(BTC) Archives

Crypto Is Back At It Again

Cryptocurrency prices have been on a tear lately as bitcoin continues to rally on hopes a spot bitcoin exchange-traded fund will launch soon.

Last week Bitcoin had a 24-hour time period where it exploded 13% to the upside as the digital gold wakes up from its slumber.

Lately, it certainly is odd to see US treasury yield surpassing any type of volatility that crypto can offer proving that volatility is more about a time and place dynamic rather than a certain asset class.

The volatility meant that Bitcoin passed $35,000 for the first time since May 2022 even though it has pulled back a little today.

The rally could be fueled in part by investors who were betting against the crypto asset scrambling to cover short positions as well.

Bitcoin led cryptocurrency prices higher over the past two weeks after the SEC declined to challenge its court loss against Grayscale Investments (GBTC) and its effort to convert its Grayscale Bitcoin Trust into a spot bitcoin ETF on Oct. 13.

A U.S. appeals court ordered the SEC to review Grayscale's ETF application. The regulator could still reject the spot bitcoin application, but it would need a new justification to do so.

Institutional demand for a spot bitcoin ETF is stronger than ever before. For many institutions, it is a matter of when — not if — the SEC will approve a spot bitcoin ETF.

A spot bitcoin ETF would provide a regulated and accessible vehicle for bitcoin exposure, and also mark a major vote of institutional confidence.

MicroStrategy (MSTR) added 21% and the computer software company holds 158,245 bitcoin with an average purchase price of $29,582.

Sooner or later, unless regulation totally wipes out Bitcoin, crypto is likely to find itself finagling its way into 401K’s.

The longer it lingers around, institutional pockets, which are deep, will find a way to onboard it into its business model.

For many years, institutional money has stayed away from crypto primarily because it is built on nothing and most conservative investors want to see cash flow.

At least an asset like gold bullion, there is a physical nature of what one buys.

Yet, as the world becomes more digitized and globalized, institutional money is starting to take the bait.

To Bitcoin’s credit, the absolute collapse of volatility in the past few years has been an interesting talking point because too much volatility used to be the problem for this asset class.

There is a chance that as we begin to start a new economic cycle because of a Fed pivot, that $16,000 per Bitcoin at the end of December 2022 could register the low of the next cycle.

Bitcoin is more appealing as a risk-reward proposition now than it was exactly a year ago as the Fed embarked on an epic tightening cycle.

Throw into the mix that the quality of global government has cratered to a generational low and it makes sense for institutional backers from Blackrock to front-run the next bull market in crypto as capital looks to de-risk from fiat currencies.

This could finally end up being the run-up to $100,000 per bitcoin that everyone expected during the last bitcoin spike.

Readers can play this in the equity market by buying MSTR.

August 21, 2023

Tech Letter

Mad Hedge Technology Letter
August 21, 2023
Fiat Lux

Featured Trade:

(ANOTHER RED FLAG FROM DIGITAL GOLD)
($BTC), ($COMPQ), (TLT)

Another Red Flag From Digital Gold

Tech Letter

When good times roll then the digital gold does too.

More often than not, these good times occur when liquidity gates widen.

Simply put, there’s more cash for alternative assets like Bitcoin ($BTC) to speculate on and that’s what people do.

Bitcoin as a standalone asset possesses no intrinsic value and delivers investors zero cash flow which are serious drawbacks in times of pain.

I wouldn’t go so far as to say this is a time of pain right now, but we are inching closer to it as the US 10-year treasury (TLT) hits 4.35%.

Sometimes, investors need that extra little bit of cash flow from that 50-year-old studio tucked away deep inside their portfolio to survive.

Call it a rainy day fund if you will.

The drawdown in Bitcoin is an ominous sign for tech shares ($COMPQ) because the logic goes that if Bitcoin goes up, so does tech.

The narrative for some time has been that Bitcoin is akin to something like crappy tech so if crappy tech shares deliver, then the good tech companies that offer cash flow and software products will do even better.

Bitcoin has just been jolted by some negative price action as we find ourselves lower than last week, at around $26,000 per BTC.

Longer-term US Treasury yields are around multi-year highs, part of a global bond selloff that reflects the risk of a prolonged period of restrictive monetary settings to bring down inflation.

Such a backdrop portends constrained liquidity that would pose a challenge for riskier assets like tech stocks and crypto.

Higher interest rates mean that assets like Bitcoin don’t look so attractive on a relative basis.

Some of the technical signals followed by chart analysts paint a mixed picture. A gauge of momentum known as the 14-day relative strength index suggests Bitcoin is close to the most oversold level since mid-2022.

Other metrics point to a reluctance among retail and institutional investors to engage with crypto following last year’s rout, blowups like FTX, and an ever-shifting regulatory landscape.

For instance, average daily spot volumes on centralized digital-asset exchanges over the past four months were the lowest since October 2020 — when Bitcoin was at about $10,000.

The last 30 days have been brutal for the Nasdaq index and narrowing the goalposts means that BTC will be one of the first casualties to get heaved into the dumpster.

The price action for tech stocks has been highly disappointing lately and there is a strong chance that we could revert to sell the rallies in the short term.

Numerous times the Nasdaq has started the morning hot out of the gate only to suffer sharp sell-offs as the afternoons rolled around.

Shares trending lower to end the trading day have epitomized tech shares lately.

Momentum is lackluster.

The reason I believe that tech shares will endure a harsher period of consolidation is because the added kick in the nuts is China weakness.

Growth forecasts are starting to get ratcheted back as it appears that China has entered the Japan-style lost decade type of slowdown that is a symbol of economic stagnation.

The Nasdaq is really searching hard under each stone to find some type of tailwind to propel us into year-end, but the window is closing quickly. Let’s hope we find that rocket fuel to get us over the line.

March 22, 2023

Tech Letter

Mad Hedge Technology Letter
March 22, 2023
Fiat Lux

Featured Trade:

(IF BITCOIN THEN GROWTH TECH TOO)
(COIN), (MSTR), (BTC), (DOCU), (TDOC)

If Bitcoin Then Growth Tech Too

Tech Letter

We are closing in on $27,000 and that’s quite the performance for the digital gold Bitcoin (BTC).

It just was last year when Bitcoin was down in the dumps.

I am not here flogging crypto but tech investors should take heed of what is happening in the riskier parts of the asset markets.

Yes, tech growth is quite volatile, but bitcoin even more so.

The price of Bitcoin is already up 72% this year and that will beat most tech growth stocks including the Teledocs and DocuSigns of the world.

This last strong surge is correlated with global banking contagion with even very liberal-based CNBC stating that Switzerland has become a financial “banana republic.”

Bitcoin is often advertised as the alternative asset class to fiat banking precisely because fiat banking has a history of going to zero.

The blowups at Silicon Valley Bank, First Republic, and Credit Suisse offer credible evidence that the strength of the fiat money banking system is trending down rather than up.

Hence the monster rally and this will just make banking more expensive for the unbanked and give the big banks more power and more “too big to fail” status.

Narratives are more powerful in crypto in generating real price movements than any other asset class and no matter what your thoughts on how powerful that narrative is, people actually believe this.

Cryptocurrency initially attracted interest from a niche group of investors following bank failures and government rescues.

While its popularity has grown among speculative investors in the roughly decade-and-a-half since, it has retained a status among some as being an asset more removed from the banking system than stocks and government bonds.

If the Fed decides to slow down the pace of interest rate hikes this is highly bullish for the crypto and tech growth sector.

Crypto investors have been particularly sensitive to regulatory and interest-rate developments.

They tend to pull money from long-bitcoin funds while adding to short-bitcoin products after the Federal Reserve announces interest-rate increases and regulators take action against crypto companies.

Since regulators started to crack down on some of the biggest crypto players, investors have pulled about $424 million from global exchange-traded products.

It’s been a terrible year to short bitcoin as that trade was last year’s rich uncle.

An important part of investing is to avoid searching for that boat that has left the dock.

Investors betting against crypto exchange, Coinbase (COIN), and bitcoin-buying software intelligence firm, MicroStrategy (MSTR), were down 76% and 62%, respectively, this year.

Some investors remain cautiously optimistic about the trajectory of bitcoin’s price, especially as it has surged against the backdrop of a banking crisis.

Although there could be a vicious pullback from the epic surge so far this year, Bitcoin will likely do well along with tech growth stocks in a paused or lower rate interest environment.

Throw in the bank contagion as a supercharger and 2023 is shaping up to be a great year to buy bitcoin and growth tech on the dips.

October 25, 2022

Bitcoin Letter

Mad Hedge Bitcoin Letter
October 25, 2022
Fiat Lux

Featured Trade:

(SAVING CRYPTO)
(BTC), (KPMG)

Saving Crypto

Bitcoin Letter

One can’t help but be appalled to see the former driver of global growth China turn radically inward, preferring a deeply authoritarian economic model.

What they had in the Hu Jintao years between 2002 to 2012 was legendary and might not ever happen again.

Friends of mine who have managed to flee China all mention how it was easier to leave before 2020.

Good luck now navigating Chinese lockdowns.

Authorities have made it impossible to leave and they track everything including a digital yuan now.

China and its backward economy have a lot of problems, and the more problems that add up nudge the people to a crypto solution.

I am not saying that every Chinese person will invest in crypto, but for the wealthy ones that usually immigrate to Singapore or Hong Kong, the data backs up my thesis.

KPMG accounting firm has indicated a colossal interest in the crypto market from the wealthy elite of Singapore and Hong Kong.

In fact, a 2022-survey by KPMG found that 58 % of the 30 family-offices and high-net-worth individuals (AUM US$10 m–500 m) across Singapore/HK were already invested in digital assets and a further 34 % intended to allocate funds to bitcoin, stable-coins, ether, as well as DeFi opportunities.

Of those 58 % who already invested:

100 % held bitcoin,
87 % held ether,
60 % bought NFTs/metaverse tokens,
47 % held DeFi tokens.

Beyond that, most already invested only allocated less than 5 % of their portfolio to the digital-asset class (reflecting caution around regulation/valuation).

But since 2022, things have evolved:

In 2025, the global fintech investment in H1 reached US$44.7 billion across 2,216 deals.
In Singapore, fintech (including cryptocurrency/digital assets) pulled in around US$1.04 billion in H1 2025.
Meanwhile in China, the stance toward cryptocurrencies remains very hostile: crypto ownership, trading and DeFi operations in mainland China are being criminalised and enforcement has stepped up markedly in 2025.
And the digital yuan (e-CNY) is being actively deployed: for example, by end Sept 2025, cumulative e-CNY transactions hit RMB 14.2 trillion (~US$2 trillion) and 225 million personal wallets were in circulation.

So: The good news is that there is a pathway that links rich Chinese to the future of crypto, but it’s largely contingent on whether crypto can get its act together or not.

China is ramping up its control over money supply by advancing the digital yuan that they can track and regulate with fine control.

This is really 1984 in its purest form.

As the crypto winter continues, there are indeed some silver linings.

However, crypto needs to be careful that it doesn’t turn into just another centralized version of what the Chinese are running away from.

Decentralization is hard to pull off in the long term as the government will want its cut.

Rome wasn’t built in one day.

October 20, 2022

Bitcoin Letter

Mad Hedge Bitcoin Letter
October 20, 2022
Fiat Lux

Featured Trade:

(LOOKING TO MAKE A DIFFERENCE)
(BTC), (NFT)

Looking to Make a Difference

Bitcoin Letter

A non-fungible token (NFT) is a unique digital identifier that cannot be copied, substituted, or subdivided, that is recorded in a blockchain, and that is used to certify authenticity and ownership.

Like cryptocurrencies, they are also digital tokens.

But compared to cryptocurrencies, which are fungible, or interchangeable, NFTs are singular and unique. Like cryptocurrencies, they exist on the blockchain as cryptographic assets.

The price direction of NFTs is a good way to take a barometer of a speculative technology market underpinning crypto.

I can tell you that the NFT marketplace is dead as a doornail, and like how the price of Bitcoin had been engulfed in a crypto winter during 2022–2023, it’s even worse in the NFT world. Bitcoin has recovered since then, but NFTs haven’t.

How bad?

Multimillion-dollar NFT purchases marked down to $100 kind of bad.

In times when the crypto industry is bullish, NFT prices benefit from being a second-derivative industry.

One might say that it’s just a 3X ETF of Bitcoin and for speculators, this can be either good or bad.

If you don’t believe me about the state of NFTs, let's roll through some of the data points.

In sectors from art to gaming, trading volume and prices collapsed more than 90% from their early-2022 peaks, and by 2024–2025 an estimated 96–98% of NFT collections saw virtually no trading activity at all.

By 2025, global NFT sales sit in the low single-digit billions per quarter, compared with tens of billions at the height of the 2021–2022 mania. Daily volume across major collections now totals only a few million dollars.

The NFT capitulation is solid proof that NFTs are not stores of wealth and definitely aren’t inflation hedges.

I can also say that Bitcoin pretty much failed every test of legitimacy during the 2022–2023 crypto winter.

NFTs and Bitcoin are speculative assets that only do well during a time of increasing liquidity. The reverse holds true as liquidity tightens.

Many of those art NFTs are being bought and sold on OpenSea, the most prominent peer-to-peer marketplace.

Daily trading volume on OpenSea peaked around $2.7 billion on May 1, 2022 and then fell by about 99% to under $10 million a day by late August 2022. By 2025, OpenSea’s annualized marketplace revenue is in the low tens of millions of dollars, a fraction of its peak activity.

Personally, I don’t believe in NFTs long term, I don’t get how a digital certificate will hold weight.

I rather have a real physical certificate that shows I own something like a real estate deed.

For those who might think NFTs could hold more utility in the future, then I am another hater you must convince.

Preaching to me about how long-term prospects are positive and investors should buy the dip is laughable.

Any serious asset doesn’t go down 95% in one year without a crisis and in the short-term survival of NFTs isn’t guaranteed. For most collections, prices remain more than 90% below their 2021–2022 highs even in 2025.

This was a fad that caught on and rode the hysteria of Bitcoin to relevance and now is being dumped faster than one can imagine.

Back in 2022, as markets braced for a Fed-induced recession that ultimately turned into a slowdown rather than a deep, official downturn, it was hard to believe Americans would be interested in buying an NFT when they worried about keeping their jobs - and even in 2025, high rates and lingering inflation shocks have left little appetite for ultra-speculative JPEGs.

Surveys show that roughly half of U.S. adults have heard at least a little about NFTs, while globally about 47% of consumers have never heard of them at all, only 7% say they know exactly what they are, and roughly 1% actually own one.

But most understand that securing shelter and food during unemployment is more important than throwing money down the toilet.

Avoid the NFT asset class, period.