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"Short Seller That Nailed FTX, SVB, and Silvergate "
I agree with him about the fraud endemic in Crypto, the whole thing is a corrupt cabal. The US regional banks have been hammered because of lax regulation and he might be right about the FED continuing to raise Interest rates to defeat inflation.
continued:
Once the dust settles, they'll start analysing tweets leading up to the bank run at SVB, and look at the various entities withdrawing deposits and tweeting afterward. Even if they can't directly blame Crypto for the collapse, they'll likely spin Crypto as a significant risk-on sector associated with the failures. I haven't got a crystal ball but if I was a betting man, I'd bet Crypto will come out of this badly in the end. Crypto will probably be a perfect and easy scapegoat in the near future.
"Imagine not being allowed to buy what you want with your own money"
When this banking storm clears, it wouldn't surprise me to see the regulatory authorities go after Crypto with a vengeance; Think of it like this, a Crypto Bank Silvergate was the first domino to fall, quickly followed by SVB and Signature. All three banks were significantly tied to Crypto projects and Crypto has benefited from the deposit bailouts. To make things worse the Crypto community have used the publicity to bash the same regulators and use the banking turmoil to hype Crypto higher.
The US regulatory authorities are among the most vindictive and spiteful on the planet and could spin this to partially blame the Crypto community. Once the dust settles, they'll start analysing tweets
This is what ChatGPT says, so it must be right lol:
"is bitcoin a tangible asset
No, Bitcoin is not a tangible asset. A tangible asset is a physical object with intrinsic value, such as real estate, gold, or artwork. Bitcoin is a digital asset and exists only as a series of entries on a decentralized ledger (the blockchain). While it can be stored and traded, it does not have a physical form and cannot be touched or held like a tangible asset."
Gold coins, like sovereign's, can be classed as legal tender but the metal value far exceeds the nominal value, so it isn't money in the true sense of the word.
The definition of Tangible is:
"Something that's literally tangible can be touched. A rock is tangible, and so is a broken window; if the rock is lying next to the window, it could be tangible evidence of vandalism. When we say that the tension in a room is tangible, we mean we feel it so strongly that it seems almost physical. But if we're being literal, tension, like hope, happiness, and hunger, is literally intangible—it may be real, but it can't be touched. When lawyers talk about an intangible asset, they might mean something like a company's good reputation—very valuable, but not quite touchable."
https://www.merriam-webster.com/dictionary/tangible
Bitcoin and Crypto tokens in general are intangibles. Bitcoin doesn't have a tangible value, because the token isn't associated with anything in the physical world. If it was backed by something real, like Gold, or oil, then I'd agree there's an argument for it to be described as having a tangible value, but the biggest driver of the Bitcoin price is sentiment and that is most definitely intangible.
I posted on two separate YouTube videos and my comments didn't show for some reason. I rarely post on YouTube, so I'm at a loss as to why it didn't show.
This what I said:
"What is Bitcoin? Some code embedded in a Blockchain and stored in a distributed ledger. It isn't backed by any institution, or commodity, and therefore has no tangible value. Bitcoin is simply assigned a value based on what the next person is willing to pay, so the only entity determining the price is sentiment.
The 21 million maximum for Bitcoin's mined, touted as giving it scarcity value, is also fake since Alternative coins can be mined, also based on proof of work, with an even lower maximum hard cap programmed into the Algorithm. Another issue with the so called scarcity theory, is that Bitcoin can be subdivided into infinitesimally smaller tokens even smaller than Satoshi's; Also once Bitcoin gets to the 21 million hard cap, what would stop developers programming a Hard Fork and creating another 21 Million tokens as some kind of offshoot? Since Bitcoin is just some code on computers, anything could be done with a bit of digital Alchemy, unlike the old traditional Alchemy where all attempts to turn metal into Gold failed, does this mean Bitcoin is Digital Fools Gold?
The argument that Fiat currencies aren't backed by anything is also false; Fiat is backed by the issuing Central Bank and valued based on the strength of a country's economy. The US Dollar is backed by the FED and based on the strength of the US economy, what is the value of Bitcoin based on?"
Once the banking hysteria subsides, that's when the market will refocus on the consequences of less liquidity and less lending to Risk-On stocks and assets. The biggest consequence of this is that Growth stocks, Crypto projects and anything considered risky, will have to jump through far more hoops to secure a fraction of the money that was previously thrown at them. I think Risk-On will face a liquidity crunch going into the summer, and beyond, with any new ventures put under the due diligence microscope and forensically examined before any money is lent.
FTX is a perfect example of how money was thrown at anything and everything without any due diligence, would you have lent money to that crowd? I know I wouldn't, yet institutional investors fell over themselves to give money to SBF. The FTX fiasco is a good example of the hype driving Crypto, and demonstrates the fragility and fraud permeating the Crypto universe. It wont just be Crypto who'll suffer liquidity issues going forward, growth in general will too. in my opinion.
I think the Banking hysteria will hammer the final nails into the current growth cycle. The FED may well have saved depositors at SVB, but once the current investment in Growth runs out, I suspect the drought will begin.
"‘Cracks starting to appear’: how the failure of SVB has rocked European banks"
I can't see the article as its behind the Paywall, but I think this will soon pass and banks will become boring again. Credit Suisse has to be taken over as the brand is completely destroyed, probably this weekend
"The Banking Collapse is Forcing a Fed U-Turn"
They wont stop fighting inflation, anyone who believes central banks would promote inflationary policies are deluding themselves. The FED would only reverse on rates if they thought the inflation genie is firmly back in the bottle.
The idea that Bitcoin would somehow replace Fiat and solve all the Worlds problems is wrong, since it isn't tied to anything in the real world and isn't backed by any institution, but all this is just going over old ground.
"They also now have the ability to choose to take self custody of some of their money via a hot wallet/ cold wallet in the form of Bitcoin of another crypto asset rather than give it to a Bank and hope the Bank doesn't lose or steal it"
What good is a Bitcoin in a cold wallet when you need the internet to trade it and a bank to convert it to real money, or real assets? Do you really believe that Crypto will see wide spread adoption and become a mainstream way of making transactions? Even the likes of Saylor doesn't try and describe it as a currency any more, he now suggests it's a commodity like digital gold or digital oil. The Bitcoin narrative changes as each use case gets trashed, eventually they'll run out of narratives to support the hype. If I was going to invest in a disaster safe commodity, it would probably be Gold coinage like Sovereigns or Krugerrands, and not a bit of invented code stored in a distributed ledger with no tangible intrinsic value. Maybe its my age, but I think it's mad that people assign value to something based on nothing more than hype, it defies common sense.
As things stand, I don't invest in Gold either, I invest in companies that own real assets, or in the case of Lloyds a substantial Mortgage loan book with an extremely low and safe LTV ratio.
"Something has to break...eventually"
There's nothing new about the current situation, there have been many instances where the system's been under strain and then came good. The Crypto/Bitcoin narrative that everything is somehow different this time and the Fiat World is going to end, is a false narrative to fool the naïve.
Look at Black Monday:
https://en.wikipedia.org/wiki/Black_Monday_(1987)
Or Black Tuesday:
https://en.wikipedia.org/wiki/Wall_Street_Crash_of_1929
Or Black Wednesday in the UK:
https://en.wikipedia.org/wiki/Black_Wednesday
Or the Dollar Crisis on the back of the Plaza Accord:
https://en.wikipedia.org/wiki/Plaza_Accord#:~:text=The%20Plaza%20Accord%20was%20a,yen%20and%20the%20British%20Pound
The truth is history is littered with events where people could say this is the end, but it all comes good in the end. The Bitcoin replacing Fiat narrative is fake, it's just a matter of time before Bitcoin fades and dies in my opinion.
Yeah but it's different this time, I doubt it.
I've heard that argument, but it only works if you can later trade the Bitcoin back into your own currency, or into an alternative stronger currency. Bitcoin only survives because Governments and regulatory authorities have allowed it to. What they'll most likely do is squeeze the life out of Bitcoin, while offering stable coin alternatives. You can't have a worldwide currency that isn't backed by anything but hype, proof of work is a made up concept to try and assign some sort of tangible value. The reason Bitcoin will fail, is because it's an act of fiction and at some point the fans will lose interest and throw it to one side, or store it on their metaphorical bookshelf.
Bitcoin defying gravity over the last two weeks, even though Crypto seems to have lost its sheen in general retail. When I chat to people, usually in the steam room at the gym lol, they're either totally uninterested or they don't like Bitcoin. People like us, who are interested in the subject, are in the minority. There's some big money invested in Bitcoin and I suspect much of the recent rises are attempts to spark up the hype machine and inject enthusiasm back into retail.
I believe MicroStrategy average price paid is around $31,000, it'll be interesting to see what they do should their holdings go back into the green.
"What the hell is going on with US markets !?!"
The markets are dysfunctional, with money chasing Unicorns and unable to value stocks on fundamentals. As an example, I'm invested in BT and Vodafone and both have been in the doldrums for years, yet the internet and the I.T. universe is dependent on Telecom infrastructure to survive. On the one hand they say Telecom is cheap for a reason, yet Billions is spent on Altnet FTTP rollout and Private Equity is mopping up Mobile Tower assets anywhere and everywhere; The rhetoric in the press doesn't match the actions by big money, so I just keep topping up my cheap stocks over time and growing my dividends. Even if the price of my stocks went through the roof, I'd probably be hesitant to sell unless the market showed signs of severe distress, because I've grown attached to the dividends,
"Federal Reserve announces July launch for the FedNow Service"
First I've heard of that, but it describes it as a nationwide service, rather than an international service. I'm not sure what it's about to be honest, because I already make ASAP transfers and payments via my online current account. All I can think is that it makes it easier for the banks to facilitate interbank transfers via the FedNow service. Maybe transfers are more difficult in the US, than the UK, so this service fills a gap somewhere, your guess is as good as mine?
"Off topic Evgen Pharma just put out an RNS that should see sp increase."
I've never invested in Pharmaceuticals, as I don't understand the industry and the prices can rise and fall with the R&D successes and failures. I've got nothing against the sector and if I was going to invest there it would be a company like AstraZeneca, as I only invest in big Blue Chips.
"Ironic if by taking out Crypto friendly Banks in the US they inadvertently shone a light on all Banks unrealised losses,"
Unrealised losses aren't an issue on Bonds held to maturity. SVB had painted itself into a corner with long dated Bonds and not enough cash to cover withdrawals and it was SVB's own customers that engineered the destruction of their own bank. I'm hoping all this carries through to next month, I want to top up our ISA's and Lloyds is what I'm looking at, since the next dividend is 1.6p and ex dividend date is the 13th April.
I watched the Raoul Pal video and listened to everything he said. I was surprised to see him throwing recommends at specific stocks.
Reliance have had their ups and downs, one big success is Jio who came from nothing to become the number one mobile provider in India; The thing with Jio was the Indian Government and regulatory authorities went out of their way to nobble the competition, leading to Vodafone India merging with Idea and more recently the Indian Government taking a big stake to prevent Vodafone Idea from going bust, probably because Vodafone decided that India wasn't worth throwing any more capital at. Previously the Indian Government had gone after Vodafone for back taxes, with court cases proving the tax wasn't payable, and with all the other games going on Vodafone wrote down its India investments to zero.
Apple, Microsoft, Meta have done well, but will they always do well? Regulators worldwide are scrutinising big tech and there are lots of ways regulation could damage their business models. Tesla is way overvalued in my opinion, at one point it was worth more than all the other car companies combined.
He mentioned Starlink, 5G, IOT. Low Earth Orbit satellites are incredible tech, but they have their limitations, like multi user bandwidth availability and the requirement of a dish for reasonable service, so LEO's will never ever ever replace terrestrial communications. In respect of AI, he mustn't watch Jim Cramer otherwise he would have mentioned Nvidia, at least I don't remember him mentioning them.
Credit Suisse needs putting out of its misery, it's probably a safe bank but the brand is totally trashed, the Swiss authorities should engineer a takeover by another bank in my opinion.
"We appear to be advancing from Cows to Crypto"
Crypto is just a waste of energy, resources and time as far as I'm concerned. I'm surprised to see Bitcoin climb up to $25,000 plus again. in my opinion its already showing signs of long term decline, with the recent climb explained by risk on trades and possible manipulation; Bit by bit it's being squeezed and the only ones left, that are really interested, are the industry vested interests, traders and HODL's/believers. I'm not sure what the final nails in the coffin will be, but something lurking in the background will eventually jump out break it irreparably. It fascinates me, because I don't understand how so many can believe in something I see no value in.
"housing market crashes along with car loan defaults and credit defaults etc will bring an end to fractional reserve banking, The Fed and the existing system."
Highly unlikely, if things get too bad there may some sort of reset, but it wont help Bitcoin. Bitcoin is only tradeable while the people in charge allow it to be; The powers that be could wipe out Crypto in a weekend, I'm not sure why investors in Crypto can't see that. The only reason Bitcoin still exists, is because the regulators and authorities allow it to, if they really go after Crypto then they could kill it dead in no time.
Fractional reserve banking has nothing to do with Fiat currency, it goes back to the days when there were no central banks, or banks for that matter. "Fractional reserve banking supposedly has its roots in an era when gold and silver were traded. Goldsmiths would issue promissory notes, which were later used as a means of exchange. The smiths used the deposited gold to issue loans with interest, and fractional banking was born."
https://www.investopedia.com/terms/f/fractionalreservebanking.asp#:~:text=History%20of%20Fractional%20Reserve%20Banking,and%20fractional%20banking%20was%20born.
Instead of being backed by a commodity, like Gold, Fiat is backed by the strength of the economy where it is issued, Bitcoin is backed by nothing. Because Bitcoin is a non entity bouncing around in some sort fluidic space, where pressure pushes it up, down, or sideways without anything to anchor to, it has no intrinsic value so its price is set purely by what the next fool is willing to pay. Bitcoin is digital Fools Gold.