Tuesday, Nov 14, 2023

disagreeing with JPMorgan on several fronts, consumer inflation expectations, and more...

“To see what is in front of one’s nose needs a constant struggle.” – George Orwell  ||  

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IN THIS NEWSLETTER:

• JPMorgan gets it wrong

• Bank stablecoins are not programmable II

• Inflation expectations are flashing worrying signals

• EV policy

WHAT I’M WATCHING:

JPMorgan gets it wrong

Last week, JPMorgan analysts published an investment note on bitcoin, suggesting that the recent price rally was overdone. The note contains some surprising justifications, which I’d like to push back on.

One reason given is that the US listing of bitcoin spot ETFs would probably not bring in a significant amount of new money into the market. The analysts allege that the new products will probably benefit from the migration of money already in other crypto products, and cite the report cite the example of the Canadian spot ETFs that did not attract notable interest after inception.

Looking at the evolution of the assets under management of the largest Canadian bitcoin spot ETF, however, we can see that this is not exactly true. As of yesterday, BTCC had a record $1.5 billion in assets under management, which is not insignificant, and is almost three times what it had in January. Plus, the size of US stock market is around 22x that of Canada.