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legendary
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In this thread I will collect various Research papers published by Wall Street Banks on Bitcoin.
Banking sectors have begun to cover Bitcoin in Various aspects. A few reports are quite remarkable, so will deserve their own thread. Some other are important for a minor reason, but maybe they are referenced on other news, or papers without proper reporting, and it is often difficult to read the original article.
I will use those to collate and reference into other thread, publishing graphs and paragraph linked to these research.
I won't be able to post full documents to protect my sources, obviously.
All reported material will be quoted.
My comments will be out of quotes.
If you find some missing article, or want to read a particular one, just ask, I will unleash my hounds to fetch the missing pieces.
Now bank accepted the online transaction for bitcoin.In countries like India,the liquidity and flow of coin was reduced by making 00101010he statement by RBI.Before investing,you should cross verify the team.The crowd sale will happen and team should concentrate on the future
legendary
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A new report from Arane Research, powered by Bitstamp. 
The case for bitcoin as collateral
The value of the global market for collateral is estimated to be close to $20 trillion in assets. Government bonds and cash-based securities alike are currently the most important parts of a well- functioning collateral market. However, in that, there is a growing weakness as rehypothecation creates a systemic risk in the financial system as a whole. The increasing reuse of collateral makes these assets far from risk-free and shows the potential instability of the financial markets and that it is more fragile than many would like to admit.
Bitcoin could become an important part of the solution and challenge the dominating collateral assets in the future.
Bitcoin's unique properties make it the perfect collateral asset
Bitcoin's combination of properties is unlike those of any other asset classes: It is an asset without both counterparty risk and credit risk. It is available for trading 24/7, 365 days a year, all over the world. In addition, it is the most portable asset the world has ever seen. Bitcoin can be transferred around the world, instantly, at almost no cost, any time of the day, and any day of the year, and with full finality. No other assets can match these properties today, making bitcoin the perfect collateral asset for the future.
A potential trillion-dollar market
The current size of the collateral markets is estimated to almost $20 trillion in assets. Our estimates show the huge potential for bitcoin as collateral, even if it just captures a few percentages of the existing market.
Based on our calculations and data collected for this report, we estimate that around 625,000 BTC are used as collateral in the crypto market today, or approximately $30 billion. This number is based on estimations of collateral held in the derivatives market, in relation to bitcoin collateralized lending and tokenized BTC in Decentralized Finance (DeFi). Comparing this number of 625,000 BTC to the total collateral market, shows that bitcoin collateral only accounts for 0.15% of the total collateral market today but the market is growing rapidly.
legendary
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Wells FargoThe investment rationale for cryptocurrenciesMay 2021 https://www.wellsfargo.com/investment-institute/sr_investment_rationale_for_cryptocurrencies/Key takeaways- Improved regulatory clarity and rising interest in digital technologies, especially during the coronavirus pandemic, have accompanied a wider variety of cryptocurrencies and increased market capitalization.
- Risks remain, yet we view improved depth and breadth as components of a gradually maturing marketplace.
What it may mean for investors- We view digital assets as an alternative investment for qualified investors through a professionally managed fund. Due to the uniqueness, complexity and continued evolution of these assets, we plan to produce a series of reports with a goal of increasing investor education and understanding of cryptocurrencies.
Executive summary – What’s changed and why now?We believe that cryptocurrencies have evolved into a viable investment asset. There are over 9,000 cryptocurrencies, with $2.4 trillion in capitalization (as of May 7, 2021), and this depth and breadth allow additional analysis of their trends. 1 Short-term factors suggest further deepening of the market. We believe long-term supply and demand trends support further industry growth, the potential for further compression in price volatility, and a possible role as portfolio diversifiers. Several crucial events in 2020 drew increased mainstream usage in transactions and accelerated the maturation of cryptocurrency markets. First, banks received regulatory permission to custody cryptocurrencies, and the investment industry and regulators took additional steps to extend a legal and oversight framework that should help solidify cryptocurrencies as investable assets. The coronavirus pandemic also played a role by fast-tracking the digital economy, as the return to near-zero interest rates sparked inflation fears and interest in alternative payment systems. Evolving markets for investable assets often introduce unique risks that require deeper due diligence. The main known cryptocurrency risks include the possibility of additional regulation and various operational risks associated with making transactions. Periods of persistently high volatility remain likely as maturation occurs. These potential risks and the need for ongoing due diligence underscore our preference that qualified investors consider a professionally managed option. We classify any cryptocurrency or digital asset investment as an Alternative Investment. In general, assets in the Alternative Investments category entail some combination of nontraditional sources of return, potential long-term diversification, complexity, potential illiquidity premiums, and higher volatility. Exposure through a professionally managed fund potentially may serve alongside private equity and debt strategies as the primary means of capturing long-term trends from fintech and other secular developments arising from digitization in the economy. 2 Additional investment structures may arrive in the not-too-distant future.
legendary
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Well, this one would have been hard to manipulate since the tokenized version trades based on custody of actual shares, <...>
I would expect the two to trade in near lockstep now.
Oh really? Is there a share backing up a token? Who says that? It took years to have an audit of the reserves of the biggest stablecoin: who is taking care of auditing this particular token? How can be a share backing up a token if the share wasn't quoted in the first place? Who am I trusting to deliver the payoff when needed? I would love to trust those "code is law" token, but as usual, I feel uncomfortable trusting someone I don't know without a clear legal framework. Yes, the sponsor of the token (CM-Equity) has shares of Coinbase to back up each token and the tokens are redeemable for Coinbase shares on demand. These spot tokens are backed by shares of stock custodied by CM-Equity. They can be redeemed with CM-Equity for the underlying shares if desired.
CM-Equity is fully regulated in Germany, and is a licensed financial institution permitted to offer such products. All FTX users who trade tokenized stocks may also have to become customers of CM-Equity, and pass through CM-Equity's KYC and compliance. Furthermore, all trading activity may be monitored for compliance by CM-Equity. CM-Equity custodies the equities at a third party brokerage firm. CM-Equity (not FTX Trading LTD) provides the brokerage services. Since this is a regulated financial institution in Germany, I'd expect this to be true. They'd be in for some huge fines if they made these representations and they were not true.
legendary
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To be honest, Wall Street predictions are crazier than ever and particularly crazier regarding bitcoin. Seriously, they have prediction spreads of x10 between Morgan, Goldman and all the rest of the so called investment experts. It is quite unusual to see these people diverge so much and my take is that they are absolutely confused about the whole crypto because they do not have the usual sources and methods that they use to deal with companies and other resources.
Well yeah, it's hard to "value" something that's arbitrary and speculative. Bitcoin doesn't produce income and it doesn't produce cashflow, which are two things needed to determine a valuation of what it should be "worth" in the present. Bitcoin is just worth what the largest group of people at any one time agree it's worth. While this is true for stocks as well, stock valuations are at least tied to valuation metrics (not always at any given time, but ultimately always eventually).
legendary
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Well, this one would have been hard to manipulate since the tokenized version trades based on custody of actual shares, <...>
I would expect the two to trade in near lockstep now.
Oh really? Is there a share backing up a token? Who says that? It took years to have an audit of the reserves of the biggest stablecoin: who is taking care of auditing this particular token? How can be a share backing up a token if the share wasn't quoted in the first place? Who am I trusting to deliver the payoff when needed? I would love to trust those "code is law" token, but as usual, I feel uncomfortable trusting someone I don't know without a clear legal framework.
legendary
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It's offered from a licensed and regulated firm in Germany, and because the tokens are backed by the the shares, the token should trade in near-unison with the stock. So either Coinbase will is already expected to trade well above the target price listed above, or there's some information disparity currently and the token price will trade sharply down once Coinbase starts trading publicly.
Very interesting. Gray markets have been there since the start of financial markets, but I would steer away from highly manipulated, unregulated markets if I were trying to infer anything on the real thing. Well, this one would have been hard to manipulate since the tokenized version trades based on custody of actual shares, so it's just a way to trade something more easily that was locked away for accredited investors. That's one area I think tokens are very useful, as long as the entity sponsoring the token is a regulated financial entity in a country with strong financial regulation, as is the case here. To follow up on it, the token crashed hard when Coinbase started trading, which was one of the two outcomes I stated might happen. In retrospect, of course it was the cryptotraders who were wrong and hyped themselves into a risky position. :] I would expect the two to trade in near lockstep now.
legendary
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To be honest, Wall Street predictions are crazier than ever and particularly crazier regarding bitcoin. Seriously, they have prediction spreads of x10 between Morgan, Goldman and all the rest of the so called investment experts. It is quite unusual to see these people diverge so much and my take is that they are absolutely confused about the whole crypto because they do not have the usual sources and methods that they use to deal with companies and other resources.
legendary
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legendary
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It's offered from a licensed and regulated firm in Germany, and because the tokens are backed by the the shares, the token should trade in near-unison with the stock. So either Coinbase will is already expected to trade well above the target price listed above, or there's some information disparity currently and the token price will trade sharply down once Coinbase starts trading publicly.
Very interesting. Gray markets have been there since the start of financial markets, but I would steer away from highly manipulated, unregulated markets if I were trying to infer anything on the real thing.
legendary
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The price target is for Coinbase. Interestingly, Coinbase hasn't started trading publicly yet but there is a tokenized version already trading and it's priced at $535 as of now. I was unfamiliar with this concept, but from the description: What are tokenized stocks?
Equities are stocks that trade on traditional regulated exchanges. FTX lists tokens on select equities. These spot tokens are backed by shares of stock custodied by CM-Equity. They can be redeemed with CM-Equity for the underlying shares if desired.
CM-Equity is fully regulated in Germany, and is a licensed financial institution permitted to offer such products. All FTX users who trade tokenized stocks may also have to become customers of CM-Equity, and pass through CM-Equity's KYC and compliance. Furthermore, all trading activity may be monitored for compliance by CM-Equity. CM-Equity custodies the equities at a third party brokerage firm. CM-Equity (not FTX Trading LTD) provides the brokerage services.
It's offered from a licensed and regulated firm in Germany, and because the tokens are backed by the the shares, the token should trade in near-unison with the stock. So either Coinbase will is already expected to trade well above the target price listed above, or there's some information disparity currently and the token price will trade sharply down once Coinbase starts trading publicly.
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That "adoption" line is very important, it shows how much bitcoin is getting the usage case as well as the investment part and that is what I care about. Honestly these wall street companies talking about bitcoin all this much really improves our chances to be taken seriously, the more positive things they talk about the better will be for us and that is why I care about that a lot, but at the end of the day we do not need to just talk about it, we need them to act on it.
For the past 40 days or so we haven't received any decent investment from these big companies, those billions of dollars spent on late months of 2020 and early months of 2021 is not happening for the past 40 days. They can talk as much as they want but if it is not providing us with billions of dollars worth of investments again, that is not going to mean anything in the end.
legendary
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legendary
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Bloomberg Crypto Outlook Rising Bitcoin Adoption Tide05 April 2021
 https://fillippone.altervista.org/1060725_Crypto-Apr2021Outlook.pdf
Electricity, Internet, Bitcoin, Digitalization, Dollar Dominance
Bitcoin Fills the Digital Reserve-Asset Need in Low-Yield World
Bitcoin Replacing Old-Guard Gold Is More Sudden Than Gradual
Dollar's Digital Dominance Eclipsing China Yuan Global Adoption
Grayscale Bitcoin Trust Is Gaining the Upper Hand Over Tesla
legendary
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DB ResearchPart III. Bitcoins: Can the Tinkerbell Effect Become a Self-Fulfilling Prophecy?17 March 2021 - Bitcoin’s market cap of $1 trillion makes it too important to ignore. Big players who buy and sell bitcoins have considerable market-moving power. As long as asset managers and companies continue to enter the market, Bitcoin prices could continue to rise.
- But bitcoin transactions and tradability are still limited. And the real debate is whether rising valuations alone can be reason enough for bitcoin to evolve into an asset class, or whether its illiquidity is an obstacle.
- Bitcoin’s value will continue to rise and fall depending on what people believe it is worth. This is sometimes called the Tinkerbell Effect — a recognised economic term stating that the more people believe in something, the likelier it is to happen based on Peter Pan’s assertion that Tinkerbell exists because children believe she exists.
- Central banks and governments understand that cryptocurrencies are here to stay, so they are expected to start regulating crypto-assets late this year or early next year. They are also speeding up research on their own Central Bank Digital Currencies (CBDCs) and launching pilots. Click here for more details.
- In the medium to long run, due to very strong network effects, there will likely be little room for using cryptocurrencies as a widespread means of payment. The regulatory landscape related to CBDCs, current cryptocurrency projects, and future efforts (e.g. Libra/Diem by Facebook) is still uncertain.
In the short term, Bitcoin is here to stay and its value will remain volatile - We estimate that less than 30% of transactional activity in bitcoins is related to payment for goods and services, with the rest largely used as a financial investment.
- As an investment asset, Bitcoin liquidity remains low. In 2020, 28mn bitcoins changed hands (150% of total bitcoins in circulation), compared to 40bn shares of Apple (270% of its total shares in circulation).
- Due to its still limited tradability, Bitcoin is expected to remain ultra- volatile; a few additional large purchases or market exits could significantly impact the supply-demand equilibrium.
- The root causes of Bitcoin’s volatility include: small tactical asset allocations and the entries and exits of large asset managers.
In the long term, Bitcoin, like Tesla, will have to transform potential into results to sustain its value proposition - Tesla’s current market capitalisation is $665 billion (as of 03/12/2021), which is almost five times the market cap of Ford and GM combined. That's remarkable because GM sold around 8 times as many cars as Tesla in 2020, while Ford sold more than 5 times as many. The ratio of market-cap to vehicle sold by Tesla and Ford shows that the current value of Tesla is 63 times that of Ford.
- Tesla’s valuation is pricing in a significant market shift toward electric cars, leading to the hypothesis that Tesla will remain an absolute leader in that market.
- Similarly, Bitcoin’s total value is $1,075 billion (as of 03/15/2021), which is around 102% of the yen in circulation, 65% of the euros, 53% of the USD, and 904% more than the GBP. Yet, the average number of bitcoins exchanged daily in USD is equivalent to only 0.05% of the yen and 0.06% of the GBP.
- Bitcoin’s current valuation is pricing in a shift toward cross-border digital currencies; the hypothesis is that Bitcoin, as
the leader, will benefit from network effects and become an important means of payment in the future. - Tesla is five years older than Bitcoin and has always sparked robust debates between people who see it as a soon-to-die fad and those who see it as the future of the car. Market sentiment has started to shift significantly in the last 18 months as Tesla delivered early results, such as Model 3, at scale.
- The next two or three years should be a turning point for Bitcoin; consensus about its future may emerge as people monitor digital currency developments. For more details, see Part II. When digital currencies become mainstream.
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JPM has a complex strategy on Bitcoin. There is a flurry of reports from them: the latest is a presentation deck for their private clients, UHNW Individuals with more than 10 Mios $ of financial asset allocation. JPMorgan tells private wealth clients that bitcoin can be a portfolio diversifier 'if sized correctly'In a slide entitled "How others are valuing crypto?" the bank broke down three commonly used metrics taken by market participants that "suggest significant upside [of bitcoin] is possible." Under the so-called Metcalfe's law, which suggests the value of a network is proportional to the square of the number of users, bitcoin's per-coin valuation would be at $21,667. If comparing the current global value of gold to bitcoin by using the 21 million max supply of bitcoin, then bitcoin's valuation would be at $540,814. Finally, if applying the global value of money supply to the max supply of bitcoin, its value would be $1.9 million.  Apparently, they see the demand, albeit not at full potential (yet) but they don't want their client to miss the opportunity. So they are moving in different direction with a various degrees of "risks" and "innovations". See for example also this: a very conservative way of getting crypto exposure. The problem with the last metric is it assumes that bitcoin is a perfect replacement for the global money supply and has no other competitors as to where to allocate dollars, so it seems faulty to me to assume that bitcoin's value has to be proportionally equivalent to the total money supply in the world. In reality, as an asset class it competes against all other asset classes for an allocation in a portfolio, so people who don't want to hold dollars will choose between real estate, gold, equities, debt instruments, crypto and any other type of asset. Bitcoin could never represent all of it because it's not the only asset class.
legendary
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JPM has a complex strategy on Bitcoin. There is a flurry of reports from them: the latest is a presentation deck for their private clients, UHNW Individuals with more than 10 Mios $ of financial asset allocation. JPMorgan tells private wealth clients that bitcoin can be a portfolio diversifier 'if sized correctly'In a slide entitled "How others are valuing crypto?" the bank broke down three commonly used metrics taken by market participants that "suggest significant upside [of bitcoin] is possible." Under the so-called Metcalfe's law, which suggests the value of a network is proportional to the square of the number of users, bitcoin's per-coin valuation would be at $21,667. If comparing the current global value of gold to bitcoin by using the 21 million max supply of bitcoin, then bitcoin's valuation would be at $540,814. Finally, if applying the global value of money supply to the max supply of bitcoin, its value would be $1.9 million. Apparently, they see the demand, albeit not at full potential (yet) but they don't want their client to miss the opportunity. So they are moving in different direction with a various degrees of "risks" and "innovations". See for example also this: a very conservative way of getting crypto exposure.
legendary
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JP Morgan Flows & LiquidityThe retail impulse remains strong16 February 2021- The retail impulse remains strong with no signs of abating.
- The share of retail-driven equity trading volumes in the US rose to unprecedented levels in January even before the equity market correction of the last week of January.
- Has only $11bn of institutional flow into bitcoin since September-end caused a $700bn increase in its market cap?
- Similar to CME bitcoin futures three years ago, Ethereum futures have seen a rather slow start since launch. ago, Ethereum futures have seen a rather slow start since launch.
Has only $11bn of institutional flow into bitcoin since September-end caused a $700bn increase in its market cap?- Since the end of September the market cap of bitcoin has grown by $700bn, from 200bn on Sep 30th to $900bn currently. This $700bn increase means that bitcoin has already surpassed gold in risk capital terms, i.e. after adjusting for the much higher vol of bitcoin relative to gold. To see this, one could compare the volatilities of bitcoin and gold, or the volatilities of the biggest bitcoin and gold funds given many institutional investors are only allowed or prefer to invest in fund format. The 3m realized vol for bitcoin currently stands at 87% vs. 16% for gold. In other words, the ratio of the two vols suggests that bitcoin currently consumes 5.4x more risk capital than gold. This ratio rises further if one looks at the biggest bitcoin and gold funds. The 3m realized vol for the Grayscale Bitcoin Trust stands at 113% vs. 16% for GLD, the largest gold ETF by AUM, i.e., the ratio of the two vols suggests that the Grayscale Bitcoin Trust currently consumes 7.1x more risk capital than GLD. Taking the average of the 5.4x and 7.1x ratios, suggests that bitcoin and its biggest fund on average consume 6.2x more risk capital than gold and its biggest fund, double the 3x ratio needed to equalize the market cap of bitcoin ($900bn) to that of gold for investment purposes ($2.7tr). In other words, bitcoin, at current market prices, has already more than doubled relative to gold in risk capital terms. In our opinion, unless bitcoin volatility subsides quickly from here, its current price of $48k looks unsustainable.
- What has been remarkable over the past five months is that the $700bn increase in the market cap of bitcoin has taken place with relatively little institutional flows. For example, proxying these institutional flows via the cumulative flows into the Grayscale Bitcoin Trust or other publicly listed bitcoin funds as well as the cumulative flows into CME bitcoin futures and announcements by institutions such as Tesla, Mass Mutual, Guggenheim and others, we get an aggregate flow of around $11bn since the end of September which accounts for just above 1.5% of the increase in the bitcoin market cap over the same period. How is it possible that such a limited flow would result in the magnitude of the increase in bitcoin market cap? One possibility is that, given the increase in interest from real money investors, and speculative investors seeking to front-run it, this limited flow is hitting a relatively inelastic supply of a predetermined increase in new bitcoins mined and having to offer a premium to get existing holders to part with their bitcoin holdings. A second possibility is that retail inflows have significantly magnified the institutional flow. As mentioned in the first section above the US retail impulse has been particularly strong since January and there is little doubt that this retail impulse has been a driving force not only for equities, but also for bitcoin.
- Figure 5 shows 2-week rolling flows into the Greyscale trust as a proxy for real money interest and 2-week rolling changes in our futures positioning indicator as a proxy for speculative institutional investor interest compared to 2-week rolling returns in bitcoin prices. It suggests that, after announcements from end-September onwards, real money inflows during Oct/Nov/Dec contributed to the rally in bitcoin prices at the time, while the movements since January this year appear to have been more influenced by speculative flows. This also suggest that some pickup in real money flows would likely be needed to sustain current prices in the absence of a re-acceleration of the retail flow.
|  | | Figure 5
legendary
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One Piece I forgot to add: JP Morgan Flows & LiquidityUS retail investors’ call option buying rises to new highs2 February 2021Will the CME launch of ethereum futures contracts reverse recent price dynamics in a repeat of Dec 2017? - In past F&L’s we have noted the gradual maturing of the cryptocurrency space as the influence of institutional investors has grown over time since the listing of CME bitcoin futures in Dec 2017.
- This week will see the launch of ethereum futures at CME with cash settlement as with CME bitcoin futures. The listing of ethereum futures on a regulated exchange should serve to enhance the crypto market structure by allowing investors to gain exposure to the second most important cryptocurrency as a diversifier to bitcoin, or for simply hedging existing ethereum exposures. As with CME bitcoin futures, one criticism with cash-settled futures is that they may only allow for imperfect hedging for existing holders of ethereum as hedgers are susceptible to price risk associated with converting ethereum to cash at maturity. And there is an issue of potential manipulation with cash-settled contracts as settlement is based on a collection of spot prices from a number of exchanges with variable liquidity, which traders may be able to manipulate around the time of the futures contracts expiry. While that was also the initial criticism with CME bitcoin futures, some of these criticisms eventually proved overstated as evidenced by the relative growth of cash settled CME bitcoin futures vs. physically settled Bakkt bitcoin futures on the Intercontinental Exchange.
- Initial volumes are likely to be low, echoing the initial listing of cash-settled bitcoin futures by the CME and CBOE in December 2017. At the time, the listing of CME bitcoin futures coincided with all-time highs in bitcoin prices, and researchers at the San Francisco Fed suggested that, by providing a market where bearish positions could be more readily expressed, the listing of these futures contributed to the reversal of bitcoin price dynamics. In a similar vein, it may be that this week’s listing of ethereum futures contracts will be followed by negative price dynamics by enabling some holders of physical ethereum to hedge their exposures.
- A successful launch of ethereum futures this month is likely to be followed by options on ethereum futures, perhaps as early as 2022, in a similar manner to the launch of options on bitcoin futures in the first quarter of 2020. That would expand the alternatives for investors to manage price risk for ethereum , the second most important cryptocurrency with a market cap of $170bn.
No pictures or graphs here. This was the original text.
legendary
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legendary
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<...>That is the most common strategy between traditional wealth and asset managers. Now that everyone's talking bitcoin they are suggesting a tiny exposure to counterbalance stocks, bonds and other traditional assets. Usually they propose between 1-5% btc exposure. Which is not bad on a multi-million portfolio.
As I wrote elsewhere (on my infamous Proudhon post).
When I decided to buy bitcoin I made a few back of the envelope calculation. The first one was about gold parity, pointing to 350k dollar at the time (now more in the 500k region).
A second one was about the answer of the following question: what if everyone put 1% of their financial wealth on bitcoin.
So a few computation (getting updated figures for gold parity consistency):
World financial wealth (Credit Suisse 2020) : 360 Trln
1% : 3.60 Trillion
This has to becdivided over
21 million bitcoins (I want a conservative number)
Target price: 170,000 USD
Not bad.
Bullish.
My body is ready.
This is why I am particularly excited when I hear someone suggesting a tiny %age allocation to bitcoin in big portfolios.
legendary
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Another one! Wall Street is on fire on those reports: Understanding Bitcoin Does bitcoin belong in asset allocation considerations?KEY TAKEAWAYS - Among an increasing number of investors and portfolio managers, bitcoin is considered a legitimate and distinct asset class.
- Bitcoin, by design, is a finite asset, with both a unique supply and a unique demand dimension, and as its network increases, bitcoin’s value and durability could increase even faster.
- Seen as a form of “digital gold,” bitcoin may act as a stable store of value and potentially offer protection against inflation—and even hyperinflation.
- Bitcoin, however, faces risks from volatility, competitors, substitutes, regulation, and other factors; further, bitcoin may not be an appropriate or prudent diversifier for all portfolios.
- In my view, some investors may wish to consider bitcoin, alongside other alternatives, as one component of the bond side of a 60/40 stock/bond portfolio
This one sports a more traditional approach. Very interesting on a the proposition in adding Bitcoin to a financial portfolio. That is the most common strategy between traditional wealth and asset managers. Now that everyone's talking bitcoin they are suggesting a tiny exposure to counterbalance stocks, bonds and other traditional assets. Usually they propose between 1-5% btc exposure. Which is not bad on a multi-million portfolio.
legendary
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Another one! Wall Street is on fire on those reports: Understanding Bitcoin Does bitcoin belong in asset allocation considerations?KEY TAKEAWAYS - Among an increasing number of investors and portfolio managers, bitcoin is considered a legitimate and distinct asset class.
- Bitcoin, by design, is a finite asset, with both a unique supply and a unique demand dimension, and as its network increases, bitcoin’s value and durability could increase even faster.
- Seen as a form of “digital gold,” bitcoin may act as a stable store of value and potentially offer protection against inflation—and even hyperinflation.
- Bitcoin, however, faces risks from volatility, competitors, substitutes, regulation, and other factors; further, bitcoin may not be an appropriate or prudent diversifier for all portfolios.
- In my view, some investors may wish to consider bitcoin, alongside other alternatives, as one component of the bond side of a 60/40 stock/bond portfolio
This one sports a more traditional approach. Very interesting on a the proposition in adding Bitcoin to a financial portfolio.
legendary
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After years of blockchain not bitcoin useless brainwash now all the big banks and the wall street firms have to spend liters and liters of ink on BITCOIN which is the only thing that has ever mattered here! Thanks for sharing, this might fill my night's insomnia.
legendary
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A very interesting and complete review of Bitcoin and Blockchain Technologies BITCOIN At the Tipping PointA 100 plus long piece. I will report here the conlcusions: Conclusion
The philosopher Schopenhauer once remarked that “All truth passes through three
stages. First it is ridiculed. Second it is violently opposed. Third it is accepted as
being self-evident.”187 Though this sentiment was expressed more than 150 years
before the emergence of Bitcoin, the introduction and evolution of the
cryptocurrency illustrates this very human response to change.
The idea that a new payment system relying on a decentralized cryptographic
approach to facilitate transactions in an extrajudicial manner might gain traction and
challenge traditional payment rails seemed like a pipedream in the early days of its
release. This gave way to denouncements and restrictions as governments, banks,
and regulators sought to limit its growth. As recent events have shown, however,
that resistance may now be melting away.
Large institutional investors and organizations are choosing to participate in and
support Bitcoin. Regulators are beginning to lay the groundwork for the asset to
potentially enter the mainstream. Governments themselves are being pressured
and many are re-considering their own currency offerings. The vision of Bitcoin as a
force that will transform the world may seem self-evident in just a few more years.
The fact this progression has occurred in just over a decade makes Bitcoin
remarkable regardless of its future.
Throughout this journey, the perception of what makes Bitcoin unique continues to
morph. Bitcoin is now many things. To some, it is a payment system based on new
technology set to potentially drive a re-wiring of the entire payments landscape. To
others it is a new currency that can store value in a unique way and marks a new
model of issuance beyond the control of any one nation. Many focus on the
limitations imposed on Bitcoin’s supply and liken it to digital gold, focusing on its
value as an asset class. Those thinking about its future see the potential for Bitcoin
to become a global facilitation currency helping to reduce the friction and complexity
of cross-border trade.
What Bitcoin has undoubtedly become is the inspiration for a rapidly evolving
blockchain-based economy. Its core innovations were the building blocks that
launched this ecosystem and those innovations themselves are now being
extended and levered in new ways that are remaking the world of commerce and
finance. Bitcoin’s existence has helped create a new landscape that in turn has
spawned a whole set of altcoins and created a new, decentralized cryptocurrency
market.
All of these views about Bitcoin’s potential and how it influences and helps to inspire
new business models emerging in the blockchain domain are what leads us to call it
the North Star. Whether it maintains this position and how far the potential
transformation it has inspired extends are both unknowable at this time, but
Bitcoin’s journey has clearly entered a new stage.
Our goal in this paper has been to help readers understand Bitcoin’s past, present,
and possible future. Armed with a fuller understanding of what has driven Bitcoin’s
growth and how it has spurred so much additional innovation and disruption should
allow readers to better assess and determine their own view about Bitcoin’s value
and understand how future news may facilitate additional growth or force a
retrenchment and re-evaluation of its potential.
Very long, yet interesting read. Thanks to @Plutosky who made me aware of this.
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JP Morgan Flows & LiquidityDid Q4 rebalancing flows materialise?9 February 2021
- While bitcoin got another boost with Tesla’s announcement this week, the 8% allocation of its cash reserves to bitcoin is unlikely to be followed by more mainstream corporates.
- Irrespective of how many corporates eventually follow Tesla’s example, there is no doubt that this week’s announcement changed abruptly the near-term trajectory for bitcoin by bolstering speculative institutional flows via bitcoin futures as well as retail flows.
- How sustained this week’s price surge becomes would depend in our opinion on whether less speculative institutional flows like those behind the Grayscale Bitcoin Trust follow suit.
Speculative bitcoin flows surge following Tesla’s announcement - Tesla’s announcement this week that it has invested $1.5bn in bitcoin or 8% of its corporate cash reserves surprised markets by the magnitude of the purchases and re-invigorated expectations that other corporates will follow with their cash reserves. Although we are skeptical that Tesla is a typical corporate and its example will be followed by more mainstream corporates, we recognize that Tesla’s announcement broadens corporate sponsorship, after a gap of five months with no corporate treasury announcements beyond MicroStrategy and Square last August. In our opinion, the main issue with the idea that mainstream corporate treasures will follow the example of Tesla is the volatility of bitcoin. The typical portfolio of a corporate treasury consists of bank deposits, money market funds and short-dated bonds. As a result, the annualized vol of a typical corporate treasury portfolio is around 1%. This implies that even small allocations of 1% to bitcoin would cause a big increase in the volatility of the overall portfolio. For example, if a corporate treasurer allocates 1% of her 1% vol portfolio to bitcoin, the overall portfolio volatility will rise from 1% to 1.3%, or more than a one-quarter increase. This is because of the large 80% annualized vol of bitcoin.
- Irrespective of how many corporates eventually follow Tesla’s example, there is no doubt that this week’s announcement changed abruptly the nearterm trajectory for bitcoin by bolstering inflows and by helping bitcoin to break out above $40k. This reduces one downside risk that we saw previously with bitcoin, i.e. the idea that if its price fails to break out above $40k, the momentum signals would keep decaying till the end of March, inducing further unwinding by momentum traders. The opposite is now happening. With bitcoin breaking out above $40k, momentum traders are forced to amplify the current upmove by rebuilding their long bitcoin futures positions.
- Indeed, our position proxy based on CME bitcoin futures, the preferred vehicle of momentum traders and other speculative investors, saw a sharp almost $1bn increase this week (Figure 4) pointing to intense buildup of futures positions. As a reminder to our readers, to infer positioning in bitcoin futures, we use our open interest position proxy methodology that we also apply to other futures contracts, where we look at the cumulative weekly absolute changes in the open interest multiplied by the sign of the futures price change every week. The rationale behind this position proxy is that when there is a price increase, the net long position of spec investors increases also with the magnitude of the increase determined by the absolute change in the open interest. It does not matter whether the open interest rises or falls, as the net long position can increase either via fresh longs (increase in open interest) or a reduction of previous shorts (reduction in open interest). And vice versa. When there is a price decrease, the net long position of spec investors decreases also, with the magnitude of the decrease determined by the absolute change in the open interest. It does not matter whether the open interest rises or falls, as the net long position can decrease either via fresh shorts (increase in open interest) or reduction of previous longs (reduction in open interest).
|  | | Figure 4
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Morgan Stanley: Why Crypto Is Coming Out of the ShadowsIf you were trying to doom a newly invented currency to irrelevance, naming it “cryptocurrency”1 would have been a crafty first step. “Crypto” means hidden or secret, and often describes a target of popular suspicion and fear, as in crypto-fascist or crypto-communist. But now, despite the jitters natural in a global pandemic, cryptocurrencies are rapidly gaining popular support as alternatives to gold (a store of value) and the dollar (as a means of payment).
Nice read. Not very technical, but I guess ti is written for their general customers, rather than their agents.
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fillippone : good finds. I wouldn't use Tesla as a benchmark as it is overvalued as a company, and it's not that special, it's still a car company, with some technology that doesn't really work yet (self-driving).
Bitcoin on the other hand is its own beast, and it is special for a couple reasons, one being the limited supply, the other being the mother/father of crypto.
I'll keep that in mind : "current mining cost of $11k" and set up a buy order at that price...wait, I already did some time ago, I guess we think alike with JPM...
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This is a good thread and I noticed that other stocks/assets has been seriously lagging behind Bitcoin which has been seeing some huge increases in price. I am happy about that, and as we are now starting to have a lot of institutions that are becoming part of this great community I believe there will still be more to it, so I look forward to that. Stocks typically return 8-10% annually in aggregate, so 15% is quite robust.
Yep, I also noticed that, 15% is an improvement. Although in the case of bitcoin, I think it’s because it is still new and when it grows huge it might stop being as volatile, and the up and down wouldn’t be as much as it is now.
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<...> There are plenty of individual stocks that have outperformed bitcoin in the time period shown in the graph, however the graph only shows a single asset versus a broad asset class, so it is misleading in that it's not a like comparison.
I do agree. Think of Tesla. The stock had a better return than Bitcoin this year. Not only, TSLA had a greater volatility than bitcoin during such period. This is something that I usually oppose to someone telling me "bitcoin is a toxic, volatile asset".
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I would not have expected stock values to lag that far behind bitcoin, considering stocks have been in a prolonged bull market for over a decade now--but nonetheless the bitcoin growth numbers are incredible! There's certainly been huge demand for it, particularly by all those companies that bought it as an alternative to cash (like MicroStrategy). Whew. It's been one hell of a year in many ways, but at least one positive that came out of 2020 is that bitcoin reached a new ATH.
Stocks typically return 8-10% annually in aggregate, so 15% is quite robust. You have to remember that this is an the entire asset class of all stocks, and it's weighed down by a significant number of under performers. You would see the same weighted down effect if you looked at the entire crypto asset class instead of just bitcoin, and crypto as a whole would be significantly weighed down by the vast majority of under achievers. There are plenty of individual stocks that have outperformed bitcoin in the time period shown in the graph, however the graph only shows a single asset versus a broad asset class, so it is misleading in that it's not a like comparison.
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It is awesome that JP Morgan type of companies are finally seeing what we have seen for a decade now. Bitcoin has always been a great investment if you could make it at a good level but these companies never really understood or seen that for a long time. We are finally seeing these companies making a change and they are really doing it for smart reasons as well basically validating what we have been doing so far.
Five years ago or so if you invested 100k into bitcoin all-in and you said it is going to go up people would say that you were gambling your money away and you would be losing a lot of money from that investment, today people are investing tens of billions of dollars into bitcoin from huge corporations, that 5 year change from 100k being risky to tens of billions of dollars is basically a way of saying people who bought bitcoin were smart people and not idiots like people claimed back then.
What puzzles me the most is how the banking sector, that has traditionally poached the best mind across all sectors, due to the financial power they had (for years salaries in the banking sector have been well above average), completely oversaw this opportunity. I can understand if we were talking about central bankers, the real target of the bitcoin revolution. But all other banks could well thrive in a new bitcoin standard, nevertheless, they decided to keep the eyes shut until the phenomenon was too big to ignore, and then they decided to ride it...
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It is awesome that JP Morgan type of companies are finally seeing what we have seen for a decade now. Bitcoin has always been a great investment if you could make it at a good level but these companies never really understood or seen that for a long time. We are finally seeing these companies making a change and they are really doing it for smart reasons as well basically validating what we have been doing so far.
Five years ago or so if you invested 100k into bitcoin all-in and you said it is going to go up people would say that you were gambling your money away and you would be losing a lot of money from that investment, today people are investing tens of billions of dollars into bitcoin from huge corporations, that 5 year change from 100k being risky to tens of billions of dollars is basically a way of saying people who bought bitcoin were smart people and not idiots like people claimed back then.
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Hello. I have been finally able to reproduce JPM Position proxy. They described it as: to infer positioning in bitcoin futures, we use our open interest position proxy methodology that we also apply to other futures contracts, where we look at the cumulative weekly absolute changes in the open interest multiplied by the sign of the futures price change every week. The rationale behind this position proxy is that when there is a price increase, the net long position of spec investors increases also with the magnitude of the increase determined by the absolute change in the open interest. It does not matter whether the open interest rises or falls, as the net long position can increase either via fresh longs (increase in open interest) or a reduction of previous shorts (reduction in open interest). And vice versa. When there is a price decrease, the net long position of spec investors decreases also, with the magnitude of the decrease determined by the absolute change in the open interest. It does not matter whether the open interest rises or falls, as the net long position can decrease either via fresh shorts (increase in open interest) or reduction of previous longs (reduction in open interest)
This the latest image:  This is what I got (added price for convenience):  This is the Spreadsheet I used for. Position Proxy IndicatorSadly, I haven't been able to find a publicly available source for aggregated open interest positions, maybe I have to dig a little bit more on tradingView. Also yes, it would be interesting if someone could reproduce this indicator in trading view! Stay tuned!
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Interesting reading, especially if we take into account that it was written by JPM, which still has a very high place in the world of finance. The report focuses in large part on comparisons of gold and Bitcoin, and interestingly, the Bitcoin market cap should grow by about x4.5 to reach the value of all private investment in gold, which includes gold ETFs. According to JPM, millennials will play a big role in this in the coming years because they prefer digital then physical gold.
The fact that Bitcoin has equalized gold in terms of risk capital says a lot, especially if we take into account the fact that gold ETFs have recorded an outflow of $7 billion in the last few months. If the trend of institutional investment continues, with the evident growth of investment from retail investors, JPM predicts that in 2021 it is realistic to expect the price of BTC from $50k - $100k.
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JP Morgan Flows & LiquidityPolicy Shift22 January 2021- With bitcoin failing to break out above $40k, the balance of risks is still skewed to the downside over the near term.
A review of the past year for bitcoin- The virus crisis by boosting money supply as well as demand for an “alternative” currency supported both gold and bitcoin over the past year. The older cohorts preferred gold, while the younger cohorts preferred bitcoin as an “alternative” currency. Both gold and bitcoin investment vehicles have experienced strong inflows over the past year, as both cohorts saw the case for an “alternative” currency. This simultaneous flow support has caused a change in the correlation pattern between bitcoin and other asset classes, with a more positive correlation between bitcoin and gold but also between bitcoin and the dollar (Figure 4). In addition, the simultaneous buying of US equities and Bitcoin by Millennials has increased the correlation between bitcoin and S&P500 since last March, so it is more appropriate to characterise bitcoin as a “risk” asset rather than “safe” asset also, given its still very high 70% realized volatility. To some extent, this is also true with gold. Gold’s correlation with the S&P500 has been predominantly positive over the past year and its volatility at close to 20% is more similar to that of equities than to currencies or bonds (Figure 5). In other words, both bitcoin and gold could be more characterised as “risk” rather than “safe” assets based on their behavior over the past year and investors’ preference for them is likely more of a reflection of a need for an “alternative” currency rather than a need for a “safe” asset or “hedge”.
|  |  | | Figure 4
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JP Morgan Flows & Liquidity Retail investors’ euphoria returns08 January 2021 Why the approval of a bitcoin ETF in the US would be negative for bitcoin in the near term? - Optimism around the prospect of the SEC approving a bitcoin ETF in the US this year has risen in anticipation of SEC leadership changes. While the introduction of a bitcoin ETF in the US would be positive for bitcoin over the longer term, in the near term it could have a negative impact. The reason is a potential decline in the Grayscale Bitcoin Trust (GBTC) premium to NAV from the introduction of bitcoin ETF in the US, which would unwind a big portion of GBTC investments currently placed for monetizing this premium.
- An important support for the large premium to NAV in GBTC arises from the fact that many institutional investors are only allowed or prefer to invest in bitcoin in fund format for regulatory or other reasons. In fact, many of them are not even allowed to hold restricted shares of the Grayscale Bitcoin Trust via private placements given the 6-month lock up period, and are thus forced to pay a premium by buying these shares in the secondary market.
- The typical GBTC premium monetization trade involves borrowing bitcoin (typical cost of 5-7% per annum), placing these bitcoins to GBTC at NAV via private placement for in-kind shares locked up for 6 months, and hedge the exposure during the lockup period by borrowing GBTC shares (typical cost of 7- 10% per annum) and selling them short. Alternatively one could hedge via shorting CME futures, but this entails some basis and rollover risk. The cost of this GBTC premium monetization trade is around 10-15% per annum and this is why it has been difficult so far for the GBTC premium to NAV to fall below this threshold.
- Some institutional investors likely subscribed to GBTC (at NAV) during the second half of last year with the intention of selling after the 6m unlock period to monetize the premium (selling price minus subscription at NAV). Gauging by the amount of GBTC shares on Loan (around 8% of outstanding stock) and by the short base in CME bitcoin futures, we believe that the GBTC premium monetization trade could account for around 15% of outstanding GBTC stock. As the 6m unlock period expires, some of these institutional investors might sell GBTC during the first half of 2021 to monetize the premium. If it materialises, this selling pressure would put downward pressure on GBTC premiums.
- This unwinding of the GBTC premium monetization trade could become more violent if a bitcoin ETF is approved in the US. The introduction of a bitcoin ETF would erode GBTC’s effective monopoly status and cause a cascade of GBTC outflows and a collapse of its premium. ETFs allow for daily creation and redemption of shares and thus a more efficient arbitrage of the premium to NAV. A cascade of GBTC outflows and a collapse of its premium would likely have negative near-term implications for bitcoin given the flow and signaling important of GBTC.
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I think these are weak conclusions. Too much emphasis on the need for a decline in gold to fuel a rise in Bitcoin. I don't think they fully understand Bitcoin's scarcity dynamics, and how few consistently circulating BTC there really are.
You have to understand where they come from. Jp Morgan is (one of the best) investment banks in traditional finance. Hence their mindset is all about the difference between yielding and not yielding bearing assets. Scarcity is not a feature they are really understanding, as they are applying the traditional way of thinking in those investments. I am pretty satisfied, as it's a nice U-turn since the infamous Jamie Dimon statements a few years back. Just give them a few more years to complete their transformation.
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My point here is the following: "Why bother trying ti infer the price of Bitcoin from mining costs, when the Stock to Flow model already correctly captures the 95% of the value of Bitcoin? I am not that worried with that 5%"
Based on a very small sample. How long that plays out into the future, we shall see. I think stock-to-flow comes off as voodoo to many. It's just so out of touch with traditional fundamental analysis. But this long term upside based on an equalization of the market cap of bitcoin to that of gold for investment purposes is conditional on the volatility of bitcoin converging to that of gold over the long term.
This implies that the above $146k theoretical bitcoin price target should be considered as a long-term target, and thus an unsustainable price target for this year. I think these are weak conclusions. Too much emphasis on the need for a decline in gold to fuel a rise in Bitcoin. I don't think they fully understand Bitcoin's scarcity dynamics, and how few consistently circulating BTC there really are. As for $146K being unattainable this year.....maybe, maybe not. Related to the above, I don't trust their ability to recognize the prospects for a speculative blow-off top.
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What's your comment on the suggestion that mining cost represents intrinsic value for Bitcoin?
Mining cost varies depending on location and some other factors and would you consider it to be the metric that gives Bitcoin its value and as such any price spike above that could be considered to be purely speculative?
As the article itself stated mining costs are becoming less and less relevant determining the value of bitcoin. My point here is the following: "Why bother trying to infer the price of Bitcoin from mining costs when the Stock to Flow model already correctly captures the 95% of the value of Bitcoin? I am not that worried about that 5%"
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Those are pretty impressive figures. $3 billion inflows into Bitcoin is quite significant and when you consider it's only being charted from Grayscale investments, it gives the idea that there is a global paradigm shift in investment destination as individuals and companies alike are trusting Bitcoin to preserve the value of their funds and speculatively give them profits.
What's your comment on the suggestion that mining cost represents intrinsic value for Bitcoin?
Mining cost varies depending on location and some other factors and would you consider it to be the metric that gives Bitcoin its value and as such any price spike above that could be considered to be purely speculative?
legendary
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JP Morgan Flows & LiquidityHas bitcoin equalised with gold already?04 January 2021Summary: - We believe that the valuation and position backdrop has become a lot more challenging for bitcoin at the beginning of the New Year.
- While we cannot exclude the possibility that the current speculative mania will propagate further, pushing the bitcoin price up towards the consensus region of between $50k-$100k, we believe that such price levels would prove unsustainable.
- Risk markets look vulnerable ahead of this week’s Georgia runoffs..
Relevant Bitcoin Parts: - We note that the spectacular bitcoin rally of the past few weeks has moved bitcoin into more challenging territory not only in terms of its positioning backdrop, but also in terms of its valuation. We had previously used two valuation metrics for bitcoin, one based on its comparison to gold and one based on its mining cost or intrinsic value.
- Bitcoin's competition with gold has already started in our mind as evidenced by the more than $3bn of inflows into the Grayscale Bitcoin Trust and the more than $7bn of outflows from Gold ETFs since mid-October (Figure 1). There is little doubt that this competition with gold as an "alternative" currency will continue over the coming years given that millennials will become over time a more important component of investors' universe and given their preference for "digital gold" over traditional gold. Considering how big the financial investment into gold is, a crowding out of gold as an "alternative" currency implies big upside for bitcoin over the long term. As we had mentioned previously in the Oct 23rd F&L, "Bitcoin's competition with gold," private gold wealth is mostly stored via gold bars and coins the stock of which, excluding those held by central banks, amounts to 42,600 tonnes or $2.7tr including gold ETFs. Mechanically, the market cap of bitcoin at $575bn currently would have to rise by x4.6 from here, implying a theoretical bitcoin price of $146k, to match the total private sector investment in gold via ETFs or bars and coins.
- But this long term upside based on an equalization of the market cap of bitcoin to that of gold for investment purposes is conditional on the volatility of bitcoin converging to that of gold over the long term. The reason is that, for most institutional investors, the volatility of each class matters in terms of portfolio risk management and the higher the volatility of an asset class, the higher the risk capital consumed by this asset class. It is thus unrealistic to expect that the allocations to bitcoin by institutional investors will match those of gold without a convergence in volatilities. A convergence in volatilities between bitcoin and gold is unlikely to happen quickly and is in our mind a multi-year process. This implies that the above $146k theoretical bitcoin price target should be considered as a long-term target, and thus an unsustainable price target for this year.
|  | | Fig.1
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Well, the explanation is in the previous graph: |  | | Fig.1
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Cool idea for a thread, OP. It's kind of amazing to me how mainstream bitcoin has become in terms of its coverage in the financial news compared to when I started getting interested in it about six years ago. There was some coverage back then, but it was almost as if bitcoin was a freak-show asset that was performing like a carnival act. Now there's just straight reporting on it as if it were just another investment class. This caught my eye:  I would not have expected stock values to lag that far behind bitcoin, considering stocks have been in a prolonged bull market for over a decade now--but nonetheless the bitcoin growth numbers are incredible! There's certainly been huge demand for it, particularly by all those companies that bought it as an alternative to cash (like MicroStrategy). Whew. It's been one hell of a year in many ways, but at least one positive that came out of 2020 is that bitcoin reached a new ATH.
legendary
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There is an interesting bit here:
As a reminder to our readers to infer positioning in bitcoin futures, we use our open interest position proxy methodology that we also apply to other futures contracts, where we look at the cumulative weekly absolute changes in the open interest multiplied by the sign of the futures price change every week.
The result is the following graph: |  | | Fig.7
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JP Morgan Flows & LiquidityHow has the investment landscape changed during 2020?21 December 2020Summary: - In percentage terms, the expansion of the equity universe has been smaller than that of the bond or cash universe.
- Private asset classes lagged the growth of public asset classes.
- Alternative “currencies” such as Gold and Bitcoin have been the main beneficiaries of the pandemic in relative terms.
- Within equities, the EM Asia universe grew the most, while Latam contracted.
- With credit, the strongest growth has been in Euro HY.
- Among investor types, retail funds such as Mutual Funds and ETFs and SWFs appear to have seen double-digit growth in their AUM this year, thus increasing their share in the total investor universe. HFs, as well as pension funds and insurance companies saw low single digit AUM growth instead.
- We find it difficult not to characterize bitcoin as overbought at the moment.
- At the same time, we acknowledge that the inflows into the Grayscale Bitcoin Trust, at $1bn per month currently, are too big to allow any position unwinding by momentum traders to create sustained negative price dynamics similar to the ones seen before in the second half of 2019.
- Any signs of significant slowing in the flow trajectory for the Grayscale Bitcoin Trust would raise the risk of a bitcoin correction similar to the one seen in the second half of 2019.
Relevant Bitcoin Parts: - As the year comes to a close it is useful to look at how the investment landscape changed during 2020.
How have different asset classes and types of investors fared in terms of overall growth during a year dominated by the impact of the global pandemic and policy responses to it? Figure 1 and Figure 2 show the overall changes in broader asset classes in dollar terms as well as relative to their end-2019 levels, and includes the 4% contraction in global GDP for 2020 that our economists have in their forecast for context. The most striking increase has been in the total outstanding debt which in 1H20 had already increased by around $14tr, almost matching our previous projection for 2020 in total of $16tr 16tr (see F&L More debt, more liquidity, more asset reflation, Jul 6th). As a result, we now project total debt growth for 2020 of $21tr, reflecting continued strong bond issuance in particular. Of this total, the increase in bonds accounts for around $13tr reflecting a significant increase in government deficits as they sought to smooth the impact on incomes as well as record corporate bond issuance as companies sought to increase their cash buffers to weather the shock on cash flows. The remainder is a combination of bank loans, shorter-maturity paper such as bills, EM local debt and other non-marketable debt.
|  |  | | Fig.1
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In this thread I will collect various Research papers published by Wall Street Banks on Bitcoin.
Banking sectors have begun to cover Bitcoin in Various aspects. A few reports are quite remarkable, so will deserve their own thread. Some other are important for a minor reason, but maybe they are referenced on other news, or papers without proper reporting, and it is often difficult to read the original article.
I will use those to collate and reference into other thread, publishing graphs and paragraph linked to these research.
I won't always be able to post full documents to protect my sources, obviously, as often those materials come with a watermark.
All reported material will be quoted.
My comments will be out of quotes.
If you find some missing article, or want to read a particular one, just ask, I will unleash my hounds to fetch the missing pieces.
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