cryptomaniac

Physics enthusiast, full time investor

[Raoul Pal @RaoulGMI]

https://t.co/nCw6ZOnb4K

[Daily Loud @DailyLoud]

Police raided the University of Iowa’s Alpha Delta Phi fraternity house, and bodycam footage shows pledges in the basement during hazing rituals.

[Raoul Pal @RaoulGMI]

This might be the most uncomfortable article I'ever ever published. It is easily the most ambitious.

The Universal Code is the culmination of 30 years of macro thinking... but its a LOT more than just macro.

https://t.co/me4h2ufTLx

[Julien Bittel, CFA @BittelJulien]

These are all solid points.

Let’s take it one step further…

Think back to the 2016 to 2017 cycle.
Bitcoin took a 20% hit, two 30% hits, one 35% hit, and three separate 40% flushes. It was relentless. Yet the market still delivered a 46x move.

The human mind conveniently forgets how awful those corrections felt because the final outcome rewrote the narrative.

Now look at this cycle...

We have had four 20% pullbacks and now three 30% pullbacks (chart 1).

Nothing about this is new. It only feels painful because you are inside the move right now. And if you are anchored on the idea that the cycle peaks this year, which is not our base case but is a view many people hold, it becomes very easy to convince yourself that you missed the bulk of the move, that it’s all over, and that the best of this cycle is already behind us.

What really stands out is how similar these corrective structures have been over the past couple of years, as shown in charts 2 and 3…

The pattern, the size, the timing, they keep repeating. It is almost fractal. I have more examples of this as well.

When you compare both the magnitude of the pullback and the amount of time spent correcting, it suggests we are getting very close to the end of this move.

Now, to Raoul’s point, sentiment is indeed completely washed out…

Everyone is calling for the top. People are capitulating emotionally and not analytically. That is exactly the environment where bottoms tend to form. RSI is sitting at 28, and DeMark counts are close to flashing 9s and 13s almost across the board.

Nothing is guaranteed, but the probabilities are starting to lean heavily toward a bottom forming this week. Let’s see…

And remember, most people are overcomplicating the idea that Bitcoin’s traditional four-year cycle can extend. It’s simple. If the business cycle extends, the crypto cycle extends (chart 4).

Bitcoin is a macro asset…

[Raoul Pal @RaoulGMI]

I think this week the Feds hand will be forced to tweak the plumbing to avoid a month end and year end funding crisis.

Crypto is currently trading like a stressed funding vehicle reflecting the broken plumbing, while stocks are cushioned by buybacks and performance chasing for now,
but risk a repeat of 2018/19 if not solved immediately.

It's clear the Fed are concerned, hence the meeting with the banks and NY Fed to understand why the SRF isn't being tapped enough to resolve this. The fear from markets and the Fed is rising.

The bigger battle is that the Treasury now wants control over liquidity via the banks (increased lending helps Main St) vs the Fed QE. This allows fiscal and monetary policy to align under the key goal of targeting stimulus to Main St while still allowing for Wall St to benefit from debasement which increases collateral values. QE doesn't leak into Main St. Liquidity management is now a political game, not a monetary policy game.

In the end, it's all down to The Everything Code and the economic gravity of financing the debts but politically in a way that doesn't hurt Main St as much (Trump needs to win the midterms).

That's the optics but the reality is it's still debasement smoke and mirrors.

I'll write this all up in detail in RV Pro Macro this week.

This week will be volatile until this is solved.

The big fix is eSLR changes which are now becoming more urgent as the key source of financing the deficits and driving liquidity in the future. Not sure when they ramp up communications on that but an interim fix via repo/SRF is very close to being unleashed.

You can hear the cowbell in the distance getting rapidly louder and closer. That will usher in the 2026 cycle extension as $7trn of interest payments need to get serviced.

[Real Vision @RealVision]

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[cryptomaniac @cryptomania22]

@RealVision Remember 0 leverage and enjoy the ride

[Julien Bittel, CFA @BittelJulien]

Ok, let’s get one thing straight…

Delinquency rates on credit card loans (or otherwise) are not a leading indicator. The ISM is not a leading indicator. PMIs are not a leading indicator. Heavy truck sales are not a leading indicator. Job openings are not a leading indicator. Consumer confidence is not a leading indicator. Small business confidence is not a leading indicator. Durable goods orders are not a leading indicator. Capital goods orders are not a leading indicator. Jobless claims are not a leading indicator. Payrolls are not a leading indicator. The unemployment rate is not a leading indicator. Retail sales are not a leading indicator. Port traffic is not a leading indicator. Rail traffic is not a leading indicator. Freight volumes are not a leading indicator. Rig counts are not a leading indicator. Bank lending is not a leading indicator. The Conference Board LEI is not a leading indicator (I know, crazy, but no…).

All of these indicators are coincident at best, some even lagging. But not all coincident economic data is created equal. Some start flashing early when the cycle turns.

Our GMI US Coincident Business Cycle Index pulls together some of the more forward-looking elements within the coincident economic data, including early employment trends I’ve talked about before and a few other signals that tend to move first.

But more importantly, EVERYTHING is downstream to changes in financial conditions…

Here’s the backdrop:

Our lead indicators bottomed in June 2022, leading both the ISM and our coincident index by around nine months.

By March 2023, exactly nine months later, the ISM and our GMI index had also bottomed and started turning higher.

Lagging data, particularly the unemployment rate, continues to rise and that is what keeps the Fed engaged.

Most assume rising unemployment is always bearish for risk assets. But it depends entirely on the cycle’s context and where lead indicators are heading… and they’re rising.

What’s the bottom line?

The labor market is doing exactly what it needs to do to bring rates lower, which will eventually feed through to rate-sensitive areas of the economy like housing and manufacturing, driving the next leg of the business cycle higher.

It’s a recursive feedback loop.

Once you get The Everything Code Dominoes, the whole thing suddenly makes sense…

You see how it all fits together, and you understand the cycle phasing and variable leads and lags.

From there, it’s easy: focus on what really matters and ignore the noise…

[Raoul Pal @RaoulGMI]

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[Real Vision @RealVision]

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[cryptomaniac @cryptomania22]

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[Bitcoin Merch @BitcoinMerchCom]

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[cryptomaniac @cryptomania22]

Silly Elon imagined by Grok

[cryptomaniac @cryptomania22]

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[Raoul Pal @RaoulGMI]

Network effects and Metcalfe's Law have always been something that I'm very curious about...

And once you crack that, you understand what drives value and price in this Exponential Age...

I think the way that Solana has been building network value with their new Seeker phone is v clever!

So, I sat down with Emmett Hollyer, General Manager of @solanamobile, to dive deep into their roadmap and why they're betting big on mobile... As ever, please enjoy!

[Raoul Pal @RaoulGMI]

URGENT UPDATE— join us now! https://t.co/NnbNo25Ehj

[Raoul Pal @RaoulGMI]

This was a really good discussion and I give some of my bigger ideas about AI and crypto

[PlanB @100trillionUSD]

Just a scenario:
- Oct: classic pump month. BTC 70k
- Nov: Trump wins election, ends democrats Biden/Harris/Warren/Gensler war on crypto. BTC 100k
- Dec: massive ETF inflow. BTC 150k
- Jan: crypto people/companies return to US. BTC 200k
- Feb: Power Law crew sells. BTC 150k
- Mar: bitcoin legal tender in Bhutan, Argentina and Dubai. BTC 300k
- Apr: Trump/US start building strategic BTC reserve. BTC 400k
- May: Other countries (except EU) join rat race. BTC 500k
- Jun: several AI start using bitcoin to autonomously arb tradfi. BTC 600k
- Jul/Dec: face melting FOMO. BTC ATH 1M
- 2026: distribution phase. BTC back to 0.5M
- 2027: bear market. BTC bottom 0.2M

[cryptomaniac @cryptomania22]

@jimcramer Bull market is on 💪