Borrow me harder

📚️ PDF ⏳️ 4 min 📖 7

A big day

Today is the last possible day that the SEC could approve all current Bitcoin ETF applications simultaneously. It arises by virtue of the way the various deadlines roll out, with Hashdex and Franklin hitting their first deadlines (I’ve never heard of them either). This would have the advantage of creating a level playing field for all the participants.

Cathie Wood would argue that ARK lodged first and should launch first. I agree with her because they did do the work and everyone else pretty much copied their submission as we comprehensively summarised back in June.

My money is still on the 10th of January 2024, but if it happens sooner then what's the difference?

BlackRock also filed an Ethereum ETF application this week. These will play out over a longer period into the middle of next year.

The difference a year makes

A year is a long time in any industry, but I felt like perusing MoneyBits from 12 months ago. FTX had collapsed and we were enjoying reviewing Sequoia Capital’s review of their golden boy, Sam Bankman-Fried: 

Bitcoin dipped intra-day below $15,000 that month and our monthly report, looking back, was perhaps a little defensive. 

A bit touchy, but not wrong.

Borrow me harder

Here's an interesting offer for you from the new owner of Credit Suisse’s toxic derivative book, UBS. 10% debt instruments known as AT1s. They are a specific category of subordinated debt that banks use to meet regulatory capital requirements. They rank behind the debt stack and in front of equity (mostly). The UBS offering is rather special though because the bank intends that these AT1’s will have a conversion option. Should the bank ‘run into difficulty’ you will be able to convert to equity which at that point will presumably be worthless. 

So far so good, but the more I find out, the more I wonder.

BBB- grade debt; uncertainty around the (probably worthless) conversion option because it needs shareholder approval, plus the uncertainty of what on earth lurks in the acquired Credit Suisse balance sheet. What’s more, the experience of the Credit Suisse collapse implies that the law as far as banks is concerned is very much flexible in a crisis in Switzerland. 

Seems incredible risk for 10%. 

Jeff is having fun

I'm enjoying watching semi-retired Jeff Bezos have fun flying to space and hanging out with his girlfriend. This week's viral action saw Jeff release some photos for December’s Vogue which the internet was rather unkind about. I must say Jeff looks very muscular and the vehicle he's in is implausibly old for someone with his above average resources. Still, they seem to be having a nice time, so what of it?

It all doesn't have much to do with investing except in the comments a reader was missing the days when Jeff had really interesting things to say.

“I am always asked about what will change in the next 10 years; I am almost never asked what will not change. You can build a business around what is stable in time.”

Very little is consistent over time. What will actually still be doing what you thought it would be doing in 10 years time? What asset performs like that or could?

I am putting it to you that the most valuable proposition of Bitcoin investing is that it behaves in an entirely consistent way in the past and in the future. It is very simple: process transactions in 10 minute blocks; distribute them globally; do it forever.

Jeff called it. He wasn’t talking about bitcoin but it exactly fits his criteria.

There are possible alternatives, such as gold. Although it doesn’t really exhibit ‘behaviour’ in the way bitcoin does. Open to your ideas.

The Vogue article is here. If ‘space fashion’ is your thing, I wholly recommend it.

Euro-Trash

A “secured e-identity for their lifetime”. Doesn’t that sound wonderful, citizen? 

Thierry Breton is the European Union’s digital attack dog. He has pursued Google, Elon Musk (personally) to the point where the US tech firms wonder whether to bother with Europe at all.

His latest dystopian nightmare will have all sorts of advantages; just look at all these fun things listed on the website.

Imagine! You’ll be able to check into a hotel. The future is going to be so special in Europe. Can’t wait to file my digital tax return with my new digital ID and hand over the ‘cash’ in digital euros.

Have a nice weekend Citizen 1840583-887.

Further information

Read our bitcoin news wrap-up on Livewire: Bitcoin news you didn’t see in the Fin Review

Our October 2023 report to investors can be found here.

If you are considering an investment in the Managed Fund, you can now apply using our online application form: