Bitcoin’s no hedge

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Bitcoin up 70% as banks fail

Bitcoin’s price has appreciated by over 35% since Silicon Valley Bank collapsed on March 10, while the Nasdaq Composite Index has traded up less than 5% over the same period. Bitcoin’s price is up nearly 70% in 2023.

Remember Bitcoin?

Hello darkness, my old friend 

Who else trusted FTX?

Referring to Why Temasek should not have punted on FTX, let’s give Temasek and Ontario Teachers’ Pension Plan a break?

Even hedgies, the mortals who became masters of the universe because they are uber-cynical, trusted FTX:

Hedge funds have billions stranded on FTX, the collapsed crypto exchange, and may face a years-long wait to recover assets, my colleagues report. The direct exposure of crypto-focused hedge funds to FTX Group and FTT, the exchange’s token, amount to around $2bn. Around 25-40 per cent of specialist crypto hedge funds may have some exposure. Including firms such as Genesis Trading and BlockFi, exposure could be as high as $4bn-5bn. Many had trusted FTX to be among the industry’s most reliable operators. Oops.

FT newsletter

Compared to them Temasek’s executives are GCT’s “mediocrities”

Why Temasek should not have punted on FTX

Temasek has written off its US$275mn stake in cryptocurrency company FTX, saying its trust in former chief executive Sam Bankman-Fried appeared “misplaced”.

Much has been written by PAP and anti-PAP paper warriors and investors.

Talking about two Canadian pension funds losing $ in two crypyo investments (one of which was FTX) this year, the FT pronounced (or should it be” pontificated”?)

Pension funds have no business investing customers’ retirement savings in a market as volatile as crypto.

FTX’s $8bn crunch exposes a dog-eat-dog cryptosphere

While Temasek is not a pension fund, I think that given the way the PAP govt treats our reserves (Die, die must raise GST to protect the reserves: Reason why die die must have GST rise in January to replenish our reserves? ), this principle should apply to Temasek and GIC.

Btw, while Temasek took its time admitting the cock-up, the Ontario Teachers’ Pension Plan disclosed almost immediately that the US$95mn investment in FTX FTX collapse will have ‘little impact’ on its performance. “Naturally, not all of the investments in this early-stage asset class perform to expectations,” loss on this investment will have limited impact on the Plan, given this investment represents less than 0.05% of our total net assets.”

Our central bank is really Mickey Mouse

(Explanation: When Chris K was a tua kee swinging big dick, MAS was known as Mickey Mouse, according to him. Don’t know about now)

Several months ago, former US treasury secretary Larry Summers, made an acerbic remark, taking issue with central bankers’ growing focus on climate-related risks. Comparing them with children neglecting their homework for the sake of extracurricular activities, Summers said: “Maybe you don’t get to take on global climate change when you’re having double-digit inflation rates.”

This remark about the consequences of not focusing on one’s reason for existence while doing BS came to mind recently: firstly when I read

A South Korean court issued an arrest warrant for Do Kwon, the co-founder of collapsed cryptocurrency operator Terraform Labs, over alleged violations of capital market rules after the $40bn implosion of the terra stablecoin.

https://www.bbc.com/news/business-62910462

The South Koreans said he was in S’pore, though the S’pore police deny he is here. Whatever, the five other individuals connected to the case that the Koreans want to arrest are here.

Meanwhile MAS is trying to clean up its act by cracking down on crypto firms. It had encouraged them to come here.

Secondly, Chris K, now a pensioner who is managing his money like a hedgie is KPKBing:

Ofcos the supertalents missed inflation surge earlier this year. They were in the transitory bandwagon even at the time the central bankers were getting cold feet whether it was after all transitory. And don’t worry, the inflation rate will moderate in the 2nd half of this year, the minister(s) cooed. Ofcos none of that happened, they were offside by a long yard …

Chris K on Facebook

All in all, MAS’s cockups on crypto and inflation (Remember that it’s part of the Pay And Pay ecosystem) show that paying millions doesn’t mean not getting monkeys.

Yesterday it was Three Arrows, today it’s Vauld

Another bad day in the office for the MAS, and our millionaire ministers.

Another crypto business based in supposedly well regulated and crypto-friendly S’pore tanks.*

Vauld, a S’pore-based crypto lender halted withdrawals and trading on its platform, int’l media reports. It said was looking at all options, including restructuring. It was offering clients annualised returns of up to 40% to lend out their crypto tokens, said clients had yanked almost US$200mn from its platform in the past three weeks as high-profile failures panicked investors. Doubtless our central bank allowed it to operate here because Coinbase exchange and billionaire investor Peter Thiel.

Let’s see if our constructive, nation-building media reports this breaking story. Remember this: Did our constructive, nation-building media report this?

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*This sentence was added hours after first publication.

Did our constructive, nation-building media report this?

Worries about cryptocurrency contagion coalesced around Three Arrows, a crypto-based hedge fund in Singapore. The Financial Times reported that it missed margin calls at the weekend, even before Bitcoin plumbed an 18-month low.

Economist’s The world in brief

Worse than NASDAQ bear market

Among the most dramatic downturns has been in the world of crypto-currencies. Investors in crypto are used to great swings of fortunes, so perhaps they won’t worry too much.

On May 13, Luna, the sister token of controversial stablecoin* TerraUSD (UST), plunged to $0 marking a collapse of the cryptocurrency that was worth more than US$100 ($139).

The sell-off came after the US$18 billion algorithmic stablecoin TerraUSD lost its peg to the USD, wiping out the price of its support coin Luna which has now lost almost 99% of its value, according to a report by Forbes.

Further complications also emerged as the Terra blockchain which underpins UST and Luna stopped processing transactions twice in less than 24 hours, according to a report by CNBC.

*Stablecoin,

  a type of cryptocurrency that is pegged to another currency, sometimes a conventional one like the dollar. These are part of the plumbing of the crypto system: they act as a bridge between conventional banks, where people use dollars, and the “on-blockchain” world, where people use crypto. It is stablecoins’ interaction with traditional finance that has led regulators to fret about the impact they could have on financial stability.

https://www.economist.com/finance-and-economics/2022/05/12/the-crypto-infrastructure-cracks?utm_campaign=r.the-economist-today&utm_medium=email.internal-newsletter.np&utm_source=salesforce-marketing-cloud&utm_term=5/15/2022&utm_id=1167954

Gold regains its lustre

So much so that the relationship between gold and inflation-adjusted “real” interest rates is starting to weaken amid concerns about the economic outlook and rising prices. Usually, real rates are negatively correlated with gold. Not this year, as real rates have increased, the gold price has remained resilient.

Err I tot Bitcoin was supposed to have taken gold’s place? Sell Gold, Buy Bitcoin?

Related post: Bloodbaths galore this week/ BS about Bitcoin (Fyi, it’s now around US$39,000)

Sell Gold, Buy Bitcoin?

Recently, I wrote

I suspect that cryptos are now the real hedge against inflation or stagflation: Bitcoin is above US$60,000.

Stagflation? What stagflation?

Look at this

Bitcoin is trading around US$67,000 while investors angst over inflation and stagflation.

Stagflation? What stagflation?

The price of gold, the usual safe haven against inflation or stagflation, does not seem to reflect the possibility of stagflation.

Gold is suffering from an expectation that central banks will raise rates to stem the inflationary shock say the experts. But real interest are still negative so there’s no carrying cost.

I suspect that cryptos are now the real hedge against inflation or stagflation: Bitcoin is above US$60,000.

Asean’s crypto first adopters are global leaders

Not S’pore for sure (Cryptocurrencies in S’pore). Vietnam is the tua kee global crypto adopter by a country mile. Thailand is somewhere further down the list, PinoyLand is even further down the list. We are not on the list.

Cryptocurrencies in S’pore

Two interesting charts showing our level of awareness of cryptocurrencies. Good omen for the government’s attempts via MAS to make S’pore a global centre for all things crypto currencies. In Asia, China has made all activities connected to crypto currencies illegal as it prepares to launch its very own digital currency. And Japan is cautious on the issue having approved several exchanges. They ran into problems.

our central bank with several big banks is experimenting with the code underlying Ethereum. it can be used to create smart contracts.

Btw, Ethereum’s doing well

Bitcoin is dead! Long live Monero!

Bitcoun: Easy come, easy go

The new King? Or at least the new kid on the block.