Mad Hedge Bitcoin Letter
November 2, 2021
Fiat Lux
Featured Trade:
(ISSUANCE CONSTRAINTS ELEVATE ETHER)
(BTC), (ETH)
We are at the point where sure Bitcoin will go higher and I fully expect it to be close to $100,000 next year, but Ether will outgain Bitcoin by percentage points.
And it’s no shocker that Ethereum (ETH) has already climbed above $4,000 for the 3rd time this year.
Talk about a 2-foot putt.
In the last five months, the supply of ETH has shrunk meaningfully from 22 million tokens to 18 million today.
Dwindling supply intersected with higher demand means higher prices no matter what asset you’re talking about.
The tape shows that retail and institutional money piling into ETH in the last few months means fewer sellers looking for short-term smash and grab type of profits.
I do believe this is a legitimate reason why we are seeing the volatility of crypto settling down the last month as nobody is willing to take profits when they know more profits are on the table for next year.
In total, the Ethereum network has seen its first consecutive week of negative supply issuance as frothy markets drive persistently high transaction fees.
The London upgrade introduced a burn mechanism into Ethereum’s fee market in early August, meaning a small quantity of Ether (ETH) has since been destroyed with every transaction executed on the network.
The Ethereum London Hard Fork upgrade is a set of five improvement proposals.
Unlike Bitcoin, there is no limit to mining Ether coins, which makes it an inflationary cryptocurrency which is why development understood installing a deflationary mechanism would do wonders for the price of ETH.
Miners are paid new coins for validating each block of information. They are compensated with transaction fees that are paid by users.
One of the biggest benefits of the London upgrade is that it has enabled the Ethereum network to handle a higher transaction load per second. It will help with scalability and tackle the high transaction fees — one of the biggest complaints of small investors or those who make frequent transactions.
Since the London upgrade, more than 724,400 ETH worth $3.1 billion has been permanently destroyed.
Truth be told, ETH has not experienced lower transaction fees, or gas price.
Yet, the upgrade has not increased gas prices but has made them more predictable and stable.
This has led to a smoother network overall during peak hours.
Transaction volumes are 400% higher since the same period last year and Ethereum needs to handle the higher workload to legitimize itself into a solid cryptocurrency.
The inability to function properly as a network could cause a massive sell-off that would spill into more mature Bitcoin.
ETH simply won’t be attractive relative to other crypto if they can’t put a lid on transaction costs.
The reason equities are so attractive is not only because they are fully insured by the federal government, but because liquidity and costs are minimal.
Thwarting this underlying issue of a bloated supply, six times larger than Bitcoin's, should act as a major catalyst in awakening the price action of ETH and that’s what we are currently seeing.
In total, there's been a 57% reduction in cumulative ETH issuance to date and it’s hard for me to envision a scenario in which ETH is not over $8,000 per unit next year.
Generally speaking, after the transition to proof of stake, the supply of ETH will decline 2% annually.
The scarcity value that will hit next year will easily cause the asset to double quickly.
I predict a rapid run-up in ETH prices leading up to the December debt ceiling triggering new all-time highs in BTC and ETH.
Jump on the bandwagon while it’s still rolling!
“Whereas most technologies tend to automate workers on the periphery doing menial tasks, blockchains automate away the center. Instead of putting the taxi driver out of a job, blockchain puts Uber out of a job and lets the taxi drivers work with the customer directly.” – Said Co-Founder of Ethereum Vitalik Buterin
When John identifies a strategic exit point, he will send you an alert with specific trade information as to what security to sell, when to sell it, and at what price. Most often, it will be to TAKE PROFITS, but, on rare occasions, it will be to exercise a STOP LOSS at a predetermined price to adhere to strict risk management discipline. Read more
When John identifies a strategic exit point, he will send you an alert with specific trade information as to what security to sell, when to sell it, and at what price. Most often, it will be to TAKE PROFITS, but, on rare occasions, it will be to exercise a STOP LOSS at a predetermined price to adhere to strict risk management discipline. Read more
Global Market Comments
November 2, 2021
Fiat Lux
Featured Trade:
(THE CROOKS ARE GETTING SMARTER)
(ROM), (THO)
When John identifies a strategic exit point, he will send you an alert with specific trade information as to what security to sell, when to sell it, and at what price. Most often, it will be to TAKE PROFITS, but, on rare occasions, it will be to exercise a STOP LOSS at a predetermined price to adhere to strict risk management discipline. Read more
When John identifies a strategic exit point, he will send you an alert with specific trade information as to what security to sell, when to sell it, and at what price. Most often, it will be to TAKE PROFITS, but, on rare occasions, it will be to exercise a STOP LOSS at a predetermined price to adhere to strict risk management discipline. Read more
Mad Hedge Technology Letter
November 1, 2021
Fiat Lux
Featured Trade:
(A FINE-TUNED MACHINE)
(MSFT)
What this health crisis did was force us to understand how critical Microsoft (MSFT) and its products, especially Windows, are to the world.
The clamoring for its products whether it be software, hardware, or gaming, spoke volumes to Microsoft’s strategic footprint in the Silicon Valley ecosystem.
That’s part and parcel of why it’s been my go-to, iron-clad tech recommendation for as long as I can remember.
This Redmond, Washington company is an all-weather type of stock and even in an inflationary environment, the first place any business should lean on is Microsoft in order to understand how to ensure that they are able to carve out productivity gains.
And even dealing with constraints, for example, if you have supply chain constraints, one of the goals you want to achieve is run factories or even if that’s your work desk, at the leading edge of the efficient frontier.
That means tools like Microsoft’s cloud products, simulating success is going to make sure that every production run has the least amount of slippage.
So, I think any which way you look, whether it's in the knowledge department, first-line worker, or the cloud products and simulation, utilizing all the stallions in the stable are going to be the best way for any company to deal with inflationary pressures so that they can in fact accelerate productivity the fastest way possible and thereby calculate the fastest way to meet aggregate demand out there.
Microsoft is essentially the best at doing and it’s not even a toss-up.
In a strong inflationary environment, the case for digital transformation strengthens with Microsoft helping others, and this plan is hatched by deploying MSFT’s top-line services to spur digitization as a deflationary force that massages the bottom line.
The signs are everywhere that companies from all walks of life are doing this with Microsoft Cloud quarterly revenue surpassing $20 billion for the first time, up 36% year over year.
Businesses small and large can improve productivity and the affordability of their products and services by building tech in density.
The Microsoft Cloud delivers the end-to-end platforms and tools organizations need to navigate this time of transition and change.
Every organization will need a distributed computing fabric across the cloud and the edge to rapidly build, manage, and deploy applications anywhere.
MSFT is building Azure as the world's computer, with more data center regions than any other provider, delivering fast access to cloud services while addressing critical data residency requirements.
They are partnering with mobile operators from AT&T and Verizon in the United States to Telefonica and BT in Europe, Telstra and Singtel in Asia Pacific, as they embrace new business models and bring ultra-low latency, compute power, and storage to the network and the enterprise edge.
The numbers back up their achievements with 78% of the Fortune 500 using MSFT’s hybrid offerings.
LinkedIn now has nearly 800 million members. Confirmed hires on the platform increased more than 160% year over year. And this quarter, MSFT launched new ways to help job seekers discover roles that align with how they want to work. In a rapidly evolving labor market, companies are increasingly turning to LinkedIn Learning to upskill and reskill their employees.
The totality of MSFT’s dominance translated into MSFT notching first-quarter revenue of $45.3 billion, up 22%.
MSFT will surpass $200 billion of total revenue this year and they will easily surpass $300 billion annually in the next 18 months.
I am highly bullish MSFT — buy on every and all dips.
