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  Today we’ll cover the latest in the bitcoin derivatives market. At the time of writing, the price of bitcoin is up approximately 8% over the previous day’s time. When analyzing the derivatives data, the previous two months have brought about a regime of periodically negative funding, showing the caution shown by market participants during a period of macroeconomic uncertainty. Analyzing bitcoin derivatives data makes it clear that market participants are cautious in this period of uncertainty. The bitcoin price weighted by the hourly perpetual funding rate demonstrates caution by market participants. Shown below is the funding rates annualized, with approximately 10% annualized being the market neutral rate to go long. As we stand today, funding rate sentiment emphasizes a skewed, below-neutral sentiment to the downside since late January. Analyzing bitcoin derivatives data makes it clear that market participants are cautious in this period of uncertainty. Funding rate sentiment ...

  So, we all remember the absolute abysmal tragedy that was the United States’ withdrawal from the Afghan theater, right? And I place emphasis on the word “tragedy” here to keep in line with “pandemic ethics scholar” Dr. Julie Ponesse’s clarification during a recent discussion with John Vallis of the word, using it to describe a negative outcome that was brought about by the protagonist’s own actions (the protagonist in this case being the U.S.). But what you may not know is that the United States, after leaving Afghanistan in a truly tragic position, followed up these activities not by working to make amends, but by freezing and then announcing designs to seize assets held by the country’s central bank, with half of the funds planned for victims of the 9/11 attacks. Why would funds be going to the victims’ families now, 21 years after the event? And why would these funds be supplied by stealing from the country of Afghanistan when the hijackers involved in this event primarily ori...

  In this episode of Bitcoin Magazine’s “Fed Watch: podcast, CK and I continued our monthly series with Dylan LeClair, author of the Deep Dive report. We had the opportunity to go over the metrics in the bitcoin market that he is watching and is an expert in. They have a free version of the report that comes out daily, and an exclusive paid version monthly and yearly. Follow along with his slide deck here. “Fed Watch” is a podcast for people interested in central bank current events. Bitcoin will consume central banks one day, understanding and documenting how that is happening is what we are about here at “Fed Watch.” BITCOIN’S CORRELATION TO STOCKS AND VIX The first topic we covered in this episode and the first topic from the January issue of the Deep Dive is bitcoin’s correlation to stocks and the volatility measure, the VIX. LeClair described why this correlation has appeared over the last year and what it can tell us about the health of the bitcoin market. GRAYSCALE GBTC AND ...

  ABSTRACT The “HODL model hypothesis” is that bitcoin has crossed a historic inflection point where the asset’s illiquid supply is outpacing the rate of new supply issuance. Future halvings with lower supply issuance will only exacerbate this divergence. Illiquid supply as a percentage of circulating supply will grow in a parabolic fashion as bitcoin’s digital scarcity drives investor behavior towards store of value as the dominant use case. As a result, illiquid supply will approach 80% of circulating supply by 2036. Disclaimer: This is a market hypothesis and not investment advice; it should not be treated as such. WHAT IS ILLIQUID SUPPLY? It’s essential to understand the liquidity profile of bitcoin’s circulating supply. Quantifying supply across different levels of liquidity helps us better understand market supply dynamics, investor sentiment and bitcoin’s price trajectory. Liquidity is quantified as the extent to which an entity spends their bitcoin. A HODLer that never sell...

  PART ONE: BUT THIS IS HOW WE’VE ALWAYS DONE THINGS … There is a great story floating around the web about a married couple and a ham (full story). In brief, the wife is preparing a ham for dinner and in doing so, cuts approximately 1 inch off of two sides of the ham and throws them away. The husband, visibly upset, proclaims, “That’s a waste of good ham!” When asked what the rationale was, the wife didn’t know, simply stating that this was the way that her mother had done it. Later, the wife called her mother and asked her why she cut the ends off, to which she replied, “That’s the way my mom prepared the ham.” The wife’s grandmother had passed, but her grandfather was still alive and when he was asked why his late wife cut the ends of the ham off he replied, “So the ham could fit in the baking pan.” The tale revolves around cultural training at its heart, but the story is really something many of us can relate to and the notion of: this is how we’ve always done things. With ETFs...

  The price of any asset is always impacted by a combination of factors. Unlike traditional financial assets, bitcoin has historically had its own set of factors affecting its price. Do things look any different now? Let's find out. BASIC FACTORS: SUPPLY AND DEMAND Bitcoin’s price is heavily dependent on supply and demand fluctuations, just like other assets. However, contrary to measures of fiat money, bitcoin’s supply is always known and its hard cap is set at 21 million coins. The demand for bitcoin always sits at the top of the cryptocurrency world’s agenda — that’s why adoption of BTC is so talked about. Higher demand will lead to an increase in its price, especially when institutional investors get involved. For example, when companies and institutions began buying and holding bitcoin in early 2021, its price rose significantly as demand outpaced the rate at which new coins were being placed on the market for sale, resulting in a decrease in the total available supply of the ...

  The chemical composition of our fecal matter allows it to carry internal energy, which can be extracted through special wastewater treatment processes. Bitcoin mining seeks the cheapest energy available, which is frequently the energy being wasted without anyone to consume it. Treating human waste by turning it into biogas could be an effective means of mining bitcoin which would benefit small towns in developing countries the most. Wastewater treatment plant in Serang, Indonesia (source). There is generally complex engineering and energy expenditure to release the potential of nuclear power, coal-fired power plants and renewable sources of energy, such as solar and wind. Now imagine a simple process that starts by simply sitting on the toilet. After we do our sitting and flushing (minimal energy expenditure), all that highly diluted fluid (with our poop in it) gets collected by an intricate sewage system that finds its way into a wastewater treatment plant (WWTP). Once there, hi...