Specialising in Bitcoin, Gold and Digital Assets

ByteTree Asset Management

Investment Manager specialising in bitcoin, gold and digital assets

CEO, ByteTree Asset Management

Crypto

<p>This week,&nbsp;The Multi-Asset Investor&nbsp;<a href="https://bytetree.us3.list-manage.com/track/click?u=a4a4461fba9ee073aaefd6019&amp;id=e66cf05b9d&amp;e=7c019babf2" target="_blank" data-saferedirecturl="https://www.google.com/url?q=https://bytetree.us3.list-manage.com/track/click?u%3Da4a4461fba9ee073aaefd6019%26id%3De66cf05b9d%26e%3D7c019babf2&amp;source=gmail&amp;ust=1668888480574000&amp;usg=AOvVaw0UtZHGNAVSLIKLVdlVv7kY" rel="noopener">covered</a>&nbsp;the third largest single day’s momentum crash on record, which was triggered by the release of US CPI data last week. The market now believes the fight against inflation has been won.&nbsp;</p>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/310/647/original/image_343308728131668808604436.png?1668808606" class="editor-image img-responsive" data-smartkarma-image-id="310647"></figure>
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<p style="text-align: center;">Source: Bloomberg</p>
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<p style="text-align: left;">To be clear, the everything bear is not over, but parts of it are. There is plenty of value that has said enough is enough. Bonds too. With people like Jeremy Scrooge Hunt raising taxes like the Sheriff of Nottingham in Robin Hood, the bond market looks to be in much better shape. If he thinks rate cuts will end fairly soon and then collapse by 2024 as a deep recession bites, that is hardly a scenario for high inflation, but we shall see.&nbsp;<br><br>UK inflation data was terrible on Wednesday, but that is yet to reflect a much-recovered pound (a ByteTrend 3* in USD) and stability in the gilt market. Moreover, oil started this. Has anyone noticed oil is now in a downtrend? A slump in oil prices is hardly consensus.</p>
<h3>Brent Crude (0* in USD)</h3>
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<p style="text-align: center;">Source: Bloomberg</p>
</div>
<p style="text-align: left;">This is why ByteTrend is so powerful, as it sends unbiased signals. Sometimes they are noise, but all biases are taken away, and every major shift will be highlighted in advance.&nbsp;<br><br><a href="https://bytetree.us3.list-manage.com/track/click?u=a4a4461fba9ee073aaefd6019&amp;id=df2dfe5cf9&amp;e=7c019babf2" target="_blank" data-saferedirecturl="https://www.google.com/url?q=https://bytetree.us3.list-manage.com/track/click?u%3Da4a4461fba9ee073aaefd6019%26id%3Ddf2dfe5cf9%26e%3D7c019babf2&amp;source=gmail&amp;ust=1668888480575000&amp;usg=AOvVaw0v08t3s01BqA6vSzuU1PaU" rel="noopener">Issue 77</a>&nbsp;of&nbsp;Atlas Pulse&nbsp;defended the gold premium, which as of this morning, is a whopping 26%. Could gold be part of the everything bubble too? Relative to TIPS, gold looks rich. But against general asset prices, that seems unlikely.<br><br>The world’s above ground supply of gold is worth $11,291bn in contrast to US equities of $42,165bn and US Treasuries of $31,328bn. So gold is a mere 15.4% of those two, compared to a 100-year median of 16.8% and a mean of 24.2%. Gold is under-priced – surely.</p>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/310/649/original/image_90106273151668808742084.png?1668808743" class="editor-image img-responsive" data-smartkarma-image-id="310649"></figure>
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<p style="text-align: center;">Source: Bloomberg, ByteTree, World Gold Council</p>
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<p style="text-align: left;">While on the subject of unbiased signals, it’s worth a visit to the&nbsp;ByteTree Terminal&nbsp;to look at our&nbsp;<a href="https://bytetree.us3.list-manage.com/track/click?u=a4a4461fba9ee073aaefd6019&amp;id=f0f513d24d&amp;e=7c019babf2" target="_blank" data-saferedirecturl="https://www.google.com/url?q=https://bytetree.us3.list-manage.com/track/click?u%3Da4a4461fba9ee073aaefd6019%26id%3Df0f513d24d%26e%3D7c019babf2&amp;source=gmail&amp;ust=1668888480575000&amp;usg=AOvVaw1BPjdL2s8F4tQ5LOyHjakN" rel="noopener">Bitcoin valuations</a>&nbsp;(you don’t need to be a Premium subscriber to see this). Following the FTX-related fall, we finally see Bitcoin’s price trading at around the right value across the 1,5 and 12-week timeframes.</p>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/310/650/original/image_168007288161668808771613.png?1668808773" class="editor-image img-responsive" data-smartkarma-image-id="310650"></figure>
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<p style="text-align: center;">Source:&nbsp;<a href="https://bytetree.us3.list-manage.com/track/click?u=a4a4461fba9ee073aaefd6019&amp;id=edac390b72&amp;e=7c019babf2" target="_blank" data-saferedirecturl="https://www.google.com/url?q=https://bytetree.us3.list-manage.com/track/click?u%3Da4a4461fba9ee073aaefd6019%26id%3Dedac390b72%26e%3D7c019babf2&amp;source=gmail&amp;ust=1668888480575000&amp;usg=AOvVaw3mTuTMdzv9Ocy308SYBjy2" rel="noopener">ByteTree Terminal</a></p>
</div>
<p style="text-align: left;">You’d think that given the dismal news in crypto, bitcoin holders would be dumping. Well, look at this. They aren’t. They’re adding.</p>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/310/651/original/image_324214033171668808793231.png?1668808795" class="editor-image img-responsive" data-smartkarma-image-id="310651"></figure>
<div class="content-remarks">
<p style="text-align: center;">Source:&nbsp;<a href="https://bytetree.us3.list-manage.com/track/click?u=a4a4461fba9ee073aaefd6019&amp;id=18bb73581d&amp;e=7c019babf2" target="_blank" data-saferedirecturl="https://www.google.com/url?q=https://bytetree.us3.list-manage.com/track/click?u%3Da4a4461fba9ee073aaefd6019%26id%3D18bb73581d%26e%3D7c019babf2&amp;source=gmail&amp;ust=1668888480575000&amp;usg=AOvVaw0wDuEB0Pt3iBvdKid6P-R6" rel="noopener">ByteTree Terminal</a></p>
</div>
<p style="text-align: left;">Bottom-picking is for monkeys, as they say, so I’ll leave it there, but the two items above are noteworthy nonetheless. As discussed in&nbsp;ATOMIC&nbsp;last week, it really can’t be emphasised enough that the FTX collapse shouldn’t be seen as just a crypto issue. It’s a classic traditional finance world screw-up in a crypto wrapper – the sooner this sort of chicanery is eradicated, the better. Then the good guys, of which there are many, can carry on moving forward.&nbsp;<br><br>We made&nbsp;<a href="https://bytetree.us3.list-manage.com/track/click?u=a4a4461fba9ee073aaefd6019&amp;id=98dd07c476&amp;e=7c019babf2" target="_blank" data-saferedirecturl="https://www.google.com/url?q=https://bytetree.us3.list-manage.com/track/click?u%3Da4a4461fba9ee073aaefd6019%26id%3D98dd07c476%26e%3D7c019babf2&amp;source=gmail&amp;ust=1668888480575000&amp;usg=AOvVaw1-xXMshuTiLfrdNmqjtsvR" rel="noopener">a single trade</a>&nbsp;in&nbsp;ByteFolio&nbsp;this week, which continues to outperform bitcoin. We also note the remedial efforts from CZ of Binance to help patch up confidence in the space. We can offer no insight into other shoes that might drop in the wake of FTX’s collapse, but we do know that everyone is scared witless and convinced that “there’s more to come”. We’ll continue to look at the things we can measure to form an opinion, but we haven’t budged on our core long-term views on portfolio holdings. On that note, Premium subscribers should keep a careful eye on what’s happening in the Network Demand Model. More soon!</p>

This week,&nbsp;The Multi-Asset Investor&nbsp;covered&nbsp;the third largest single day’s momentum crash on record, which was triggered by the release of US CPI data last week. The market now believes the fight against inflation has been won.&nbsp;


Source: Bloomberg

To be clear, the everything bear is not over, but parts of it are. There is plenty of value that has said enough is enough. Bonds too. With people like Jeremy Scrooge Hunt raising taxes like the Sheriff of Nottingham in Robin Hood, the bond market looks to be in much better shape. If he thinks rate cuts will end fairly soon and then collapse by 2024 as a deep recession bites, that is hardly a scenario for high inflation, but we shall see.&nbsp;  UK inflation data was terrible on Wednesday, but that is yet to reflect a much-recovered pound (a ByteTrend 3* in USD) and stability in the gilt market. Moreover, oil started this. Has anyone noticed oil is now in a downtrend? A slump in oil prices is hardly consensus.
Brent Crude (0* in USD)


Source: Bloomberg

This is why ByteTrend is so powerful, as it sends unbiased signals. Sometimes they are noise, but all biases are taken away, and every major shift will be highlighted in advance.&nbsp;  Issue 77&nbsp;of&nbsp;Atlas Pulse&nbsp;defended the gold premium, which as of this morning, is a whopping 26%. Could gold be part of the everything bubble too? Relative to TIPS, gold looks rich. But against general asset prices, that seems unlikely.  The world’s above ground supply of gold is worth $11,291bn in contrast to US equities of $42,165bn and US Treasuries of $31,328bn. So gold is a mere 15.4% of those two, compared to a 100-year median of 16.8% and a mean of 24.2%. Gold is under-priced – surely.


Source: Bloomberg, ByteTree, World Gold Council

While on the subject of unbiased signals, it’s worth a visit to the&nbsp;ByteTree Terminal&nbsp;to look at our&nbsp;Bitcoin valuations&nbsp;(you don’t need to be a Premium subscriber to see this). Following the FTX-related fall, we finally see Bitcoin’s price trading at around the right value across the 1,5 and 12-week timeframes.


Source:&nbsp;ByteTree Terminal

You’d think that given the dismal news in crypto, bitcoin holders would be dumping. Well, look at this. They aren’t. They’re adding.


Source:&nbsp;ByteTree Terminal

Bottom-picking is for monkeys, as they say, so I’ll leave it there, but the two items above are noteworthy nonetheless. As discussed in&nbsp;ATOMIC&nbsp;last week, it really can’t be emphasised enough that the FTX collapse shouldn’t be seen as just a crypto issue. It’s a classic traditional finance world screw-up in a crypto wrapper – the sooner this sort of chicanery is eradicated, the better. Then the good guys, of which there are many, can carry on moving forward.&nbsp;  We made&nbsp;a single trade&nbsp;in&nbsp;ByteFolio&nbsp;this week, which continues to outperform bitcoin. We also note the remedial efforts from CZ of Binance to help patch up confidence in the space. We can offer no insight into other shoes that might drop in the wake of FTX’s collapse, but we do know that everyone is scared witless and convinced that “there’s more to come”. We’ll continue to look at the things we can measure to form an opinion, but we haven’t budged on our core long-term views on portfolio holdings. On that note, Premium subscribers should keep a careful eye on what’s happening in the Network Demand Model. More soon!

Bitcoin

The Death of Inflation