14 min read

Behind Dark Clouds

The neurosis around elections has been palpable and hard to avoid. Looking back from the future these prices will be a blessing. One way or another, Bitcoin's price is about to enter a brave new era.
Behind Dark Clouds

As you are probably aware, US Elections will take place in a few days. I usually don't talk politics but here we are, I'll be brief.

The current climate is familiar to me: supporters from both sides are absolutely positive they're going to win (I'm not immune to this).

The challenger and his supporters are convinced the incumbent will cheat as much as they can to stay in power. Tensions are high.

My personal hope is for a quick and peaceful resolution courtesy of a massive landslide victory (I've seen this happen before recently).

The prospect of a drawn out contested election result would be a grim one.

This is the perfect opportunity to remind you the best investment opportunities are hidden behind dark clouds. If you can see what's behind the clouds you're ahead of everyone else.

"Every decade or so, dark clouds will fill the economic skies, and they will briefly rain gold."
—Warren Buffett

Buffett's recent actions —amassing his largest cash stockpile ever— suggest he's waiting for a buying opportunity.

Jeff Bezos is also going cash heavy.

One example of refusing to see through dark clouds —and there are many— is Dave Ramsey.

A good place to start is the realization that regardless of whether your candidate wins or loses, nothing stops this train.

The ability to kick the can down the road decreases day by day.

There are at least $440 Billion left to borrow… in the next 2 months.

The global context around all this debt is also concerning, foreigners have shown decreased interest in US debt since 2014. A trend that accelerated visibly in 2022 —after the US seized assets from Russia's Central Bank.

The weaponization of USTs plus the prospect of unchecked debt growth has led some countries to accumulate gold instead of USTs for their reserves.

They say when big macro correlations change you should pay attention. I'm going to side with "it's not a coincidence" that gold prices and real yields broke their long-standing relationship after the weaponization of USTs.

If other nations stop buying US debt, that means they stop "importing US inflation" which also means this inflation will now have to be absorbed by US citizens and corporations.

Luke Gromen uses a colorful metaphor to describe the impact of this change (paraphrased): Nations recycling their surpluses into gold instead of USTs is like going from having a neighbor who supports your kids' drug habit to paying for that drug habit out of your own pocket.

Unlike some bitcoiners, I actually like gold and think its a fine asset to hold, but the future will not be built on gold. The best play here is obvious.

So, what's behind the dark clouds?

You know I'm going to say Bitcoin, but this week we got a glimpse of what a future built on Bitcoin can look like, courtesy of Microstrategy, the first Bitcoin Treasury Company.

Before we get into what they're up to its worth noting they were in no way the first corporation to "find" Bitcoin —which makes their journey all the more remarkable.

Coinbase had a very significant time-lead in which it could have established itself as the undisputed leader in Bitcoin holding companies. Instead it announced buybacks and has been overtaken in Market Cap by Microstrategy.

This is worth mentioning because many feel they're too late to Bitcoin, but the reality is your edge is not in your timing, it's in your conviction.

42

During last week's earnings call, MSTR announced they'll be raising $42 Billion (equal mix of equity and debt) to buy Bitcoin over the next 3 years.

Unsurprisingly, the mainstream media cannot see behind the clouds.

I don't find it surprising they don't understand what MSTR plans to do.

I do find it absurd that they don't recognize the results they've already achieved, Schwab gave the worst possible ranking…

Despite MSTR's stock outperforming pretty much everything.

And their bonds doing the same.

I won't try to explain MSTR's playbook in detail, you can find hours of quality analysis online (I'll post a link below).

To see through the dark clouds all you need to know is:

  • MSTR has been successfully building pipelines between Bitcoin and large pools of institutional capital pools that are unable to deploy capital directly into Bitcoin.
  • They're about to deploy their massively successful strategy with size.

In a nutshell, what they've done is "packaging" BTC into securities (like equity and debt) which institutional clients are familiar with and can easily buy. Additionally they're creating a daily buying pressure that substantially exceeds daily BTC issuance at today's prices

Their strategy also drives positive feedback loops between MSTR, its shareholders and Bitcoin.

Not About Trading

If you're still thinking in terms of a good trade, stop. Think again. Or you may wind up like the übergeeks at Reddit who recently fell for this trap.

The key distinction —which Saylor gets— and will allow you to develop the conviction to hodl is understanding you are at the dawn of a superior asset.

Your takeaway is simple:

You still have timing going for you, but you won't for much longer.

If you haven't built up an unshakeable conviction, fixing this is be the best investment you could make right now. The current price reflects massive uncertainty in the markets, putting you in the right place at the right time.

Godspeed.


Bitcoin News

Sweet 16

The Bitcoin white paper turned 16 on Oct 31st. If you haven't read it yet, I highly recommend you check it out.

Slowly turning

As politicians start paying attention to Bitcoin, the narrative starts to shift.

And while most are still uninformed, quality education efforts have been making good progress.

And a few have started coming around and are pushing for adoption.

And in some places they're even celebrating it.

Pensions

One of the more obvious cases for Bitcoin is pension funds —many of which are ironically unfunded. Cartwright is the second Pension Fund to allocate to BTC and I expect to see these numbers grow significantly.

Not Slowing

The Bitcoin ETFs keep breaking records.

Krypto News

"Crypto" can be lethal to your portfolio

Buried Recognition

Even though they buried it, the US Treasury is starting to recognize stablecoins.

Perhaps because they're one of their top clients?

Another Fumble

I've never used Ledger products, even though some friends swear by them. I've seen them make unforced mistakes too many times.

Oh Lord

Another clown pretends to be Satoshi.

Fiat News

Foreshadowing

This is no casual, off-hand comment. Banks huge exposure to underwater Treasuries could end badly. One wonders if statements like these are foreshadowing.

I think the Swiss said it better.

Anxious

Are these pre-election jitters?

I don't have a firm view on the stock-market. On the one hand I feel its very over-priced and due for a strong correction, on the other I see how capital could keep flowing in to escape bonds and debasement.

Take Nvidia, which just overtook Apple as the most valuable company in the world and replaced Intel in the Dow Jones Index. Very impressive…

Yet they're asking to be protected from securities fraud prosecution after their 3rd biggest customer (Super Micro Computer) had their auditor refuse to sign off on their financials.

I'll stick to Bitcoin, thank you very much.

What Jobs

The US expected to add 100k jobs in October, it added 12k. Whoever inherits the presidency, they'll have their work cut out for them.

Dystopian News

For Peanut

The fact that a squirrel and a racoon were killed should not be national news.

The fact a NY judge signed off on officials from the Department of Conservation conducting a 5-hour raid to a private home and killed a couple of harmless and beloved pets of 7 years —based on a complaint by a woman who does not even live in that state— is absolutely scandalous and newsworthy.

The upcoming bull-run will be dedicated to Peanut and Fred

Eat Your Money

One thing that most people miss about the significance of BRICS countries is they produce / manufacture a significant portion of the world's things.

We dismiss them at our peril.

Mission Accomplished

$40 Billion sounds like a lot but at least they got the planet's temperature under control.

Stay Vigilant

As the value of Bitcoin rises, you'll be increasingly reminded to keep a low profile. Might as well start now.

Hopeful News

Price News

Bitcoin doesn't care.

Bitcoin Surfing

Bitcoin jumped to $73.6K almost touching the ATH ($73.79k) before coming back down, just above the Board ($66k). Anything goes pre-elections, let's just sit tight and wait.

Dip Fishing

After quickly breaking out to goose $73k price came back below the $69k resistance. If Kamala wins I could see it dumping down to $56k and maybe even $50k, not a dip I'd like to catch but we'll see if life gives us lemons.


Calm Chart

After a Green October November opens slightly red —not unusual before elections.