Frank Holmes: Bitcoin Cracks Record High Due To Institutional Buying

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This week the Federal Reserve left interest rates near zero and committed to continue its bond-buying program until “substantial progress” has been made regarding employment and inflation. Initial jobless claims increased for the second straight week, hitting 885,000 in the week ended December 12—the most since early September.

I was floored to see just how much the Fed is buying—and will continue to buy—each month. The central bank is gobbling up as much $120 billion of debt, split between $80 billion of Treasuries and $40 billion of mortgage-backed securities (MBS).

The size of the Fed’s balance sheet now stands at a staggering $7.36 trillion, or 34% of gross domestic product (GDP).

Harris Kupperman: Why This Reflexive Ponzi Scheme Will Continue…

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Since many of you are sick of hearing about Bitcoin, I promise this is my last post on the topic for a while. That said, I’d be remiss if I didn’t point out the unusually lucrative arbitrage trade that is largely responsible for sending Bitcoin parabolic. I glossed over it in my last post and given the questions that I’ve received, a full post on the topic was more than necessary—especially as the mechanism is really quite fascinating.

To start with, I believe that Grayscale Bitcoin Trust (GBTC – USA) is unique in the world of finance in that it facilitates an oddly reflexive Ponzi Scheme. Since we all know what a Ponzi Scheme is, I’m going to gloss over the terminology and instead focus on the concept of reflexivity. Before George Soros focused on destroying American society, he was a remarkably successful investor. His theory of reflexivity asserts that prices do in fact influence the fundamentals and that this newly influenced set of fundamentals then proceeds to change expectations, thus influencing prices; the process continues in a self-reinforcing pattern. In the case of Bitcoin, GBTC is the transmission mechanism for this reflexivity and once you understand how this game works, you’ll realize that Bitcoin is going much higher before it collapses.

Harris Kupperman: My Favorite Ponzi Scheme (Part II)

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Let’s go back to what I wrote about Grayscale Bitcoin Trust (GBTC – USA) hoovering coins. At the end of July when I wrote about it, there were 406.6 million shares of GBTC outstanding. As of Friday November 13, that number had grown to 531.6 million, or an increase of 125 million shares. That’s equivalent to about 119,000 additional Bitcoins purchased during a brief period of time. To put this into perspective, the total “free float” is somewhere between 6 and 8 million coins. Hence GBTC purchased somewhere between 1.5% and 2% of the “free float” during this brief period of time.

Now add in the 38,250 coins that Microstrategy (MSTR – USA) purchased and the 17,732 that CEO Michael Saylor personally owns and you have almost another 1% locked up. There are dozens of entities also hoovering up coins, many of which are not likely sellers in the near term. Almost every week, we learn of a new vehicle with big marketing resources behind it. Do you think Fidelity is launching their Bitcoin vehicle without a substantial marketing campaign? In their mind, unless they raise a few billion dollars, their fund has been a failure. Just think about what that sort of inflow would do to such an illiquid market.

Paul Tudor Jones says he likes bitcoin even more now, rally still in the ‘first inning’

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Billionaire hedge fund manager Paul Tudor Jones has turned more bullish on bitcoin, calling it the best inflation hedge.

“I like bitcoin even more now than I did then. I think we are in the first inning of bitcoin and it’s got a long way to go,” Jones said on CNBC’s “Squawk Box” on Thursday. He first revealed his bitcoin investment in May and he said Thursday he holds a “small single-digit investment” in the cryptocurrency.

Frank Curzio Podcast- Whats really moving Bitcoin?

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Frank welcomes Edward Karr onto his show to discuss Bitcoin and other crypto currencies

Tim Ferris Podcast- The Quiet Master of Cryptocurrency

Tim Ferris:

Interview with Nick Szabo

"Trusted Third Parties are Security Holes"- Nick Szabo

Wide ranging conversation on cryptocurrencies including Bitcoin, Ethereum, etc... including their origin, utility, future uses and applications.