Crypto, meet traditional markets. Markets, crypto. get to know one another because you impact each other. 

Below are a bunch of BTC price action related assets that I keep an eye on. I have (and remain) extremely uneasy and suspicious of the PBOC and relentless yuan strength. My thesis has been that a potential Aug'15 style yuan devaluation may come at any time (ät any time does not mean "imminent"' - though it can). 

Keep a very close eye on Chinese equities (CSI300, China A50 & Hong Kong as well Hang Seng), and watch the onshore yuan USDCNY in particular.

 

 

And given CCP insiders, who are corrupt and tend to move their money ahead of doing something risk-off, I have been pondering a non-zero probability that what may be happening is that CCP insiders certainly remember the global cross asset market carnage from Aug '15 yuan deval- but this time there's nowhere safe to store assets, and meanwhile BTC/crypto is far more robust an asset class than it was in '15. CNY strengthens → CCP moves their money into BTC (among other assets) ahead of a potential nuclear weapon thrown into markets with global central banks having just fired off their remaining ammo and may not be effective in supporting markets upon the next asset crash. Stronger CNY gets, stronger BTC gets, that is until the last few days, when PBOC finally began to set the daily fixing vs USD weaker (crypto traders, wherever you are in the world, you need to make sure you're watching BTC/crypto markets Mon-Fri at 10:15-10:30am Hong Kong time when PBOC's yuan fixing rate comes out and China / HK markets open).

HKD peg has also been shady. Early Nov '20, it was announced that BTC and crypto would be banned for retail trading (HK is a large crypto market). But days prior to the announcement, HKDUSD peg suddenly became unhinged, May be nothing, may be officials front running headlines. Either way, when USDHKD peg took the latest sharp move higher, that just so happened to mark the recent BTC top. 

 

Other BTC on/off correlated assets I watch:

Silver "foresaw" (led) the end of the rally:

 

 Crude implied volatility (inverse) relation to gold miners, which I’ve applied to crypto, and works just as well. General idea is the same- mining (gold and crypto) is energy intensive. However, simply having higher energy input costs won’t necessarily impede supply production and lead to higher prices  - which is why I look at implied volatility instead of energy cost levels. Higher input costs are manageable, high uncertainty of costs → pause.

 

Those of you who are "crypto only" with no interest in traditional financial markets because BTC is uncorrelated vs stocks, currencies, commodities, bonds etc - what you mean to say is: FUNDAMENTALLY uncorrelated to traditional financial assets. And you'll soon come to learn that markets tend to not give a F about fundamentals. 

And those who are traditional asset / equity market investors (particularly if US-based + no international market awareness), just know that the crypto market prior to this correction reached and exceeded a trillion USD in market cap. And just because you may have no personal interest or exposure, doesn't mean you're unaffected if your peers' portfolio holdings are getting affected by crypto volatility and stirring up market activity in traditional markets. Liquidations are liquidations.

Welcome to the big leagues, BTC.

@Jack Farley @Ash Bennington @Raoul Pal