"We Don't Need Custodians Anymore"
Believe it or not... that was said by BlackRock CEO Larry Fink. Dissecting Fink's Fox Business appearance. Plus, a new short report worth reading and a look at HSEP.
I honestly don’t know how to feel about all of this BlackRock BLK 0.00%↑ Bitcoin stuff. As I laid out in June shortly after the ETF application, I’m just not totally sure BlackRock owning a large amount of Bitcoin is actually good for the utility story long term.
If you want Bitcoin to be “Digital Gold” and simply benefit from ‘number go up’ as the dollar inflates away, this is great news. If you’re a self-custody maxi who wants BTC to actually be used as borderless settlement layer, this is probably less exciting.
Imagine my surprise then when BlackRock CEO Larry Fink said “we don’t need custodians anymore” during an interview with Fox Business earlier this week:
Now here’s the caveat; on this custodian obsolescence point (a point which I feel like I’ve made numerous times on Heretic Speculator)… Fink made this statement when talking about blockchain as a technology, not necessarily Bitcoin itself. This is an important distinction to make because if BlackRock has its way, the company will have a spot BTC ETF with a whole lot of coins under custody at Coinbase COIN 0.00%↑. These are not coins that would be “circulating” or used in settlement. Like Gold, “Bitcoin is an international asset.” Fink’s words not mine. It’s all very interesting and I’ll leave it at that…
Before we jump into some broader market thoughts, I wanted to give a quick cap tip to Edwin Dorsey over at
. Yesterday, The Bear Cave released Problems at Applied Digital (APLD) - it’s a very well-researched short thesis on Applied Digital APLD 0.00%↑:The Bear Cave believes Applied Digital relies on puffery over substance and is a perfect case study on our market’s bizarre underbelly of reverse mergers, microcaps, and shell companies. - Edwin Dorsey
If this company sounds familiar, it’s because it was a name that I have covered a handful of times both here and on Seeking Alpha back when the ticker traded in the $2 range. I’ve since alerted people (twice) that it might be wise to take profit. In any case, check out Edwin’s work. It’s very good.
Market Musings
It’s actually been a very busy week for the Heretic Speculator Equity Portfolio and I’ll detail the moves in a moment. First, I believe we’re very overdue for a correction in the broad equity market and I’ve put on some trades based on that thesis. This morning we received a new jobs report from the BLS. The headline number was 209k jobs added in June. Here’s a really interesting nugget from the report:
The number of persons employed part time for economic reasons increased by 452,000 to 4.2 million in June, partially reflecting an increase in the number of persons whose hours were cut due to slack work or business conditions.
Uhm. Wow. A 12% rip in part time employees for economic reasons? Interesting. As for the stonk market, I see indications of exhaustion technically:
On the S&P 500 I’m tracking a bearish RSI divergence in the daily chart as well as weak volume and a MACD that foretells a possible decline. Furthermore, US debt rates are spiking:
Not only is the 2 year flirting with 5%, but the 10 year yield is breaking out (above chart). When equities look overbought (as they do now) and short term bonds pay 5%, I don’t think a rotation is out of the question. How I’m playing this is very simple, and no, I’m not just sitting in cash. I’m actually getting a bit more aggressive…
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