15th March 2024 > > Leverage, Wright, & taxes.

tl;dr

Hopefully we will never hear from Craig Wright again. US politics and cryptos are unhappy bed-fellows.

Market Snap

Market Wrap

$660mm of leveraged long liquidations drove BTC from $73k to $66k in just a couple of hours. That has been the risk of over-enthusiasm from the long side – a matter of when, not if. The trigger for the long squeeze was news that BTC ETF inflows were down 48% on their 14-day average, almost certainly not the start of a new trend. But when the exit door has been made smaller with leverage, we get outsized moves.

Having sold the last of my green economy investments on Wednesday (that was a truly bad play) the cash settling today will be used to add yet more MSTR (MicroStrategy) to my portfolio.

Curious Cryptos’ Commentary – The Liar Craig Wright

I can write that with no hesitation now, for the Judge in the COPA vs Wright case has made an early ruling before his final judgement that:

-          Wright is not the author of the BTC whitepaper;

-          Wright is not Satoshi Nakamoto.

I think his claims fit the definition of a lying fantasist.

Curious Cryptos’ Commentary – Seller’s remorse

US Senators Jack Reed and Laphonza Butler have sent a formal request to the SEC to reject any more spot crypto ETFs. Right now, there are several proposals for spot ETH ETFs, which are clearly the target of the Senators’ ire.

It is an unfortunate fact that I do not need to tell you which party they represent – the politicisation in the US of the crypto divide is complete, as is support or otherwise for that tool of financial repression and societal control, CBDCs.

Alexander Grieve, Government Affairs for Paradigm, has his own take on this development:

 “The success of the BTC spot products clearly ruffling some feathers on the Hill. @SenatorJackReed and @Senlaphonza write to the @SECGov urging:

-no further ETPs for other tokens

-make life difficult (i.e. examinations/reviews) for brokers and advisers that recommend BTC ETPs.”

I think that the Senators are just a little sore that their previous public stance as members of Warren’s anti-crypto army (think of the famous German army exercises recently when soldiers had to carry brooms rather than actual guns when playing a war-game) means they cannot take advantage of this opportunity for making a life-changing investment. And they sure as hell do not want anyone else to benefit.

…

Their fear is encapsulated in this comment from Matt Hougan, CIO of Bitwise Invest. No further comment is needed from me:

“Day 4 of 20 on the road talking bitcoin and crypto. Today, I gave an hour-long keynote to a room full of the largest independent RIAs in the country as part of the Barron's Advisor Independent Summit.

Some take-aways:

** Every seat in the room was taken and people were standing in the back. No one left. There is significant interest.

** Based on a show of hands, ~40% of the room owned bitcoin personally and ~5% or ~10% had exposure in client accounts. We're still early.

** Questions ranged from sophisticated ones on the use of bitcoin in a portfolio to early-stage questions. On the margin, larger RIAs may be a tad earlier in the process of onboarding to bitcoin vs. smaller RIAs, which makes sense.

** Multiple firms followed up asking for additional educational sessions, which is a positive sign.

Most of this group is still months (maybe 3-12?) from investing in crypto on behalf of clients, but they opening up to it rapidly.

Put differently, we're making progress, but big chunks of the wealth market remain to be unlocked.”

…

OK, perhaps I will comment.

That last phrase starting with “… but big chunks …” is the key point.