Rich Dad Poor Dad author Robert Kiyosaki has warned investors about the bond market crashing, urging them to invest in “safer real assets,” like bitcoin, before their prices “explode.” He criticizes financial planners for promoting bonds as safe investments, predicting significant losses for investors when AAA bonds and commercial real estate crash. Meanwhile, Kiyosaki expects […]
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Tokenized US Treasury Bonds Hit $1 Billion Milestone on Public Blockchains
This week, 21.co’s onchain data analyst Tom Wan presented figures revealing that tokenized U.S. Treasury bonds on public blockchains have surpassed the billion mark. The analyst highlighted that Blackrock’s BUIDL experienced significant growth of 400%, escalating from million to 0 million within a span of a week. The Rise of Tokenized Real-World Assets […]
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Latam Insights: Volcano Bonds Target Q1 2024 Launch, Unblock Global $15 Million Bitcoin Flare Gas Bet
Welcome to Latam Insights, a compendium of Latin America’s most relevant crypto and economic news during the last week. In this issue: The Salvadoran Volcano Bonds might be launched in Q1 2024, Unblock Global raised million for a flare gas mining project in Vaca Muerta, and Argentine President Javier Milei axes ministries to reduce state expenditure.
Salvadoran Volcano Bonds Target Q1 2024 Launch
Discussion about the Salvadoran Bitcoin Volcano Bonds, a series of digital on-chain debt instruments that would help to fund the construction of the so-called Bitcoin City in El Salvador, has resurfaced after the approval of the regulatory framework enabling its issuance.
The bonds, to be issued by Bitfinex Securities using Blockstream tech, are now estimated to be launched in Q1 2024, according to a recent post from the Bitcoin Office in El Salvador. The institution highlighted the significance of this move, stressing that the approval of this regulation marked “just the beginning for new capital markets on bitcoin in El Salvador.”
Stacy Herbert, head of the Bitcoin Office, explained they were working on the size of the offer, estimated to be around billion, and that issuing these first sovereign bonds will help develop new capital markets around Bitcoin.
Unblock Global Raises Million to Take Advantage of Flare Gas Possibilities for Bitcoin Mining in Argentina
Unblock Global, a Bitcoin mining company, announced it had raised million to take advantage of the flare gas possibilities for Bitcoin mining in Vaca Muerta, one of the largest oil reservoirs in Argentina. The capital raise, which had the participation of Crusoe Energy, Pampa Energia, and Petrocuyo, will enable Vaca Muerta to produce oil with less emissions, according to Tomas Ocampo, founder of Unblock Computing, an Argentine branch of Unblock Global.
Ocampo explained that burning 10% of methane in flare gas helps reduce oil emissions’ impact seven times. Ocampo also remarked that Unblock Global was the second company executing this kind of bitcoin flare-mining project.
Argentine President Javier Milei Axes Ministries to Reduce State Expenditures
The newly proclaimed Argentine President Javier Milei has started fulfilling one of his campaign promises, slashing several existing ministries to reduce state expenditure. As part of his shock adjustment policies, Milei slashed the number of ministries to nine, targeting a reduction of 5% of the country’s gross domestic product (GDP) in public spending.
Milei also led a reduction of public subsidies for energy and transportation that will be executed next year and devalued the Argentine peso’s value by more than 50%. “We are without doubt facing the worst legacy in our history, a country where Argentines are increasingly poorer,” Economy Minister Luis Caputo concluded.
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Salvadoran Bitcoin Volcano Bonds Target Q1 2024 Launch After Getting Regulatory Approval
Discussion on the Volcano Bonds, a series of digital debt instruments that would be used to finance the creation of Bitcoin City, has resurfaced after their regulatory approval in El Salvador. The Bitcoin Office in the country revealed that it anticipated a launch date of Q1 2024 for these bonds.
Volcano Bonds Might Be Issued in Q1 2024
The Salvadoran Volcano Bonds might be launched next year, according to the National Bitcoin Office. The institution, created by President Nayib Bukele last year to manage and oversee bitcoin projects in the country, reported the approval of the regulation that will support the issuance of these bonds.
It stated:
The Volcano Bond has just received regulatory approval from the Digital Assets Commission (CNAD). This is just the beginning for new capital markets on bitcoin in El Salvador.
Furthermore, the office anticipates that the launch of these instruments will happen during Q1 2024. Stacy Herbert, director of the Bitcoin office, stated that they were currently working on determining the size of the bond offer, which is expected to reach bn.
In an interview with El Salvador, a local newspaper, Herbert explained:
Our interest is to develop new capital markets in bitcoin and the issuance of the first sovereign bond backed by bitcoin will help us achieve this.
The bonds will be issued through Bitfinex Securities, a company that received approval as a digital assets service provider in the country and will reportedly use Blockstream’s Liquid network. Bukele first revealed the Volcano bonds in 2021 when he announced the construction of the so-called Bitcoin City, which would be financed with funds from these bonds.
However, their issuance has been delayed for several reasons, including the lack of a regulatory framework for digital securities in El Salvador. In September 2022, Bitfinex CTO Paolo Ardoino acknowledged this issue, revealing that the company would take two or three months more to have everything prepared after the approval of this law.
What do you think about the Volcano Bonds and their upcoming launch? Tell us in the comments section below.
City of Basel Settles Tokenized Bonds Using Wholesale CBDC
The Swiss city of Basel recently settled a series of tokenized bonds using a wholesale central bank digital currency (WCBDC) as part of Helvetia III, a WCBDC pilot program. The system is designed to prioritize efficiency, as having on-chain funds bypasses the need for reconciling transactions with a private bank account.
Basel Issues Tokenized Bonds Settled Using a Wholesale CBDC
The city of Basel in Switzerland has achieved a milestone by completing what might be the first regulated settlement of tokenized bonds in a production environment. As part of the Helvetia III wholesale central bank digital currency (WCBDC) pilot program, the city issued a tokenized bond via the Basel Cantonal Bank that was settled using a WCBDC.
The issuance, valued at almost 0 million, was managed by the Swiss National Bank and the SIX digital exchange, the entity in charge of tokenizing the Swiss francs for the transactions. Using on-chain money is said to make these transactions cheaper and more efficient, given that participants don’t have to wait for private bank redemptions in the settlement process.
David Newns, head of SIX digital exchange, praised this development as a new step in modernizing securities markets. He stated:
The settlement of the first securities transactions in WCBDC … represents a major milestone for the entire industry on the road of adoption of a tokenized, DLT based financial markets infrastructure.
The Helvetia III pilot involves six commercial banks and the SIX digital exchange. The next step for this WCBDC is to be used for repo transactions, something that had already been hinted at by the SIX digital exchange in November.
All of these operations use R3’s Corda blockchain platform, with its CEO David Rutter stating the endeavors represent “another key milestone for the wider development of wholesale CBDC and digital assets which will importantly be used in a live production environment.”
What do you think about Basel issuing tokenized bonds settled with a WCBDC? Tell us in the comments section below.
Arthur Hayes Insists Bitcoin Has ‘Proven to Outperform Bonds During Times of War’
In an environment of surging U.S. deficits and monetary easing, former Bitmex CEO Arthur Hayes delivered a critical review this week of Treasury Secretary Janet Yellen’s fiscal and monetary strategies. Hayes highlighted the complexity and rise of bond yields and the role of bitcoin as a fiscal counterbalance.
Hayes: ‘The Smartest Trade Is Going Long Crypto’
On Thursday, Arthur Hayes explained the precarious balance the Treasury’s Janet Yellen must strike in managing U.S. fiscal health amid rising government deficits. Hayes describes Yellen’s strategic options, including liquidity injections and manipulating Federal Reserve rate expectations, to manage economic growth and government funding.
“Inject liquidity into the system so that stocks rise. When stocks pump, capital gains taxes rise, which helps pay some bills,” Hayes detailed in his latest missive called “Bad Gurl.”
Hayes speaks to the rising yields on long-term U.S. debt and the market’s negative response to Treasury strategies. He presents the “bear steepener” scenario as a challenge to financial stability, explaining, “Yields on long-end treasury debt are rising faster than short-end yields,” which could undermine banking solvency. Hayes’ previous work, “The Periphery,” delves into why this steepening is particularly toxic for the banking system.
In his analysis, Hayes points out the global reverberations of U.S. monetary policy, suggesting that other central banks will engage in similar quantitative easing tactics. “All other major central banks … will also print money,” he asserts, viewing it as an inevitable response to the Fed’s easing, creating a global ripple of fiscal expansion that may redefine the international monetary balance.
For investors, Hayes recommends shunning long-term bonds in favor of more liquid and short-term investments. He suggests that the RRP (Reverse Repo Program) balance is key to understanding the immediate investment landscape. A trillion-dollar liquidity injection will power a rising U.S. stock market, Hayes predicts, advocating for a diversified approach to asset allocation amid these shifts.
Diving into cryptocurrency, Hayes champions bitcoin (BTC) and ethereum (ETH) as foundational assets within the digital currency sphere, outperforming traditional investment vehicles amidst central bank balance expansions. “Bitcoin and ether are crypto’s reserve assets,” he states, asserting their dominance over “sh**coins” and other altcoins in terms of development, application activity, and locked value.
Hayes forecasts that the RRP’s reduction will inject liquidity into global markets, strengthening crypto’s position. He outlines a potential scenario where dollar liquidity swells, Treasury bill sales surge, and Bitcoin investment trends sharpen. “The RRP drawdown is a goal,” Hayes notes, marking it as a pivotal indicator for future fiscal and monetary policy decisions.
Emphasizing big tech’s resilience and growth potential, Hayes highlights companies with ties to artificial intelligence (AI) as smart investments in a liquidity-rich economy. “AI is the future,” he asserts, linking technological advancement to economic growth and suggesting that investments in AI could see significant returns as cash becomes “trash” once more. Hayes says the “smartest trade is going long crypto.” The former Bitmex CEO added:
There is nothing else that has outperformed the increase in central bank balances sheets like crypto. The first stop is always bitcoin. Bitcoin is money and only money. The next stop is ether. Ether is the commodity that powers the Ethereum network which is the best internet computer.
Asserting bitcoin’s resilience, Hayes contrasts its performance with traditional assets during economic or geopolitical strife. He reflects on bitcoin’s robust response to market unrest, suggesting that it remains a wise investment despite potential short-term sell-offs. “Bitcoin has proven to outperform bonds during times of war,” Hayes remarks, reaffirming his confidence in the leading crypto asset as a hedge against inflation and instability.
What are your thoughts on the former Bitmex CEO’s comments regarding Yellen, Treasury bonds, and bitcoin? Share your views on this topic in the comments section below.
Egypt Becomes First MENA Country to Issue Chinese Yuan-Denominated Bonds
Eygpt has reportedly become the first Middle East North Africa (MENA) region country to issue so-called “panda bonds” after it issued Chinese yuan denominated bonds worth 9 million. Issuing panda bonds marks another step in Egypt’s attempts to move away from costly dollar denominated loans.
Egypt’s Worsening Debt Affordability
Egypt, one of Africa’s heavily indebted countries, recently issued Chinese currency denominated bonds worth an estimated 9 million or 3.5 billion yuan. The three-year bonds, which were reportedly issued with an interest rate of 3.5%, are part of the North African country’s attempts at diversifying the country’s funding sources.
According to a Business Insider report, the rate of interest on these bonds is much lower than what Egypt would ordinarily pay were they denominated in dollars. Lowering the cost of servicing its debts remains a priority for Egypt, which recently had its credit rating status lowered to Caa1, some seven levels into junk status. Egypt’s worsening debt affordability was cited by rating agency Moody’s as one of the reasons why the country’s credit status was cut.
However, Mohamed Maait, Egypt’s finance minister, is quoted in the Business Insider report expressing his country’s desire to rein in on borrowing costs.
“We are working on diversifying our financing sources through different capital markets as well as securing guarantees from several institutions to reduce the cost of the debt during this challenging high interest-rate environment,” Maait reportedly said.
Egypt’s De-Dollarization Drive
The yuan bonds, also known as “panda bonds,” are debt instruments issued by non-Chinese entities. The bonds can only be sold in China, while issuers are not permitted to repatriate such funds. Poland and the Philippines are known to be the only countries to have issued such bonds.
By issuing the so-called panda bonds, Egypt has become the first country from the MENA region to do so. The move also makes good on Egypt’s pledge to de-dollarize its economy. Meanwhile, in addition to the panda bonds, Egypt is also reportedly planning to issue Japanese yen denominated bonds or “samurai” bonds.
What are your thoughts on this story? Let us know what you think in the comments section below.
Bitcoin Dominates 2023: Surges Past Stocks And Bonds With 63% YTD Growth
Bitcoin (BTC), the world’s leading cryptocurrency, continues to face challenges in reclaiming the ,000 level amid rising US treasury yields, a stronger dollar, and geopolitical uncertainties.
However, according to a report by the digital asset research firm Reflexivity, despite these obstacles, Bitcoin remains the standout performer among asset classes in 2023, with an impressive year-to-date (YTD) return of 63.3%.
This exceptional performance has surpassed returns from US large-cap growth stocks (28%), US large-cap stocks (13%), bonds, commodities, and REITs, according to a report from New York-based Bitcoin investment firm NYDIG.
ETH/BTC Ratio Reflects Risk Appetite And BTC’s Strength
According to the firm’s latest analysis of the current state of the Bitcoin market, there is a notable importance in monitoring Bitcoin’s market cap dominance, which measures Bitcoin’s market capitalization as a percentage of the total crypto market capitalization.
Market participants often view this metric as a risk gauge for the broader crypto market. Just as traditional markets experience cycles, with early stages marked by capital concentration in a select few high-quality assets that gradually disperse into riskier assets, the crypto market follows a similar pattern.
The cycle commences with capital concentrated in Bitcoin, then dispersion into Ethereum (ETH) and eventually other altcoins. The cycle concludes with capital flooding into high-risk assets, as witnessed in the memecoin frenzy of 2021.
The report’s chart illustrates the rising dominance of Bitcoin, indicating a healthy concentration of capital into the leading asset. Bitcoin’s sustained dominance suggests that the crypto market is stable, with significant capital still flowing into Bitcoin.
Alongside monitoring Bitcoin dominance, another key indicator of risk-taking behavior in the crypto market is the ETH/BTC ratio, which compares Bitcoin’s performance to Ethereum, the second-largest cryptocurrency by market capitalization.
The chart demonstrates a downward trend in the ETH/BTC ratio since the Merge in September 2022, which, according to the report, both Bitcoin dominance and the ETH/BTC ratio will be crucial to watch for any potential shift from a Bitcoin-dominated market regime into higher-risk assets.
Bitcoin Eyes Bullish Momentum
After a two-month consolidation period between the ,000 and ,000 range, BTC finally experienced a surge of bullish momentum, breaking the pattern and climbing to the upside.
However, the cryptocurrency’s upward trajectory was halted as it encountered a formidable resistance wall in the mid-term, reaching ,600 on October 2nd and facing a significant hurdle at ,700.
This resistance level poses one of the final challenges preventing BTC from revisiting the ,000 mark, last seen in August.
Despite the setback, Bitcoin currently trades above its crucial 50-day and 200-day moving averages (MAs), indicating the potential for another attempt to breach previously lost levels.
Market analysts and enthusiasts are closely watching the ,700 mark, as a successful break could signal the formation of a perfect ‘W’ pattern, with a target set at ,100.
On this matter, renowned crypto YouTuber and founder of Crypto Sea, known as ‘Crypto Rover,’ highlights the significance of the ,700 level as a potential catalyst for Bitcoin’s next move.
According to the analyst’s latest post on X (formerly Twitter), a successful breakthrough could reignite bullish sentiment and pave the way for a push toward the ,100 target.
BTC is trading at ,300, experiencing a modest decline of 0.6% over the past 24 hours. However, the cryptocurrency has recorded notable gains of 4.4% and 6% over fourteen and thirty days, respectively.
Featured image from Shutterstock, chart from TradingView.com
Bonds Out, Bitcoin In? Bloomberg Analyst Predicts Major Portfolio Shifts
In a comprehensive evaluation of global market dynamics, Bloomberg Intelligence analyst and Chartered Market Technician (CMT) Jamie Coutts has opined on the shifting sands of financial asset volatility. With bonds potentially falling out of favor and Bitcoin cementing its place as a debasement hedge, traditional portfolio models may be on the verge of a renaissance.
Major Portfolio Shift Towards Bitcoin?
Coutts tweeted, “It looks like we are about to see a substantial uptick in volatility across all markets, given where yields, USD, & global M2 are heading. Despite what lies ahead, there has been a big shift in the volatility profiles of global assets vs. Bitcoin over the past years.”
A comparative analysis by Coutts highlighted that since 2020, the volatility profiles of Bitcoin and Gold have declined, while most other assets have seen an increase in volatility.
His breakdown indicates that the traditional 60/40 portfolio volatility is up by 90%, NASDAQ’s volatility has surged by 53%, and global equity volatility rose by 33%; meanwhile, only Bitcoin’s volatility decreased by 52% as well as Gold’s volatility, which went down by 6%
Coutts further elaborated that following the “hyper-volatile” phase of Bitcoin during 2011-14, the cryptocurrency’s volatility has been on a downward trajectory. From a peak above 120 in early 2018, this metric currently stands at 26.39.
However, Coutts maintains skepticism over Bitcoin’s short-term prospects given the deteriorating macro environment: “Given that BTC volatility is near the bottom of the range plus a deteriorating macro environment: US dollar (DXY) is up, 10Y Treasury Yield is up, Global M2 money supply is up. It’s difficult to see how BTC (& all risk assets) can hold up with this setup.”
BTC Vs. Global Asset Classes
On the bright side, from an asset allocation perspective, Coutts considers the real question to be whether “Bitcoin can add value as a risk diversifier & improve risk-adjusted returns.” Comparing the risk-adjusted returns using the Sortino ratio during the last bear market, Bitcoin’s performance is not the best.
In the 2022 bear market, Bitcoin’s Sortino ratio is -1.78, positioning BTC above global equities, the NASDAQ 100, and the traditional 60:40 portfolio. However, it trails the S&P 500 (-1.46), European Equities (-1.01), Gold (+0.1), Silver (+0.28), and commodities (+1.25).
Elaborating on the cyclical behavior of Bitcoin, Coutts added, “The problem with BTC is the relatively short history makes inferences difficult and 1 year periods are certainly not significant. The best we can go on is multiple cycles. It’s clear that holding over the full cycle has been a winning strategy.”
Evaluating the Sortino ratio over the past three Bitcoin cycles (2013-2022), Coutts found Bitcoin to lead with a score of 2.46, outperforming the NASDAQ 100 (+1.37), S&P 500 (+1.25), and global equities (+1.05).
BTC: Top Bet Against Money Printing
In this scenario, Debasement concerns further enhance Bitcoin’s proposition. Coutts emphasized this saying, “And if allocators want to outpace monetary debasement, over most timeframes, bonds are not the place to be.” He identified Bitcoin as the foremost choice for portfolio reallocation against monetary debasement.
Citing the vast difference between asset returns concerning money supply growth (M2) over the past 10 years, he highlighted Bitcoin’s dominance with a staggering ratio of +8,598, followed by NASDAQ (+109), S&P 500 (+25) and global equities (-7.5).
In a concluding statement, Coutts postulated, “In the years ahead it’s conceivable that allocators begin to shift towards better debasement hedges. BTC is an obvious choice.” Moreover, he suggests that Bitcoin could supplant bonds by securing at least 1% of the traditional 60/40 portfolio.
At press time, BTC traded at ,433.
Robert Kiyosaki Advises Buying Bitcoin Today — Foresees a Rush to Buy BTC as Stocks, Bonds, and Real Estate Crash
Rich Dad Poor Dad author Robert Kiyosaki has advised investors to buy bitcoin today before stock, bond, and real estate markets crash and people rush to buy BTC alongside gold and silver. The famous author has predicted that bitcoin’s price will reach 0,000 by 2025, with gold soaring to ,000, and silver reaching 0. However, he anticipates BTC reaching million in the event of a global economic collapse.
Robert Kiyosaki Recommends Buying Bitcoin Today
The famous author of Rich Dad Poor Dad, Robert Kiyosaki, has urged all investors to buy gold, silver, and bitcoin today before the stock, bond, and real estate markets crash and people rush to buy those three assets. Rich Dad Poor Dad is a 1997 book co-authored by Kiyosaki and Sharon Lechter. It has been on the New York Times Best Seller List for over six years. More than 32 million copies of the book have been sold in over 51 languages across more than 109 countries.
Kiyosaki shared on social media platform X on Tuesday that he is constantly asked about what the price of gold, silver, or bitcoin will be in 2025. “My reply is that is a silly question,” he said, adding that the “more important question is how many gold, silver, bitcoins do you have today?” He explained:
Gold, silver, and bitcoin are bargains today … but not tomorrow. America is broke. Buy gold, silver, and bitcoin today before stocks, bonds, and real estate crash & people rush for gold, silver, and bitcoin.
In February, Kiyosaki predicted that the price of bitcoin will hit 0,000 by 2025 while gold will soar to ,000 and silver will reach 0. In August, he said that bitcoin will rise to million, while gold will jump to ,000 and silver to ,000 if the world economy crashes.
Kiyosaki also previously warned that a “giant crash” is coming and the possibility of a depression is not to be dismissed. Earlier this month, he predicted that Airbnb will lead the real estate market crash.
He expects the U.S. economy to head for a crash landing, further predicting that the U.S. dollar will die. The renowned author cautioned that the Federal Reserve will be forced to print billions in “fake money.” He sees fiat money, including the U.S. dollar, as fake money while gold and silver are “God’s money” and bitcoin is “people’s money.” Last week, Kiyosaki said that crypto is the future and fiat money is “toast.”
What do you think about Rich Dad Poor Dad author Robert Kiyosaki’s advice on buying bitcoin? Let us know in the comments section below.