Thursday, Nov 16, 2023
BTC behaving strangely again, for encouraging reasons; what new fund raises mean; Argentine banks; science
“It isn't a matter of forgetting. What one has to learn is how to remember and yet be free of the past.” – Aldous Huxley ||
Hello everyone! You may be pleased, or perhaps terrified, to learn that there are 30 trading days left in the year, counting today.
You’re reading the daily premium Crypto is Macro Now newsletter, where I look at the growing overlap between the crypto and macro landscapes. There’s also usually some market commentary, but NOTHING I say is investment advice. For full disclosure, I have held the same long positions in BTC and ETH for years, and have no intention to either buy more or sell in the near future.
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IN THIS NEWSLETTER:
Why bitcoin reacted strangely again
What the new VC fund announcements are telling us
Argentine liquidity concerns
Science is not necessarily good for society?
WHAT I’M WATCHING:
Why bitcoin reacted strangely again
To the casual observer, bitcoin is starting to seem like a rebellious teenager… which is actually fitting when you consider its relative age and its disruptive mission. But in marketspeak, its rebellion is manifesting by not reacting as traditional lore says it should.
In theory, easing yields imply easing liquidity which boosts risk assets, and bitcoin is arguably one of the most sensitive assets to liquidity conditions (in that it doesn’t have any earnings or cash flow issues to dilute the impact).
In theory, a weaker dollar boosts hard assets denominated in dollars by lowering the denominator of the price ratio and by increasing the potential return of assets with no risk of supply dilution.
Yet two days ago, we got both those conditions and yet BTC fell. Yesterday we got the inverse with yields and the dollar climbing, and BTC rose with them.
(chart via TradingView)
Continuing with the teenager analogy, this isn’t that bitcoin is just feeling contrary. It’s more a sign that bitcoin has a lot going on these days.
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