2021.12 - Patience
TLDR:
Bitcoin favors the patient. The most difficult part of investing in Bitcoin is sitting on your hands and doing nothing. HODLing is a decision you make every single day —sometimes you’re fighting back fear, other times greed and surprisingly often boredom. The profits are in the waiting.
THE STANCE
My personal opinion on where the ball might be heading.
I get that markets are hot and people are anxious to find the next great trade that’s going to 1000x and make them rich with a $100 investment.
This is not that.
Bitcoin is the first time in human history where we see the base-layer of money being upgraded in real-time. It’s like switching your money to a new Operating System. The best part: it’s opt-in, Bitcoin is not being forced upon anyone.
The reason it’s still such a huge opportunity is because it’s still fairly complicated and not everyone understands it. Like someone said:
Bitcoin’s price is a lagging indicator of humanity’s understanding of money.
There is still a ways to go and it will not all be smooth sailing. But if you have any understanding of money and how broken the current system is, you know that Bitcoin is among the most hopeful news in a world gone crazy.
All you have to do is accumulate as much as you can, store it safely and wait. It sounds easy, it ain’t. After crossing the 1 Trillion mark Bitcoin has entered new territory, but that doesn’t mean the waters won’t get choppy.
Steel your nerves by educating yourself, build your conviction by understanding what problems Bitcoin solves and what enemies it’s up against. Make no mistake about it, buying Bitcoin is stepping into one of the most important battlegrounds of our time, casual tourists may not make it.
Your weapons are knowledge and patience. Master them both.
LONG BITCOIN
Recent news that keeps me bullish on Bitcoin —"long / bullish" means you have the expectation something will rise in value.
Trading Teslas for Bitcoin
Elon Musk made some waves this week with the announcement that you could now buy Teslas using Bitcoin.
The most bullish part of the announcement however, came in the second tweet:
Tesla is using only internal & open source software & operates Bitcoin nodes directly. Bitcoin paid to Tesla will be retained as Bitcoin, not converted to fiat currency. —Elon Musk
This is a clear signal that this was not a gimmicky move to attract Bitcoiners but a genuine interest in the asset. More companies will follow suit.
US Bitcoin ETF
The race for a US-based Bitcoin ETF keeps heating up. There were seven different groups waiting for authorization And while previous applicants were mostly smaller, newer firms, the new entrants are huge and have a lot of pull with regulators.
In this context NYDIG (which has already applied for a Bitcoin ETF) announced they will be lowering fees for their services.
What this all suggests is that several ETFs may be approved at once, lest the regulators be accused of king-making, and competition among them will likely be intense. Who will win? You.
Cryptucky
In a pleasant surprise —given the frequent and incorrect “crypto-mining is evil” rhetoric in the MSM— the state of Kentucky is actively seeking to put its abundant energy to good use by attracting crypto-miners:
The realization of the benefits of Bitcoin mining is only beginning, but it will make for a fascinating race with positive ramifications across several different industries and fields.
Soros. Hodler?
In a recent interview with Dawn Fitzpatrick, CIO of Soros Fund Management, expressed general “crypto” bullishness on well-founded arguments and chimed in on CBDCs (Central Bank Digital Currencies).
The clip is well worth watching as Ms. Fitzpatrick has clearly done her homework —always refreshing to see— but what I found particularly tasty was her reaction to the question “Do you own Bitcoin?”
There is a real fear of debasement of fiat currencies
—Dawn Fizpatrick
Flipping Brandt
Peter Brandt started trading in 1975 and he has been following/trading Bitcoin since at least 2017. Needless to say, he’s seen a thing or two during his career.
I’ve (mostly) enjoyed following him for a long time. He’s usually very agnostic about what he trades. He looks at the chart, finds a pattern, makes a call —he usually doesn’t seem to care much about the underlying asset.
Recently he expressed dismay over the whole “Laser Eyes” incident (see the Destroyed edition of this newsletter), so I was extremely surprised to hear this from him:
The mark of intelligence is being able to change once mind when presented with new information, I salute Mr. Brandt and celebrate his change of heart.
I hope he gets laser eyes soon.
Billionaire FOMO
Two weeks ago we commented on Norways’ second richest man becoming a Bitcoiner and starting a new company called Seetee. It seems the news provoked a fellow Billionaire to reconsider his stance on Bitcoin, so much so that Spetalen invested in crypto-exchange MiraiEx.
I don’t think this is the last billionaire that will FOMO into Bitcoin as they see their peers making decisive moves into the asset.
CRYPTO WARS
crypto- | ˈˌkrɪpˌtoʊ | concealed; secret.
The monopoly over fiat money will not be given up without a fight.
Block-Clocked
Jack Dorsey testified before congress via remote call. On the background he had a blockclock mini, one of several lustworthy items from Coinkite, a popular Canadian maker of Bitcoin hardware products and accessories:
Jack’s Blockclock was displaying the current exchange rate for one USD in Satoshis or as someone described it “a real-time indicator of the dollar’s fall against Bitcoin”.
The display read “1952” (1 dollar = 1952 sats) and naturally, many were not sure what to make of it. Out of the confusion a new meme was birthed when Data breach hunter turned professional asshat tweeted this:
So far it was all in good fun. Several Bitcoiners (many of them politely) pointed out the reality of the situation to Chris, who then doubled, tripled and cuadrupled down with impressive ACKSHUALLY vigor, while proceeding to block all Bitcoiners and coming close to questioning the very nature of reality itself.
So thanks to Chris, “Moscow Time” joins “Quad 4”, “Boiling the Oceans”, “Open Minded” , “Tulips”, “Rat Poison” and other select nuggets in Bitcoin’s pantheon of eternal mockery. Have Fun Staying Poor Chris!
FTX Arena
The Miami Heat basketball team will now be playing in the FTX arena —the first time a crypto-exchange sponsors a professional team.
As Bitcoin shakes off some of its repetitional taint wider adoption becomes easier. Congratulations to FTX, I hope they don’t use their newfound power to shill shitcoins.
F the FATF
The Financial Action Task Force is one of those obscure organizations that has no official power but wields huge influence. Long story short, they don’t like the idea of not being able to surveil your every financial transaction.
This will be the battleground between financial sovereignty and Big Brother surveillance. Keep an eye on it and choose wisely. Here’s a good analysis on the new guidance.
SHORT FIAT
Recent news that makes me bearish on the legacy financial system —"short / bearish" means betting it will go down in value.
The Steel Bubble
There’s no inflation, but prices of steel, lumber, wire, food and many other basic things keep rising. Must be sorcery, perhaps printing more money would help.
Falling Turkey
As the world watches, the Turkish Lira keeps falling. If you think “that can’t happen here” you should be paying closer attention. Not surprisingly, Bitcoin’s popularity in the country is soaring.
The risk of the government introducing capital controls was also now “elevated”
PRICE DISCOVERY
This is the section where I talk about price with an updated weekly price chart. If this is your first time here, there’s a “how to interpret” guide below the chart.
Back on the board
Last week, with prices around $55k, I wrote that a good spot to buy the dip would be close to $51,100 —because that was where “the board” was and it was likely Bitcoin would “come down and land on the board” (the actual low for the week turned out to be $50,300).
What come next? Impossible to say, but I expect UP soon.
Levels to watch:
The Stratosphere (current price “ceiling”) starts around $91k
The Board (support) is just under $52k
The Water Level (strong support) has been rising and is at $32.5k
Each candle in the chart represents one week
How to interpret the Bitcoin Surfing chart:
Think of Bitcoin's price-action as a kite-surfer:
Bitcoin uses its board to stay above water and wants to catch some air.
When it catches air, it tends to keep rising but if it rises too fast (it's feet no longer touch the board) it can stumble.
If it falls off the board, it tends to keep falling until it regains its footing (may need to touch water or sand for that).
Water and sand arrest the fall and help it push itself back up.
If it goes up so much that it gets close to (or into) the Stratosphere, it will probably crash down all the way into the sand and may need to tap the bedrock level before pushing up again.
