The BIS and crypto bias.
Crypto markets once again bound into a very narrow range though as the days pass since the FTX fraudulent fiasco one cannot help but get hopeful that there is no more contagion. One day the last of the leveraged loons who are suffering because of recent price action will go out of business, which likely will be the trigger for the market’s recovery.
Curious Cryptos’ Commentary — BIS (Bank for International Settlements)
The BIS is very much a legacy TradeFi institution. It is owned by 63 CBs (Central Banks) and provides a forum for discussing policy, it provides “independent” financial analysis, and offers banking services to those CBs.
It is a bureaucratically driven organisation, much like the IMF (International Monetary Fund) and is not too hot on the concept of innovation. One can safely assume it is institutionally critical of the crypto revolution.
But it is always good to know what the enemy is thinking, and the BIS has just allowed us to do exactly that.
In a new report titled “Crypto trading and Bitcoin prices: evidence from a new database of retail adoption,” the BIS attempts to portray interest in BTC as being driven primarily by periods of price rises:
This report is flawed on so many levels.
The basis for this conclusion is that the downloading of crypto related apps increases with the price of BTC and claims that the peak of such activity was in the months leading up to November 2021, when BTC reached its ATH (all-time high) of $69. k.
That comment makes me want to recommend to the authors that they go away and try to understand cause and effect, for they have them mixed up in their own heads.
The report states that 40% of crypto users are men under 35 and concludes from this that “Users [are] being drawn to Bitcoin by rising prices.” One must be tremendously biased against cryptos to dream up such nonsense.
Finally the report makes the astonishing claim that up to “81% of users would have lost money” if they had purchased Bitcoin over $20,000.
I remain quietly confident that 100% of purchases of BTC above $20k are currently in the red.
Much like the auditors of Alameda Research (see CCC 8th November 2022) I suggest that senior management at BIS dig deep to fork out the funds for a brand new calculator to help their researchers perform simple subtraction exercises.
Trigger alert warning — if any reader feels that they are “literally shaking” (as claimed by a Durham student who cannot emotionally cope with a different point of view) after reading my commentary, then I can only suggest you don’t read, or don’t shake. It’s up to you.
Cryptos — none of my commentary should be seen as a recommendation to get involved in cryptos. I might be talking complete nonsense without knowing it. Any crypto investments must be viewed as extremely high risk and treated as if they are worth zero until sold.
Stocks — just to make it clear this is not a stock advisory service. The CCC team does not provide financial advice in any way at all. Any reference to asset prices in this commentary are there to simply give context to the commentary and to give color to the performance of certain stocks related to cryptos.
For the avoidance of doubt, this newsletter is not an incitement to buy cryptos, buy stocks, or even to sell family members in the hope of buying cryptos or stocks.
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