, 13 tweets, 6 min read Read on Twitter
1/ No, it's not @facebook's "crypto" experiment. My trading instincts say it's dollar weakness.

Earlier I had the pleasure of sitting down with @lisaabramowicz1 and @ptsweeney on @Bloomberg to discuss what's fueling bitcoin recent run: bloomberg.com/news/audio/201…
2/ Contrary to many headlines, so far Libra / Calibra does not appear to be a "cryptocurrency."

Rather, it represents fiat value transported on cryptocurrency rails.
2/ Contrary to many headlines, so far Libra / Calibra does not appear to be a "cryptocurrency."

Rather, it represents fiat value transported on cryptocurrency rails.
3/ Because of this, it's inheriting the legal & regulatory hurdles associated with both crypto (difficult) & the legacy banking system (also difficult).

Our firm (@CoinSharesCo) is very familiar with this regulatory quagmire.

Facebook certainly has their work cut out for them.
4/ So why might they take on this endeavor? Because of growth.

My colleague @Melt_Dem has an excellent piece exploring their motivations: medium.com/coinshares/cal…

More or less, the opportunity to monetize 2.9 billion users is too lucrative even for Facebook to pass up.
5/ Though this news did not drive the recent price movement in my opinion, bitcoin will still benefit when (if) Libra manages to launch as it will provide a new crypto on-ramp for 2.9 billion users while familiarizing them with digital wallets and public-private key cryptography.
6/ But if Facebook isn't to thank for the recent price action, what is?

As a trader, I always have to look at the larger backdrop.

The main theme I see in the market right now is USD weakness with additional uncertainty injected by the Fed.
7/ Today we're in uncharted territory with central banks & negative interest rates - arguably more so than post '08 financial crisis.

This means policymakers are leaving fewer tools to fight the next downturn that inevitably will occur. Investor psychology is notoriously fickle.
8/ Yet coincidentally #bitcoin is up over 200% through the first six-months of 2019, and continues to gain dominance as the crypto winter thaws
9/ Another encouraging sign is that now we have more professional custodians:
- Fidelity @DigitalAssets is live
- @CoinbaseCustody too
- @ledgerx just secured @CFTC licenses
- @Bakkt futures supposedly launching in July

(Physical delivery is necessary for any true hedging.)
10/ But don’t get too excited too soon - it's not as if institutions are all of a sudden racing in...

Looking at CME volume, I get a different story than they do:
11/ Napkin math for CME $BTC futures volume compared to others supports this read...
- 1/5th of crude volume
- 1/16th of @Bitmex volume
- 1/100th of gold volume

In my view, we've got a long way to go before we can reasonably conclude that institutional money is here for good.
12/ So to answer the question "is bitcoin back?"

My take - yes, bitcoin dominance is back... but only comparatively speaking, of course.
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