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21st March 2024 > > TradFi adoption of cryptos.


tl;dr

TradFi crypto adoption everywhere we look, to the dismay of the maxis, but pleasing all normies no end.


Market Snap








Market Wrap

Monday and Tuesday we saw net outflows from the ETFs, driven of course by GBTC. Those outflows were not recycled into the other nine new-borns. Larry, our resident techie, suggests that this might be to support cash needs to settle forthcoming liabilities, such as those that Genesis are facing. Whatever the reason, net selling from the ETF cohort had the expected price response.


Intriguingly we saw a similar picture yesterday, but BTC was resilient in the face of these outflows


One point of interest is that none of the other ETFs away from GBTC saw outflows, except for a minor one of $10mm from BTCO, the least popular of the nine new-borns it seems. The dampener from GBTC sales has a limited life-span.


The Fed kept interest rates unchanged but seemed to suggest three cuts in 2024. As Marlo of The Wire said to some of his lieutenants who couldn’t decide whether to shoot Bubbles and his side-kick Johnny Weeks, “… do it or not, I gotta be somewhere.”


Occasional Series – Leo Varadkar, ex-Taoiseach (soon, anyway)

The CCC remains fiercely apolitical as always.


When Varadkar made his entirely predictable decision yesterday to run away from the results of the referenda he had imposed on Ireland (David Cameron is probably his advisor on that point) he referenced the patron saint of Ireland, St. Patrick, in justifiably glowing terms.


However, he also described St. Patrick as a “single, male, undocumented migrant”. I think we know where he was going with that observation, though Ireland has shown little enthusiasm for the proposals by Italy, Greece, France, & Germany for the rehoming of desperate people arriving at the southern borders of the EU from difficult parts of the world.


I do also wonder why he didn’t mention that St. Patrick was a white slave, probably stolen from Cornwall or possibly Wales, regions inhabited by Britons that were frequently raided by slavers from Ireland and Africa on a regular basis over a period of many centuries. The largest slave market in Europe was based in Dublin trafficking Britons. This vile trade out of Dublin only came to an end with the abolishment of slavery by the Normans in 1102, a surprisingly liberal stance at the time that gives us an insight into the medieval chivalry of the Plantagenet reign that swiftly followed.


I guess these would be inconvenient truths that wouldn’t appeal to his support base, so best just ignore them, eh?


Curious Cryptos’ Commentary – Japan

This is what you want to see.


The world’s largest state pension fund belongs to Japan. Known as GPIF (Government Pension Investment Fund) it has $1.4 TRILLION assets under management. We have seen in the last week a seismic shift in the Japanese government’s manipulation of the yield curve (rates are no longer negative). Equally seismic shifts are underway at GPIF:



This short document sets out the fund’s desire to investigate the appropriateness or otherwise of the fund holding illiquid assets. Two notable inclusions for consideration are gold and BTC.

Pension funds are by nature probably the most conservative investment pools of money. GPIF fits that categorisation in spades, or at least has done so until now.


A few pension funds in the US, and South Korea are already invested in BTC. Early studies show that BTC’s largely negative correlation with traditional assets enhances returns whilst also reducing the Sharpe Ratio, a situation akin to finding the Holy Grail.


The OECD estimated pension fund assets at the end of 2022 at $51 TRILLION. That is probably an understatement, but we can use that as a benchmark.


If GPIF – a big “if” I grant you – decides to allocate funds to BTC, you can be certain that at least 90% of all other pension funds will do the same. Every 1% of those funds – and you know I think it will be higher than that – adds $500bn to the demand shock that is being ramped up by the spot ETFs in the US.


Reduced supply, increased demand, guess what happens.


Rather pleasingly, the deadline for responses to this request for information by GPIF from anyone who wishes to contribute is 19th April 2024. Not usually known for rapid innovation, I have a sneaky feeling that the GPIF might move on this potential development in relatively short order.


I will keep you updated with any information I receive from my sources within the GPIF.


Curious Cryptos’ Commentary – BlackRock & tokenisation

Larry Fink, CEO of BlackRock and therefore a very wise man in all matters financial, has long pinned his colours to the tokenisation mast. In January, Larry told the CCC CNBC:


“… BTC and ETH ETFs are just stepping stones towards tokenization, and I really do believe this is where we’re going to be going.”


We have frequently discussed the outstanding benefits that accrue from the tokenisation of RWAs (Real World Assets) on the blockchain, so I won’t repeat them here. The key take-away is that tokenisation has the potential to dramatically reduce the costs of raising capital for business, enhancing productivity for companies, enhancing returns for stakeholders, driving more innovation, improving all our lives, and making everyone richer than we would otherwise be.


Obviously here in the UK, the government will take all those benefits away from us in the form of additional taxes, as the concept of productivity gains is sneered at by both major parties. Nonetheless the underlying ethos remains sound, no matter what the politicians do.


BlackRock is backing up Larry’s belief (he is the CEO after all) with a tokenised digital asset fund, seeded with $100mm of USDC (the C rather than a T is important) using the Ethereum network.

Here is the wallet:



The transparency of the blockchain is awesome.


Note that all those other alts in that wallet are donations to this public address, simply to gain some attention and traction and do not form any part of BlackRock’s plans. Though they all add up to a free $30k so far. I did have some jokes lined up about some of the alts and some of the contributors of these alts, but Milk Road beat me to it.


What happens next? Well, UK investors will remain frustrated that the UK government fails to recognise that the US has the most stringent security laws in the world, and for reasons that are unfathomable, we will not be allowed to get involved.


If you are lucky enough to be able to buy US ETFs, I suggest you take a look at this, the first easily accessible tokenisation project when it does launch to the public. It will likely be a monster.

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