Monthly updates and thoughts about the market

[El duderino_]

April update

The month of April is already behind us, so it is time to give you an overview of the latest developments in the crypto landscape as well as some macro-economic insights.

During April we saw a continuation of the trend that had already started at the end of March. Namely a further revival of so-called risk assets such as shares and Bitcoin while the entire world is in lockdown.

This can be explained by the fact that financial markets reflect how its participants look to the future. This means that markets are always anticipative and not reactive. The market had clearly priced in a worst-case scenario in which health systems would perish worldwide. As a result, a higher mortality rate. Except for a few exceptions such as Italy and Spain, this turned out not to be the case.

The wave of panic has turned into a wave of hope. Hope for a rapid revival of the economy when all this is over. This account, combined with an unprecedented intervention by central banks and governments through tax incentives and liquidity, means that the markets have already recovered most of their losses.

However, we are cautious that this could change again when economic reality comes to the fore. Unemployment, bankruptcies, a new wave of contagion, government deficits,… These are all uncertain factors for the future, so that we can expect a new downward trend.

We believe that Bitcoin can disconnect from other risk assets and will come out of this crisis very positively. Bitcoin has unparalleled features such as digital scarcity, making it an alternative to the current monetary system for many. A crisis of this magnitude can be the catalyst for Bitcoin to take the forefront of the macroeconomic landscape.

The Bitcoin halving will take place within a week. A long-awaited event that takes place every four years. This means that Bitcoin miners will halve their reward for securing the network. It ensures that miners have fewer Bitcoins available to cover their costs. This reduces the long-term downward pressure on prices. In the short term, this event can bring volatility to the market. However, for us as an investor with a long-term horizon, the price action is irrelevant in the short term.

We hope that we have made it clear to you what Bitcoin's position is in these turbulent times and what our outlook is for the future!

[El duderino_]

Just wanna explain ... these updates are from a personal friend of mine who’s managing his own fund in Belgium and I share his monthly update towards his investors.... his perfectly ok with me sharing them as we are close to best friends etc
But just wanna let you all know that these are not my own writings, I already explained in Dutch section and was cleared ok with an admin for doing so.
I will keep posting his updates and add a line under every post that it’s not my writings.
Just to get this clear hope you guys enjoy these words and insights of my friend who I believe is very smart towards btc-crypto-economics etc

[Lucius]

We believe that Bitcoin can disconnect from other risk assets and will come out of this crisis very positively. Bitcoin has unparalleled features such as digital scarcity, making it an alternative to the current monetary system for many. A crisis of this magnitude can be the catalyst for Bitcoin to take the forefront of the macroeconomic landscape.

Bitcoin is indeed unique in the market, but from time to time we can clearly see the correlation between it with gold, stocks or oil. The proclamation of a pandemic affected everyone, and the BTC with a terribly sharp decline was no exception. Yet such declines are part of a dynamic market, and few are the ones that just hold on when everything collapses, most still try to mitigate the damage and sell before it hits bottom.

In relation to the crisis that started in 2008 and this one that started this year I personally look at Bitcoin as something that arose at the beginning of a recession, managed to build a certain reputation and achieve a certain level of development, and in the next recession it should actually show its strength. There is a saying "what doesn't kill you, makes you stronger", so I believe Bitcoin will come out of this economic collapse even stronger.

The Bitcoin halving will take place within a week. A long-awaited event that takes place every four years. This means that Bitcoin miners will halve their reward for securing the network. It ensures that miners have fewer Bitcoins available to cover their costs. This reduces the long-term downward pressure on prices. In the short term, this event can bring volatility to the market. However, for us as an investor with a long-term horizon, the price action is irrelevant in the short term.

Although halving in the past has proven to be a very strong element in terms of long-term impact on price, there are a lot of those who are already talking about the pre-halving effect in terms of current price growth and the beginning of a new big bull-run. Although the pre-halving FOMO should not be completely ignored, I still think that it does not play a major role in increasing the price we are seeing now. The crypto market is recovering and returning to the same positions where it was some 2 months ago, and after halving we will see in which direction it will move.

[Majormax]

We believe that Bitcoin can disconnect from other risk assets and will come out of this crisis very positively. Bitcoin has unparalleled features such as digital scarcity, making it an alternative to the current monetary system for many. A crisis of this magnitude can be the catalyst for Bitcoin to take the forefront of the macroeconomic landscape.

Bitcoin is indeed unique in the market, but from time to time we can clearly see the correlation between it with gold, stocks or oil. The proclamation of a pandemic affected everyone, and the BTC with a terribly sharp decline was no exception. Yet such declines are part of a dynamic market, and few are the ones that just hold on when everything collapses, most still try to mitigate the damage and sell before it hits bottom.

In relation to the crisis that started in 2008 and this one that started this year I personally look at Bitcoin as something that arose at the beginning of a recession, managed to build a certain reputation and achieve a certain level of development, and in the next recession it should actually show its strength. There is a saying "what doesn't kill you, makes you stronger", so I believe Bitcoin will come out of this economic collapse even stronger.

The Bitcoin halving will take place within a week. A long-awaited event that takes place every four years. This means that Bitcoin miners will halve their reward for securing the network. It ensures that miners have fewer Bitcoins available to cover their costs. This reduces the long-term downward pressure on prices. In the short term, this event can bring volatility to the market. However, for us as an investor with a long-term horizon, the price action is irrelevant in the short term.

Although halving in the past has proven to be a very strong element in terms of long-term impact on price, there are a lot of those who are already talking about the pre-halving effect in terms of current price growth and the beginning of a new big bull-run. Although the pre-halving FOMO should not be completely ignored, I still think that it does not play a major role in increasing the price we are seeing now. The crypto market is recovering and returning to the same positions where it was some 2 months ago, and after halving we will see in which direction it will move.

All true: Put quite simply BTC is most definitely more mature than at the last halving/last bear market or whatever historical comparison is to be made.

Therefore it will behave differently.  ergo:  all historical comparisons are flawed in some way.

[fillippone]

April update
<...>

The Bitcoin halving will take place within a week.
<...>
In the short term, this event can bring volatility to the market. However, for us as an investor with a long-term horizon, the price action is irrelevant in the short term.

It's reassuring hearing such a statement from a fund investor.
They are usually quite obsessed with benchamrking their returns to some kind of performance index.
The HODL attitude in the financial industry is something realtively new. Even in the commodity investment sector, the one more similar to BTC, the "gold-bug" attitude is frown at.

Nice report, will definetly contribute to this thread.

[El duderino_]

May update

The month of May has already ended. Thus it is time to give you an update on Bitcoin and its positioning during these turbulent times.

The Bitcoin halving is behind us. It has not created the volatility many had predicted. The price has moved sideways throughout the month.

The correlation that emerged between Bitcoin and other risk assets seems to be over. This may be due to the uncertainty that is disappearing as most countries are easing their lockdown measures.

The key question, however, remains at what speed the economy will return to full speed.

Just as the Corona crisis seems to have been temporarily overcome, there is great disorder in the United States. The protests and riots in response to George Floyd's death take on unseen proportions. We are following this closely as it could be the next catalyst for financial market volatility.

After a number of turbulent months, we can look back on the month of May as a kind of decompression. We will see if this trend continues during the summer months.

(These articles are always written by a close friend of me)

[LeGaulois]

...

We had differences in values of up to $1000 during the month. I still find that to be significant volatility, especially compared to the last months.

If it's about a massive rise, who thought it was going to happen? The newbies or the so-called analysts. With the precedents halvings, we know that it only happens over the next few months.

As for the economy to recover, it won't happen in 2020 (if we consider all countries generally speaking)

[El duderino_]

It has been 2 months since we provided you with an update on Bitcoin and some macro economic developments. This is due to the fact that Bitcoin continued its sideways movement in the month of June.

For a long time it seemed that this would also be the case for July. However, Bitcoin has started a strong final sprint to end the month of July very positively.
The last week of July, Bitcoin saw a price appreciation of> 15%.

Now that we are 7 months away in 2020, it seems interesting to us to look back on certain important events month by month, as well as our vision and analysis of these events.

In January, Bitcoin had a blitz start. The price rose more than 30% as the US and Iran were on the brink of war and the Corona virus surfaced in China. However, we mentioned that it remains to be seen whether Bitcoin could take on its role as a macroeconomic tool to absorb economic shocks.
Our analysis also stated that we needed a clear overrun of $ 10,000 before we could break the downward trend. This did not happen and was followed up in the coming months.

February became the month when the Coronavirus started to spread throughout the rest of the world. This was the time when financial markets suffered serious blows. It was our cup of coffee to see if Bitcoin could distance itself from traditional markets as an uncorrelated asset. This is why we never adjusted our allocation.
February was also the month in which central banks announced they would inject stimuli back into the market. We pointed out that this is positive for Bitcoin in the long term.

The month of March will go down as the month when the world went into lockdown and entire economies were shut down. As a result, central banks that took unseen measures to maintain the market artificially. Here we underestimated the strength of central banks. We expected a further decline in the stock market. The reverse has happened and stock markets worldwide, especially in the US, have made up for the full corona crash.
Where we were correct is that Bitcoin, as an alternative to the current system, would come out positive.
Bitcoin reached a bottom price of $ 3,800 on March 13. Today we clock at a price of $ 11,500. An increase of more than 200%. Even for Bitcoin, this is unprecedented.
We also looked back to 2008 where we saw the same pattern in gold and silver. A huge decline for precious metals in the beginning of the crisis followed by a huge price increase. Gold has now reached its highest point ever and silver also experienced a huge price increase.

During April we saw a continuation of the trend that had already started at the end of March. Namely a further revival of so-called risk assets such as shares and Bitcoin while the entire world was in lockdown.
The market had clearly priced in a worst-case scenario in which health systems would perish worldwide. As a result, a higher mortality rate. Except for a few exceptions such as Italy and Spain, this turned out not to be the case.
So we can conclude that the market was over-reacting to the corona crisis. Together with the injection of central banks, this has ensured that shares, precious metals and Bitcoin have experienced a huge price increase.
In April, we focused once again on the unparalleled characteristics of Bitcoin as a digital scarce commodity in a world of unlimited fiat money. We think this will become even more prominent in the coming years.

In May, the long-awaited Bitcoin halving took place, which halves the reward for Bitcoin miners. However, this became a non-event and its positive effect will only be reflected in the price in the long term. (which may already be evident)


Now that we have looked back at the turbulent past months, we can look forward again. Although it is impossible to predict the future, the previous months have shown that we can create a rough picture.

Corona is still growing in size worldwide. However, it appears to have little or no negative impact on the financial markets. The "promise" of central banks worldwide to continue to provide support seems sufficient for investors to have a positive outlook for the future.
At the European level, a corona fund has been approved containing 750 billion in aid to the affected countries.

For Bitcoin, I see the recent price appreciation as confirmation that the bull market has started. We expect the upward trend since Bitcoin's inception to continue in late 2020 and all of 2021.

Enjoy the month of August!

(These articles are always written by a close friend of me)

[fillippone]

Corona is still growing in size worldwide. However, it appears to have little or no negative impact on the financial markets. The "promise" of central banks worldwide to continue to provide support seems sufficient for investors to have a positive outlook for the future.
At the European level, a corona fund has been approved containing 750 billion in aid to the affected countries.

(These articles are always written by a close friend of me)

This is a weird statement.
It is almost impossible not to recognize the negative impact Corona had in financial markets: the sheer amount of money Central Banks poured on the market acted like a giant fire retardant. The problem is still there, but the immediate and most dramatic consequences (for the financial markets) are only delayed. No surprise then everything rallied: fixed income, equity and commodities (read:gold) are all rallying toward their ATH.
This is perfectly rational: if CB’s keep printing money, it's inevitable the loss of purchasing power, and inflation is going to materialise, sooner or later. So the only place where you don't want your money to be is in cash: "cash is trash" (Ray Dalio) is the new "cash is king". One another way of looking at this is the inflation is already here: it's not markets are at their all time high, but the unit of measure of such markets, money, is at his historical low: it's not that Gold is becoming more precious (or APPL more profitable- ok I might have picked the wrong example here), is that we are measuring it with a shorter and shorter meter.
Sooner or later this decoupling between real and financial markets will close, and this will not be pleasant.
Luckily, if you are reading this, you probably know how to hedge against this.

[Lucius]

Sooner or later this decoupling between real and financial markets will close, and this will not be pleasant.
Luckily, if you are reading this, you probably know how to hedge against this.

There is a general opinion that the real effects of the pandemic crisis are yet to be felt in early Q3 and Q4 (2020) and only then will it be seen how well (or badly) anyone has reacted to minimize damage caused to the economy during the lockdown. When there was a sharp decline in all world markets on March 11/12, many said that this was just the beginning, and that we could expect a few smaller but strong enough declines - because there was no logic for the opposite to happen - and now we have a rather strange situation if we look GDP falling almost everywhere - and on the other hand the stock market, gold or Bitcoin have their best days this year. It is logical to assume that this is the result of injecting huge amounts of fresh money into the system, but also to some extent a paradigm shift from the fact that the economy must come first, and then comes the fight against the pandemic.

I wonder if something (even Bitcoin) could be a hedge in case we are hit by the biggest recession in 100 years? Of course, anything other than fiat is a better option in this case - so there will be no better test for Bitcoin than what is being prepared.

[fillippone]

<...>
I wonder if something (even Bitcoin) could be a hedge in case we are hit by the biggest recession in 100 years? Of course, anything other than fiat is a better option in this case - so there will be no better test for Bitcoin than what is being prepared.

Gold has proven a good Store of Value over the last 4,000 Years. It has proven itself against local and global wars, pandemics, discoveries of new worlds (contintents). Bitcoin has been around only since 10 years. It has massive challenges to overcome to be continued proven as a good SoV, but I am confident it will be able to overcome those, one by one, becoming a truly digital, better, gold.

[Sanugarid]

<...>
I wonder if something (even Bitcoin) could be a hedge in case we are hit by the biggest recession in 100 years? Of course, anything other than fiat is a better option in this case - so there will be no better test for Bitcoin than what is being prepared.

Gold has proven a good Store of Value over the last 4,000 Years. It has proven itself against local and global wars, pandemics, discoveries of new worlds (contintents). Bitcoin has been around only since 10 years. It has massive challenges to overcome to be continued proven as a good SoV, but I am confident it will be able to overcome those, one by one, becoming a truly digital, better, gold.

On the other way around bitcoin has established a good stand in the market to all people who knew it, a decade of a great venture, through negative opinions to scam accusations, bitcoin is what I called a 'tilt proof' asset, at least just for me. Gold is seen as the very standard of wealth for ages, bitcoin cannot just take that from gold, and we should not be letting there be to have a two sided idea of which is which. I believe that one day, people will be talking about bitcoin casually. If you said "better gold" rather than " better, gold" I'm gonna completely disagree with that lol. Yearly test coming on its way for bitcoin, what you guys expect this year?

[exstasie]

So we can conclude that the market was over-reacting to the corona crisis.

I'd say the market was being perfectly rational at the time. Not only were equities riding a major bubble, but we're talking about literally the biggest GDP drops ever, since we started keeping records anyway. In a free market, this would have been the crash to end all crashes.

That's one of the cruel things about both government interventions and markets in general: they punish the rational.

[fillippone]

So we can conclude that the market was over-reacting to the corona crisis.

I'd say the market was being perfectly rational at the time. Not only were equities riding a major bubble, but we're talking about literally the biggest GDP drops ever, since we started keeping records anyway. In a free market, this would have been the crash to end all crashes.

That's one of the cruel things about both government interventions and markets in general: they punish the rational.

While I do agree with you in principle, it is actually perfectly rational to buy equities in this context. It's hard to swallow, but the reality is that the decoupling from equities, or financial markets in general, as also Treasuries are nearing bubble valuations, and the real economy, namely the GDP, is perfectly coherent with the massive financial stimulus it has been poured on the economy since 10 years ago, and has now accelerated during the pandemic: all this money printed by the FED has to go somewhere, and first, being real business not available for investment, it had to go on the stock market, secondly, the equities themselves are a good hedge for the prospective inflation many foresee coming, as a consequence of that vey financial stimulus, third, is a TINA (There Is No Alternative) prospect: given equities are rallying, and probably are going to rally even more, you don't want to miss such an opportunity to invest. This is particularly evident from the fact S&P500 is now the S&P5+495...Are we in a bubble?  Probably, can you afford to stay out of the market when NasdaQ is up 20% YtD? No.

[exstasie]

I'd say the market was being perfectly rational at the time. Not only were equities riding a major bubble, but we're talking about literally the biggest GDP drops ever, since we started keeping records anyway. In a free market, this would have been the crash to end all crashes.

That's one of the cruel things about both government interventions and markets in general: they punish the rational.

While I do agree with you in principle, it is actually perfectly rational to buy equities in this context. It's hard to swallow, but the reality is that the decoupling from equities, or financial markets in general, as also Treasuries are nearing bubble valuations, and the real economy, namely the GDP, is perfectly coherent with the massive financial stimulus it has been poured on the economy since 10 years ago

That's quite easy to say now, in hindsight, after the Fed pumped $3 trillion in QE (75% of its balance sheet) inside ~3 months, with another $3 trillion in stimulus spending by Congress over the same period. These levels of market intervention were completely unprecedented. We're talking 10x the size of TARP and beyond. It's downright silly to make comparisons to previous generations of QE and say it was rational to buy the knife in March (or not to sell) on that basis.

It's funny, I was one of the only people around here predicting a V-bottom in stocks back in March-April. Now everyone is trying to act like it was so obvious.....

[STT]

None of us get to say we called it really, Satoshi apparently knew it was going to play out like this way back when this all started.   He had the Hubble telescope of foresight on that one really, most others considered as a 'new' alternate is simple blocks of gold.   We're all way behind that judgement and vision that a better system would be required.    Politics is a very predictable failure and an awful caretaker for any nations savings value, no genius required to observe that.   The timing of when exactly any asset responds to the latest wave of inflation or is taken badly by negative effects of interference which can be deflationary, theres skill in that I think.
   Thats my old SPY chart which happened to have an old trend match near the bottom and give me some confidence that shorting was not likely profitable risk reward bet from there on.   The volume also spikes near that level which often means it at least pauses as digestion is required.

stimulus

We're going to find out this word is misplaced, new money isnt free money and theres certainly negatives and value to repay & readjust.   So bumpy ground, volatility is a certainty.   I dont think new highs for BTC this year would represent a positive, that'd make me fear some negatives as its just too broad and large a movement in just 9 months or less.   New highs not being positive might sound like nonsense but we'd achieve far more if regular gains occur per year not just this year, I dont want a spike to occur personally.

[JayJuanGee]

It's funny, I was one of the only people around here predicting a V-bottom in stocks back in March-April. Now everyone is trying to act like it was so obvious.....

People predict all kinds of things.  I find it difficult to understand why so many people want to ascribe ONLY status to themselves... I see this quite a bit.  Maybe I am too sensitive?  Perhaps?

None of us get to say we called it really,

Exactamente!!!!

There are just too many things happening to be saying that you know all the variables, beyond getting lucky or maybe having a lot of the variables right and having a pretty decent sense of probabilities (but likely still getting matters wrong on a regular basis in terms of direction, degree or both.. or just don't specify too much in order to always be right.. there's that, too). 

[Lucius]

Gold has proven a good Store of Value over the last 4,000 Years. It has proven itself against local and global wars, pandemics, discoveries of new worlds (continents). Bitcoin has been around only since 10 years. It has massive challenges to overcome to be continued proven as a good SoV, but I am confident it will be able to overcome those, one by one, becoming a truly digital, better, gold.

Nothing can be challenged about gold as a store of value over thousands of years, and all the other applications it has today - but it is crucial that gold has been proven over a very long period of time (in human terms), while on the other hand Bitcoin has yet to prove its worth - and no matter the time we live where things are evolving far faster than 50 years ago, I think it will take at least another 10 years to see how Bitcoin will position itself in relation to already proven things like gold, silver, stocks, real estate...

When I say another 10 years, I mean a total of 20 years from the first block, because Satoshi himself said something along those lines when he wrote: "I'm sure that in 20 years there will either be very large transaction volume or no volume." How applicable this thesis is, given that Satoshi could not have foreseen everything that has happened so far, and of course what will happen in the future - remains to be seen.

[fillippone]

That's quite easy to say now, in hindsight, after the Fed pumped $3 trillion in QE (75% of its balance sheet) inside ~3 months, with another $3 trillion in stimulus spending by Congress over the same period. These levels of market intervention were completely unprecedented. We're talking 10x the size of TARP and beyond. It's downright silly to make comparisons to previous generations of QE and say it was rational to buy the knife in March (or not to sell) on that basis.

It's funny, I was one of the only people around here predicting a V-bottom in stocks back in March-April. Now everyone is trying to act like it was so obvious.....

I don't want to be too technical, but of course when oil traded negative or equity dividend were battered of course it was very easy to pickup a good trade.
While expressing views here on the forum you also have to consider who you are talking to: you don't want to say "Go out and buy!The time to buy is when there's blood in the streets!"

It you did experess the V-shaped call, well done! Hope you also profited from this view!

<...>
Nothing can be challenged about gold as a store of value over thousands of years, and all the other applications it has today - but it is crucial that gold has been proven over a very long period of time (in human terms), while on the other hand Bitcoin has yet to prove its worth - and no matter the time we live where things are evolving far faster than 50 years ago, I think it will take at least another 10 years to see how Bitcoin will position itself in relation to already proven things like gold, silver, stocks, real estate...

When I say another 10 years, I mean a total of 20 years from the first block, because Satoshi himself said something along those lines when he wrote: "I'm sure that in 20 years there will either be very large transaction volume or no volume." How applicable this thesis is, given that Satoshi could not have foreseen everything that has happened so far, and of course what will happen in the future - remains to be seen.

Every day bitcoin has volume, this makes bitcoin more resilient, anti-fragile, and closer to the Shelling-poin of money.

As I said in my third post here onBitcointalk:

<...>
Bitcoin is a huge bet but while I don’ know if in 10 years bitcoin would be worth 1 million or zero (or course I have an idea), I am absolutely sure that in 10 years every present shitcoin (all of them, but bitcoin) will be worth ZERO.
<...>

Now two years have passed and bitcoin made incredible progresses in the right direction, while the fiat shitcoins have made horrible steps in hte wrong directions. Don't forget that the US Dollar is not 200 years old, but it is only almost 50 years old. You cannot consider the Dollar before the 1971 in the Gold Standard being the same as the Dollar after the end of Gold Standard, that was actually an hidden default.

So yes, we prety much agree on the 2030 date to state the successfulness of the bitcoin experiment. I just added an appointment in my agenda!

[buwaytress]

Now two years have passed and bitcoin made incredible progresses in the right direction, while the fiat shitcoins have made horrible steps in hte wrong directions. Don't forget that the US Dollar is not 200 years old, but it is only almost 50 years old. You cannot consider the Dollar before the 1971 in the Gold Standard being the same as the Dollar after the end of Gold Standard, that was actually an hidden default.

So yes, we prety much agree on the 2030 date to state the successfulness of the bitcoin experiment. I just added an appointment in my agenda!

It's actually been three years I think! If you're referring to the non-market related community split of mid 2017, the insistence on doing things the way it went despite all the existential threats from politicking forces. And the patient implementation of scaling measures not being pressured, yeah I gotta agree. Practically everything else just made impatient steps, squirming themselves deeper into the quicksand.

I'm definitely still considering this a (so far successful) experiment. Willing to re-assess that in 2030 too;)