Square Buys $170 Million More Bitcoin, Deepening Crypto Bet

0
29

Your free daily email from Fuller Treacy Money


Comments of the Day


25 February 2021




Video commentary for February 24th 2021




Eoin Treacy’s view


A link to today’s video is posted in the Subscriber’s Area.

Some of the topics discussed include: Buyers return after a small dip encouraged by central bank statements, bonds yield continue to trend higher even if they are somewhat oversold, oil firm, gold steady, copper strong.




Email of the day on paying up for commodities


Thanks again for your very calm analysis of these volatile times. I appreciate it a lot. I enjoyed very much your comments about the tendency of remembering the end of the events/experiences. There is a very good experiment on this done by Daniel Kahnemann. On a different note; you seem to be very bullish on copper, but it seems not enough to invest on that theme yet. Are you planning to invest? Otherwise, what would be a good instrument to invest for the medium/long term on that theme. Thanks in advance




Eoin Treacy’s view


Thank you for this email which may be of interest to subscribers. I have been conditioned through the decades to refuse to pay up for commodities. It’s a volatile sector that tends to have outsized moves in both directions. I am very bullish on industrial commodities overall and copper in particular.


Seeing outsized new sources of demand emerge for a commodity is a once in a couple of decades event. It will require a massive supply response to bring the market back into equilibrium. At present commodities are rallying because investors are pricing in an epic rebound in economic activity as fear about the pandemic subsides and people embrace fun and joie de vivre.




Long-End Yields Surge in Biggest Treasury Selloff Since January


This article from Bloomberg may be of interest to subscribers. Here is a section:


The selloff in Treasuries sent the yield on the 30-year bond surging on Wednesday, putting the long-end

benchmark on track for its biggest one-day advance since early January.

Rates climbed across notes and bonds, with the long-end increasing most and the curve steepening. The 30-year yield jumped by around 11 basis points at one stage, hitting a one-year high of 2.29%, while the 10-year rate rose as much as 9 basis points to 1.43%.

Global bond markets are suffering this year amid the prospects for U.S. stimulus and a surging reflationary narrative, with volatility gauges climbing to multi-month highs. That’s prompted fears over a potential tantrum in havens, such as Treasuries and German bonds. While Federal Reserve Chairman

Jerome Powell this week called the recent run-up in bond yields “a statement of confidence” in the economic outlook, the move raises pressure on central banks to keep financing conditions easy.


“The market is nervous about additional stimulus, worried about the risks of higher inflation, and concerned about QE tapering,” said Gennadiy Goldberg, senior U.S. rates strategist at TD Securities. “The selloff is likely being exacerbated by convexity hedging and positioning stop-outs.”




Eoin Treacy’s view


Demand for save havens is waning. That’s perhaps the easiest way to explain the run-up in yields; globally. The scale of the flight to quantity because of angst at the lockdowns drove yields down to historic lows almost everywhere.




Square Buys $170 Million More Bitcoin, Deepening Crypto Bet


This article from Bloomberg may be of interest. Here is a section:


Square inc. said it purchased $170 million in Bitcoin, further committing to the cryptocurrency and raising its holdings to about 5% of the company’s cash and equivalents.

The announcement came Tuesday as Square reported that cryptocurrency continues to be a growing part of its business through the use of its Cash App for Bitcoin transactions. The financial payments company’s involvement with Bitcoin is a reflection of Chief Executive Officer Jack Dorsey’s belief in

cryptocurrencies and the open internet.

The investment “really comes down to the alignment with our purpose, and aligning our incentives with cryptocurrency and more broadly expanding the economic empowerment opportunities and making them acceptable more broadly in a fair way around the world,” Chief Financial Officer Amrita Ahuja said. Square also bought $50 million worth of Bitcoin in October.

“Bitcoin has the potential to be a native currency of the internet and we want to continue to participate and learn in a disciplined way,” she said.




Eoin Treacy’s view


Once a company begins to accept bitcoin and promotes its use to clients it is virtually impossible to pull back. The fate of the company becomes twinned with the outlook for the cryptocurrency.


During bull markets demand for tokens increases and requires a devotion of capital to cater to the needs of clients. During bear markets, the company is left with useless assets that are expensive to maintain and lie dormant until the next bull run.




Battery Technology Fantasy Doesn’t Match Reality


This article by Anjani Trivedi for Bloomberg may be of interest to subscribers. Here is a section:


Technology has been forced to chase investors’ expectations. In China, the world’s largest market for electric cars where sales are growing steadily, battery installations of so-called lithium iron phosphate, or LFP, batteries – the technology of the last decade – accounted for 38% of the market, up from 33% the year before. Such batteries lag behind newer ones by as much as 30% in terms of energy density.

The reality is, these powertrains are highly complex. Even as some promising advances are made, commercial viability remains a stumbling block. Chief among those hurdles is boosting energy density and along with it, safety. The more energy a battery has, the further a car can go. However, that also hastens the pace of degradation and shortens battery life. Several higher-density batteries don’t have stable chemical compositions either, leaving them dangerously vulnerable to combustion.

To get over such challenges, firms are trying to make solid-state batteries that will be safer and, eventually, cheaper. Others are intent on boosting battery density by using more nickel content, and less cobalt, which is expensive and mired in supply issues. The progress so far has been limited.

Investors and analysts, meanwhile, are honing in the improvements on to individual battery parts, like cathodes and anodes.

The flipside of these advances are often overlooked. For instance, solid-state batteries that can store more have low power density, which means their energy delivery is slow, while those with higher nickel content are less chemically stable. In addition, solid state batteries have been known to discharge

sulphides.




Eoin Treacy’s view


It feels like I see a sensational headline about a new battery innovation almost every day. The reality is that it can take a decade to proof up and commercialise a new discovery and even that timeline is ambitious. There is no denying a great deal of capital is being poured into the sector but nothing has happened to question the historical timeline of 5 years between doublings in energy density.




Eoin’s personal portfolio – stop triggered on hedge position


Eoin Treacy’s view


One of the most commonly asked questions by subscribers is how to find details of my open traders. In an effort to make it easier I will simply repost the latest summary daily until there is a change.




This is your daily comment from www.fullertreacymoney.com.

Subscribe to Fuller Treacy Money Limited for exclusive content and audio: Click here for details.




The information provided on this website (www.fullertreacymoney.com) is for the purposes of information only. This website and its content is not and should not be considered or deemed to be an offer of or invitation to engage in any investment activity. Nothing Fuller Treacy Money does and nothing on this website is intended to operate or be construed as the giving of advice or the making of a recommendation by Fuller Treacy Money to any investor or prospective investor. Fuller Treacy Money and any other group or associated company of it is not authorised or regulated by the Financial Conduct Authority in the UK or any other regulatory body in any other jurisdiction. By means of your login to our service you are deemed to thereby accept our current Terms of Business including this notice, Except for permission to download a single copy for personal use, the research published by Fuller Treacy Money may not be reproduced, distributed or published in whole or in part by any recipient for any purpose, without the prior express consent of Fuller Treacy Money. Information featured on the website is based upon information and data provided by Fuller Treacy Money and remains the intellectual property of Fuller Treacy Money. Some of the information may also be provided by third parties and whilst Fuller Treacy Money will seek to ensure that information featured the website is updated on a regular basis, Fuller Treacy Money does not accept any responsibility for, and disclaims any and all liability for, any such information (including the accuracy of such information) or views or opinions expressed on the website. Any person considering an investment opportunity as a result of data presented on the website should give full regard to all the content of the website, and should perform their own due diligence and obtain advice from suitably qualified professional advisers before investing. Prospective investors are also encouraged and recommended to take their own independent legal and taxation advice together with any other advice that they may consider necessary to consider the benefits and risks attached to any investment opportunity. No representation or warranty, expressed or implied, is or will be made or given by Fuller Treacy Money (including its executives, employees, agents, contractors and advisors) in relation to the accuracy or completeness of the contents of the website, save that any such liability is not excluded in respect of fraudulent misrepresentation.

LEAVE A REPLY

Please enter your comment!
Please enter your name here