#Bitcoin’s roughly tripled in past 3 months, but its liquidity has deteriorated

#Bitcoin liquidity is only $10BN/day vs. $100BN for #Gold, making it much more prone to wild gyrations from relatively small orders. $BTCUSD

Bitcoin Rally Faces Potential Test From Falling Market Liquidity

Joanna Ossinger

February 22, 2021, 6:48 AM GMT+1

Ether hit records on the weekend passing $2000/ $ETH

The rally in Bitcoin that took the digital token to a fresh peak over the weekend could face a test from declining liquidity in the market for the largest cryptocurrency.

Bitcoin rose as high as $58,350 on Sunday before retreating to about $56,200 as of 2:30 p.m. in Tokyo on Monday. The token has roughly tripled in the past three months but its liquidity has deteriorated, according to Nikolaos Panigirtzoglou, a strategist at JPMorgan Chase & Co.

"Market liquidity is currently much lower for Bitcoin than in gold or the S&P 500, which implies that even small flows can have a large price impact," he wrote in a note on Friday. 

Such a backdrop opens up the possibility of sharp moves higher or lower in the cryptocurrency depending on the prevailing ardor for digital assets. Of late, even some of the token's biggest backers appear surprised by its ascent. In a recent tweet, Elon Musk said Bitcoin prices "seem high," having earlier called it a "less dumb" version of cash.

Bitcoin trading volumes are around $10 billion daily for the spot and futures market combined, compared with an equivalent figure of $100 billion for gold, Panigirtzoglou wrote. That's consistent with "much lower liquidity in Bitcoin than in gold," he said.

Cryptocurrencies have enjoyed a strong start to the year, leaving other assets in the dust. The Bitcoin faithful argue corporate treasurers and institutional investors are new sources of demand and that the token can hedge risks such as faster inflation. Others see a prime example of speculative froth stoked by hedge funds and day traders in markets awash with stimulus.

"Bitcoin seems impervious to the barrage of fear, uncertainty and doubt waged against the industry," Paolo Ardoino, chief technology officer at cryptocurrency exchange Bitfinex, wrote in an email.

Shares of Asian cryptocurrency stocks advanced Monday in the wake of Bitcoin's all-time high. One of the biggest movers was Japan's Monex Group Inc., which jumped as much as 16%.

Ether, the largest token after Bitcoin, also rallied over the weekend, topping $2,000 for the first time on Saturday. It's up about 150% year-to-date.

See the piece on Bloomberg here: 

https://www.bloomberg.com/news/articles/2021-02-22/bitcoin-rally-faces-potential-test-from-falling-market-liquidity?sref=VxHCy32x

Additional resources:

Explain This: Bitcoin's Wild Ride 

https://www.bloomberg.com/news/videos/2021-02-10/explain-this-bitcoin-s-wild-ride?sref=VxHCy32x

https://bit.ly/PangeaBlog

Someone is Missing Something... $TLRY $APHA

Aphria shareholders will get 0.8381 shares of Tilray for each common share of Aphria they hold.(1) 

The spread doesn't make sense w regards to the prices.!!

#Silver’s recent surge is just the beginning of the coming #Commodities boom

The Digital economy will still need Metals & Minerals, says the FT, so get ready for a Commodities Boom!

"This is to be the year in which "the narrative of a greener government supported transformation of the social paradigm meets the reality of too little supply, inadequate infrastructure and a business world that has been so busy getting digital it forgot the physical world".

Great products don't just need to be hailed on social media, they need to be produced, shipped and delivered. That needs real-world commodities.

"where are we in the cycle now? At the beginning of the good bit (from an investor point of view at least.). The big metal miners effectively went on investment strike in 2014 — stopping almost all expansionary spending with the result that a large number of industrial metals were already in short supply even as we went into the pandemic last year."

In the post-Covid-19 era, it appears that no one will worry much about fiscal prudence. Instead, there is every chance that the fashion for the government to fill individuals' pockets will continue; that the endless promises of green transformation and infrastructure revolution will come good; and, crucially, that governments will prioritise high levels of employment over low levels of inflation. Think of the volume of cash that will spray around economies, and perhaps we are moving into something of a "Keynesian golden age" says Gavekal Research.

All this is wonderful for industrial metals and particularly wonderful for any materials that are at the core of green transformation. There is, for example, no replacement for copper in electrification. The more you think green, the more you need brown metal.

See the article by Merryn Somerset Webb, editor-in-chief of MoneyWeek (Twitter:  @MerrynSW ), on the FT here:

Silver surge could signal coming commodities boom

https://www.ft.com/content/faef0bde-f95a-4f9b-a3f1-4cdea304b12a

#Greylock, one of the best-known #EmergingMarkets #Debt #HedgeFunds, Finds Itself at Similar Crossroads As Its Previous Targets, #Bankruptcy

Some 25 years after its founding, the firm -- its assets headed to a mere $350 million or so by the end of March -- on Sunday filed for bankruptcy protection in New York

Argentina, Mozambique, Barbados and the Republic of Congo have two things in common: They’ve all restructured their debt, and they’ve all tangled with Greylock Capital Management.

Now Greylock, one of the best-known hedge funds in emerging markets investing, finds itself at a similar crossroads. Some 25 years after its founding, the firm -- its assets headed to a mere $350 million or so by the end of March -- on Sunday filed for bankruptcy protection in New York. The firm is seeking to end its lease in midtown Manhattan after investors pulled their money following three years of losses, most recently stemming from the pandemic.

It’s a humbling turnaround for the hedge fund, which made a name for itself for its deep expertise and as one of the more outspoken firms in the emerging-market space, punching well above its weight. While the firm has no plans to shut down, it’s operating at a fraction of its former self: a staff of nine, down from 21 in 2017, and assets at about 30% of their $1.1 billion peak. Paying $100,000 in monthly rent for now-unused Manhattan offices was becoming untenable.
...

Altogether, Greylock’s partners have participated in over 50 creditor committees in more than 30 countries, dating back to the 1980s and early 1990s, including restructuring the debt of several countries into Brady Bonds.

Its more notable deals include Greece, where Greylock was the only U.S. creditor on the steering committee to negotiate the nation’s debt restructuring. The hedge fund also co-chaired a steering committee before Argentina’s notorious 2005 debt restructuring, and was among bondholders that rejected that 30-cent offer. The firm’s partners have been involved with no less than five workouts in Argentina.
…

Poor Performance

The firm was digging itself out of 3% losses in 2019 from private credit trades gone awry and tighter oil sanctions that pummeled Venezuelan debt when the Covid-19 pandemic hit. The flagship fund plunged about 14% last year as the virus slammed risk assets. Losses were led by Argentina and Venezuela, while the firm continued to write off some private credit trades, according to Mediratta.

Investor withdrawals were mostly spurred by the poor performance. The firm was stung by one particularly large withdrawal by an institution concerned with socially responsible investing that didn’t like the optics of being invested in countries such as Mozambique.

In the absence of new money, assets will drop to about $350 million at the end of March. Despite the recent losses, Greylock’s flagship fund has had annualized returns of 11% since its inception, beating the average hedge fund and JPMorgan Chase & Co.’s benchmark emerging-market debt index over the same span.

See the whole piece on Bloomberg here: 
For Shrinking Greylock Hedge Fund, $100,000-a-Month Rent Proved Too Much