⬇️ My Thoughts ⬇️
Bitcoin is not a good collateral for a loan, here's why: 1️⃣ You can only get ≈50% LVT credit 2️⃣ You pay higher interest than on mortgages/real estate-backed loans 3️⃣ You get liquidated from ≈80% LVT So if your strategy is to purchase assets and use them as collateral for loans, you may be better off with real estate: 1️⃣ You can get more than 75% LTV credit 2️⃣ You'll pay lower interest for a mortgage/real estate-collateralized loan than for a BTC collateralized loan 3️⃣ No liquidations when real estate is collateral. If property (collateral value) falls, you may be requested a cure, but forced sales must go though courts.
and there you go 😄 once the short-term suport line was broken, silver's price fell down to another support
silver's current short-term support line is in green it will be touched soon watch it closely!
silver's current short-term support line is in green it will be touched soon watch it closely!
the vast majority, if not all of tariffs set be the US will be removed in the next 4 years latest - by the next US administration. it will be an easy way to mitigate price inflation a bit, and mobilize the overall US economy tariffs are a net negative - i've said it from the very start. it's a lot more obvious now
ILLYA GERASYMCHUK: "There are 60M millionaires and only 281M kg of gold. Do the math"
the majority of real estate purchases in Portugal are done with credit. moreover, each property itself can be used as a collateral to get more credit - at least 75% of the property's value. so not only you can purchase the property, earn a yield via rents, but also get a credit/loan for 75% of value of the property in Portugal, ≈90% of all credit/loans against real estate, go into investing into more real estate. so each collateraized property, can contribute ≈2x of its value as buying pressure for the real estate market as a whole (1x when the property is first purchased, and 0.75x-1x when the property is used as collateral to get a loan against it) so effectively real estate itself is driving real estate prices up. banks happily finance real estate acquisitions, and lend against real estate collateral. then, most of that credit goes into purchasing more real estate, thus pushing the prices up so the main drivers behind increasing real estate prices in Portugal are: the real estate itself, i.e. the property itself funding rate/cost of credit (highly influenced by ECB policy rates) low relative transaction volume/market cap, making it easier to move the median the first two points are generally universal across the globe. i've previously written an article about what makes real estate such a special asset from the point of view of financing. you can read it here: https://illya.sh/threads/@1757632740-1.html the relatively low total transactional volume, which has increased almost x3 in the past decade - makes it "easier" for buying pressure to push the housing prices up of course, other factors contribute as well. Portugal is highly demanded area for cultural and geographical reasons - i.e. locals are welcoming and Portugal has a huge coastal area. there is also high inflation, regulatory challenges and supply chain limitations the bottom line is that real estate purchase and rent prices in Portugal will continue to increase over medium-long term
portugal golden visa real estate investments are less than 3% of total housing transactions portuguese real estate market volume is ≈30B€/year, golden visa purchases accounted for ≈556M€/year 3% of total volume of the housing market is unlikely to be the primary driver of the national median prices increase so next time someone tells you that one of the main drivers behind increasing Portuguese real estate prices are golden visa investments - their argument is likely to lack substance
if you buy a car with Bitcoin, you're still subject to capital gains tax under the US law cryptocurrencies are property - so you're taxed on the USD value of the car at the time of purchase minus the cost of your original crypto purchase (so you're only taxed on the gain/profit) so if the processing fee of a payment with Ethereum is larger than it would be by selling Ethereum for USD first (e.g. transfer ETH to an exchange --> sell --> transfer to your bank account), then you end up paying more with Ethereum than you would with USD. it make sense, because you'd be removing an intermediary (i.e. you sell ETH for USD yourself) in either case, the seller receives USD for the car, not ETH or BTC. the intermediary most likely doesn't keep ETH/BTC on their balance sheet either, they just proxy your order to the market and charge a spread
central banks have rejected holding Bitcoin in their reserves including Fed, ECB, PBoC and many others what would even be the purpose of a central bank holding BTC on their balance sheet? so that they can stabilize the value of the currency against Bitcoin? what would be the practical benefit from it now? cross-border crypto trade in non-stablecoins is negligible. Bitcoin is extremely volatile, which would make central-bank issued currency more volatile - this goes exactly against the direct mandate of most central banks - price stability. a more volatile currency will also lead to a more volatile bond market, which will make government funding more volatile, and thus a high risk/uncertain economy and i'm not even going to touch on the security risks. okay, maybe briefly 😄: ➖ governments are one of the only entities that can realistically perform a successful 51% attack on Bitcoin. well, with central banks owning BTC will make such attacks much more attractive - including at the geopolitical level. the same goes for denial of service family of attacks ➖ what if the central bank's wallets get hacked/compromised? i'm not talking about quantum computers breaking RSA, but operational level mistake or compromise so for the next 10 years, I view central banks holding Bitcoin on their balance sheet as a negative sign for their currency. of course, the protocol and the bitcoin network will evolve/change over time, and with so may my stance i believe cryptocurrencies, and more specifically distributed layer technologies/blockchain architectures can bring immense value to our financial system as a whole, but that doesn't mean that we should have central banks speculating on that today. it makes much more sense to increase gold reserves instead
virtually every corporation that accepts Ethereum/Bitcoin for payments doesn't actually process the payment in crypto they immediately covert it to USD or another FIAT, and not actually hold the BTC, ETH, etc the convertion is generally done via an intermediary, so the company you're buying never even touch or care about the crypto asset. they want the same government-backed currencies that we use now the intermediary will also generally charge a fee, around ≈1% of the transaction value. so buying directly with crypto is likely to be more expensive than directly with FIAT. if you just sell the crypto for FIAT and pay directly in USD, EUR, etc it will likely be cheaper. so what's the point of paying more? don't be fooled by headlines or articles that suggest otherwise
portugal golden visa real estate investments are less than 3% of total housing transactions portuguese real estate market volume is ≈30B€/year, golden visa purchases accounted for ≈556M€/year 3% of total volume of the housing market is unlikely to be the primary driver of the national median prices increase so next time someone tells you that one of the main drivers behind increasing Portuguese real estate prices are golden visa investments - their argument is likely to lack substance
when mega caps like gold explode by ≈50% in a year and you don't think that that's a warning sign for US equities/risk asset - you probably should look back at history 😄 Bitcoin and Intel have do have one thing in common - direct monetary intervention from the US government
How Banks Create Money When Purchasing Assets I have previously written about the unique legal powers given to commercial banks and credit institutions in general, that allow them to create new currency, thus increasing its supply. For banks, this also extends to their open market operations, such as when they buy securities and other assets from the open market. If the bank’s counterparty happens to be a non-bank, or more generally an entity without an account at the central bank, then the bank will create new currency to pay for that transaction. I described this in my thread/article titled "when a bank buys an asset from a non-bank it creates broad money": https://illya.sh/threads/@1755863018-1.html I received a question about it via e-mail, so I’m writing a follow-up with clarifications. The flow that I was describing the thread linked above is what happens when a bank buys an asset from a non-bank. Let’s assume the bank ABC wants to buy an asset from you. Let’s forget about US government bonds for now, let’s say the bank wants to buy 100 shares of Tesla from you. The current market price for 1 Tesla share is ≈$450, so the ABC bank would pay you $45000 and you will give the bank the 100 shares. Let’s also assume you have an account in that bank (this is not mandatory!) Let’s say that right before the bank makes a purchase from you (a microsecond before that transaction/sale happens) there is a total of $1 million ($1000000) of US dollars in circulation. The moment right after the transaction is made, and the bank crediting your account with $45000, the total money in circulation would become $1 000 000 + $45000 = $1 045 000. The main point here is that those $45000 didn’t exist in circulation before. They were not taken from someone else’s account, nor from internal bank reserves. Those $45000 were created “out of thin air”, and that money was credited into your account. I say “credited” because it’s from the point of view of the bank - your deposit account at the bank is a liability to the bank - it sits on the liabilities side of the balance sheet - a credit increases liabilities. Now, I referred to “money in circulation”, but I actually meant Broad Money. There is another form of money - called Broad Money. There is a great paper from the Bank of England that describes them, alongside how commercial banks create money: https://www.bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2014/money-creation-in-the-modern-economy.pdf . But in short, Broad Money is the money available for use by the larger economy (individuals, companies, etc), while Base Money is physical currency and currency held in reserve accounts at the central bank - the reserve accounts portion doesn’t touch the broader economy directly. If instead a bank ABC purchases an asset from another bank DEF - then the total money does not change. The bank ABC would just debit their reserve account at the central bank and credit the reserve account of the bank DEF. So money moves accounts, but total quantity does not change. In the same manner, when a commercial bank buys bonds directly from the government, there is no creation of “new money” - the money moves within the central bank’s reserve accounts. The general rule is: if the transacting entities have reserve accounts in the central bank the transaction is made within the central bank’s reserve accounts. Commercial banks, governments and sometimes select financial institutions (like in the US) have reserve accounts at the central bank, so transactions within them move Base Money The following article on how commercial banks work will be very helpful to understand how they operate and create money: https://illya.sh/threads/@1754426330-1
you can read the full article/thread explaining why September is generally a bad month for Bitcoin and other cryptocurrencies here: https://illya.sh/threads/@1755867104-1.html
my article on repo rates and BTC price was referenced on bitcoin.com apparently it's been there for a month, but i only noticed now it's a short read - and explains the negative price pressure that quarter-ends, and especially September bring on the price of liquidity sensitive assets like Bitcoin it give you a concrete perspective on the current cryptocurrency price dump, even with decreasing funding rates
my article on repo rates and BTC price was referenced on bitcoin.com apparently it's been there for a month, but i only noticed now it's a short read - and explains the negative price pressure that quarter-ends, and especially September bring on the price of liquidity sensitive assets like Bitcoin it give you a concrete perspective on the current cryptocurrency price dump, even with decreasing funding rates
even if silver goes down to $30/oz it will still be in an uptrend 🤯 (weekly chart)
in a 6 months timeline, gold's current price dip is a buying opportunity
illya's threads & illya's thoughts are also on substack i don't actively use substack, but i also import my thoughts & threads RSS feeds there illya's threads on substack: https://illyathreads.substack.com/ illya's thoughts on substack: https://illyathoughts.substack.com/
previously, there was only a web version at https://illya.sh/threads/ now there is also RSS, just like for illya's thoughts
added RSS feed to illya's threads/articles: https://illya.sh/threads/feed.xml so now you can subscribe my longer-form articles directly in your RSS reader
added RSS feed to illya's threads/articles: https://illya.sh/threads/feed.xml so now you can subscribe my longer-form articles directly in your RSS reader
(silver) a breakdown below the bottom orange line will likely push the price further down, at least to ≈$43.35 so now, watch the orange trend line/triangle 👀 1h candles
silver's key short-term trend support is the green light from the chart we can only talk about potential pullbacks or consolidations once it's broken watch it closely 👀
silver and gold move differently, which why I generally refrain from referring to these commodities in conjunction, even though a lot of what I write about gold also applies to silver both, gold and silver are currently great investments, but they exhibit a different risk profile silver is a lot more volatile, meaning its moves are amplified in both directions if you’re planning to hold in the treasury/balance sheet it can play a big difference, as you’ll generally be less liquid with your silver holdings - in the sense that you may find it in a significant pullback from a previous high if you try to liquidate it ad-hoc, especially short-term
So the US government funds & contracts OpenAI, buys 10% of Intel, gets a stake in NVIDIA and places Oracle to oversee TikTok Then, these companies invest one into another That’s a bubble within a bubble 🤯
silver's key short-term trend support is the green light from the chart we can only talk about potential pullbacks or consolidations once it's broken watch it closely 👀
expect silver to correct down by ≈18% if the correction starts at the current level, that would bring the price down to ≈$36.22 but you may want to place orders above if you want to enter, somewhere from $37.5
gold moves up by ≈13% on breakouts, thus ≈$4000/oz gold in November 2025 this means that the current move would bring the gold price up to ≈$3978, which should happen at the start of November, around November 4th 2025 so far, gold has completed ≈6% of the current move - which means there's another ≈7% to move up from the current gold price of ≈$3715 this makes ≈$4000 the top of the next consolidation range. once that price is approached - expect a larger pullback, and potentially a longer consolidation phase, which could last ≈90 days. this means that after the top of the current move is hit (≈$4000) you may have to wait for another ≈3 months before a new all time high it's important to note that the top of the target range is close to $4000, so gold may not cross $4K before the aforementioned pullback. this means that it may take gold another 4 months before gold firmly sits over $4000/oz
