0/ With $BTC fighting with $30K theres a lot of parallels being drawn to the $6K level from 2H18.

The theoretical cost basis from June-Nov '18 was $5,126 and BTC traded at an average ~27.4% premium over that time to that level.
1/ Comparing $BTC & $ETH, ETH tends to move later in the cycle and the market is notably worse at buying it.

The avg / median "premium" for $BTC holders is 79.1% / 65.6% with just ~15% of days "under water."

For $ETH the avg / median is 45.3% / 35.1% with ~31.1% under water
2/ So we know the market isn't good at buying $ETH and from June-Nov '18 it traded at a ~18% discount to the theoretical cost basis which didn't trough until April '20 at $212.89.

This should be even greater divergence the further out the crypto risk curve
3/ For $BTC a 27.5% premium to current levels is $24.6K, but if the cost basis follows what happened in '18 lower (it dropped 13.8% peak to trough on a monthly basis and followed a similar trajectory here that would be $17K + 27.5% or ~$22K.
4/ This time around there are different market participants that drove the move higher in 4Q20 compared to 4Q17-1Q18 (insurance funds, asset managers, pensions) versus pure retail so the magnitude of the reversion should be lower although the complicating factor is macro.
5/ On December 23 2018 many remember @stevenmnuchin1 convening the "US Plunge Protection Team" reversing the last monetary policy mistake when DJT tried to (but couldn't) fire Powell.

$BTC bottomed close to the day given what was a very conducive macro backdrop.
6/ In recent comments by Bernanke he thinks we start reducing purchases by $10B/month from the current $120B/month cadence (we'll see if the market lets that happen) but this would be a very different macro backdrop for $BTC despite microstucture similarities to '18
7/ If $ETH follows a similar trajectory to '18 during the calendar year it saw the theoretical cost basis drop by ~46% peak to trough which would be ~$875; but then it also saw an 18-20% discount putting it in the $625-$700 with $BTC at $22K-$25K that's 0.028-0.03
8/ Finally looking at historical $BTC corrections its currently down ~55% from the peak in mid-April (96 days later) going back to t'10 the avg / median correction was 127 / 54 days with a pullback of ~57.7% / 49% with the big outliers coming at the end of cycles in '15, & '18.
9/ The macro backdrop will be very important for $BTC going forward as a lot of the micro structure damage is closer to the end than the beginning. So what will Jay Powell do?

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More from @JohnStCapital

21 Jul
0/ According to II, since Steve Mandel founded Lone Pine in '96 it has returned $42.3B to investors, 3rd all time. Last year his L/S fund was +30% & his LO fund +46% joining other Tiger Cubs Tiger Global & Viking at the top of the list.

Another master class w/ @patrick_oshag
1/ In terms of margin of safety Steve is focused on the nature of the business franchise, the replicability of that & the quality of the people running it versus things that are financial in nature.
2/ He started his career in retail & said it was an interesting area to grow up in, due to the fact that it is rapidly changing & there's always winners & losers. Many of the richest people in the world are retailers (e.g., Beranard Arnault, Amancio Ortega, Francoise Bettencourt
Read 24 tweets
20 Jul
0/ Ben Bernanke back on the road talking about all things inflation, monetary policy, the Fed's response from here, tightening, social responsibilities, crypto, CBDCs and more. Very similar sentiment to last week so highlighting a few nuances he expanded upon including...
1/ The 5.4% CPI print raised some eyebrows at both the White House & Fed, and it's a historically high #. He continued to reiterate we're not in the '90s anymore & the Fed is very much trying to overshoot its 2.0% target

But he still believes its transitory w/ some upside risks
2/ Re: transitory considerations he once again discussed base effects, the uneven opening resulting in bottlenecks & problems with supply chains (notably chips leading to auto inflation spilling into used cars) as well as commodity prices.
Read 21 tweets
19 Jul
0/ Interesting InsurTech deal today with @kinsured going public via a merger w/ @mhiggins $OCA. Congrats to @seanharper & team.

The OCA team w/ Matt & @garyvee has deep DTC expertise helping to build the first brand for home insurance

$1.0B EV is 4.4x '22E GWP / 15.0x '22E GP
1/ Home insurance is a $105B/yr compelling end-market that has seen little technological disruption; the product is homogeneous, incumbents are inefficient from a cost perspective & it is a product people are required to buy, with long retention rates (8-9 years).
2/ InsurTech names have been under pressure YTD with $LMND $MILE $ROOT (30%)-(50%) & $RTPZ below trust.

These names were being valued at double digit multiples on GWP and 40-50x GP vs. incumbents trading on a multiple of book value often w/ worse fundamentals (but > growth).
Read 9 tweets
18 Jul
0/ The @Paytm team filed to go public & the S1 is a good read on all things payments / India.

A few highlights:
-Paytm has a two-sided network with 333M consumers & 21M merchants (114M ATU's)
-800K payment devices
-They consider themselves a "payments-led super app"
1/ They talk up the macro India story:
-GDP of $2.7T (6th largest in the world); growing 7%/yr since '15
-Projected to grow 9%/yr from '20-'25 to hit $4.2T & by 2030 projected to be third largest economy in the world.
-745M working age people (vs 172M / 849M in the US / China)
2/ -Median age of 28 (vs. 38 in China & the US, 43 in West. Europe, & 48 in Japan)
-700M gen Z & millennials, largest in the world.
-450-500M urban population, expected to grow to 550M by the FY 2026.
-Indian middle class is 55-57% of the population (proj to be 65%+ in '30)
Read 23 tweets
14 Jul
0/ Ben Bernanke spoke in a fireside chat on inflation, the real economy, monetary policy, etc... Re: inflation he notes Economists / Fed have revised their inflation forecast higher. "There is a very substantial transitory component, looking at base effects; used cars, airfares /
1/ hotel prices that dropped dramatically in '20 are coming up to more normal levels. There are bottleneck supply issues, chips not being able to produce cars, a commodity price jump that's not sustainable or won't continue to provide an inflationary shock, etc... Other pot'l
2/ transitory effects are the labor market. Including trend, Fed is still ~10M jobs short from pre-pandemic rate, yet participation rate hasn't moved since last summer, a lot of vacancies, there is a supply effect coming from labor market which is no doubt transitory. Parents
Read 32 tweets
14 Jul
0/ $BAC CEO Brian Mohynihan on spending: "We are halfway through the year & total payments are $1.8T or ~60% of last year's level (which was a record).

Total BAC consumer SMB payments set a 4th quarterly consecutive record, reaching $976B, +41% YoY & +23% over '19.
1/ "Spending accelerated as COVID vaccinations increase, business reopen & domestic travel increase. Combined spend at retailers & services comprises over 50% of debit & credit card spending, a portion of the total spend +27% vs 2Q19.
2/ As of mid-June, domestic airline purchases were +8% vs '19 while int'l airline purchase on their cards are still down ~40%, showing the difference of the progress in United States versus other places (relevant for $V).
Read 6 tweets

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