MacroScope

In the decade I’ve been posting here, I’ve never done a product review. But here’s one that may interest readers. I tried out Coinbase’s “borrow” product. This lets customers borrow cash using their BTC as collateral. I didn’t have a need for this, but since it’s becoming a popular retail-facing product for Coinbase and other companies, I wanted to see how easy they’ve made it. I was amazed. The entire process was simple and took just a few minutes. You deposit BTC as collateral and get USDC, which is immediately convertible to USD, then a quick transfer to your linked bank account. It’s seamless and you never leave the platform. The variable APR 30-day average is currently 4.82%. Of course DeFi borrowing has been around a long time. But my sense is that many people in this space don’t realize how easy the process has become for the casual, non-tech user (or how competitive the APRs are). It certainly makes BTC an even more useful and attractive asset to own. My main takeaway was “disruption.” Once you get in the trenches and see how quickly products are evolving in this space, you understand the growth potential -- and how much the legacy Wall Street firms will lose if they don’t adapt and dive in.

Seeing lots of tweets about BTC and lower engagement/public interest. I personally find this fascinating and any trader active 20 years ago should be getting flashbacks. In terms of sentiment and interest, 2023 = 2003. You can go to the dusty finance message boards for AMZN and other eventual winners and see the same dynamic back then. Retail and fast-money desks were blown out after '99, but a new ownership base was slowly moving in as tech leaders survived and continued to build. In terms of price action, one of the keys back then was to watch the longer term charts (weekly and especially monthly) for when price levels that were previously lost were quietly regained. This led to huge profits for traders who were still in the game and paying attention, because it indicated the continuation of a long-term secular trend. In the case of BTC, for example, a recent level to watch would be 28-30k. And so on at higher levels. I can tell you this: despite all the fundamental company analysis that Wall Street and the media like to peddle, you'd probably be surprised by how many smart institutional guys act off the charts (especially true with BTC). Self-fulfilling on the way down...and on the way up.

Gold should be watched here. Quietly near its high, tight range for months, out of the headlines. Futures positioning hasn’t given strong signals this year, partly due to the huge underlying sovereign bid that has made positioning a less reliable indicator than in the past. In this type of environment it’s best to just let price tell you what it wants to do next. A sustained spot move to 3450 and then 3500+ would have big implications, including for BTC as we’ve seen in the past. To be clear: I don’t have a strong short-term view on gold, just saying it should stay on the radar. Along with its $116 million BTC disclosure, Harvard’s sudden new $100 million gold position last quarter sticks in the mind.

In the decade I’ve been posting here, I’ve never done a product review. But here’s one that may interest readers. I tried out Coinbase’s “borrow” product. This lets customers borrow cash using their BTC as collateral. I didn’t have a need for this, but since it’s becoming a popular retail-facing product for Coinbase and other companies, I wanted to see how easy they’ve made it. I was amazed. The entire process was simple and took just a few minutes. You deposit BTC as collateral and get USDC, which is immediately convertible to USD, then a quick transfer to your linked bank account. It’s seamless and you never leave the platform. The variable APR 30-day average is currently 4.82%. Of course DeFi borrowing has been around a long time. But my sense is that many people in this space don’t realize how easy the process has become for the casual, non-tech user (or how competitive the APRs are). It certainly makes BTC an even more useful and attractive asset to own. My main takeaway was “disruption.” Once you get in the trenches and see how quickly products are evolving in this space, you understand the growth potential -- and how much the legacy Wall Street firms will lose if they don’t adapt and dive in.

Last week, I flew from New York’s JFK airport to El Salvador. I was struck by the changes since my visit last year, especially in terms of infrastructure. San Salvador’s historic center (Centro Histórico) is a must-see and probably the best example of urban revitalization and smart design anywhere in the world. Many new stores and lots of international tourists. I’ve said it before and I’ll say it again: US investors should be in El Salvador right now, looking for opportunities. The reason for this trip was the big Bitcoin conference. It was interesting and worthwhile. Discussions were wide-ranging and included different areas of technology and economics. Despite BTC’s recent drop along with other assets, there was lots of buzz and activity; I learned that these are not the type of people who get discouraged or quit. The event was full and the hotels and restaurants were packed. Here’s something I noticed at the conference. Among the international attendees I talked to, there was a sense of impatience with their own countries -- a dissatisfaction with the status quo and a desire to build. Many of them are early in their careers and they want to be part of something big and historically significant. If that also describes you, here’s a recommendation. Go to San Salvador’s historic center on a Friday or Saturday night. Have dinner at a rooftop restaurant overlooking the National Palace, while a DJ's soft beat plays in the background. I promise you will feel like you’re in an important place at an important time.

Something caught my eye in the latest 13F filings. The biggest new entrant into IBIT, from a brand new entity, is something called Laurore Ltd. No website. No press. No footprint. The only public information is that the filer's name is Zhang Hui and it's HK based. Let's double click on that for a second. Zhang Hui is the Chinese equivalent of John Smith. It's what I like to call it a "non-anonymous anonymous" name, something hiding in plain sight buried under the statistical weight of millions to make it untraceable. The "Ltd" suffix suggests a Cayman or BVI structure, the classic offshore wrapper for accessing US markets. And the portfolio? A single holding. Nothing but IBIT. This isn't a diversified fund. It's a $436 million Bitcoin access vehicle dressed in institutional clothing. Why would you do this? Because Chinese investors can't hold Bitcoin. If this is what it looks like, it might be an early sign of institutional Chinese capital moving into Bitcoin, not through crypto exchanges or gray market channels, but through a BlackRock ETF, filed with the SEC in a regulated jurisdiction hiding in the most "transparent non-transparent" place imaginable. Funny that the name Laurore likely derives from the French l'aurore: the dawn. Smells like capital flight to me.