Liked by Jeremiah S
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Ok well even before understanding what you’re specifically pointing to, just right off the bat- unless you’re specifically talking about TLT the instrument (which I don’t think you are - I think you’re looking at UST long end duration yes?), if you want to visually compare Btc price action to USTs, instead of comparing vs TLT, I would suggest using just a generic US 20Y yield chart and for several reasons, namely 1) Because TLT is a semi bastardized derivative of 20Y+ USTs, and USTs themselves are the underlying globally traded actual instrument that is US debt itself (US treasury dept doesn’t issue shares of TLT, they issue 20 & 30y bonds). 2) TLT is a BlackRock US listed ETF, which means it trades 6.5 hours/day, 5 days/week, BTC trades 24/7/365. So any given normal US biz week, TLT captures less than a fifth of the trading hours vs that of BTC. The UST market however (and UST futures on CME) trade almost round the clock, just an hour or 2 shy, and closed on weekends. But still a far better snapshot comparison to use USTs vs TLT- with TLT chart, the price you’re getting is an arbitrary 4pm snapshot of ”where 20y USTs” are priced against a 24/7 trading asset BTC.
3) Generally speaking, looking at inverse relationships on charts is far more difficult than looking at positive relationships (or, the latter being far more easy). So rather than look at TLT and seeing if there’s a negative relationship in price action, you can either invert one of the 2 charts, or, as per the previous point, just use 20y UST yields, which should be inverse to bond prices (TLT). Much easier to make/visualize, and more accurate with time overlap
…and then once you see it that way, again I don’t know what your question is, but shouldn’t the question (or one of many many questions) also be: look at the btc price matchup with long dated treasury yields for the run up, and look at the divergence after the BTC sell off for which apparently long end USTs don’t seem to care (and therefore did they ever care / was the run up just coincidental) ? Or another angle would be- no, there wasn’t a reciprocal scale of collapse in 20y yields along with BTC’s collapse, BUT, 20y yields DID drop (TLT ↑) alongside the crypto sell off. Can it therefore be possible that some people who were long BTC ( particularly institutional investors) are very much ironically finding safe haven shelter away from BTC risk within long dated USTs…? And if so, what the hell does that do to the whole narrative of these over indebted govs printing dollars to service expanding deficits, if anything?
is it possible that the 20Y is a significantly bigger asset than BTC and the correlation might not be all that strong in the first place, when considering bigger things in the overall bond market? I don't believe BTC has all the externalities that bonds have to deal with e.g. the magnitude issues of short positions in TLT, bond auctions, primary dealers in need of collateral, FOMC meetings, and the specter of YCC.
Also I'm not sure I agree with this assumption that crypto investors that already have a pretty high risk tolerance, are going to move directly from crypto to long bonds and skip over all the other equities that might be inverse of crypto but provide a better return.
If you told me a good argument for TLT shooting back up to 160, because shorts will need to cover, and BTC is has been/currently consolidating in the ~36k... that be a better argument.
thanks @Jeremiah S
Sorry @John Huang I don't understand the question- what do you mean specifically by "what happened" in context of your chart? I see that you've noticed inverse price action between TLT and BTC, and you're asking "what happened" on the chart between march 31 and April 13, but I don't really know what you're pointing to in the chart as to garner a "what happened"
Do you mean what happened to flatten and narrow the band in which both trade in (realized volatility ↓)? Or what happened in that the end of that time period was BTC top (though not TLT bottom)? etc
If you can elaborate what it is that you're seeing, would be helpful for me to help. "what happened starting march 31 - April 13, reflected in this chart as _________ (describe what's going on in the chart - 'orange line up while blue line flat' etc)"
Wow very interesting chart
I’d love to hear @Weston Nakamura thoughts
RVDB Live w/ Weston and Jack
Market Talks w/ Weston & Petr
Exchanging Lanes: Episode Two w/ Weston and Bradley