Panics and crashes lead investors to hunt for safe haven assets such as bonds, gold, and maybe Bitcoin. But it’s complicated so be careful!

Bitcoin and Gold are increasingly seen as related assets

As the onslaught of the coronavirus continues to march worldwide and achieves pandemic status, many financial portfolios also continue to be caught in the turmoil. Markets are a constant push and pull between fear and greed, and in the past few weeks, fear has taken a front seat across asset classes. This marks a sharp shift from the start of the year when volatility was low, and the stock market was making new record highs regularly. Although the immediate cause of the collapse in prices is the coronavirus, many troubling signs were building up for global economies before the virus…


By Siddhartha Jha on The Capital

One of the greatest attributes of markets is that they are highly efficient processors of information. They are not always right but they are the best option we have to quantify large social systems such as our economies. Among the plethora of markets, interest rates are one of the largest and most important signals of where the economy is headed. In this article, the main interest rate we will be concerned with is that of US Government debt (aka Treasuries) as they form the bedrock of other interest rates and other markets. Interest rates determine the cost of capital and…


Bitcoin is sometimes discussed as a future world currency by its proponents since it transcends borders and its supply is not controlled by a single government. The concept of a world currency is not new and has existed in partial forms for long periods historically. For large periods of our civilized history, gold has been accepted across regions as a currency making it the original world currency. Even if rulers may have issued local coins composed of a range of metals or insignia, gold still held a store of value in many of these places. For example, Roman gold coins…


This article is the first of a series discussing why interest rates are important. The focus of this article is the philosophical place of interest rates for resource allocation in an economy.

One of the central aims of any economic system is to allocate scarce resources between its members. To solve these allocation problems, a large number of economic systems have spawned throughout history ranging from simple tribal systems with relatively equal distribution of subsistence resources to large scale systems such as capitalism and communism. The goal of all these systems is to balance often competing goals of allocating resources…


By Siddhartha Jha on The Capital

Money is power. This statement is said often in the context of individual wealth, but on a larger scale, currency is an expression of the power of the state. The foundation of a sovereign currency is the directive to accept a printed piece of paper, otherwise known as fiat money. Often this is framed in a benevolent context referencing social trust. We accept the dollar because we trust others will be willing to exchange goods and services for that dollar later on. While superficially trust facilitates acceptance of fiat day to day, the trust is enforced by the coercive power…

Siddhartha Jha

Founder of Arbol (www.arbolmarket.com). 15 years of quantitative research/trading experience in interest rates / commodities. Author of “Interest Rate Markets”

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