$COIN: TRADER OF VALUELESS TRINKETS
📺 FIRST EPISODE: $COINBASE SHORT, PITIFUL Q3 DESPITE LARGE ADVANCE IN #BTC
📺 WATCH $COIN ONE : MEAGER RESULT IN Q3 DESPITE LARGE ADVANCE IN #BTC
This short position on $COIN is a position that has been preparing for a while, and it’s already a medium position personally. The most absurd ‘investments’ bubbles are by definition very popular. I have already, without equivocation, explained that #BTC was worthless as a commodity.
A commodity, either tangible or intangible, to have value, must be incorporated into a good or service. A physical commodity would be incorporated, for example, Silver is an industrial product or in a jewelry product. For Gold, it would be mainly jewelry; 51% of demand of Gold is jewelry and 8% for chips. Central Bank demand, as a trade settlement token, is only 15% over a period of 10 years. For a digital commodity it would be for example a dataset that could be incorporated to produce an information.
There is nothing particular about Gold as a trade settlement token versus any other commodity; they are all assets that are not liabilities at the same time, unlike FX. FX as a reserve, because it is also a liability at the same time, creates gigantic imbalances around the world: consumption versus production, savings versus spending, and Purchasing Power Parity gaps that do not resolve over time. Any asset that is not a liability like Gold does not have this problem.
The speculation part on bars and coins called ‘investment’ is 30%, though. This can introduce volatility in price.
BTC is not a diamond, it is not a precious commodity, and if diamonds are not fungible, nobody cares and goes around that it should not have value because it’s not fungible and as a result is a “bad form of money”. In fact, the source of value for #Gold is precisely its precious commodity nature, and the value as money is only a second emergent property, simply because unlike diamonds, Gold is fungible.
The classical economists are very clear on that topic.And if it did not have value as a precious commodity FIRST, it could not become a form of money SECOND.
#BTC is a scriptural monetary abstraction, a ‘name’ like CNH, USD, or CHF. It is a collective imaginary yardstick to measure the things of value (goods and services, productive assets), not a thing of value itself. Just a means of circulation. #BTC lacks the essential for a currency: significant circulation. It can only acquire purchasing power via circulation in goods and service.
An example I cite often: the greenbacks between 1866-1879 doubled in purchasing power versus currencies of Europe that were convertible in precious metals. The reason was that McCulloch balanced the budget and repaid debt and contracted the circulation: LARGE QT if you will. So the greenbacks were more than limited, they were reduced!
But in 1879, the greenbacks went to ZERO; they were demonetized. The conclusion is that a scriptural monetary abstraction can be the scarcest in the world, but if it is not monetized in circulation or barely monetized in the circulation of goods and services, it will not have significant purchasing power. There is no record in history in 300 years at least where a scriptural monetary abstraction without meaningful circulation would have large purchasing power.
It’s a lot less conventional now to present $COIN short, now that #BTC has been humiliated by all commodities ramping very significantly from Copper to Food and Precious commodities also while #BTC and the Shitcoins showed correlation with nominal rates sensitive assets (Commodities are not sensitive to NOMINAL rates; the proof is Argentina with plunging currency, very high rates, and commodities in national currency continuously rising).
In the slack channel, I present an episode about the connection with the alteration of the currency versus commodities and its impact on nominal rates. With more nominal rates crash up, the Minksy Assets propped up by 14 years of ZERO interest rates and money printing should be vaporized. There should be a nice opportunity in short junk bonds indexes, shitcos, Russel and other assets like so.
I shall in the future be a bit earlier in disclosing those controversial trades as you get used to those. There are many of those in China, and I should remind you that the two biggest positions of Michael Burry are two Chinese equities. Politics be damned; we are here to make money.
Most shitcoins are now significantly below their recent high, while their recent high is far lower than the 2021 high. A dead cat bounce, echo bubble from 2021.
So in Q3 of 2023, I showed how despite the strong performance of #BTC for the first 3 quarters of 2023, $COIN had, in fact, very lackluster results.”
Find here the link for the first episode.
📺👉https://link.graphcall.com/COINBASE_SHORT_ONE
About the author
Geoffrey provides unique insights. As DM and EM start to switch places in fiscal dominance regimes, his experience from a firm that traded EM bonds in the early 2000s will prove crucial. He is also versed in pre-FX as reserve monetary systems ( prior to 1922) and it will prove handy to understand local ccy trading, and its impact in FX, bonds, PM and currencies.
Former portfolio manager of 15 years at York Asset Management, a US and UK based firm specialized in Global Risk Arbitrage & Special Situations, Geoffrey is now CEO of DocuTalk, a NY-based software company that pioneered a new visual format to interactively present documents in video format using patented technology (and featured in the ’30 year anniversary’ edition of the Investor Relations Magazine New York).