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Bitcoin’s revival: Is this time different?

By Florian Ginez, Associate Director, Quantitative Research at WisdomTree.
The outlook for Bitcoin has gradually been changing over the past year.
The post Bitcoin’s revival: Is this time different? first appeared on ETF Strategy.

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By Florian Ginez, Associate Director, Quantitative Research at WisdomTree.

Bitcoin’s revival: Is this time different?

Bitcoin’s revival: Is this time different?

The Covid-19 pandemic will certainly be one of the most significant events of our lifetimes. Its societal and economic effects will be profound, as the world is getting used to new ways of living, new ways of working, and new ways of consuming.

The future remains uncertain, and some see the disparities in countries’ economic recoveries as a catalyst for a reshuffling of the global economic order.

In the meantime, the pandemic has led economies around the world to contract, sometimes to extents not seen in centuries. As economies were shut down in an effort to prevent the virus from spreading, policymakers had to take action to try and cushion the economic blow.

The amount of liquidity injected by the central banks of developed economies ballooned to unprecedented levels, raising the specter of inflation. This is occurring while interest rates lie near all-time lows, with little prospect for being raised in the coming months or even years across most major developed markets like Japan, the UK, the EU, and the USA.

Furthermore, governments have been mounting piles of debt to support businesses and help maintain employment through lockdowns. The Institute of International Finance (IFF) expects global debt to reach a staggering 365% of global Gross Domestic Product (GDP) at the end of this year, versus 320% at the end of 2019.

Bitcoin, could it be the ‘digital gold’?

Investors are looking for alternatives to hedge the risk of declining values of fiat currencies (the US dollar, the euro, the yen, the British pound, etc) against this backdrop. One of the options is hard assets. Gold is probably the main candidate and has seen major inflows and a strong price performance this year. Figure 1 shows that European net flows into gold have been quite consistently going up this year, currently around $14bn year-to-date.

Source: WisdomTree.

Source: WisdomTree.

This context is playing well for Bitcoin’s investment narratives too. Many now fear for the long-term value of the US dollar and look for other ways to store value. With its decentralized features and its finite and predictable supply, bitcoin seems to be finding its place in portfolios as ‘digital gold’, and we do see investors switching some of their gold allocations to bitcoin more and more frequently.

Interest from institutional investors is rising

Access to Bitcoin has never been easier, as the infrastructure around digital assets has grown significantly over recent years. The main options available to institutional investors include:

  • Direct physical holding of Bitcoins.
  • Indirect physical investment through physical Bitcoin exchange-traded products (ETPs), which eliminates the burden of managing keys and custody for the investor.
  • Synthetic exposure through regulated futures like the CME instrument, offering the usual advantages that come with any other commodity futures contract (ease of shorting, leverage, etc…).

Against this backdrop, a lot of new buyers have been entering the market: wealth channels, family offices, asset managers, hedge funds…The pickup in demand is reflected in all parts of the digital asset space, with a strong pick up in open interest (currently over $1bn) and trading volume on the CME Bitcoin futures over the course of the year, as well as over $200m inflows into European Bitcoin ETPs (Figure 2).

Source: WisdomTree.

Source: WisdomTree.

So Bitcoin has definitely been getting more interest from the investment community lately. Only this time, the attention is also coming from financial institutions, and not exclusively from retail investors. Price action this year has been strong, with a 173.6% return year-to-date, and 379.4% from the lows of the Covid-related crash in March. As of this writing, Bitcoin just reached a new all-time high of over $19,800. If we look at the market cap (Figure 3), bitcoin actually reached a new all-time high a couple of weeks ago, as more Bitcoins are in circulation now than back in 2017.

Source: WisdomTree.

Industry developments support the growth of the asset class

FEATURED PRODUCT

WisdomTree Bitcoin ETP (WBTC SW)

– Provides professional investors with exposure to
the price movements of Bitcoin.

– Fully backed by a coin entitlement stored using
institutional-grade storage solutions.

– Each share in the ETP corresponds to 1/100th
of a Bitcoin.

– Houses $100m AUM; comes with an expense
ratio of 0.95%.

Some headlines have further helped Bitcoin over the course of this year. PayPal recently launched a new service allowing its users to buy and sell digital assets and announced that users will be able to spend digital assets on its network of 26 million merchants in 2021. The Bitcoin use case as a means of payment has never been tested on that scale, so that will be something to keep an eye on next year. In the meantime, users are already using the platform to trade crypto, and some even suspect buying activity from that new PayPal service to have underpinned the recent price rally.

Furthermore, some firms have started to allocate some of their treasury to Bitcoin, highlighting the potential for a new source of demand for the asset. US-listed companies Square and MicroStrategy have respectively allocated $50m and $425m. Both companies quoted a belief in the future growth of the digital asset space, as well as global macro uncertainty as some of the reasons for this decision. B2C2, one of the main market-makers in the digital asset space has reportedly been pitching a similar idea to large trade conglomerates in Japan.

In conclusion, a lot has been going on this year in the digital asset space. The uncertain macro backdrop, as well as new industry developments resulted in an improved outlook for Bitcoin, as well as an increased level of demand from more diversified sources. We believe that what we witnessed this year were only the early stages of a new paradigm to come for Bitcoin, shifting away from a quasi-exclusively retail asset to a widely accepted financial instrument. This will certainly not happen overnight, but 2021 will probably be a key year to see whether the trend is confirmed.

(The views expressed here are those of the author and do not necessarily reflect those of ETF Strategy.)

The post Bitcoin’s revival: Is this time different? first appeared on ETF Strategy.

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Government

Mike Pompeo Doesn’t Rule Out Serving In 2nd Trump Administration

Mike Pompeo Doesn’t Rule Out Serving In 2nd Trump Administration

Authored by Jack Phillips via The Epoch Times (emphasis ours),

Former Secretary…

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Mike Pompeo Doesn't Rule Out Serving In 2nd Trump Administration

Authored by Jack Phillips via The Epoch Times (emphasis ours),

Former Secretary of State Mike Pompeo said in a new interview that he’s not ruling out accepting a White House position if former President Donald Trump is reelected in November.

“If I get a chance to serve and think that I can make a difference ... I’m almost certainly going to say yes to that opportunity to try and deliver on behalf of the American people,” he told Fox News, when asked during a interview if he would work for President Trump again.

I’m confident President Trump will be looking for people who will faithfully execute what it is he asked them to do,” Mr. Pompeo said during the interview, which aired on March 8. “I think as a president, you should always want that from everyone.”

Then-President Donald Trump (C), then- Secretary of State Mike Pompeo (L), and then-Vice President Mike Pence, take a question during the daily briefing on the novel coronavirus at the White House in Washington on April 8, 2020. (Mandel Ngan/AFP via Getty Images)

He said that as a former secretary of state, “I certainly wanted my team to do what I was asking them to do and was enormously frustrated when I found that I couldn’t get them to do that.”

Mr. Pompeo, a former U.S. representative from Kansas, served as Central Intelligence Agency (CIA) director in the Trump administration from 2017 to 2018 before he was secretary of state from 2018 to 2021. After he left office, there was speculation that he could mount a Republican presidential bid in 2024, but announced that he wouldn’t be running.

President Trump hasn’t publicly commented about Mr. Pompeo’s remarks.

In 2023, amid speculation that he would make a run for the White House, Mr. Pompeo took a swipe at his former boss, telling Fox News at the time that “the Trump administration spent $6 trillion more than it took in, adding to the deficit.”

“That’s never the right direction for the country,” he said.

In a public appearance last year, Mr. Pompeo also appeared to take a shot at the 45th president by criticizing “celebrity leaders” when urging GOP voters to choose ahead of the 2024 election.

2024 Race

Mr. Pompeo’s interview comes as the former president was named the “presumptive nominee” by the Republican National Committee (RNC) last week after his last major Republican challenger, former South Carolina Gov. Nikki Haley, dropped out of the 2024 race after failing to secure enough delegates. President Trump won 14 out of 15 states on Super Tuesday, with only Vermont—which notably has an open primary—going for Ms. Haley, who served as President Trump’s U.S. ambassador to the United Nations.

On March 8, the RNC held a meeting in Houston during which committee members voted in favor of President Trump’s nomination.

“Congratulations to President Donald J. Trump on his huge primary victory!” the organization said in a statement last week. “I’d also like to congratulate Nikki Haley for running a hard-fought campaign and becoming the first woman to win a Republican presidential contest.”

Earlier this year, the former president criticized the idea of being named the presumptive nominee after reports suggested that the RNC would do so before the Super Tuesday contests and while Ms. Haley was still in the race.

Also on March 8, the RNC voted to name Trump-endorsed officials to head the organization. Michael Whatley, a North Carolina Republican, was elected the party’s new national chairman in a vote in Houston, and Lara Trump, the former president’s daughter-in-law, was voted in as co-chair.

“The RNC is going to be the vanguard of a movement that will work tirelessly every single day to elect our nominee, Donald J. Trump, as the 47th President of the United States,” Mr. Whatley told RNC members in a speech after being elected, replacing former chair Ronna McDaniel. Ms. Trump is expected to focus largely on fundraising and media appearances.

President Trump hasn’t signaled whom he would appoint to various federal agencies if he’s reelected in November. He also hasn’t said who his pick for a running mate would be, but has offered several suggestions in recent interviews.

In various interviews, the former president has mentioned Sen. Tim Scott (R-S.C.), Texas Gov. Greg Abbott, Rep. Elise Stefanik (R-N.Y.), Vivek Ramaswamy, Florida Gov. Ron DeSantis, and South Dakota Gov. Kristi Noem, among others.

Tyler Durden Wed, 03/13/2024 - 17:00

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International

Riley Gaines Explains How Women’s Sports Are Rigged To Promote The Trans Agenda

Riley Gaines Explains How Women’s Sports Are Rigged To Promote The Trans Agenda

Is there a light forming when it comes to the long, dark and…

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Riley Gaines Explains How Women's Sports Are Rigged To Promote The Trans Agenda

Is there a light forming when it comes to the long, dark and bewildering tunnel of social justice cultism?  Global events have been so frenetic that many people might not remember, but only a couple years ago Big Tech companies and numerous governments were openly aligned in favor of mass censorship.  Not just to prevent the public from investigating the facts surrounding the pandemic farce, but to silence anyone questioning the validity of woke concepts like trans ideology. 

From 2020-2022 was the closest the west has come in a long time to a complete erasure of freedom of speech.  Even today there are still countries and Europe and places like Canada or Australia that are charging forward with draconian speech laws.  The phrase "radical speech" is starting to circulate within pro-censorship circles in reference to any platform where people are allowed to talk critically.  What is radical speech?  Basically, it's any discussion that runs contrary to the beliefs of the political left.

Open hatred of moderate or conservative ideals is perfectly acceptable, but don't ever shine a negative light on woke activism, or you might be a terrorist.

Riley Gaines has experienced this double standard first hand.  She was even assaulted and taken hostage at an event in 2023 at San Francisco State University when leftists protester tried to trap her in a room and demanded she "pay them to let her go."  Campus police allegedly witnessed the incident but charges were never filed and surveillance footage from the college was never released.  

It's probably the last thing a champion female swimmer ever expects, but her head-on collision with the trans movement and the institutional conspiracy to push it on the public forced her to become a counter-culture voice of reason rather than just an athlete.

For years the independent media argued that no matter how much we expose the insanity of men posing as women to compete and dominate women's sports, nothing will really change until the real female athletes speak up and fight back.  Riley Gaines and those like her represent that necessary rebellion and a desperately needed return to common sense and reason.

In a recent interview on the Joe Rogan Podcast, Gaines related some interesting information on the inner workings of the NCAA and the subversive schemes surrounding trans athletes.  Not only were women participants essentially strong-armed by colleges and officials into quietly going along with the program, there was also a concerted propaganda effort.  Competition ceremonies were rigged as vehicles for promoting trans athletes over everyone else. 

The bottom line?  The competitions didn't matter.  The real women and their achievements didn't matter.  The only thing that mattered to officials were the photo ops; dudes pretending to be chicks posing with awards for the gushing corporate media.  The agenda took precedence.

Lia Thomas, formerly known as William Thomas, was more than an activist invading female sports, he was also apparently a science project fostered and protected by the athletic establishment.  It's important to understand that the political left does not care about female athletes.  They do not care about women's sports.  They don't care about the integrity of the environments they co-opt.  Their only goal is to identify viable platforms with social impact and take control of them.  Women's sports are seen as a vehicle for public indoctrination, nothing more.

The reasons why they covet women's sports are varied, but a primary motive is the desire to assert the fallacy that men and women are "the same" psychologically as well as physically.  They want the deconstruction of biological sex and identity as nothing more than "social constructs" subject to personal preference.  If they can destroy what it means to be a man or a woman, they can destroy the very foundations of relationships, families and even procreation.  

For now it seems as though the trans agenda is hitting a wall with much of the public aware of it and less afraid to criticize it.  Social media companies might be able to silence some people, but they can't silence everyone.  However, there is still a significant threat as the movement continues to target children through the public education system and women's sports are not out of the woods yet.   

The ultimate solution is for women athletes around the world to organize and widely refuse to participate in any competitions in which biological men are allowed.  The only way to save women's sports is for women to be willing to end them, at least until institutions that put doctrine ahead of logic are made irrelevant.          

Tyler Durden Wed, 03/13/2024 - 17:20

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Part 1: Current State of the Housing Market; Overview for mid-March 2024

Today, in the Calculated Risk Real Estate Newsletter: Part 1: Current State of the Housing Market; Overview for mid-March 2024
A brief excerpt: This 2-part overview for mid-March provides a snapshot of the current housing market.

I always like to star…

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Today, in the Calculated Risk Real Estate Newsletter: Part 1: Current State of the Housing Market; Overview for mid-March 2024

A brief excerpt:
This 2-part overview for mid-March provides a snapshot of the current housing market.

I always like to start with inventory, since inventory usually tells the tale!
...
Here is a graph of new listing from Realtor.com’s February 2024 Monthly Housing Market Trends Report showing new listings were up 11.3% year-over-year in February. This is still well below pre-pandemic levels. From Realtor.com:

However, providing a boost to overall inventory, sellers turned out in higher numbers this February as newly listed homes were 11.3% above last year’s levels. This marked the fourth month of increasing listing activity after a 17-month streak of decline.
Note the seasonality for new listings. December and January are seasonally the weakest months of the year for new listings, followed by February and November. New listings will be up year-over-year in 2024, but we will have to wait for the March and April data to see how close new listings are to normal levels.

There are always people that need to sell due to the so-called 3 D’s: Death, Divorce, and Disease. Also, in certain times, some homeowners will need to sell due to unemployment or excessive debt (neither is much of an issue right now).

And there are homeowners who want to sell for a number of reasons: upsizing (more babies), downsizing, moving for a new job, or moving to a nicer home or location (move-up buyers). It is some of the “want to sell” group that has been locked in with the golden handcuffs over the last couple of years, since it is financially difficult to move when your current mortgage rate is around 3%, and your new mortgage rate will be in the 6 1/2% to 7% range.

But time is a factor for this “want to sell” group, and eventually some of them will take the plunge. That is probably why we are seeing more new listings now.
There is much more in the article.

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