17th February 2025 > > Texas & MSTR.

tl;dr

Texas is moving quickly to establish its own BTC reserve. MSTR is fast becoming a top pick for US state pension funds, both Democratic and Republican, which is mightily cheering.

Market Snap

Market Wrap

If the war in Ukraine is about to end, Europe will start importing Russian oil and gas immediately with consequent downward pressure on energy prices, with the UK missing out on the benefits inflation-wise because of our deliberate and self-imposed policy of having the highest energy costs globally. The lower energy prices could largely offset the pain from Trump’s tariff wars setting the scene for a more benign interest rate environment.

Occasional Series – Afghanistan

Really?

If your guiding principles are based on a culture of misogyny, homophobia, racism, and a genocidal distaste of anyone different to you (probably inspired by the inhabitants of Krikkit), where is the room for being “more progressive”?

Answers, as always, on a postcard to CC Towers.

Occasional Series – A Central Banker, until he decided to do something far more useful instead (*)

“If you think you understand what I am saying you do not understand what I am saying.” Alan Greenspan.

Or perhaps:

“Since I've become a central banker, I've learned to mumble with great incoherence. If I seem unduly clear to you, you must have misunderstood what I said.” Alan Greenspan.

…

(*) He retired.

Curious Cryptos’ Commentary – Texas

The bill that was introduced to create a BTC reserve for Texas on 12th February is being fast-tracked with a public hearing already set for tomorrow. Texas is now in the race to beat Utah in being the first state to legally adopt BTC for its reserves.

Surprisingly, not everyone agrees with me that this is undoubtedly positive for BTC price action. Iliya Kalchev, dispatch analyst at Nexo, is all a bit meh:

“Texas considering Bitcoin as a reserve asset is another chess move in BTC’s march toward institutional legitimacy, but state-level initiatives often make ripples, not waves, compared to ETF inflows or corporate treasury allocations. Unless the hearing unveils a near-term purchase plan or a major policy shift, the market’s response will likely be mild, as Texas’ pro-crypto stance is already well known.”

Well, we shall see.

Curious Cryptos’ Commentary – MSTR (Strategy)

As we wait for the news that MSTR has made it into the S&P 500 (see yesterday’s CCC), forcing all passive index trackers to add into the mix, there are now twelve US state pension funds that are wisely involved ahead of the news:

Currently, about 10% of MSTR’s stock has been shorted mostly by TradFi hedge funds who are still struggling with the concept of BTC yield. This is a significant number, though considerably lower than the 30% or so we saw during May 2024.

Even at 10%, borrowing costs will be elevated, and the risk of a short squeeze higher remains ever-present, a situation I like a lot.