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Politicians can't abuse the fiat system indefinitely. At some point, the government won't be able to afford the interest expense on federal debt. That's a big problem with fiat, it relies on the government not overspending too much. At $32T, U.S. government debt is reaching a point where...

Note that 10/20/2021 is the first date reported by Yahoo and Barchart.com. BITO (ETF) from 10/20/2021 to 6/22/2023: return of -56.98% (including dividends) BTC (underlying) from 10/20/2021 to 6/22/2023: return of -54.39% HODL outperformed U.S. ETF.

Suppose they lend out all the assets. At most they'd be creating extra paper bitcoin that equals the size of the fund, right? But they'd still need to hold actual bitcoin to back all the paper bitcoin, is that correct? So, if the ETF held 10,000 bitcoin, they would issue ETF paper shares that...

As far as Bitcoin, I'm more or less a novice. But I've taught international finance for many years, and my Eurodollar knowledge is pretty solid. If you were to move USD deposits from Wells Fargo, USA to a bank in the Cayman Islands, you've essentially converted those USD into Eurodollars. Since...

Eurodollars are printed by the Fed, same as all USD. Eurodollars are held offshore (i.e., deposited in a non-U.S. bank). The distinction between onshore USD deposits and Eurodollar deposits is onshore deposits are subject to substantial regulation (FDIC insurance, etc.), whereas offshore banks...

Before chairing the SEC, Gensler was an adjunct professor at MIT. His boss at MIT, Glenn Ellison, is Caroline Ellison's father. Caroline was the head of Alameda Research, the hedge fund affiliated with FTX.

The weak link in the system is the U.S. federal government's ability to service the ever-increasing level of U.S. national debt. Interest expense currently represents 13% of the federal budget ($460 billion). That percentage goes up by 9% (about $315 billion) for each additional 1% higher...

What you’re both referring to is the balance of payments. When the U.S. net imports, it makes up the difference by borrowing from foreign countries (i.e., selling U.S. treasuries). The net of the two is zero. If foreign countries worry about the USD losing value, they’d be less interested in...

It wasn't everyone. I traded every day in 2008 up to the bottom in March 2009 and never felt the worst was over or that fundamentals were improving. Here, the prospects for BTC are improving for any number of reasons, including de-dollarization gaining steam, continued weakness in the regional...

Probably half the reason I'm bullish on BTC is because I have such low opinion of the self-serving career politicians in the U.S. government. The current situation with the $31.5T national debt plus higher interest rates provides less room for their incompetence.

If you go that route, you could just as easily say BTC is inextricably linked to the S&P500. Correlations, based on daily returns, through April 11, 2023: Past 5 years: Correlation(BTC,NDX) = 0.30 Correlation(BTC,SPY) = 0.29 Correlation(NDX,SPY) = 0.93 Past 3 years: Correlation(BTC,NDX) =...

If Bitcoin were to replace the USD, both the house associated with the mortgage and the mortgage itself is priced in units of Bitcoin, as is the salary backing the mortgage. You'd only be bankrupt if you had to take a significant Bitcoin salary cut, but if the cost of living is in units of...

The global money supply is $49 trillion. Considering that fiat currency, excessive debt, and inflation are a global issue, wouldn't the upside be $49 trillion / 21 million Bitcoin = $2.33 million? Regardless, lots of room to appreciate before a market size problem kicks in.

He mentions that centralized payment systems can process tens of thousands of transactions per second, while Bitcoin can manage only seven. Can anyone assess the extent to which this would limit Bitcoin's upside?

Besides price trend, what are the best indicators for Bitcoin? Two that come to mind are (i) its market share within crypto, defined as Bitcoin's market cap divided by the sum of all crypto market caps, and (ii) its network effect. Network effect is complex, and I don't know how to estimate it.

When I look at the history of reserve currencies, as shown below, it's not so incredibly stable that the U.S. should be antagonizing countries with its foreign policy. What's the saying, slowly at first, then all at once?

I understand risk and uncertainty, not putting all your eggs in one basket. I've been wrong many times before. That lots of smart people see things differently regarding Bitcoin is not lost on me.

The steep trajectory is worrisome when combined with the higher interest rates needed to fund it. It takes $315 billion extra government spending to service interest expense on the debt for each 1% increase in treasury rates. That's 5% of the entire federal budget for each 1% increase. The issue...

I'll be fine if my small allocation doesn't pan out. Caution is a good thing when it comes to uncertainty. But the emperor truly has no clothes. I'm much more optimistic about bitcoin now at $28K than when it was at its all time highs because of what's gone on with inflation and the inability...