As you’re probably aware, Bitcoin has soared to multiple, fresh all-time highs and shows no sign of letting up.
On top of that, retail is still nowhere to be found. This is 100% institutional capital and the move has been reflected in stablecoin issuance (nearly $4B between Tether and Circle over the last couple weeks) and ETF inflows: IBIT has hit $76 billion AUM in under one year (350 days).
By comparison it took GLD, the gold ETF over 15 years to hit the same level (as per @KobeissiLetter).
That said, gold and Bitcoin are both unambiguously on the move at the same time (as is silver!). Meanwhile, bonds and the USD are also running in tandem: they’re both tanking.
(It’s almost as if capital is fleeing fiat and bonds and rushing into hard assets. Who would’ve thunk it?)
We’ll obviously have more to say about this in the next letter.
LQWD Divergence
Everything in our portfolio is ripping – even COIN has broken out to fresh all-time highs originally set on their IPO day, which was April 2021.
Against this backdrop, LQWD has been dropping, why?
My first instinct was to look at whether we should cut or trim LQWD because it wasn’t confirming the move, but once I looked at the chart it appeared to be extremely oversold:
I think what we’re looking at here is simply the remnants of digesting that megaspike out to $11/share and the recent private placement.
The price weakness here appears to be happening on declining volume, the clumsey technical analyst in me thinks selling pressure is running out.
This looks like a good setup. If there was an options chain on LQWD I’d grab some calls, but there doesn’t seem to be.
My personal position is already overweight, but I may add some here just to catch the move and drum up some cash for the trading account.
A few readers asked me over the past week if this was a good place to add to LQWD – it is now.
Also note – they’ve since opened a credit line for $12M and bought some more Bitcoin, their HODL is now at 181 BTC – but that also means they are no longer debt free. Their debt/equity is now about 0.12, which is fine.
(One reader also asked about EXOD just before I was to hit “send” – hold it through. That one is volatile as hell, but when retail finally shows up, I think it’s going to fly).
