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Parabolic Trav @parabolictrav
, 7 tweets, 2 min read Read on Twitter
1/ I believe that financial product innovation drives market cycles. New methods of access and leverage improve ability to speculate, and if the underlying is bullish, they can dramatically enhance returns. 1920s, for instance, was so powerful due to the introduction of margin.
2/ The 1980s, as well, was so incredibly powerful due to the introduction of futures trading on the S&P 500 in April 1982. Some of the most famous investors/speculators made the bulk of their wealth in the 1980s (Soros, Tudor Jones).
3/ When SP500 futures were introduced in '82, the market fell an abrupt 15% afterwards. Once the new instrument took hold, I feel it was instrumental in the extreme uptrend that ultimately led to the 1987 crash.
4/ You can go further with this concept, CDOs and CDS drove post 2000s returns. ETFs, and leveraged ETFs drove post 2008. GLD ETF drove 2010-2012 Gold parabolic bull run. And recent market returns driven by the myriad of instruments that allow the ability to go short VIX.
5/ Bitcoin is going through a similar development path. First each exchange launch fuels each bull (Gox, then Stamp, then Finex, etc), then leveraged exchanges launched (OKex and Bitmex) and they drove the heavy returns post 2015 bottom all the way to 20k.
6/ Now we've just had a big set of launches with SQ, Robinhood, CME/CBOE futures, @CoinbaseIndex, and eventually ETFs and other products (leveraged ETFs, mutual funds, etc). Bitcoin is going through a 100 years of financial infrastructure growth in a decade.
7/ One of the fundamental reasons I am so bullish is because all this new innovation just launched the last 3 months. And like 1982, CME BTC futures have launched into a correction, and I think they'll find footing then fuel the next mega bull wave. My next video will be on this.
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