Monday, Nov 20, 2023

what BTC gets wrong about Milei's victory, debt maturities, AI craziness...

“Neither a man nor a crowd nor a nation can be trusted to act humanely or to think sanely under the influence of a great fear.” – Bertrand Russell ||

Hello everyone, and happy Monday!

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IN THIS NEWSLETTER:

• What’s behind BTC’s weekend bump?

• What bitcoin gets wrong about Milei’s victory

• Maturing debt

• As if AI wasn’t dramatic enough…

WHAT I’M WATCHING:

What’s behind BTC’s weekend bump?

Bitcoin started the week off in a good mood, with a jump late yesterday that has only seen a slight retraction.

(chart via TradingView)

Yesterday’s jump came roughly an hour after polls had closed in Argentina, and so it doesn’t feel like a knee-jerk reaction to the results (which were obvious even before polls closed). But the narrative does fit – a Milei victory is good for bitcoin, in that the resulting currency and economic chaos highlights the advantages of storing wealth in hard assets. Expectations of a bitcoin standard in Latin America’s second-largest economy are overblown, though. Nor are we likely to see Milei scream about the advantages of bitcoin from his now-significant podium. More on this below.

So, does that mean that BTC over-reacted to the win, and we’ll see a correction? Perhaps, but I’m skeptical that Milei’s win is behind the price movement. If it were, we’d have seen more momentum. It could be a derivatives-related move, a technical buy, or any one of a range of other factors behind price moves these days.

Rather, we are more likely to continue to see investment interest pick up in all jurisdictions as the case for hard assets and currency depreciation protection becomes more obvious. Bitcoin is not short of supportive narratives these days, and investors are noticing.

What bitcoin gets wrong about Milei’s victory

By now, if you follow crypto media or crypto Twitter, you’ll have seen streams of headlines crowing about the victory of Javier Milei in Argentina’s general elections yesterday. This is uncomfortable, it highlights how blinkered crypto enthusiasts can be to bigger issues, and brings up the old adage “be careful what you wish for”.

Don’t get me wrong, I’m glad Javier Milei won, and if I were Argentinian, I would have voted for him. But reluctantly, with deep sadness, and only because the “continuity” opponent Sergio Massa would have been even worse. Profound change is needed in Argentina, and I am eager to see the results of the radical economic experimentation Milei has been promising. But three key things need to be kept in mind: