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Alex Thorn Profile picture
@intangiblecoins
Aug 13 • 14 tweets • 7 min read • Read on X
NEW EVIDENCE THAT @KamalaHarris WILL CONTINUE CRYPTO CRACKDOWN

her advisor choices suggest she will keep biden’s hostile attitude to crypto

harris is working w/ brian deese & bharat ramamurti, 2 key anti-crypto officials from biden admin..

thread 🧵 Image
we got some intel on the harris campaign’s current posture on economic policy, and who they are working with, from some bloomberg @business reporting this morning

deese and ramamurti are two key architects of the biden admin’s anti-crypto crusade, including chokepoint 2.0

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deese famously wrote a blog on the white house website “the administration’s roadmap to mitigating cryptocurrency’s risks” on jan 27, 2023

the blog claims to support innovation, but casts the whole of their crypto policy through a “fraud” and “risk mitigation” lens whitehouse.gov/nec/briefing-r…Image
harris advisor brian deese’s anti-crypto white house blog was published on jan 27, 2023 — that very same day:

- the Fed rejected @custodiabank’s membership ()…

- …and master account application ()

- the Fed extended jan 3 2023 bank restrictions on crypto activities to all members, including state-chartered entities ()

- jan 27 was a friday, but when the senate opened again on feb 2, sen. dick durbin (majority whip, number 2 senate dem) took to the floor to lambast firms like fidelity for working on crypto (video: , press release: ). durbin also specifically praises the fed for its denials of custodia’s application

white house blog, two key fed denials, fed guidance expanding its authority on crypto dramatically, and 11 min floor speech from senate banking it’s hard to believe that the concurrent timing of these actions was not coordinated. and given the national economic council’s central role in forming white house economic policy, it’s obvious that deese was a central figure in the enactment of “chokepoint 2.0,” of which the actions above were central parts. but we don’t have to infer — it’s been widely reported (more later in thread)federalreserve.gov/newsevents/pre…
subscriber.politicopro.com/article/2023/0…
federalreserve.gov/newsevents/pre…

durbin.senate.gov/newsroom/press…
now to bharat ramamurti. he worked under deese at the national economic council (the two probably met at yale law, where they overlapped in the 2000s) and has extensive experience working for sen. elizabeth warren, the senate’s biggest crypto antagonist. he worked in her senate office and led economic policy for her presidential campaignImage
fortune describe bharat as “the white house’s top crypto critic”

@leomschwartz reported that it was ramamurti who intervened to block the stablecoin compromise between @PatrickMcHenry and @RepMaxineWaters in july 2023 finance.yahoo.com/news/white-hou…

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by the way, bharat later left the white house and was replaced on the NEC by jon donenberg, yet ANOTHER former warren aide. based on harris’ advisor choices, i won’t be surprised to hear shortly that he TOO will advise the harris/walz campaign. SAD! Image
in april, @rkuttnerwrites confirmed leo’s reporting, saying that it was specifically deese and ramamurti who intervened to kill the stablecoin legislation ()

keep in mind that this bill would have legalized but *heavily regulated* stablecoins — both with oversight (how they operate) and prudential (what collateralizes them) powers. regardless of what you think of such a bill, it would undoubtedly have brought stables in from the cold and added significant consumer safetyprospect.org/power/2024-04-…Image
by the way, the well-known primary sticking point was that republicans like @PatrickMcHenry wanted to preserve a state pathway for stablecoin issuer registration, meaning that a state-chartered depository (a state bank) could be allowed to issue a stablecoin. democrats seems okay with this, until deese and ramamurti’s intervention, at which point the democrats decided they would ONLY support a stablecoin bill if it gave regulatory authority SOLELY to the federal reserve and national banks
the irony in this is, of course, that on jan. 3 2023 (7 months earlier), the fed (and OCC and FDIC) issued guidance effectively prohibiting national banks from doing anything with crypto, and on jan. 27 2023 (6mos earlier) extended that guidance to state banks).

so when the democrats changed their stablecoin negotiating position to “only national banks under fed oversight can issue stables” at the urging of deese and bharat, it wasn’t intellectually honest. the fed and national bank regulators already prohibited it! brian and bharat knew this of course, because they helped orchestrate the operation chokepoint 2.0 policies with the fed and regulators in the first place!
mchenry and the republicans couldn’t accept that position because they knew that leaving it up to the national banking regulators and federal reserve would ultimately prevent any legal stablecoins from being issued, negating the purpose of the bill itself (fwiw states like New York have long allowed stablecoin issuers with strict oversight, but it has worked)
if harris’ campaign is really about the future, why are the backwards thinkers of the biden administration advising her on economic policy? she would do well to instead listen to democrats like @RoKhanna @RitchieTorres @WileyNickel @RepDarrenSoto @SenGillibrand and others who know that blockchains are the futures
people are policy at the end of the day, and if brian deese, bharat ramamurti, wally adeyamo et al are set to lead economic policy in a harris/walz administration, it’s VERY UNLIKELY the administration will soften its stance on crypto
.@CaitlinLong_ talked about bharat’s influence beginning at 32:45 on @laurashin’s podcast that came out today — worth a listen

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More from @intangiblecoins

Alex Thorn Profile picture
Jun 24
creditors have been stuck in mt gox bankruptcy for 10+ yrs--finally trustee says in-kind distribution of #BTC #BCH will begin in july. we think fewer coins will be distributed than people think & that it will cause less #bitcoin sell pressure than market expects

here's why 👇
the data in this thread is based on reviewing bankruptcy filings, talking with creditors, and a variety of assumptions. please note that these are estimates and are intended to be directional rather than definite. this is not investment advice and please do your own research.
on may 13 i sent a note to clients & counterparties of @galaxyhq detailing some of the numbers. see the summary graphic. gox lost ~940k btc ($424m at the time) and recovered 15% (141,868 BTC, or ~$63.9m at the time), now worth $9bn. while only a 15% recovery, that's a 140x gain for creditors in USD terms.Image
Read 12 tweets
Alex Thorn Profile picture
Feb 28
Why We Aren't (S)Topping

(for my first ever long X post, I'm releasing a note I sent early this this morning to Galaxy counterparties and clients)

The sun hasn’t yet risen in NYC, but I know it will. From Galaxy HQ north of Battery Park, the Hudson River looks like a sea of black but for the occasional glow of ferry lights appearing from or receding into the darkness. But Bitcoin is awake. If you want to sleep in this market, you better not wake up for a glass of water at 3am and look at the Bitcoin price, because you’re liable to be greeted with a fat green candle that makes returning to bed difficult. BTC is trading above $59k, and apparently traded as high as $59.5k in the early hours on the Eastern seaboard of the United States.

There are reasons – if you’re reading this you probably know a lot of them. The BTC ETFs took in a whopping net $576m of BTC yesterday (Tuesday Feb. 27), with BlackRock alone seeing $520m of inflows, its largest ever day. Saylor is still buying for MSTR; Reddit is going public and said it may continue to add BTC, ETH and MATIC to its balance sheet. Fidelity Canada (different from Fidelity Investments) is recommending a 1-3% allocation. Every day we see news that another RIA platform has added support for the ETFs. A wave of new demand is smashing against a programmatically scarce asset of which 75% is held by long-term holders, many of them diamond-handed zealots forged in the fire of several volatile market cycles.

One big question I’m hearing this week – where are we in the “cycle?” Notably, Bitcoin is trading just 12.16% below its prior all-time high. Bitcoin’s 4th halving will occur in about 52 days. At this point prior to the last two halvings, BTC was still down 60%+ from its previous all-time highs. Effectively, the bull runs of 2017 and 2020 hadn’t yet begun at this stage in Bitcoin’s supply schedule.

52 days before 2nd Halving (9-JUL-16)
BTCUSD $455.22 (-59.86% from ATH)

52 days before 3rd Halving (11-MAY-20)
BTCUSD $6,174 (-68.56% from ATH)

52 days before 4th Halving (20-APR-24)
BTCUSD $59,330 (-12.16% from ATH)

Although there have only been 3 halvings, and at 15 years old Bitcoin is still young by the standards of any asset class, some have raised worry that we may be speedrunning the “cycle” this time around. I suppose the notion is that the run we’ve seen over the last year might be the bull run, and that the normal course of post-halving bullish cycle may not occur. If we make a new ATH before the expected halving date of Apr. 20, 2024, that would further exacerbate this view, some say.

I’m here to say that I don’t believe that for a second. This time is different. The advent of Bitcoin ETFs in the United States is truly a monumental shift that will disrupt everything we know about Bitcoin price cycles, how to assess holder behavior, and intra-crypto rotational dynamics. But before I get into that, here’s a pile of data that suggests we are not yet topping.

Long & Short-Term Holders

Long-term holders are still mostly holding strong, currently possessing about 75% of all BTC supply. In just the last few days, we have seen a small decline – signifying a marginal transfer of coins from long to short term hands – the magnitude is nowhere near what we’ve seen in prior cycles.

MVRV Z-Score

Another way to visualize the cyclicality of Bitcoin price action is to examine the aggregate cost basis of the Bitcoin supply. While market value (market capitalization) is calculated by multiplying the current circulating supply by the last known price, realized value (realized capitalization) sums the value of coins at the time they last moved onchain. For example, if I bought a coin for $100 in 2012 and haven’t moved it since, that coin contributes $100 to the aggregate realized market cap. If we calculate a Z-score, the ratio between the difference of market cap and realized cap, and the standard deviation off market cap, we can evaluate whether Bitcoin is overvalued or undervalued.

Futures Open Interest

While BTC futures open interest is nearing all-time highs, so too is CME’s market share at more than 25% of all OI. Whereas prior peaks coincided with market tops, those futures markets were dominated by offshore crypto-collateralized exchanges, and market participants were much less institutional. They used volatile cryptoassets as collateral, sometimes an exchange’s native token (RIP FTT), and took on crazy amounts of leverage. Today, CME dominates and traders must post cash. And you have bigmarket players now – such as the authorized participants for the Bitcoin ETFs – that are using futures to hedge rather than for leverage.

Indeed, as @DylanLeClair_ pointed out (), the futures complex is completely different to prior cycles. The percent of crypto-margined futures open interest is “down only.”

More on leverage – shout out to Hannah Burgess who flagged this chart from @cryptoquant_com for me. The leverage ratio across exchanges is lower than it was just 2 months ago, let alone last summer. By dividing futures exchanges’ open interest by their total BTC reserves (i.e., custodied assets), you can get an idea of what user leverage. Increasing values indicate more investors taking leverage risk, while decreasing values suggest lower risk. (Image omitted due to 4-image max on X, see subsequent tweet)

Retail Interest

There’s definitely some retail interest, as exhibited by ETF inflows (more on ETFs below), but some of the toppy metrics haven’t yet rebounded. Google Trend data shows still minimal search interest, app store rankings show the retail crypto apps are not peaking as they have during prior runs, Twitter mentions are well below prior peaks, etc. (Image omitted due to 4-image max on X, see subsequent tweet)

Bitcoin ETFs

The ETFs have added assets on a net-basis over 21 of the last 22 days – and incredible feat. Yesterday was the third largest day of net inflows, and Monday was the 4th largest day. Flows appear to be accelerating, not stagnating or subsiding.

Bloomberg Intelligence (@JSeyff)

Despite incredible volumes and flows, there’s plenty of reason to believe that the Bitcoin ETF story is still just getting started. As we wrote in our October 2023 report “Sizing the Market for the Bitcoin ETF,” () the primary net new accessible market for these vehicles are wealth managers and financial advisors, who have not had a real way to allocate client capital to Bitcoin exposure. While we are periodically seeing headlines of this or that RIA adding support for the ETFs, there is $40tn of AUM at banks and broker/dealers that has not yet turned on access. We are likely to see a constant drip of headlines over the next 3-18 months about these platforms adding access – and these won’t just be catalyzing headlines, they come with the chance of new inflows too!

US Wealth Management - By Platform Type
Broker-Dealer = $27.1tn
Bank = $11.9tn
Registered Investment Advisors = $9.3tn
Total US Wealth Management AUM = $48.3tn
Source: Galaxy Research; Data: Dakota (Oct. 2023)

In April, we will also get the first round of post-ETF-launch 13F filings, and (I’m just guessing here…) we are likely to see some huge names have allocated to Bitcoin. New platforms, new investments, and higher prices compound on each other, creating a feedback loop.

Declining Volatility

Over time, BTC’s volatility has declined, and it is likely to continue declining over time. ETF buyers, especially advisor-managed accounts, are much less likely to day trade than cryptocurrency exchange users. Said another way, if a large portion of BTC ends up inside ETFs, these assets will likely be stickier than BTC held on a crypto exchange. (Image omitted due to 4-image max on X, see subsequent tweet).

Intra-Crypto Cyclicality

That stickiness is also likely to dampen intra-crypto cyclicality. Long time crypto traders and observers will know that, historically, in bull runs BTC typically leads, then when it stagnates or tops money rotates further out the risk scale, culminating in an “altseason.” Bitcoin held on a crypto exchange can be easily swapped for Ether, and then for altcoins. But Bitcoin held in ETFs cannot be so easily swapped, nor are ETF holders – again if they are heavily comprised of advisor-managed accounts – likely to swap even if they could. The ascendancy of the Bitcoin ETFs will lower the likelihood of major intra-crypto capital rotations. And if Ether ETFs get approved, it will become increasingly difficult for other altcoins to see capital inflows relative to those two because, after all, BTC and ETH together comprise most of the capital and offer exposure to nearly all of the market narratives.

Bitcoin’s 4th Halving

Just a quick word on this. We all know that, historically, Bitcoin halvings have preceded major bull runs (usually by a few months). While the reduction from ~900 new coins to ~450 new coins per day is small in absolute terms (and relative to BTC’s daily float of $10-25bn over the past few months), nonetheless prices are set on the margin and there really aren’t many coins for sale at these prices. But beyond any supply impact – which again I believe is marginal– this will be the first halving in which major US asset managers have a marketing machine working to educate on Bitcoin, and there is no better Bitcoin education than learning about the halving. So it’s a narrative event first (a quadrennial marketing moment) and a supply event second, though I think both aspects will be impactful.

Can’t (s)top Won’t (s)top

All this is to say, my answer to that burning question – where are we in the cycle? – is that we haven’t even begun to reach the heights this is likely to go. The ETFs are genuinely a game changer and they are still just getting started. Given the flows we are seeing, both in the ETF complex and through our desk, I think it’s reasonable to see a new all-time high within a matter of weeks. We’re starting to hear Bitcoin spoken about alongside gold and treasuries as macro hedge assets – just this morning I heard a traditional finance research analyst suggesting Bitcoin is becoming a genuine “hedge to fiat debasement” on national television. Bitcoin is prime time now, and while it might be hard to believe, things are just starting to get exciting.

Alex Thorn
Head of Firmwide Research, Galaxy
New York City
galaxy.com/insights/resea…Image
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disclaimers below

Disclosure Regarding Coin Ownership
Coin: BTC
Author: YES
Galaxy (including its affiliates): YES

Legal Disclosure: This document, and the information contained herein, has been provided to you by Galaxy Digital Holdings LP and its affiliates (“Galaxy Digital”) solely for informational purposes. This document may not be reproduced or redistributed in whole or in part, in any format, without the express written approval of Galaxy Digital. Neither the information, nor any opinion contained in this document, constitutes an offer to buy or sell, or a solicitation of an offer to buy or sell, any advisory services, securities, futures, options or other financial instruments or to participate in any advisory services or trading strategy. Nothing contained in this document constitutes investment, legal or tax advice or is an endorsement of any of the stablecoins mentioned herein. You should make your own investigations and evaluations of the information herein. Any decisions based on information contained in this document are the sole responsibility of the reader. Certain statements in this document reflect Galaxy Digital’s views, estimates, opinions or predictions (which may be based on proprietary models and assumptions, including, in particular, Galaxy Digital’s views on the current and future market for certain digital assets), and there is no guarantee that these views, estimates, opinions or predictions are currently accurate or that they will be ultimately realized. To the extent these assumptions or models are not correct or circumstances change, the actual performance may vary substantially from, and be less than, the estimates included herein. None of Galaxy Digital nor any of its affiliates, shareholders, partners, members, directors, officers, management, employees or representatives makes any representation or warranty, express or implied, as to the accuracy or completeness of any of the information or any other information (whether communicated in written or oral form) transmitted or made available to you. Each of the aforementioned parties expressly disclaims any and all liability relating to or resulting from the use of this information. Certain information contained herein (including financial information) has been obtained from published and non-published sources. Such information has not been independently verified by Galaxy Digital and, Galaxy Digital, does not assume responsibility for the accuracy of such information. Affiliates of Galaxy Digital may have owned or may own investments in some of the digital assets and protocols discussed in this document. Except where otherwise indicated, the information in this document is based on matters as they exist as of the date of preparation and not as of any future date, and will not be updated or otherwise revised to reflect information that subsequently becomes available, or circumstances existing or changes occurring after the date hereof. This document provides links to other Websites that we think might be of interest to you. Please note that when you click on one of these links, you may be moving to a provider’s website that is not associated with Galaxy Digital. These linked sites and their providers are not controlled by us, and we are not responsible for the contents or the proper operation of any linked site. The inclusion of any link does not imply our endorsement or our adoption of the statements therein. We encourage you to read the terms of use and privacy statements of these linked sites as their policies may differ from ours. The foregoing does not constitute a “research report” as defined by FINRA Rule 2241 or a “debt research report” as defined by FINRA Rule 2242 and was not prepared by Galaxy Digital Partners LLC. For all inquiries, please email contact@galaxydigital.io. ©Copyright Galaxy Digital Holdings LP 2024. All rights reserved.
images ommitted from the prior note due to X limitations

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Read 4 tweets
Alex Thorn Profile picture
Dec 11, 2023
this bill from @SenWarren massively expands the bank secrecy act, imposing bank-like KYC rules on non-custodial software products, including FOSS. and it’s gaining steam with 5 new co-sponsors 👀

this would be disastrous for #bitcoin and crypto in USA
warren.senate.gov/newsroom/press…
specifically the bill calls for dramatically expanding the bank secrecy act to cover open source software, including non-custodial wallets, miners, and validating nodes Image
as non-custodial and decentralized software cannot plausibly perform centralized compliance functions, warren’s bill would effectively outlaw crypto in america
Read 10 tweets
Alex Thorn Profile picture
Oct 30, 2023
the #bitcoin gamma squeeze from last week could happen again 👀

if BTCUSD moves higher to $35,750-36k, options dealers will need to buy $20m in spot BTC for every 1% upside move, which could cause explosiveness if we begin to move up towards those levels

more 👇 Image
when dealers are short gamma and price moves up, or when they are long gamma and price moves down, they need to buy spot to stay delta neutral. last week’s expiries will dampen potential explosiveness, but it’s still in play.

compare today’s gamma profile to last week’s. (thanks to @Amberdataio for helping us calculate this)
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this week i’m looking at some other derived metrics. (btw, if you want to understand how to use onchain data to derive valuation metrics, read this great report from @christine_dkim galaxy.com/insights/resea…
Read 9 tweets
Alex Thorn Profile picture
Oct 23, 2023
options market makers in #bitcoin are increasingly short gamma as BTC spot price moves up.

when you’re short gamma and spot px rises, you need to buy back spot to stay delta neutral.

this should amplify the explosiveness of any short-term upward move in the near term. more 👇 Image
when dealers are short gamma and price moves up, or when they are long gamma and price moves down, they need to buy spot to stay delta neutral.

using data from @Amberdataio, we can calculate dealer positioning, and our analysis shows dealers are increasingly short gamma starting around $28.5k and above. at $32.5k, market makers need to buy $20m of delta for every subsequent 1% move higher. the positioning implies that market makers need to buy back increasing amounts of BTC as spot moves higher, which should add to the explosiveness if any upward move in the short term.
more, dealers are long gamma in the $26,750-28,250 range. when you’re long gamma & spot declines, you also have to buy back spot to stay delta neutral. thus any short term downside px action will face resistance as options dealers buy back delta.

this is a great setup for bulls because if spot moves moderately higher, short gamma covering could make it rip much higher pretty quickly, but if it moves lower, long gamma covering could provide some support and limit near term downside.
Read 6 tweets
Alex Thorn Profile picture
Apr 16, 2023
once and for all — this Unicoin thing is fake.

the IMF did not announce a new global CBDC with the “DCMA”

some likely fake org (DCMA) posted a press release on @PRNewswire and it tricked tons of people (including smart friends of mine!)

here’s to spot this fake news 🚩🚩🚩
some obvious red flags if you just read the press release. first, look at the end. fake person w/ generic press release distribution service (email4pr lol). if DCMA was affiliated with IMF, it would come from IMF, not a made up person with a greensboro NC phone number Image
when real companies post press releases, they cite themselves as the contact! just one quick example ImageImage
Read 13 tweets

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