.@SenWarren & 104 other members of congress wrote a letter to the President about their concerns that crypto was financing terror. Then FinCEN published a major policy initiative in what appears to be a coordinated effort.
Here's my response. @WSJ wake-up.
bitcoinmagazine.com/legal/bitcoin-… Some key highlights from the article:
"In the face of the unstoppable tide that is Bitcoin, it is paramount that we, as a society, and particularly as citizens of the United States, recognize the critical crossroads we find ourselves. The trajectory of Bitcoin’s innovation and adoption will continue, with or without the active participation or understanding of any single nation. The question that remains is whether we will be leaders or laggards in this inevitable financial evolution."

Some Interesting Charts - a quick thread. Most are familiar with the @Yardini chart that combines all the major central banks' balance sheets into USD (FED, ECB, PBOC, & BOJ). When you see the chart, the COVID insertion appears massive relative to earlier periods. See below 1/4 But, during this period of time the M2 money supply has aggressively grown. When you adjust the chart for M2, this is what it looks like. As you can see, a new high on their collective balance sheets wasn't achieved even though in non-M2 adjusted terms it had a massive jump. 2/4

Macro Snapshot Thread:

Yen / Dollar hitting limits not seen since 2001 Euro / Dollar hitting limits only seen a few times this past two decades.

One of the most interesting charts I saw during the #Bitcoin conference was this one by @peterthiel. In 1980, the global stock market was capitalized at parity with the total market cap of gold! However, today there’s a 10X difference. Why? 🧵 1/6 I suspect the answer is based on the idea that interest rates are like economic gravity. When rates are high like in the early 80’s it’s the equivalent of conducting business as if gravity on earth was 10X more stressing than it is today. For example if you want to lift …2/6

Death Cross on the S&P500 today. Death Cross on the Nasdaq 2 weeks ago.

The prices of some major commodities since the start of 2022 (50 days).

Nat Gas: +25%
Oil: 23%
Aluminum: 20%
SoyB: 20%
Iron Ore: 17%
Corn: 12%
Coffee: 10%
Cotton: 7%
Copper 2%
Sugar: - 2.88%
Hot Rolled Steel: - 33%

If broader markets keep selling-off expect an EPIC reversal. As we "birth" this new economic system, the inflationary periods will be accompanied with violent deflationary fits. This is simply the fiat currency failing. It should be expected. Right now, it appears the fixed income market and equity markets are starting their big

So, I read a bunch of books each year, and I’m going to start highlighting my top 5 favorites reads at the end of each year. So here it goes for 2021:
#1: Layered Money by Nik Bhatia - loved this book, it does an incredible job laying out how the existing financial system… Works and where it’s going next.
#2: The Fiat Standard by Saifedean Ammous - This book does an amazing job illustrating the existing financial system in Bitcoin terms - which for me was a really interesting and informative way to present ideas…
#3: ….

Be sure to checkout my 6 hour interview with @Breedlove22 on the brain and money. I think you guys will enjoy it on your next car ride or workout. Let us know what you think. Here’s the link: Here’s the second hour:

With the unprecedented relocation of mining hardware due to China's ban, I'm paying close attention to hash rate stabilization and recovery for understanding when the BTC price action might start to recover. Over the past 6 week, the difficulty adjustment is suggesting 45%+ 1/ of the hashing power has been intermittently been removed from the network. This has happened with zero down-time and a minimal impact to the speed of transactions getting written into blocks. I suspect this enormous cost to relocate hardware is what has caused the unexpected 2/

Preston do you own any ETH?
No. Here's why. A Thread.

First, I don’t trust the decentralization of the ETH protocol. In the past, ETH has been governed by the direction of a few key influencers. If you haven’t discovered yet, the essence of this entire movement is removing 1/ the authority of a few and putting that power into the hands of the many. This occurs through a system of consensus (not governance) and a core tenant of making sure it is feasible is if all interested parties can run the code. If I want to run a 2/

Momentum in the traditional markets appears to be shifting. Now, this doesn't mean policy makers can't come out in the coming days / weeks and quadruple down on more stimulus to keep things rolling. Here's a thread of charts that show the weekly MACD for important indexes. 1/ SPY 2/ Nasdaq QQQ.

Typically when a commodity goes into Gloria Estiphon level contango, it's because there's been a supply-demand shift and the cost of scarce storage is getting bid into the future price. This is why the Bitcoin contango is confusing a lot of people. The cost of storage 1/ is near meaningless and the Bitcoin are getting minted based on a governed supply schedule. So why is someone willing to pay more for Bitcoin delivered in the future as opposed to just buying the spot? Well, it appears the buyers of these premium future contracts might be 2/

Here’s my thoughts with BTC lending as this cycle heats up. During the previous cycle we saw BTC prices jump from 10,000 to 20,000 in 16 days. This means that if the borrower overcollateralized with an LTV of 50%, their escrow will be liquidated (unless margin is met)...1/ within half a month. Now, what happens if this cycle produces growth that keeps running at double the price action in another 16 days from there? Well, it means those that just met the previous margin calls, now only have 4 days to respond to the next. So what does 2/

I think a lot of people are underestimating the power that a mature derivatives market is going to bring to #Bitcoin during this cycle. As the price goes higher and volatility continues to grow, it incentivizes more and more long-short funds to capture the massive ... post/1 spreads which are near risk free. These spreads are huge and nothing compared to any other asset class in the world. Here's where it gets really interesting - to implement this strategy, one has to HAVE bitcoin to sell it short. So what are they doing? Well they are... post/2

At what point in 1923 German did it become evident that all trust in the Mark was lost?

The years leading up to 1923 were an aggressive devaluation where the paper Mark was debased 1 : 10,000 over a five year period of time. But once the debasement exceeded 10,000, it. ran. The headlines in Germany during OCT 1922 were of particular note, according to the Frankfurter Zeitung: "German economic life is dominated by a struggle over the survival of the Mark: Is it to remain the German currency, or is it doomed to extinction? During the past few months

Well, today seems fitting for an update on this chart from August. It'll be interesting to see if it continues to keep pace. #Bitcoin

H/T: @100trillionUSD Update to August Chart.

Things continue to progress as expected. But it appears I might have been a bit bearish back in the summer.

H/T: @100trillionUSD

I hear a lot of people say that S2F is an invalid model because it doesn’t account for demand. Here’s what I’m thinking.

As long as hashing keeps going up over time, that means there’s a minimum threshold of demand being applied to the #Bitcoin eco-system where miners ... 1/ Are acting as agents (among other roles) for swapping electrical bills denominated in fiat for Bitcoin. In essence, the Labor Theory of Value (LToV) is....Valid...but only in this unique situation. This is a very unpopular opinion because most people believe Adam Smith’s ..2/

But professor...

When you told me #Bitcoin was a Ponzi scheme you left out the part about the four-year halving cycle and two-week difficulty adjustment...

How does that work?

//Thread Post 1 So you've probably heard your professor or resident expert economist tell you that #Bitcoin is a scam. Well, guess what, it's not. Everyone keeps claiming it's dead, but here we are, it keeps coming back and with a vengeance. How is that happening? Easy. The code is designed

Based on the extreme debasement that's been occurring and that's expected to continue, I would suggest adopting a new unit of measure. Although the world will continue to settle in dollars or other major fiat currencies, that doesn't mean you should measure your growth in... 1/ buying power with fiat units. For people that find Bitcoin to be undesirable, the most common alternative is gold. For example, look at the performance of the S&P 500 if you measure it in gold instead of the US dollar. Down 25% since peaking near the end of 2018. 2/

Some thoughts on the dollar's reserve status.

A quote from the book, Big Debt Crises, by Ray Dalio:

"Can reserve-currency countries that don't have significant foreign-currency debt have inflationary depressions? While they are much less likely to have inflationary...1/ contractions that are as severe, they CAN have inflationary DEPRESSIONS, though they emerge more slowly and later in the deleveraging process, after a sustained and repeated overuse of stimulation to reverse deflationary deleveraging. Any country, including one with a ... 2/

I can't take the misuse of this terminology any more.

Inflation....Deflation....

Here's my point of view.

Central banks are aggressively "inflating" the fiat monetary base. Since 2008, the US federal reserve has expanded their balance sheet from .8T to 7.1T. Post 1 That means they have "inflated" that fiat monetary base supply of currency by 21.9% ANNUALLY over that 11 year period of time. Well, then why haven't we seen CPI "inflation"? Easy, because they are buy financial assets with that freshly printed money. Bonds are purchased .. /2