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1/ No, it's not @facebook's "crypto" experiment. My trading instincts say it's dollar weakness.
Earlier I had the pleasure of sitting down with @lisaabramowicz1 and @ptsweeney on @Bloomberg to discuss what's fueling bitcoin recent run: bloomberg.com/news/audio/201…
Earlier I had the pleasure of sitting down with @lisaabramowicz1 and @ptsweeney on @Bloomberg to discuss what's fueling bitcoin recent run: bloomberg.com/news/audio/201…
2/ Contrary to many headlines, so far Libra / Calibra does not appear to be a "cryptocurrency."
Rather, it represents fiat value transported on cryptocurrency rails.
Rather, it represents fiat value transported on cryptocurrency rails.
2/ Contrary to many headlines, so far Libra / Calibra does not appear to be a "cryptocurrency."
Rather, it represents fiat value transported on cryptocurrency rails.
Rather, it represents fiat value transported on cryptocurrency rails.
3/ Because of this, it's inheriting the legal & regulatory hurdles associated with both crypto (difficult) & the legacy banking system (also difficult).
Our firm (@CoinSharesCo) is very familiar with this regulatory quagmire.
Facebook certainly has their work cut out for them.
Our firm (@CoinSharesCo) is very familiar with this regulatory quagmire.
Facebook certainly has their work cut out for them.
4/ So why might they take on this endeavor? Because of growth.
My colleague @Melt_Dem has an excellent piece exploring their motivations: medium.com/coinshares/cal…
More or less, the opportunity to monetize 2.9 billion users is too lucrative even for Facebook to pass up.
My colleague @Melt_Dem has an excellent piece exploring their motivations: medium.com/coinshares/cal…
More or less, the opportunity to monetize 2.9 billion users is too lucrative even for Facebook to pass up.
5/ Though this news did not drive the recent price movement in my opinion, bitcoin will still benefit when (if) Libra manages to launch as it will provide a new crypto on-ramp for 2.9 billion users while familiarizing them with digital wallets and public-private key cryptography.
6/ But if Facebook isn't to thank for the recent price action, what is?
As a trader, I always have to look at the larger backdrop.
The main theme I see in the market right now is USD weakness with additional uncertainty injected by the Fed.
As a trader, I always have to look at the larger backdrop.
The main theme I see in the market right now is USD weakness with additional uncertainty injected by the Fed.
7/ Today we're in uncharted territory with central banks & negative interest rates - arguably more so than post '08 financial crisis.
This means policymakers are leaving fewer tools to fight the next downturn that inevitably will occur. Investor psychology is notoriously fickle.
This means policymakers are leaving fewer tools to fight the next downturn that inevitably will occur. Investor psychology is notoriously fickle.
8/ Yet coincidentally #bitcoin is up over 200% through the first six-months of 2019, and continues to gain dominance as the crypto winter thaws
9/ Another encouraging sign is that now we have more professional custodians:
- Fidelity @DigitalAssets is live
- @CoinbaseCustody too
- @ledgerx just secured @CFTC licenses
- @Bakkt futures supposedly launching in July
(Physical delivery is necessary for any true hedging.)
- Fidelity @DigitalAssets is live
- @CoinbaseCustody too
- @ledgerx just secured @CFTC licenses
- @Bakkt futures supposedly launching in July
(Physical delivery is necessary for any true hedging.)
10/ But don’t get too excited too soon - it's not as if institutions are all of a sudden racing in...
Looking at CME volume, I get a different story than they do:
Looking at CME volume, I get a different story than they do:
11/ Napkin math for CME $BTC futures volume compared to others supports this read...
- 1/5th of crude volume
- 1/16th of @Bitmex volume
- 1/100th of gold volume
In my view, we've got a long way to go before we can reasonably conclude that institutional money is here for good.
- 1/5th of crude volume
- 1/16th of @Bitmex volume
- 1/100th of gold volume
In my view, we've got a long way to go before we can reasonably conclude that institutional money is here for good.
12/ So to answer the question "is bitcoin back?"
My take - yes, bitcoin dominance is back... but only comparatively speaking, of course.
My take - yes, bitcoin dominance is back... but only comparatively speaking, of course.
