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5th February 2024 > > Headwinds & El Salvador.


tl;dr

The Houthis are under pressure from another Western central bank. Spot BTC ETFs are a disappointment. A recent announcement has some potentially serious consequences in a year’s time, which will be positive for BTC.


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Market Wrap

I have expressed my opinion several times in the last little while that the Fed has it all wrong.

Analysts at the Bank of America are now starting to agree with me:


“Markets are still pricing about six cuts over the course of this year. This suggests to us that they are pricing in a policy error." (Bold is all mine).


I suspect 10-years will be much, much lower by the time everyone else agrees they should be much, much lower. When everyone else finally gets around to acknowledging this self-evident truth, that is likely to be the exact point in time when I will change my mind.


Never forget, the exit door for a crowded trade is too small, even for Alice.


Curious Cryptos’ Commentary – We have all been there















Curious Cryptos’ Commentary – Reasons to be fearful part 1

According to Bitcoin Insider, 2024 will see some significant selling pressure.


GBTC still holds 580,000 BTC ($25bn) some, but not all of which, will be recycled into the nine new-borns.


Mt. Gox holdings of 138,000 BTC ($6bn) is slated for distribution later this year. I suspect almost all these coins will be for sale.


Creditors of FTX will receive 20,000 BTC (850mm), a portion of which will be liquidated.


Creditors of Celsius will receive 38,000 BTC ($1.6bn), a portion of which will also be liquidated.


The US government continues to hold some of the Silk Road stash of up to 30,000 BTC ($1.3bn) which is most definitely for sale at some point unless the Fed wants to bolster its balance sheet.


BTC miners will be looking to raise a cash cushion before the halving in April this year.


I increasingly see commentators getting excited about the halving. There is a historical correlation showing rapid and sometimes huge price gains post the halving, which occurs every four years. As with any commodity, reduced supply will always lead to price gains, all other things being equal.


But its effect diminishes with each halving, for obvious reasons. I suspect this one will largely be a non-event. It would be lovely if I am wrong though.


Curious Cryptos’ Commentary – El Salvador

President Nayib Bukele has self-announced that he has won a second term as president of El Salvador.


His government has led a brutal crackdown on El Salvador’s endemic gangs, whose presence caused widespread corruption and created grinding poverty for most of its citizens. Unsurprisingly, locking up thousands of brutal gangsters has proved wildly popular, except to the gangs themselves.


El Salvador was the first country to declare BTC as legal tender in September 2021, which is an age away now. The country remains a marginal buyer of BTC with a little over 3,000 BTC on its balance sheet. With Nayib returned as President, this situation will remain unchanged.


I do have a sense of unease though. Nayib is claiming he garnered 85% of the presidential vote, and a minimum of “58 out of 60 Assembly deputies”.


These are numbers that Putin and his murderous henchmen would be pleased with.

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