David Fuller and Eoin Treacy's Comment of the Day
Category - Technology

    Billionaire investor Mike Novogratz says bitcoin will be like a report card that measures how the government is handling

    This article from Business Insider may be of interest to subscribers. Here is a section:

    "Bitcoin will literally be like a report card for how citizens think the government is doing managing their finances," the Galaxy Digital CEO said on CNBC's "Squawk Box" after the cryptocurrency hit a record high above $61,000over the weekend.

    Novogratz indicated that bitcoin is an inflationary hedge and a digital store of value, rather than regular money, which is why institutions, money managers, and retail investors are piling into the digital asset. If people in the US believe Fed Chair Jerome Powell and Treasury Secretary Janet Yellen can facilitate full employment for the economy while avoiding inflation, they will stop buying bitcoin, he said.

    The billionaire further said there has been a "secular shift" from the mindset that bitcoin isn't an asset class, to it now becoming one. "We're in uncharted territories in how much money we're printing and bitcoin is a report card on that," he said.

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    Treasury Yields Surge to Test Key Level in Sudden Selling Bout

    This article from  Bloomberg may be of interest to subscribers. Here is a section:

    The move started in Australia, where bond futures fell heading into the market’s close to put modest pressure on Treasuries. At around the same time, there was a block sale of 10-year ultra bond futures, followed by a buyer of downside put options -- the hedging of which tends to weigh on the market. The three combined to tip 10-year Treasury futures through Thursday’s session low, which unleashed the wave of selling.

    As many as 20,000 contracts changed hands in the next five minutes, the largest activity of the day. The speed and severity of the move left many traders perplexed, with volumes in the cash market comparatively modest.

    The moves there were most pronounced in the benchmark 10-year tenor, with the yield curve steepening as two-year rates only rose as much as two basis points. European bonds followed Treasuries, with U.K. 10-year yields up five basis points to 0.79%.

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    Platinum Quarterly

    This report from the World Platinum Investment Council may be of interest to subscribers. Here is a section:

    In 2020 the platinum market was in a deficit of -932 koz, the largest annual deficit on record albeit below the -1,202 koz deficit forecast in November 2020. This difference was due to Anglo American Platinum Converter Plant (ACP) Phase A being restarted in December 2020, three weeks earlier than expected. However, over the year, as a whole, lower supply due to COVID-19-related mine closures, ACP outages and reduced recycling far outweighed the pandemic-driven fall in demand from the automotive, jewellery and industrial sectors, which fall was partially offset by increased investment demand.

    For 2021 the platinum market is forecast to remain in a deficit for the third consecutive year. The modest deficit of -60 koz results from a 17% increase in total supply and a 3% increase in total demand. Interestingly, total supply in 2021 will still be 3% lower than in 2019, with industrial, jewellery and automotive demand levels all above their respective levels in 2019.

    Total platinum demand in 2020 was 7,738 koz, 7% (-569 koz) lower than in 2019. Automotive demand reduced by 17% (-474 koz) year-on-year, largely due to lower vehicle sales in the first half of the year, as measures to control the spread of COVID-19 resulted in vehicle factory and showroom closures. However, platinum automotive demand losses were cushioned by the impact of higher metal loadings on catalysts to meet tighter emissions regulations. Jewellery demand was similarly impacted in 2020, with volumes 13% (-279 koz) lower on a full-year basis despite quarter four demand returning to pre-pandemic levels. Industrial demand was 5% (-111 koz) lower, with strong glass sector demand largely compensating for weakness in all other industrial demand segments.

    In 2020, weakness in automotive, jewellery and industrial demand was partly offset by strong investment demand, from bars and coins and ETFs, collectively up 24% (+295 koz) year-on-year. Heightened global risk drove investor demand for hard assets such as platinum during the first half of the year, further encouraged by the weak platinum price. Investment demand increased in line with the improving economic outlook in the second half of 2020 and was bolstered by NYMEX futures exchange physical metal stocks, that increased significantly to address the disconnect between the price of platinum futures and platinum. However, as the year progressed bar and coin demand moderated somewhat as the platinum price increased and stock shortages in North America were addressed. ETF holdings increased strongly over the year with growth in North America, Europe and Japan far exceeding declines in South Africa.

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    In 2018, Diplomats Warned of Risky Coronavirus Experiments in a Wuhan Lab. No One Listened

    This article by Josh Rogen appeared in Politico and may be of interest to subscribers. Here is a section:

    A little-noticed study was released in early July 2020 by a group of Chinese researchers in Beijing, including several affiliated with the Academy of Military Medical Science. These scientists said they had created a new model for studying SARS-CoV-2 by creating mice with human-like lung characteristics by using the CRISPR gene-editing technology to give the mice lung cells with the human ACE2 receptor — the cell receptor that allowed coronaviruses to so easily infect human lungs.

    After consultations with experts, some U.S. officials came to believe this Beijing lab was likely conducting coronavirus experiments on mice fitted with ACE2 receptors well before the coronavirus outbreak—research they hadn’t disclosed and continued not to admit to. In its January 15 statement, the State Department alleged that although the Wuhan Institute of Virology disclosed some of its participation in gain-of-function research, it has not disclosed its work on RaTG13 and “has engaged in classified research, including laboratory animal experiments, on behalf of the Chinese military since at least 2017.” That, by itself, did not help to explain how SARS-CoV-2 originated. But it was clear that officials believed there was a lot of risky coronavirus research going on in Chinese labs that the rest of the world was simply not aware of.

    “This was just a peek under a curtain of an entire galaxy of activity, including labs and military labs in Beijing and Wuhan playing around with coronaviruses in ACE2 mice in unsafe labs,” the senior administration official said. “It suggests we are getting a peek at a body of activity that isn’t understood in the West or even has precedent here.”

    This pattern of deception and obfuscation, combined with the new revelations about how Chinese labs were handling dangerous coronaviruses in ways their Western counterparts didn’t know about, led some U.S. officials to become increasingly convinced that Chinese authorities were manipulating scientific information to fit their narrative. But there was so little transparency, it was impossible for the U.S. government to prove, one way or the other. “If there was a smoking gun, the CCP [Communist Party of China] buried it along with anyone who would dare speak up about it,” one U.S. official told me. “We’ll probably never be able to prove it one way or the other, which was Beijing’s goal all along.”

    Back in 2017, the U.S. diplomats who had visited the lab in Wuhan had foreseen these very events, but nobody had listened and nothing had been done. “We were trying to warn that that lab was a serious danger,” one of the cable writers who had visited the lab told me. “I have to admit, I thought it would be maybe a SARS-like outbreak again. If I knew it would turn out to be the greatest pandemic in human history, I would have made a bigger stink about it.”

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    'Reddit Raider' Favorite GameStop Soars After Latest Cohen Push

    This article by Bailey Lipschultz for Bloomberg may be of interest to subscribers. Here is a section:

    Monday’s rally came despite short interest being near the lowest level in at least a year. Roughly one-quarter of shares available for trading are currently sold short, according to data compiled by S3 Partners. That compares to a peak of more than 140% in January.

    “Shorts will continue to be squeezed out of their positions as GameStop’s stock price continues to trend upwards,” said Ihor Dusaniwsky, managing director of predictive analytics at S3 Partners.

    Shorts sellers are down nearly $6 billion in year-to-date mark-to-market losses, including $609 million in Monday’s trading alone, Dusaniwsky said by email.

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    Email of the day on whether technical analysis has predicative qualities

    I’m confident that most subscribers admire your courage in publishing the uncomplimentary letter extoling the benefits of Bitcoin.  Ten years ago, an early teenage, nerd neighbour, who was a Bitcoin investor gave me and some other local adults an introduction with the promise that Bitcoin was the money of the future.  At that time, one calculated the number of Bitcoins required to buy a cup of coffee.  Its usefulness seemed apparent.  My partner was keen. My reticence won-out because I could see how easy it was to buy but I was not confident that I could get my money back. 

    Today, Bitcoin is obviously not money nor a substitute for money and will never become one.  See attached article. How long it will continue to be an investible asset is also an open question. Your critic may be disappointed.  Bitcoin may be a store of value; and its liquidity has improved but there will be similar and more convenient options.  Unlike art it has no attraction other than its relatively unattractive store of value.  It is purely a speculative venture dependent upon an increasing number of bigger fools while at the same time there is a diminishing number of potential buyers. One could never say the same about gold.

    You politely ignored the correspondent’s criticism of your technical analysis that remains the principal reason for my subscription. Do you believe that T.A. has predictive characteristics?

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    Email of the on my ignorance from a bitcoin Holdr

    I suggest though that you ignore Eoin Treacy on matters relating to Bitcoin and Cryptocurrency as he clearly has no idea what he is talking about. This became obvious to me the more of his videos that you have sent to me.

    He talks about Bitcoin as if it a stock or currency and clearly doesn't understand the real value proposition here and why it actually has value. This is very obvious when he says things like you can hold gold in your hand but you can't hold Bitcoin..  This is completely ignorant of what Bitcoin is and how it works, yes it is digital but because of the encryption and the way the system works with mining/proof of work, each Bitcoin is a unique piece of information so when you have a key to a wallet it's just like you have the key to something physical. No one has access to it except you and it cannot be copied or duplicated or stolen or anything in any way, Eoin seems to misunderstand this, he is also forgetting that most gold in the world is not held in your hand it's stored in a vault somewhere subject to seizure or it's a digital representation of gold not the actual underlying that you can hold.

    He then continues this faulty thinking and misunderstanding by concluding with completely ludicrous fear mongering ideas like what if the power grid goes down it will destroy a lot of Bitcoins.  No, it won't you ignorant buffoon, first there is no way to "destroy Bitcoins" they are stored in the Blockchain and never leave it, that is all they do and were meant to do, store value and move around. You could lose access to your coins by losing the keys but technically the coins are still there sitting securely in your wallet it would be entirely your fault for losing your keys. In the situation of the power going down the Bitcoin network would continue running in other countries and then it would catch up when the power comes back on, nothing would be lost except the mining revenue of the miners who had no power.

    If there was a worldwide situation like what he mentions an EMP or a Solar flare then we would have much bigger problems then Bitcoin going down. It would take down all communications all banking services all vehicles all important infrastructure like water cleaning and pumping etc, anything electronic which in the modern world is practically everything, it would be chaos. But yea it would get Bitcoin! so don't risk any money on it!  It actually wouldn't as if everyone lost power at the same time all miners would go offline and then as power was slowly restored worldwide miners would rush to go back mining since the network would have ground to a halt, there would be easy money to be made mining without competition for as long as you can. The network would be back online and functioning properly in a matter of hours after the internet is back on and if someone like a bank or government tried to deliberately mess with the blockchain while most miners etc are offline then when the rest of the world comes back online, we would immediately backdate to the last known block before the power down and discount the manipulation that occurred while everyone was offline.

    Eoin’s technical analysis style is odd as well as I said before he seems to think Bitcoin is a stock or trades like a stock, his technical analysis is basically, look at this moving average we may go down and hit it or we may not. It is useless and cannot predict what is going to happen to prices. In fact, I believe nearly all standard indicators are useless as they are all lagging behind price, the only way to get an edge in technical analysis in my opinion is to use PA, price action methods.

    He's also forgetting (or doesn't know) the fact that Bitcoin is even harder money than gold because of the mathematical hard cap on total amount of coins and that it's also a naturally deflationary asset as coins get lost or go out of circulation over time. Gold is still inflationary as more is mined every day and we have no idea how much actually exists on earth or on asteroids etc. Taking this in mind we shouldn't be surprised to see Bitcoin going higher and higher every cycle, how could it not? especially considering the current macro environment of unlimited QE and worldwide uncertainty.

    Anyway, there's my rant for this week,

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    From Spotify to Hello Fresh: lockdown Brits give subscription economy an adrenaline boost

    Thanks to a subscriber for this article from The Times which may be of interest. Here is a section:

    Hamish Grierson, chief executive of Thriva, a home blood-testing company that helps users monitor their health, said founders were now eyeing subscription models instead of the Facebook approach of chasing huge growth with no immediate revenue stream. He said the “growth at all costs” model worked for only a handful of companies and meant that most failed.

    “As a consequence of that, there is a little bit more sympathy for more pragmatic, more resilient business models — and subscription tends to be a good version of that story,” Grierson added.

    Investors want a piece of the action, too. Last week, Deliveroo, which charges £11.49 a month for free deliveries of restaurant meals, confirmed plans to float in London.

    Thematics Asset Management launched its Subscription Economy Fund in 2019 to let investors cash in on the trend. The first of its kind, the $230 million (£165 million) fund is invested in about 50 companies with subscription models. It is up 50 per cent already.

    Nolan Hoffmeyer, who runs the fund, said: “Last spring, when many companies didn’t have visibility over the next 30 days, subscription-based companies still had a lot of visibility over the next 12 months [because of recurring revenues]. They’ve been able to continue to invest and innovate. It’s a competitive advantage.”

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    Gold ETF Exodus Quickens in Ominous Sign for Faltering Metal

    This article by Yvonne Yue Li and Eddie Spence for Bloomberg may be of interest to subscribers. Here is a section: 

    Gold’s reputation appears to have been tarnished considerably by the heavy losses of recent weeks, as evidenced by the ongoing outflows from gold ETFs,” Carsten Fritsch, an analyst at Commerzbank AG, said in a note. “A shift in sentiment among investors would be needed for gold to free itself from its extremely difficult predicament.”

    Federal Reserve officials slated to speak this week may give more insight into the economic outlook and how the central bank might respond to the recent tumult in bond markets. Higher yields dim the appeal of the non-interest-bearing metal.

    “Gold remains vulnerable to a further tightening from real rates,” TD Securities analysts led by Bart Melek said in a note.

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