the insurance company and a AI system getting better at detecting fraudulent claims. Traditionally the attitude towards Insurance company, because of conflict of interest or perception of conflict of interest, has led to policy holder feeling acceptable to make false or fraudalent claims.

What is Loss Ratio?
Loss ratio is percentage of claims the insurance company is paying out from the total amount of risk premium collected. To know more about the insurance industry read the post: Industry Analysis: Insurance

Lemonade is trying to improve this attitude towards the insurance company by removing itself from the conflict of interest by not having any incentive in delaying or denying the insurance claims. Lemonade charges a flat fee of 25% on the premium and from the remaining 75% a part is used for reinsurance and rest is added to the premium float. If there is any money left over after the end of the insurance term the money is given to the charity of choice of the policy holder.

Lemonade Pledge of Honesty

Lemonade has been able to offer insurance at price points which has made insurance an impulsive/unplanned buy. The price of entry level insurance is as low as couple of coffee at Starbucks or a monthly fee for a Spotify.

Customer Service
Almost 30% of all the claims to Lemonade are handled by the AI bots. I believe the ease of the claim process is delighting the customer and the fact that leftover premiums is going to the charity of the policy holders’ choice means that they are less inclined to make false claims.

Clearsurance.com Reviews for Lemonade

On Clearsurance.com, majority of the excellent reviews seems to be of customers happy with the onboarding process or small ticket claims. Lemonade also tops their list of best renter insurance companies in US for 2020. Almost all of the negative feedback has been from people who have been denied claims. On Trustpilot, the total number of reviews is only 25 reviews have been posted but majority of them have rated Lemonade Poor or Bad. And again most of the bad ratings are from people who have had their claims delayed or rejected.

Scalability of Lemonade’s Business Model
As the CEO Daniel Schrieber has talked about on multiple occassion about Lemonade being built on “Digital Substrate” that is harnessing the power of Disruptive Innovation Technologies including Artificial Intelligence, Mobile Connected Devices and Cloud Computing.

At Lemonade, AI bots replace the Brokers and Actuaries. AI is being used not just on the front end with interactions with the customers but also in the backend, for eg. cancelling of existing insurances, the AI bot interfacing the customer asks if they have an existing insurance and if the answer is yes the task is handed over to a bot in the backend which checks the database to verify and send the cancellation request to the insurance company in the prescribed format and mode for that particular insurance company. This gives Lemonade the possibility to scale geographically as soon as they have the regulatory approvals without any increase in staff and elastic IT infrastructure.

Since most of the activities are automated using AI, the cost for handling small claims is minimal compared that to legacy insurance providers who would incur same level of administrative cost “bureaucracy of the claim” irresptive of the size of the claim.

Traditional Insurance companies does not have the same granularity, resolution or data points about the customers as Lemonade has and that allows them to get to a much more customer specific risk premium or price to risk. During the onboarding process the customer is asked 13 questions from which 1600 data points are created. Compare this to the 20-50 questions that the broker for a legacy insurance company asks a potential insurance customer and calculates the risk premium based on this 20-50 data points.

Counter Arguments:
In this section, I have gathered from the internet some of the counter arguments for not investing in Lemonade and also my views on them.

  • Low Moat, Reinsurance, Regulatory Constraints
    Ark Invest (34:25) has commented that Lemonade is just an legacy insurance company wrapped up with a nice UI and that Lemonade have very low moat compared to other insurtech companies which have more unique technology stacks.

    Low Moat: In my view most technology companies cannot have a lasting moat and the only way to keep themselves ahead of the curve is by innovation or by pivoting. Lemonade has been in the business for only five year now (incorporated April, 2015) and they have managed to grow their customer base to a million (end of 2020). But it remains to be seen how well they can execute going forward in the face of other challengers. Also when it comes to other insurance products it remains to be seen what unique technologies they add to their stack.

    Reinsurance in my view is more a hedge tool for a small insurance company like Lemonade and not necessarily a liability. Those reinsurance premiums can be optimized when they have been in operations and have much more granularity on the risks they need to cover.

    Regulatory Constraints: As I understood in US market Lemonade needs regulatory approval from every state they would like to operate in and so regulatory constraints are for real. In Europe, they are already selling their insurance products in France, Germany and Netherlands. Dan Schrieber mentioned in one of the interviews that its much more easier to get regulatory approvals from other EU countries as Lemonade already has an approval from more that one EU country already.
  • Insurance is mature and extremely competitive. Their profit margin is limited.
    In rental and homeowners insurances, it seems Lemonade has been successful in lowering the operating costs by fully automating the onboarding process and handling 33% of the claims by using AI bots. But again it remains to be seen how they execute when they expand their product portfolio to auto or life for example.
  • Although, the insurance market is huge, Lemonade is targeting quite a small subset and because Lemonade is focused on a niche part of the market, the policy size is too small; As their model is entirely reliant on the availability and pricing of reinsurance as their source of capital, they are a relatively small buyer and will be at a major disadvantage position.

    Lemonade’s CFO Tim Bixby, mentions that Lemonade is planning to expand into Life Insurance product somewhere in Q1, 2021, involved probably in the onboarding experience for the customer and the claims process being handled by the partner (for regulatory reasons and getting faster to market). Tim also talks about Lemonade expanding into Auto Insurance products as well some time in the future. Based on these comments and the fact that they have been expanding to newer markets geographically is, in my opinion hugely expanding TAM for Lemonade products. As the figure from the latest Shareholder Letter shows, the customer growth rates and increase in IFP has been outstanding.

    Regarding the Lemonade’s planned expansion in the Auto Insurance, I am not sure how they plan to collect those data points that are needed for calculating the risk premium and also how much time and data points the AI algorithms will need to be able to automatically process the Auto claims. I was listening to the Dan Manges, CTO & Co-Founder of Root Insurance describing how they ask their potential customers to drive around with mobile having their app activated for two weeks before quoting them a premium based on factors like hard braking, accelerations. Dan also talks about not giving a quote at all if they are not able to offer a better deal than competition for riskier drivers. The same remains to be seen with Life and Health Insurance Products. There are two scenarios either Lemonade will have to invest in innovating a way to handle these new insurance products & keep delighting the customer or use the more traditional way of assessing the risk & not have any differentiation.
  • Lemonade’s loss ratios still look way to high compare to other insurance companies.

    I have not been able to compare Lemonade’s loss ratios to other insurance companies. But looking at the NAICs industry-wide net loss ratios for U.S. Property & Casualty Insurance Industry for the period 2010-2019, it has been varying between 67-79,5%. And in combination with declining trends in net loss ratio for Lemonade over every passing quarter leads me to believe that as the ML stabilizes with newer data points the net loss ratio would be at the least be inline with the industry if not better in future.
Source: Lemonade Q3 2020 Shareholder Letter
  • A path to profitability is not visible, and they have scaled their model too quickly (like Uber; burning money). The stock’s P/S is about 77 makes it strict no buy.

    It is still early days for Lemonade in my view and scaling in new markets and products has meant they had to spend at this stage. But there is some solace in the fact that trends for Net Loss Ratio and Total revenue is positive.
Lemonade Historical Operating Metrics
  • Is Lemonade really disruptive in their usage of AI ? What is stopping others to catch up with Lemonade ?

    I heard Dan Schriber talking about having a proprierty AI algorithm and data points which gives Lemonade an edge over the other start-ups and also the fact that they have already built up quite a bit of data to leverage from their more than a million customers. But yes, there is nothing stopping the competition from developing better AI and getting more data & refinements of their AI in product areas where Lemonade doesn’t has insurance products yet.

Disclosure: I have an explorative position in the company and may or may not increase my position within the coming weeks and months. See my complete portfolio here. Please read the disclaimer before acting on the information provided on the website. Some of the links in the post may be affiliate links.


  1. Lemonade Inc. – Hey investors, welcome home!
  2. Barclays Global Technology, Media and Telecommunications Conference
  3. Dan Manges, CTO & Co-Founder of Root – YouTube
  4. Lemonade is 5 Years Old! Here’s Our Strategy and Results to Date – YouTube
  5. The Future of Insurance | Lemonade @ DIA Munich 2017 – YouTube
  6. Lemonade, Inc. Q3 2020 Earnings Conference Call Letter to Shareholders
  7. Lemonade Quarterly Investor Metrics Q2 2020
  8. Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers: Osterwalder, Alexander, Pigneur, Yves: Amazon.se: Books
  9. August mARKet Update Webinar – ARK Invest (ark-invest.com)

Industry Analysis: Insurance

The insurance industry broadly consists of individual or companies who want to protect themselves against the risk of a negative outcome or insuring against loss by events like fire, accident, storm, hurricanes or theft by paying a risk premium to the Insurer, who guarantee a payment to the Policy Holder if the negative event occurs.

Insurance Industry Ecosystem

The insurer or the insurance company takes a part of the money to insure itself against over exposure risks thru Reinsurer. The insure hedges the risk of default, not being able to pay, all the claims or a huge claim by insuring against such a situation. In most cases the government regulation demand that the insurer has a reinsurance. For example, suppose the insurer has huge exposure to property insurances in a particular region and then the insurer tries to spread the risk by taking a reinsurance. In the absence of such hedging the insuring company can go bankrupt if in an unlikely event of a natural disaster like earthquake or a hurricane all its policy holders in the region send in their claims.

The insurer also spends a part of the collected risk premiums on administration costs like staff, offices, marketting etc. In legacy insurance companies, the costs of large number of employees and offices for these employees can be significant part of the operational overhead.

The remaining amount of the risk premiums collected by the insurer or the Insurance Float is invested in interest generating assets like government bonds, corporate bonds etc.

There are broadly three different types of Insurance companies:

  1. Accident and Health insurers;
  2. Property and Casualty insurers;
  3. Financial Guarantors. 

Disruptive Innovations in Insurance Industry

According to the Business Insider Intelligence report (ref), the global insurance industry is worth almost $ 5 trillion with majority of the business coming from US and Europe. Although legacy insurance companies account for most of the business, they are being increasingly challenged in their turf by nimble Insurtech and Fintech start up companies. The size of these legacy companies means that although they are aware of the need for innovation, they have a challenge of switching over from their legacy business model. Some of the legacy insurance have tried to catch up by buying up startups or their services.

Technologies being used for Disruption in Insurance Industry

Disruptive Innovation in the Insurance is being done by companies using the following technologies:

  • Artificial Intelligence
    AI is being increasingly used for automating things which traditionally were being done by humans like calculating the risk-premiums, customer service, processing of claims, fraud detections etc.
  • Distributed Ledger Technology
    Some of the insurance companies are using the Blockchain to take advantage of the distributed ledgers, consensus and smart contracts. The Blockchain Insurance Industry Initiative, B3i, was started by 21 Insurance market participants is building the solutions leveraging the Block
  • Cloud
    Legacy insurance companies like most companies in other industries are moving towards a cloud IT infrastructure. The insurtech startups have advantage in being cloud native from the inception and thus realising significant operational cost savings.
  • Internet of Things
    IoT is increasingly being used for developing highly personalised insurance products for the customers. Auto InsureTech Company, SmartRide, uses a OBD dongle to track the usage and driving trends to adjust the individual risk-premiums. Insurance giants like QBE have been using drones to remotely assesss and settle the insurance claims.
  • Mobile Connected Devices
    Insurance companies are increasingly offering the possibility to buy a insurances on the smartphones and even submit insurance claims directly from the customer’s smartphones.
  • Value Transfer
    Customer experience of Insurance has also been enhanced by the growing number of digital wallet users and innovations in FinTech. Allowing the customers to buy the insurance using the money in their digital wallet and getting payment of the claims in these digital wallets.

Please read the disclaimer before acting on the information provided on the website.


  1. A Brief Overview of the Insurance Sector (investopedia.com)
  2. The Connected Insurer (sas.com)
  3. THE INSURTECH REPORT: How financial technology firms are helping – and disrupting – the nearly $5 trillion insurance industry | Business Insider India
  4. B3i – The Blockchain Insurance Industry Initiative
  5. SmartRide – Nationwide
  6. QBE deploys drones to assess insurance claims – Hardware – iTnews

Disruptive Innovation Platforms

Efficiency innovations almost always reduce the net number of jobs in an industry, allow the same amount of work (or more) to get done using fewer people.

Empowering innovations create jobs for people who build, distribute, sell and service these products.

Clayton Christensen1, Author of Innovator´s Dilemma

The pandemic of 2020 has pushed most industries and companies to have their “Kodak Moment” where they are being forced to pivot away from their legacy business models and towards disruptive innovations. Status Quo is no longer an option. Commercial vehicle industry is already accelerating the adoption of technology and innovation in the area of Autonomous, Connectivity and Electrification to quickly move towards sustainability2 . But it was the presentation by Catherine Wood, CEO & Founder of Ark Investment Management, that introduced me to a more comprehensive picture of the Five Disruptive Innovation Platforms3 :

  1. Artificial Intelligence
  2. Blockchain
  3. Energy Storage
  4. Robotics
  5. Genome Sequencing
;Disruptive Innovation Platforms based on presentation3 by Catherine Wood, Founder & CEO  – Ark Investment Management, LLC.

I plan to build my area of competence in the technologies related to the innovation platforms including Blockchain, AI, Energy Storage and Robotics. In most part also because of my experience in these related technologies helps me expand my knowledge in these areas more intuitivly. And use this knowledge in identifying and analysing publically traded companies using these underlying technologies listed on US and European Stock Exchanges.

Related Innovative Technology Platforms for expanding the area of competence


  1. Clay Christensen: The Wrong Kind of Innovation | Inc.com
  2. (22) Cathie Woods – Investing in disruptive innovation | SingularityU ExFin South Africa Summit – YouTube
  3. Technology (scania.com)