Ok, looks like I need to explain this tweet...
Its just a thought but...

Let's say there is a $100bn of institutional money ready to come into BTC in the next 6 months and $XX bn retail.

Crypto is impossible to buy for some and hard(ish) for others.
Then imagine an equity is launched that is worth $60bn on the grey market. If you are a fund manager, then why not just own Coinbase to get exposure? Easy.

No, it ain't bitcoin, but it will move sort of like it and you don't have to beg your investment committee or trustees.
Retail - well, they can now just buy on Schwab in 3 seconds.

BTC exposure without the pain of new accounts, fear over hacks and all the other FUD.

So, rational choice - buy Coinbase, regardless of whether good or bad as a company... Its BTC for Dummies.
Job done. Boxes ticked. Move on. Get rich. (well, last part might work or not)

Sadly, it soaks up $60bn of demand (or more) for BTC. Others who hate the bearer asset custody model will switch to rest their minds and also integrate into their prime brokerages or RIA accounts.
That absorbs a lot of future demand. Maybe a few months worth and the institutional buying slows down... market corrects.

All perfectly normal and reasonable.

..Then it goes to the moon. See 2013 for details.

Who knows... but worth thinking about.

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More from @RaoulGMI

8 Jan
There is a phenomena that I have observed over the last 30 years in markets...

The New Year Head Fake. 1/2
Hedge funds and asset managers start the year with zero P&L and new risk buckets to allocate.

After a 2-week break they want to get some trades on their shiny new books.

Wall St tends to publish a bunch of consensus Year Ahead trades. So, people pile in...
Then, once everyone is in, the trend often reverses or has a massive correction, taking everyone back to flat or negative on the year and they begin the P&L grind again...

I write about this almost every year in GMI to warn people not to pile into new risks in Jan and wait
Read 7 tweets
7 Jan
Crypto Bomb:

Ok, I'm leaking some GMI early... (not published yet - tomorrow a.m.)

I will eventually publish in Real Vision too (this article only). I push back strongly the Pfeffer view and the "shitcoin" view.

It's all Metcalfe's Law, baby... and ETH = BTC, like it or not.
You are your behavior....
Network value...(Metcalfe's Law)
Read 14 tweets
3 Jan
While everyone seems to celebrate every single new BTC high, let me remind you of where we are going...

Nothing is a Law of Nature but the log-regression trend since inception makes sense to me contextually.

I think the risk is people UNDERSHOOT in their price targets. 1/
The Halving runs tend to get between 1 and 2 standard deviations overbought versus trend, and it occurs usually around 18 months.

This would give a rough price target between $400k and $1.2m by end of 2021 (not an exact science, but context).
It also ALWAYS climbs a wall of fear - in 2017 it was forks (they threw me off the trend back then). This time it feels like regulation and Tether/stable coins will create the wall of fear that the market climbs, throwing weak hands off.
Read 5 tweets
31 Dec 20
Happy New Year!

I just wanted to say thank you for a hell of a year here on Twitter.

We've all hung out together, debated, bounced off new ideas, bickered, trolled, celebrated each others victories and encouraged each other and tried to add value to the community.
We've even had fun nights on Friday night booze Twitter (Asia/Oz/NZ Saturday hangover Twitter). We've both kept each other sane over 2020 and driven each other mad, like a family. We've also enjoyed making fun of each other too and not taking ourselves too seriously.
I've tried really hard to add value where I could because that is what creates a vibrant community, where everyone tries to add value in their own way.

I've nailed some really big macro themes and got the dollar totally wrong too, but overall its been a banner year.
Read 16 tweets
30 Dec 20
We are at the stage where people I really respect - mean reversionists, value players and rationalists are urging caution in bitcoin.
However, I think reflexivity here is stronger than they can ever possibly imagine. There will be sharp sell offs on negative new and also on no news but people will hope for even better entry on sharp dips and miss it. 1/
And then bitcoin will climb the wall of fear and eventually transition to scale the cliff of incredulity.

This is the most reflexive set up I’ve ever seen in my life. Even wild eyed bulls will shake their heads in dismay.

I won’t be easy to hold on.
Read 5 tweets
22 Dec 20
Final crypto comment for a bit:

Tokens are just real-time trading VC bets. If you owned early seed investments with real-time mark to market you'd see the exact same. 80% go to zero, 19% add value and 1% make all the money. Real time marks freak people out.
If you real time marked any VC investment you see it go to near zero numerous times (for Real Vision, probably 6 times). The value comes from adoption and eventually revenues as business models adapt.Most dont survive, its normal and is capitalism.
Thinking everything is a scam because its not BTC is simply ludicrous. It is like taking a snapshot of early VC bets and writing everything off as a zero because its not Google.

Apples and oranges.

The actual money is in the numbers game - Pareto's Law.
Read 6 tweets

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