Bitcoin Headed for $400,000, Hedge fund Manager Mark Yusko Predicts

I always resist making hysterical predictions, but apparently trader Mark Yusko has no reservations.

FxStreet: Yusko maintains that Bitcoin has the potential to unseat gold. 

“Bitcoin is much easier to transport. It is much easier to divide,” Mark Yusko.

Experts are currently staying off prediction of Bitcoin price following the crash witnessed in 2018. However, the founder of Morgan Creek Capital Mark Yusko in a recent interview said that he sees Bitcoin surging to $400,000 levels in the long-term. A figure that many have found unrealistic and crazy.

Yusko maintains that Bitcoin has the potential to unseat gold as well as remain the leading cryptocurrency. Besides, the recent trends suggest that millennials are preferring Bitcoin and other digital assets as opposed to traditional assets like gold and stocks. Yusko says:

“Bitcoin is much easier to transport. It is much easier to divide. It is tough to break a bar gold into its component pieces. Bitcoin has all these essential qualities that I think are superior to gold.”

Yusko is likely to have done simple mathematics to arrive at this prediction by dividing the total market cap of gold with the circulating supply of Bitcoin. However, Bitcoin will not hit this level in the next two years. It could take it even a decade to do so.

There are a plethora of crypto currencies, including Venezuela’s failed crytpo currency,.  Maduro put the crypt in crypto currency..

crypto

I admit, Bitcoin has done better than Gold over the past month.

goldbit

Bitcoin 30 day volatility is subdued over the past year.

bitvol

Stranger things have happened.

Speculators Increase Short Treasury Futures Position (But Gold LONG Positions Increase)

Speculators are increasinng Treasury short positions while speculators are favoring long positions in gold futures.
Speculators increased net short positioning throughout the Treasury futures curve in the week ended April 9. The bulk of the moves came from adding short positions in 10-year (TY) Treasury futures contracts. They increased their short position in TY contracts by $56,982. And they added some short risk to their two-year (TU) futures positions, after nearly cutting that position in half the previous week.

futures

Speculators also increased their short positions in five-year (FV), ultralong (WN) and classic 30-year (US). Speculators still remain short every Treasury futures contract.

How about gold? The net futures have actually increased since December.

 

stack-of-golden-bars-in-the-bank-vault-60756080_Small

Venezuela’s 2Y Sovereign Yield Tops 100% … Again As US Imposes More Economic Sanctions (Oil And … GOLD!)

The US is imposing additional economic sanctions on Venezuela, both on oil … and gold!

The United States imposed sanctions on Venezuela’s state-run gold mining company on Tuesday, accusing it of illicitly propping up the government of President Maduro.

The US Treasury claims Maduro has relied on an illegal mining boom in recent years with the profits generated by the gold mining company, Minerven, proving vital to maintaining the military’s support for the government.

“Treasury is targeting gold processor Minerven and its president for propping up the inner circle of the corrupt Maduro regime,” US Treasury Secretary Steven Mnuchin said in a statement.

The announcement comes days after Uganda opened an investigation into US$300 million of unexplained gold suspected of originating with Maduro’s government. Flights this month from Caracas to Entebbe raised concerns that the government is smuggling gold out of the country and selling it to traders in Africa and the Middle East.

It is the sixth round of sanctions imposed by the U.S. since January as they attempt to wrest power away from Maduro and towards opposition leader Juan Guaido. Most Western countries have recognised Guaido as Venezuela’s interim president.

Venezuela’s gold industry is allegedly one of the country’s most lucrative financial schemes in recent years. Minerven is accused of purchasing high volumes of gold from local miners using the countries depreciated currency. The gold is then melted into bars and transported to the Central Bank of Venezuela.

The sanctions have led to a spike in Venezuela’s 2-year sovereign yield (in USD) as their economy continues to liquify.

ven2yyir

The Cafe con Leche index, meant to reflect inflation for the average coffee-drinking citizen. 2019 has been a bad year, in particular, for the average Venezuelans.

vencafelicgh

And the Gold/Venezuelan Bolivar Cross hasn’t looked so good in 2018 either.

goldbolcross

The good news? At least Venezuela isn’t on the Pacific coast of South America so they can avoid the Fukushima reactor meltdown aftermath. Chile, on the other hand. …

Energy_plot_japantsunami-e1377791396639

Deja Vu? Bankers Get Creative to Offload CLO Risk in U.S. and Europe (Here We Are Again!)

Bankers dumping business loans and corporate debt in the forms of Collateralized Loan Obligations off on investors in the US and Europe? As New York Yankee legend Yogi Berra once said, “It’s déjà vu all over again.”

(Bloomberg Quint) — Arrangers of collateralized loan obligations are innovating their way through a tough market as they try to shift a stockpile of warehoused assets from their balance sheets.

The year’s first batch of new CLO issues to price in the U.S. includes two transactions with short maturities and one static deal, where the underlying pool of loans remains the same throughout its lifetime. These non-typical features are offered to draw in investors some of who have grown more cautious after leveraged-loan prices dropped and CLO funding costs rose at the end of last year.

Investors say similar structures are being touted in Europe as well. And it’s not the first time that more creative structures have appeared: short-dated deals emerged in 2015 and 2016 when market conditions deteriorated during the oil and gas crisis and liability spreads ballooned.   

Issuance of CLOs — bonds whose cashflows are provided by an underlying pool of loans — soared last year as investors wanted exposure to higher-yielding, floating-rate debt. The market stalled toward year end amid the broader market volatility and weaker sentiment. CLO managers are now trying to navigate the slow recovery in the market.

*Pine Bridge Capital has a nice “CLOs for Dummies” article.

Although CLOs are primarily bank and corporate loans, they can degrade quickly like the “subprime” loans in 2008/2009 (as discussed in The Big Short somewhat accurately).

CLO for dummies

And like the period of time discussed in The Big Short (and other lated books and movies), the “A” rated tranches are looking good in terms of impairment rates, but the “killler Bs” are looking stressed.

CLO impairment rate

The CLOs 2.0 average structures (aka, “Cov Lite” loans) have higher risk.

CLO 1 vs 2

While this is NOT a chart of CLOs, it does show the growth of corporate debt since the financial crisis, particularly at the A and BBB ratings.

Corporate-bonds-almost-junk-Feb-19 (1)

Makes one ponder holding a protective asset like … gold.

Gold

Here we are again!

cjhere