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Wishing I was German
Plus US Election predictions
📚️PDF⏳️ 5 min 📖 6
$100k
In this sector, when you wish for something, or make a prediction, there is a good chance you will be slapped around the face with a rotten fish. Most readers have been on the volatile ride with us over the years and know that dropping 50% in short order, can happen, does happen and might happen. As far as 2024 has gone, everything we wished for, we got. ETFs, Craig Wright denied, Mount Gox distributed and the price is just what it is.
Still, I don’t want to deny the commonly received question “do you think it will get to US$100k”. Yes, of course I do.
More than that though, I believe we are already in the battle for $100k which might surprise you given the price level we are currently at. Bitcoin price discovery is extremely violent. It is unusual to reach an all time high prior to the halving as we did earlier this year, mostly thanks to the US ETFs. The violence of the moves also creates trading opportunities. That is why we see short sharp snaps up and back again as excited bedroom traders feed the Susquehanna black box.
Unless you are engaged in high frequency trading, it’s mostly noise because the trend seems clear. Bitcoin whales have been accumulating all year. The ETFs have been the most successful Wall Street product launch ever. Not close, by far. The market voted in such an overwhelming fashion to support bitcoin, it is breathtaking.
Bitcoin moves through orders of magnitude. The more it grows the more it grows. Back when $1,000 was ridiculous, we had to move the benchmark of incredulity to $10,000. Right now $100,000 is not unimaginable, but $1,000,000 per bitcoin certainly is.
So I don’t talk about $100k because I don’t think about $100k. I think about 1 satoshi = 1 US cent. I think about how that repricing of the asset into the smaller unit will be so much more helpful to useability and onboarding. I think about Bloomberg printing the price of bitcoin as moving up 3% to US$ 0.012c/sat. That happens when bitcoin reaches $1m / bitcoin. Today, the idea is ridiculous and people laugh at me. I’m quite happy with that.
Is Polymarket any good?
The press and traditional pollsters are getting upset. Most people are taking their steer as to the outcome of the election from Polymarket, the crypto based betting site. It’s really annoying for them, since polling is a big business and Polymarket can’t even take bets from Americans.
We can all have any opinion we want but with only four days to go we can just post the predictions and come back and see who was right. In the blue corner, we have Wolfgang Munchau, a former editor of the Financial Times, now at the New Statesman. We also have the New York Times, which right now has Harris in front. We also have quite a lot of well connected people across the world believing that the Trump Train is just noise and Harris is winning quite comfortably. That real possibility exists, that the silent majority is overwhelmingly going to vote Harris and she wins, as The Don would put it, “bigly”.
In the red corner, we have Polymarket, which has billion dollars speaking:
$2.7 billion in volume saying Trump wins.
Much smaller market of $71million says in the Electoral College he wins by 65; plus or minus 30.
Smaller again. $50 million on Balance of Power. Predicts President, House, Senate go Republican.
Personal thoughts on who wins? Trump with the Senate but not the House.
Back to this next week then.
Microsoft
Last week I was boring you to death about changes to accounting rules. I suggested those rules might make bitcoin a little more attractive to cash rich companies, like Apple.
As it happens a few days later Microsoft announced the details of their annual shareholder meeting. One of the items on which a vote is scheduled suggests the company “invest in bitcoin rather than treasury bonds”. It’s an overblown story because the Microsoft board is recommending shareholders vote against this proposal. They contend that their treasury department is already aware of the various risks and rewards of different asset classes and this kind of thing does not require shareholder approval at all.
The proposal by The National Center for Public Policy strikes me as a bit of a gimmick.
I should think this will be overwhelmingly rejected, but if I was Microsoft I would go and buy $100 million of Bitcoin before the end of the year. Firstly to emphasise the point about who is running the company; the CEO and the Board and not random lobbyists. Secondly though, the whole media coverage around this means that December 2024 might forever be the moment that Microsoft rejected the opportunity.
Comrades
I guess some stories are timeless. This Russian poster translates to:
“Why did you sell your bonds? Do you not wish to participate in the industrialisation of the USSR?”
In a similar fashion here is today’s Australian government website shilling “Green Bonds” which we discussed earlier in the year. The investor presentation back in June was a monument to political money.
Why? because the government is going to do whatever it wants. It’s one pool of money, this idea of separate money for separate spending has always been nonsense but it makes people feel good. Goodness knows how much has been wasted on this pretend story.
The bonds themselves have a 10 year term and yield 4.295%. The annual change in the consumer price index for Australia was 3.8% for the June quarter when the bonds priced. In real terms, a juicy 0.4295% per annum.
There is no greater fraud in the world than the bond market. True then in the Soviet Union, true now in Australia. The press was suitably gushing too.
Managed to “Snag an allocation”. Imagine the joy at Australian Super which boasts returns of 8% over 10 years while having to subsidise the government at 4.295%.
Euro-Trash
I was shocked by this chart. Germans take 25 days of fully paid sick leave on average every year. In addition, they get 20 days of paid holiday and 9 public holidays. In total, 53 days of the working year (21%) a German will not be at work.
I would make several observations here. Germany is rich, and the fact that people have so much time off reflects it, Norway’s presence would indicate the same. Mexico, also an interesting case. Employees there receive up to 52 weeks paid leave (60% of pay after the 4th day; which seems absurd).
For Americans, it must be shocking to see this sort of behaviour. They share their low sick days with the UK, down at six per annum. The UK isn’t exactly kicking economic goals though so it is hardly a proxy for success.
With the proper application of capital though, people should work less. It’s surprising there is not more discussion about four day weeks. It would be a massive leap forward for society. The general view seems to be that we would be very much poorer if we did such a thing, I don’t believe it.
This article from the Betoota Advocate resonates (I accept it’s a very non-Euro trash angle, but this image reminds me of London’s underground).
Has there ever been a better tagline than “refreshed and renewed loathing for their *** job”. I think not.
Personally, I want self-driving cars, automated fruit picking, AI medicine, robots preparing my food. In this day and age it is true what the article says. Most office jobs are basically pretend. They could be coded out of existence and in the next five years they likely will be.
We should welcome it. It’s shocking the government does not plan for it or try and exploit it as Australia so easily could. I’m impressed too by German absenteeism, that so many people have better things to do with their time is vastly encouraging for humanity.
Still, we aren’t there yet. In the meantime could you fill in your appraisal form and pass it to Sarah, who will scan it in and send it to Bob. He will organise a meeting for you with your line manager about why you have had so many days off recently. Then you can get the bus home, which inexplicably still has a driver, who may or may not turn up.
Further information
Our September 2024 report to investors can be found here.
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