(Any views expressed below are the personal views of the author and should not form the basis for making investment decisions, nor be construed as a recommendation or advice to engage in investment transactions.)
Good morning and happy first official day of Summer!
Not much has changed since my last update at the end of May, unless your portfolio consisted of more than just BTC and ETH. It has been a brutal month or so for alts, which on average are down 25%+++ from 2024 highs. I personally look at memecoins in a separate bucket from alts, and if you were all in on those…ouch. We seem to be at the end of this madness as we’re seeing C-list celebrities try to squeeze out the last few bucks before we shake our heads in disbelief that we’re here yet again, and get back to fundamentals — because while I agree markets (not just crypto) are somewhat of a casino, there are important and fundamentally strong companies and projects. Here are a few examples of late stage grift:
Yes, that’s Solana tattooed on Lil Pump’s forehead.
Andrew Tate launched a coin called daddy…lol and the mother coin he’s referring to…
Iggy Azalea launched a coin called mother. Please click above and listen to her talk about raising her market cap to $300mm and ask about how much money she’s making these dumb dumbs at the NYSE…
Don’t know what to tell ya, this space gets super weird from time to time. This capitulation in alts and memes is well-deserved. We need to cleanse the grift before we can properly recover. To be quite honest, I’m kind of embarrassed to point out the grift because most of you are sophisticated investors looking to dip your toes into this space and probably haven’t noticed any of this until now.
Cycle truths: When Bitcoin ranges, Crypto Twitter (CT) gets bored. And when CT gets bored, new main characters emerge, often showcasing peak stupidity. This month, we witnessed new main characters take the CT center stage, exemplifying this cycle of boredom and absurdity. So, let’s keep it simple and smart: buy Bitcoin. Amidst the noise and the nonsense, sticking to the fundamentals is key. Don’t get distracted by the fleeting hype of the new and often ridiculous characters that come and go. Instead, focus on what has consistently shown value and stability — Bitcoin. Let’s weather this storm of silliness and come out on the other side stronger and wiser.
The Fed wants to cut rates…
I mean, I don’t have to tell you all — most of you either have exited Canada, or have plans or wishes to do so. It’s a goddamn shame that we’ve come to this, but I’m still bullish on Canada and think we can sort it out under the new administration. Canada, along with the rest of the West, is deep in it right now…our cutting cycle has started with no end in sight. Whether you’re holding canuck bucks or good ol’ Canadian Tire money, which might arguably be more valuable, you should probably rush to spend because holy…things are bad.
Side note — I just got back from Spain. I lived it up with my girlfriend. It. Was. Awesome. It made me realize that we’re just not doing it right over here, but I’ll save it for another time. Key takeaway was whether I was having fresh shrimp (gambas) or razor clams (navajas) grilled over charcoal at a nice restaurant, everything was refreshing…ly cheap. The biggest culture shock was when we got back to Pearson…it was a mess. When we finally arrived back to our humble abode, we thought it would be nice to get a shawarma, and paid ~$38 for 2 sandwiches and 2 drinks. That’s like 6 cervezas and a plate of fresh seafood where we just were less than 10 hours earlier…gross. In case you're wondering, the Shawarmas sucked.
The US can hold off longer than its peers, but they will end up doing the same thing…just hopefully not too late. So much for everyone’s 2% inflation target. I think a surprise cut in July by the Fed is not out of the question. The global economic landscape is shifting rapidly, and while Canada might be feeling the heat, the US isn't far behind.
The anticipated rate cut cycle signals a broader economic strategy aimed at stimulating growth amidst ongoing uncertainties. Yet, this approach is not without its risks. The prolonged high inflation has already eroded purchasing power, and while rate cuts may provide short-term relief, they also risk fueling further inflationary pressures. The balancing act the Fed faces is precarious — cut too soon, and they may trigger runaway inflation; cut too late, and the economy could tip into a recession.
Adding another layer to this complex scenario are the trillions of dollars parked in money market funds, which currently sit at around $6 trillion. These funds have been attractive to investors seeking safety and liquidity in a high-interest rate environment. However, as rates come down, the returns on these funds will become less appealing. Investors will inevitably start looking for better returns elsewhere, which could be a significant boon for alternative assets like Bitcoin.
Exciting stuff…
Bears might argue that the Bitcoin ETF trade is played out and that most of the early allocations were driven by retail investors. But what they're missing is the big picture: Bitcoin ETFs are about to get approved at major wirehouses and large private bank platforms in Q3 or Q4. This could be a game-changer. The institutional basis trade is looking like a "trojan horse" for adoption, with big investors starting to evaluate "net long" positions. Bernstein is predicting some serious growth ahead: Bitcoin hitting around $200,000 by 2025, $500,000 by 2029, and a whopping $1M by 2033.
Oh... btw ... Founder and CEO of Dell Technologies, Michael Dell, who is the 10th richest man in the world, worth an eye-watering $120 billion... and is the majority shareholder owning 58.9% of the stock... is now posting about Bitcoin. Dell currently is sitting on $6 bn in cash.
3iQ Corp. has filed a preliminary prospectus to launch North America's first Solana ETP (Exchange-Traded Product), named The Solana Fund. Expected to be listed on the Toronto Stock Exchange under the ticker "QSOL," the fund aims to provide exposure to Solana (SOL) and potential long-term capital appreciation.
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