Happy Thanksgiving!
It’s been a crazy year with the Pandemic and the Elections…… meanwhile equity markets continue making all time highs! I have covered the forces propelling equity markets higher, mainly global central banks’ zero interest rate policies (ZIRP) and quantitative easing (QE) programs.
The chart below illustrates the power of an effective QE program.
So the Manatra remains, don’t fight the BOJ, ECB and FED. It really is that simple!
BITCOIN:
Another market Going to the Moon is Bitcoin. Central Bank policies are undoubtedly helping Bitcoin too. Sophisticated global investors are concerned about the debasement of fiat currencies and are steadily increasing their holdings of Bitcoin as a digital proxy for gold. See the chart below tracking growth in the Fed balance sheet and the price of Bitcoin courtesy of Pantera Capital.
But there is more to the recent rally in Bitcoin than the debasement of fiat currencies.
Crypto OG Dan Morehead of Pantera Capital summed it up in his October and November letters to investors. In short, new on ramps are making digitial assests easily accessible to the masses.
From Dan’s October letter, “across PayPal, Robinhood, and Cash App, that’s 350 million people who can instantly participate in crypto without having to go through a multi-day/week onboarding process for a crypto exchange. That was a major issue all throughout the 2017 bull market. Investors wanted exposure but it was an arduous and cumbersome experience”.
Dan points out that PayPal’s crypto infrastructure provider Paxos’ trading volume had been relatively stable prior to PayPal making Bitcoin accessible to account holders.
From Dan’s November letter, “when PayPal went live, volume started exploding. The increase in itBit volume implies that within four weeks of going live, PayPal is already buying almost 70% of the new supply of bitcoins. PayPal and Cash App are already buying more than 100% of all newly-issued bitcoins.
That is THE story in Bitcoin right now”.
Hat tip to Dan Morehead and the team at Pantera!
PODCAST:
RealVision: The Future of Crypto and the Next Generation of Blockchain:
Carlson-Wee goes into detail about the next generation of blockchains and how they differ from Bitcoin and the utility they hope to achieve. He explains the importance of defi and breaks down how he approaches research to find "the next big thing".
THE DOGG LIFE and A DRIVE:
Below is a picture of my dogs. They follow me everywhere! This is them snoozing while I write the next MacroCrunch at my stand up desk. The one on the left is a Belgian Malinois, the one on the right is a German Shepherd and the one in the middle is a Chihuahua / Belgian Malinois / Husky mix….. from Armenia!
Below is a photo on my way back from breakfast at Stinson Beach last weekend. I know, I shouldn’t be taking photos while driving, especially on that road. I need to mount a GoPro on the dash!
I hope you enjoyed the letter and as always feel free to share it with friends and colleagues. If you are interested in startups you can join over 750 other backers that follow my AngelList syndicate here.
Be well and stay safe. - Sean Bill / MacroCrunch