Price Discovery Is Alive And Well In Crypto


“If the market continues to see wild swings based on Elon Musk tweets, it’s going to be a big setback for this asset class,” Matt Maley, chief market strategist for Miller Tabak + Co. told Bloomberg. “The fact that it sees such wild swings to the tweets from one person takes away the legitimacy of the asset class.”

Reminds a bit of a financial planner who told me bitcoin is “manipulated” and followed up with the ultimate smear “unregulated”. Yikes. Then the Chinese government made all sorts of threats concerning the mining and holding of crypto's top brand. A wag on Twitter responded with words to the effect that when the Chinese banned Google in 2010 it didn’t seem to slow down the company. 

Weston Nakamura in an interview with Real Vision’s Jack Farley made the trenchant point, “This is what markets look like when you don't have global central banks artificially suppressing volatility, intervention of central banks buying every dip, putting a safety net under every single slight tremor or taper tantrum or whatever it may be, this is what happens.”

Making money isn’t easy. Whether it be working 9 to 5 or trading markets. The Fed seeks to smooth every bump so everyone will stay calm and carry on, buying stocks. Perhaps a viewer or two of his recent 60 Minutes interview caught Powell’s off-hand comment that the central bank has bailed out money market funds twice in recent months. Money market funds? Most people believe that is cash. 

There was no mention of the Plunge Protection Team or other secret committees to ensure the safety and soundness of securities markets. Just keep plugging your savings into those 401(k)s, folks, and let the experts handle it.

Cyrptoland is a little different. “This is a 70 vol asset, 80 vol, or whatever it is. What that means is that—forget what the volatility is, this is what freely trading markets look like. We haven't seen what freely traded markets look like for, I don't know, a decade or so,” Nakamura told Farley. “There's no Chairman Powell that needs to come out and announce something for you to put your capital to work. Free markets will do that. That was on display today. 70 vol assets don't exist except for here and this is what 70 vol assets behaves like. If there is a value proposition behind it, you will see investors take advantage of it.” 

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