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11 min read 2024

2024.06 - Pressure

TLDR: The ETFs are quietly creating steady buy pressure that has already eaten up more BTC than Microstrategy. When "cheap" BTC runs out, price will jump and the circus will come to town. Are you ready for it?
2024.06 - Pressure

IMHO

It's been a month since the Bitcoin ETFs started trading. What's the score?

First of all, they are not slowing down.

Second point, they have been unusually active:

The net result is, this has been the most successful ETF launch ever —by a wide margin.

If you took a snapshot of the first month of all the ETFs launched over the past 30 years (more than 5,500), the new ETFs take 4 out of the top 25 spots (by assets), including 1st and 2nd place.

Credit: Eric Balchunas

When measured in Bitcoin, the ETFs are no less impressive, and have now overtaken MSTRs holdings (I personally still like MSTR better than any ETF)

IF, THEN

One of the interesting aspects of the ETFs will be the "algorithmic" (passive) inflows which are only about to start.

For example, Fidelity just added between 1 and 3% of Bitcoin allocation to some of it's other "General" (non-Bitcoin specific) ETFs.

As this grows more common —which I absolutely believe it will, because the math works out beautifully— we will see "algorithmic accumulation" drive two novel phenomena:

  1. Growing passive inflows: This will probably be slow-moving money, but once a portion of the funds get pointed towards Bitcoin that will be large and consistent buying pressure
  2. Rebalancing: The counterpart will be that these funds will re-balance quarterly as price appreciation grows their BTC holdings beyond their allotted percentages, so the price action might look different to that generated by rabid leveraged degens + hodlers (both of which will still be in the market)

Not too surprisingly, this buying pressure pushes price upward:

therationalroot
10k BTC net inflow to ETFs in a single day. #Bitcoin price showing high correlation with ETFs’ flows. Supply already tight, NGU!

Meanwhile, interest in Bitcoin —as reflected in US Google searches for "Bitcoin"— remains rather muted:

Wat mean?

The show hasn't even started yet. People outside BitcoinTwitter still don't give a rat's ass about BTC while the ETFs are steadily, quietly vacumming all of the low-hanging supply.

Bitcoin News

MiSTR Gigachad

Microstrategy pivots to the first public Bitcoin Development Company

Market seems to like.

Random

This is one of the more interesting speculations I've heard on why Satoshi may have been an NSA insider (which would not surprise me one bit). It has to do with his choice of randomizer…

Mining Police

The US government (through the Energy Information Administration, EIA) is trying to extract a metric ton of information from miners in a gross display of overreach.

Some miners will surely comply without a peep, but not the ones we've spoken to. The good thing about this pointless posturing is it will drive the further decentralization of mining, away from US territory.

The EU seems intent on knocking itself out the Bitcoin race as well.

Make The Future Together

Fortunately, governments are not their people. Forward looking companies —like Bayern Mitte Bank— see opportunities in embracing a Bitcoin strategy.

Krypto News

"Crypto" can be lethal to your portfolio

Yield

The mirage of "yield" was one of the big drivers of the latest crypto-meltdown, the other being the GBTC "widowmaker trade" discussed in previous editions.

These phenomena were not only paired into both sides of a singular fraud, they were both fueled in large part by Barry Silbert's Digital Currency Group (DCG).

Yes, this is the same DCG that helms Grayscale's Bitcoin ETF —which has been hemorraging Bitcoin since the ETFs opened.

If you want the full breakdown of DCGs shennannigans, this —48 post long— thread by Vijay Boyapati lays it out well:

Wen moon

Travis Kling is in a similar category to Arthur Hayes in my mind. Sharp dudes with a deep understanding of Bitcoin, crypto, finance and trading.

I rarely agree with everything they say, but I do pay attention every time they say something. This was a good interview (he did a similar, subsequent on with Pomp):

In it he expands on his recent, controversial thread, poetically (and accurately) titled:

"A Lack of Pretense That Any of This Shit Does Anything or Will Ever Do Anything"

My TLDR:

  • Bitcoin has de-coupled from "crypto", playing in a different pool now.
  • BTC doesn't have enough "meat on the bone" to interest Crypto VCs or degens, "20x? pffff, we're looking for 9,000x"
  • Shitcoins won't solve anything. They'll pump anyway, because people today are driven (and addicted) to gambling
  • One or two shitcoins (which you could buy RIGHT NOW) will pump insanely, life-changing gains if you get the timing right. No clue which ones, good luck finding them.

As if on queue, five days after Travis posted his thesis, Solana went down for 5 hours —which would be inadmissible in any serious chain but is a rather frequent occurrence in Solana.

How did price react? Up of course!

Veritcal green line on the chart is the day Solana went down

Reminder: Bitcoin is for wealth accumulation through saving, crypto is for high-risk gambling.

Fiat News

Define Long

Uncle Jerome admits to being worried about US debt "in the long run". Considering he's 71 years young, one has to wonder what "the long run" means for him exactly.

Billionaire Stanley Druckenmiller paints a more precise time context:

If you'd like a visual of debt interests historic overtaking of defense spending, here you go:

Bonds

High-leverage hedge funds trading bonds seem to be eligible for bailouts now. I'm sure that's a great relief for everyday americans.

Dot-Com Vibes

Having lived (and invested) through the dot-com bubble, I'll say that while I'm bullish Nvidia in general and am confident they'll keep doing extrordinarily well, these prices are insane.

With the magnificent 7 propping up the market, the S&P soars to new ATHs

The Quickening

Small banks are not having too much fun though, seems they may have some indigestion between their Bond and Commercial Real Estate losses

But never you worry, the march towards TotalBank moves steadily on.

CRE

I've been saying/showing US Commercial Real Estate is in big trouble for a while now, so this is not new. So why's Hellen yellin'?

Maybe because the (considerable) pain in CRE is traveling outside the US borders.

As he watched CRE implode, Joe noticed his bag of popcorn was kind of light. I swore this was a deepfake at first.

Dystopian News

Don't Hate the Game

AI scams are not coming. They are here, and they will be getting ever-more sophisticated.

We are all in for a wild ride.

Mandatory

Resist the draft, get your funds seized auto-magically. So practical!

Price News

50

Last time we hit $50k things were looking very different. Buckle up.

Bitcoin Surfing

Bitcoin is ready to play in the water after a LONG slog through dry territories. Water level ($35.7k) is finally above the Sand level ($35.1k) amd BTC jumped off the Board (44k) to celebrate.

Dip Fishing

In a remarkable week, price jumped from the $42k to the $50k vicinity, demolishing resistances at $44k and $46k

Calm Chart

February now proudly Green. Hard to imagine it flipping red.

Published by:

₿ Coach

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