BVDDY Profile picture
20 Nov, 12 tweets, 5 min read
The Next Bitcoin Mania is Here...

The main thesis (explained in the thread below) has been that rising institutional demand coupled with an already-tiny float will catapult Bitcoin higher in the short to medium term.

Brief update.👇
Let’s run through all the Old Guards of Wall Street who’ve recently morphed into Bitcoin advocates...

First up, we got George Ball, ex-Prudential CEO, coming out in favour of Bitcoin on Aug 14:…
Next, we got the legendary Paul Tudor Jones, declaring that “it’s like investing early in a tech company” on Oct 22:…
Then, we got none other than the man himself, Stan Druckenmiller, telling us on Nov 9 that “if the gold bet works, the Bitcoin bet will probably work better because it’s thinner and has a lot more beta to it.”
This week, we had Ray Dalio come out and admit that he “might be missing something” about Bitcoin (what he’s missing is 165% YTD return...)…
This morning, Blackrock’s CIO for fixed income, Rick Reider, noted that he thinks Bitcoin is “here to stay”...…
With all these influential Old Guards coming out in favour, everyone’s gonna need some Bitcoin. Most allocators will eventually capitulate to at least a small Bitcoin allocation.
And let’s not forget the monster that is $GBTC, which continues to corner the float at astounding speed, gobbling up around 120,000 coins since mid October... and collecting 2% management fees...
And, if Google Search Trends mean anything, we could just be in the very early innings of this Mania...
All that said, Bitcoin is, as we well know, extremely volatile.

It’s up 65% since I wrote that it was “On the Precipice of Another Mania” on Oct 14, but it could easily give back those gains before rocketing past its previous all-time high.
If you think Bitcoin is the future and the answer to all our monetary woes, I wish you luck.

If you think Bitcoin is a giant Ponzi scheme, then I urge you to channel your inner Soros and hop in regardless: “When I see a bubble forming, I rush to buy, adding fuel to the fire.”

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More from @BvddyCorleone

20 Nov
1- $GBTC makes it a lot easier for institutions and retirement accounts to own Bitcoin. So in a sense, it does increase demand, by increasing accessibility.

Institutions that otherwise would not have been able to buy are now buying thanks to $GBTC (and other similar products).
2- Think back to the listing of $GLD; it’s a similar story. Pre-2005, it was almost impossible for institutions to own gold, as only option was physical.

Enter $GLD in Nov’04. It changed the game & ushered in a lot more buying, as more ppl who wanted to buy were able to do so.
3- The listing of $GLD in Nov’04 arguably played a role in the ~300% rise in the price of gold between 2005-2011.

We could see the same dynamic play out in Bitcoin (which is thinner and more illiquid than gold), especially as more vehicles for owning Bitcoin come to market.
Read 6 tweets
2 Nov
@coloradotravis @CTYRTZL 1/X- Let’s go back to basics (last time I did this, @profplum99 retweeted my comments about money only to liken them to a kindergarden story 😅).

Borrowers demand money. Lenders supply money. Either side can push interest rates up or down, all other things being equal.
@coloradotravis @CTYRTZL @profplum99 2/X- Let’s say economic times improve and investors see a lot of new opportunities to earn great returns. But they lack capital. So demand for money increases. That will push interest rates up, all other things being equal.
@coloradotravis @CTYRTZL @profplum99 3/X- Let’s say economic times turn bad and investors see fewer opportunities into which they would invest capital. So they reduce their demand for capital. That will reduce interest rates, all other things being equal.
Read 4 tweets
1 Nov
I finally gave this episode a listen. Great and provocative interview as always from @ErikSTownsend.

Below I’ll share some general comments on MMT along with some thoughts that came to mind while listening to Erik’s conversation with @StephanieKelton.

A thread.
1- Let’s start by dispelling common misperceptions. Many people don’t understand MMT yet think they do.

It’s helpful to distinguish two aspects of MMT. The 1st is mainly descriptive; a plain description of how our current fiat monetary system works in reality.
2- Many people, including many classical and Austrian economists, do not appreciate this (largely correct) part of MMT.

To better understand it, see @wbmosler’s succinct MMT White Paper, most of which I would consider merely descriptive. Link:…
Read 21 tweets
1 Nov
I wrote about the exceptional opportunity in US NatGas about a week ago, and things are moving quickly...

Let’s do an update and go through some exciting developments. In short, the picture for NatGas continues to improve from all angles.

A thread.
1- Injection into storage last week was only 29 Bcf, an incredible number.

This injection was ~22% lower than consensus estimates for the week (37 Bcf), ~70% lower than the injection in the same week last year (89 Bcf), and ~57% lower than the 5yr average injection (67 Bcf).
2- Not only that, but for the week in progress (report for which is out next Thursday), we’re anticipating a net withdrawal from storage.

That means we’re kicking off withdrawal season two weeks early this year. 🤠…
Read 12 tweets
30 Oct
This week was... interesting. The election turbulence that some were predicting finally materialized.

The most notable day of the week, IMO, was Wednesday: stocks sold off by more than 3.5%, while Treasuries offered no protection.

Risk Parity continues to teeter.

A thread.
1- Wednesday was one of only 10 days since 2008 where stocks sold off 3.5% or more while Treasuries offered little to no relief.

Table via @Convertbond:
2- Days like Wednesday pose a systemic threat to the financial world. And the frequency of such days appears to be on the rise:

2020 has already posted 3 days (Wednesday being the third) of heavy blows to the Risk Parity framework.

Risk Parity funds are NOT having fun.
Read 10 tweets
22 Oct
Time for a thread about US NatGas and why it will surprise to the upside...

There’s an exceptional opportunity setting up in the energy space, in particular for US NatGas and related equities.

I’ll explain the setup in this thread and also reveal my top pick. 🤠
1- I’ve been meaning to write this thread for awhile now, but the recent M&A action in the energy space has brought this opportunity to the forefront.

Let’s start simply by charting Henry Hub continuous NatGas prices over the last 20 years:
2- It’s at a generational low.

NatGas hit an ATH of almost $16 in Dec of 2005.

Since then, it’s been a brutal grind to much lower prices, owed to the all-too-easy access to financing as well as the hypergrowth in US shale and associated gas.
Read 17 tweets

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