BitBrew

BREAKING: Iran’s Speaker of the Parliament provides trading advice to investors trading US markets: “Pre-market so-called ‘news’ or ‘Truth’ is often just a setup for profit-taking. Basically, it is a reverse indicator. Do the opposite: If they pump it, short it. If they dump it, go long. See something tomorrow? You know the drill.”

@KobeissiLetter They forgot to say not financial advice

Rotation can take months. In between, there’s usually much fear. IMO, most of this is on purpose. They use this fear to rotate out of Gold while everyone is buying Gold for “protection”, then buying risk assets while they get pummeled. Now this isn’t a for sure thing as macro needs to hold up. If the economy slows, this becomes much less of a chance. But I still believe a rotation is taking place. At the moment, there’s quite buying but not huge. Most rallies are being sold into. Once this geopolitical issue resolves, I think the rotation takes full effect.

🧵Everything is bottoming against gold right now. Stocks wobbling, real estate stalling, bonds getting crushed by yields, even Bitcoin showing relative strength vs. the shiny metal after its own drawdown. Gold had one hell of a run — smashing records, hitting $5k+ territory — and now it's giving back some gains amid profit-taking, higher rates, and whatever geopolitical noise is moving the tape. But look at the ratios: $BTC / $Gold carving out a potential base after months of consolidation. Small caps ( $IWM) starting to flex vs. the big boys. Broader risk assets finding support while gold consolidates or pulls back.

Just lay siege to Iran and take over the Strait. We knew this was inevitable once they didn’t surrender after the assassination. Either Trump has to give up and look a fool, or lay siege. The latter it will be if Iran doesn’t back down. A lot of people think Trump is here to just go things. No, this is a REQUIREMENT to get the Strait in US control. How do I know this? For leverage. Did anyone notice Trump pushed the meeting back with Xi? Trump needs to get leverage going into the meeting and getting this amount of leverage would send a message. If he cannot get this leverage by May 14th, he’ll push the meeting back again. He views this as a certainty. He’s already made up his mind.

The same way paper becomes less valuable as we have machines, Gold will become less valuable as we have Bitcoin. AI accelerates the adoption of Bitcoin and the uselessness of Gold. Why would a machine trust Gold? Why does it need it? How could it understand it? We’re transforming our society from being human based, to machine based. Comparing today’s geopolitical shift to shifts in the past cannot be done because we’re on our way to becoming a fully autonomous society. Why would machines need to understand Gold? Humans used Gold as a measurement of value for thousands of years. But, machines will need a native value measurement. That’s Bitcoin. I cannot allocate to Gold having knowing this logic. It cannot be done when I know machines will be controlling and holding all value.

@LukeGromen Can’t disagree here

Sec. Bessent, February 2025: "Judge us by the 10y UST yield." 10y UST yield (blue, RS) v. oil, since Bessent said that 👇 "3 Arrows" about to turn into "0-for-3 Arrows":

Three weeks ago there were rumors that one of the labs had completed its largest ever successful training run, and that the model that emerged from it performed far above both internal expectations and what people assumed the scaling laws would predict. At the time these were only rumors, and no lab was attached to them. But in light of what we now know about Mythos, they look more credible, and the lab was probably Anthropic. Around the same time there were also rumors that one of the frontier labs had made an architectural breakthrough. If you are in enough group chats, you hear claims like this constantly, and most turn out to be nothing. But if Anthropic found that training above a certain scale, or in a certain way at that scale, produces capabilities that sit far above the prior trendline, then that is an architectural breakthrough. I think the leaked blog post was real, but still a draft. Mythos and Capybara were both candidate names for the new tier, though Mythos may now have enough mindshare that they end up keeping it. The specific rumor in early March was that the run produced a model roughly twice as performant as expected. That remains unconfirmed. What is confirmed is that Anthropic told Fortune the new model is a 'step change,' a sudden 2x would certainly fit the definition. We will find out in April how much of this is true. My own view is that the broad shape of this is correct even if some of the numbers are wrong. And if it is substantially accurate, then it also casts OpenAI's recent restructuring in a new light. If very large training runs are about to become essential to staying in the game, then a lot of their recent decisions, like dropping Sora, make even more sense strategically. For the public, this would mean the best models in the world are about to become much more expensive to serve, and therefore much more expensive to use. That will put pressure on rate limits, pricing, and subscription plans that are already subsidized to some unknown degree. Instead of becoming too cheap to meter, frontier intelligence may be about to become too expensive for most of humanity to afford. Second-order effects; compute, memory, and energy are about to become much more important than they already are. In the blog they describe the new model as not just an improvement, but having 'dramatically higher scores' than Opus 4.6 in coding and reasoning, and as being 'far ahead' of any other current models. If this is the new reality, then scale is about to become king in a whole new way. It would also mean, as usual, that Jensen wins again.

Gold and silver have topped. I don’t think they’ll make new highs for the next few months. Maybe rest of the year I’m not sure. Trust me I’m looking for different things to buy. These are not them. Even Copper I’m hesitant. The whole metals thing is overblown but Copper can trade up as long as industrial activity keeps going. Just my opinion, if you’re betting on industrial activity, I think there’s way better stocks to buy as opposed to buying copper. I’m not a huge fan of metals or any commodity (Bitcoin is fundamentally different). Study the history of commodities. They have large boom bust cycles. Not great long term investments. Great to trade though. Traders love them because they can ride them up and short them. Just not my thing.

I don’t believe in simply “allocating to a specific asset for the sole purpose of lowering the portfolio volatility”. I’d rather simply just have a larger cash position. Many times, assets don’t act in the specific way you believe they will. If you allocated to Gold right when the Iran war started thinking it’ll help hedge your risk positions, you did it wrong. You failed and made your portfolio more volatile. I don’t like putting assets in buckets. Any asset can trade down after it’s been overbought no matter whether it’s a safe haven or not. Any assets can also trade up after it’s been oversold no matter how “risky” the asset is viewed. I buy assets I believe in long term that can outperform. If I want to “hedge” the volatility, I just keep more cash. Cash gives you optionality to sit on your hands or buy more of the assets you like. People many times make the mistake of thinking that for example Gold has to trade differently than Bitcoin or whatever other asset because they label it as a “safe haven”. It’s the wrong framing. You are assuming you can outsmart the market by knowing its behavior. You don’t know ANY assets behavior. This is why I don’t like hedging. Hedging requires you to get 3 main things right. 1. Buy the right asset 2. The asset has to go the direction you need it to for your hedge 3. It has to do that in the TIMEFRAME you need it to in order to lower your portfolio volatility These are hard to get right. Many assets move in tandem now (bonds and stocks are correlated) hence why 60/40 is dead. Gold hasn’t behaved like people thought during the war (maybe Gold already priced in the war or people are selling Gold for dollars hence why DXY is up). It’s so hard in markets to get all these factors correct. If I’m cautious, I just save cash and wait until I want to buy. I don’t need a hedge. Hedges complicate investing.

@cantonmeow After Gold tops, a long secular bull for stocks begins. Just in time for AI. People really think the next 10 years would be bad for equities when AI and robotics are taking society exponential?

The first parabolic bull market for gold lasted 11 years. The second lasted 12 years. We are currently 11 years into the third parabolic gold bull market. I'm not calling top. Just stating facts that should not be controversial.

$VVIX vs. $VIX ratio, 3yr (weekly) Z-score Lowest reading since the COVID crash. Historically, readings below -1.5 have been indicative of a $SPX market bottom.

BREAKING: The USS Tripoli has arrived in the Middle East carrying 3,500 sailors and Marines amid reports that the US is preparing for a potential ground operation in Iran, per CNN.

If you're spending time staring at the weekend price action of #Bitcoin... Don't. CZ's got buy and sell order block in a tight range on the 2 hour chart. Touch grass. Or each other.

Over the past 30 days, $STRC has been less volatile than every company in the S&P 500—and every major asset class—while delivering an 11.5% dividend yield.

@DrJStrategy $STRC renders the Clarity Act irrelevant

BREAKING: The US is preparing for a potential ground invasion into Iran that would last for up to 2 months, per the Washington Post. Details include: 1. Thousands of American soldiers are arriving in the Middle East for what could become a "dangerous new phase" of the war 2. Any invasion would involve raids by a mixture of Special Operations forces and conventional infantry troops, US officials said 3. President Trump has wavered between declaring that the war is winding down and threatening to amplify it 4. Discussions over the past month have touched upon the possible seizure of Kharg Island and raids into other coastal areas near the Strait of Hormuz The Iran War appears to be entering a new era.

@GeoMetric_9 We’ve already had the consolidation…

$SPX monthly. Bounce, consolidate or crash?

@cantonmeow The rallies that followed you don’t want to miss…

$SPX Over the last 15 years, when fear and greed index is at 10 or less, the majority of the time we were either at the bottom or getting close to it.

A lot of stocks have broken important levels. The key thing to remember is that geopolitics is driving the price action. The absence of it can also drive the rally. It can reverse but problems may still linger but as long as they don't impact the macro environment too much, the rally can continue.

Finished 9 videos for @dannycheng2022's Patreon just now. He will review them and publish them later tonight when he wakes up in Hong Kong time. These are not easy times to get engaged in the market. For those who listen to the videos I make for Danny, I'm not always bullish.

Come on 2022 - Bonds were THE X variable that created the risk off 2026 - a commodity, Oil, is the v variable that created the risk off Don’t try to draw a trendline with 2 points And have a look at gold and silver since oil became the X driver - off even more than bonds or equities. Just like bonds, oil suppliers have had to sell gold to pay their bills now that oil revenues are zero. Commodities have not become the “flight to quality” instrument.