Halving buzz meets Wall St. Hedge Funder at key price level level

Bitcoin continued its rally from the mid-March lows with a strong week that saw the largest cryptocurrency hit the psychological $10k figure. The final push higher to that level coincided with news that famed Wall Street hedge fund guru Paul Tudor Jones was showing interest in Bitcoin as an inflation hedge against governments and the Federal Reserve.

In an investment letter, first reported by Bloomberg, Jones said that Bitcoin reminded him of gold’s role in th 1970s inflationary environement. He added, “The best profit-maximizing strategy is to own the fastest horse. …

In the fifteen years that I have studied the financial markets, I have always been fascinated by investor psychology. The Dutch Tulip Bubble, the South Sea investment bubble, the Tech bubble of 2000 and the subprime debt wreck of 2008–09 are just a few examples of investors’ AND policymakers’ ability to get things horribly wrong.

These past episodes actually chart a path to how we get to mainstream adoption in cryptocurrency.

Where we Stand

The recovery from the financial crisis has not been an organic one. The largest central banks in the world have collectively expanded their balance sheets from around $4 trillion to $14 trillion since the depths of the crisis as policymakers attempted to soak up bad bank assets in order to let the economy grow naturally and spur inflation, which would make the debts of governments more manageable. …

Flights to safety have only been bumps in the road

A lot has been made about Bitcoin’s status as a safe haven in times of economic turmoil, or it’s relevance as digital gold. The reality is that Bitcoin’s use as a safe haven has only been called upon for short periods of economic instability that have been controlled by central banks.

However, that dynamic is about to change as we have entered a period where central bank power is being questioned- a situation I said would happen two years ago when the majority of analysts were foolishly expecting central bankers in Europe and the UK to raise interest rates. …

At the end of November 2018 I asked, “Are We Looking at a Bitcoin Low?”. Two weeks later we began the rally that has reignited the cryptocurrency market and has seen BTC move from $4,000 to $12,000.

Bitcoin has been one of the best performing assets of 2019 and has defied the doomsayers who were calling the end of the cryptocurrency “bubble”. I stated in many articles last year that big corporations and Wall Street players were circling the market and mature platforms were being built to entice institutional money. Despite their words to the contrary, this was a clear sign that blockchain and digital currency were here to stay and the arrival of Facebook’s Libra currency will drag millions of retail investors, kicking and screaming, into cryptocurrency. …

HTC Exodus

Taiwanese telecoms giant HTC have announced the release of the first blockchain-focused mobile phone, named Exodus 1.

The mobile comes with all the usual specifications and gadgets, such as 12 megapixel camera and 6" Quad display but the product has its own secure blockchain wallet, which it calls Zion.

At present, the Exodus 1 only supports BTC, LTC and ETH, however there is also support for ERC-721 tokens and the handset can only be purchased with those cryptocurrencies as they wanted to appeal to their target market.

Litecoin founder Charlie Lee commented on the release:

“A key step towards mass adoption is having crypto wallets that are both secure and easy to use. I’m excited to help HTC tackle this with the Exodus phone.” …

The company’s CEO seeks to replicate their energy trading “revolution”

The CEO of the Bakkt trading platform, Kelly Loeffler, has shared her vision of increased institutional trading in the cryptocurrency market saying, “The digital market is fragmented like the energy market in the early 2000s. ICE was the pioneer attracting more and more institutions to trade energy, which is what created today’s liquid market.”

Loeffler went further stating, “We’re about to see a revolution”.

Her comments relate to the exponential growth seen in energy trading, which was once ignored by investment funds and asset managers but grew in popularity and importance as hedge fund-style global macroeconomic strategies became widely-used. …

Critics of cryptocurrencies love to share the following chart to confirm their belief that the the market rally at year-end 2017 was the “greed” and “delusion” stages in the anatomy of a typical price bubble.

Yes, this assessment is possible, yet if we take a closer look, that analysis may be wrong.

I would first draw attention to the “stealth phase”. Bitcoin’s price action was very stealth and saw little in the way of news headlines. It was only when the market moved through the 2013 highs around the $1,000 level that the “awareness phase” really got underway.

Note that the awareness phase is also defined by institutional investor entry. This was likely the case in the rally to $20,000 and despite the sell-off this year, there has been a clear arrival and growing interest from institutional investors with some big names entering the space this year in some way: Fidelity Investments, the New York Stock Exchange, IBM, Walmart, Microsoft and Goldman Sachs are among the names that moved further into the market, with trading exchanges, stablecoins, custody solutions and blockchain ledger products. …

The Davos fractional reserve club are in panic at losing their power

U.S. economist Nouriel Roubini is the epitome of what author and modern-day stoic philosopher Nicholas Naseem Taleb means when he mentions having zero “skin in the game”.

The problem with Roubini’s attacks on cryptocurrency market is that they expose his bias towards the current fractional reserve banking system and the fear that cryptocurrency adoption makes him even more irrelevant than he currently is. Not only were his attacks extreme and toxic, they were unneccesarily personal for someone who apprently has no skin in the game.

Only a month after trashing the entire cryptocurrency market as being, “the mother of all scams,” Roubini was penning op-eds in fractional reserve-friendly publications such as the UK’s Guardian suggesting central banks should issue their own digital currencies to, “replace a crisis-prone banking system and shut out cryptocurrencies.” …