The Bitcoin Review was the previous incarnation of my newsletter.
2021.37 - Change
Billionaires Bitcoining • Institution Bitcoining • Oh Whale • ETF Pressure • Satoshi Revealed • All Aboard • Papers Please • The Cookie Jar • Rent
TLDR:
Writing this newsletter every week for a year has been quite the experience. I will be making some changes. Thank You for reading and drop your email if you want to come along for the ride.
THE STANCE
My personal opinion on where the ball might be heading.
It’s been one year since I published the first edition of this newsletter, and a little more since I started helping others understand Bitcoin (which was well under $20k at the time).
A lot has happened in the span of this particular year and perhaps the most interesting things to see have been those that did not change through the turmoil.
As my conviction in Bitcoin keeps growing, my understanding of how to help others has evolved.
This will be the last issue of this newsletter on this format, if you want to learn about what’s coming next drop your email by clicking on the button below
LONG BITCOIN
Recent news that keeps me bullish on Bitcoin —"long / bullish" means you have the expectation something will rise in value.
Billionaires Bitcoining
Ray Dalio has been playing footsie with bitcoin for awhile now. He recently announced a small position but was still concerned that governments could stop it. I’m not sure if that’s changed but his recommended allocation to Bitcoin just got a zero added to it.
Howard Marks put in a solid appearance at The Investor’s Podcast. He explained that in 2017 —when Bitcoin first came to his attention— he came out strongly against it. But having spent some time with his son (who’s pro-Bitcoin) during the pandemic made him realize he didn’t understand it well enough to have a strong opinion. That is a skeptic stance that I can respect.
Institution Bitcoining
As is now customary, this week saw a few announcements of large institutional interest / position taking around Bitcoin.
Oh Whale
The market is moved by whales, but don’t take my word for it. In this long article David P Ellis —who has spent a lot of time analyzing BTC flows between different caliber players— he explains that whales still have an outsized effect on the market.
Well, the big players are buying. Are you?
ETF Pressure
One of the long expected detonators for a spike up has been a US-approved Bitcoin ETF, there are roughly a dozen queued up asking for authorization. You should have built your main Bitcoin position before this gets approved.
Satoshi Revealed
Hungary revealed the first public statue honoring Satoshi Nakamoto. Love to see it.
All Aboard
The onboarding process in El Salvador continues, it is heartening to see this precedent laid down.
CRYPTO WARS
crypto- | ˈˌkrɪpˌtoʊ | concealed; secret.
The monopoly over fiat money will not be given up without a fight.
Papers Please
SEC’s Gary Gensler wats crypto exchanges to register with the SEC. He has already hinted that they will apply pressure on them to de-list tokens that can be considered securities. Bitcoin is considered to be safe from this, and only a small handful of others, (your guess as to which is as good as mine).
SHORT FIAT
Recent news that makes me bearish on the legacy financial system —"short / bearish" means betting it will go down in value.
The Cookie Jar
No one likes to be Captain Obvious but this is not OK.
Several Fed presidents made investments on entities that the Fed proceeded to bail out. Now they are selling them “because ethics”.
Criminal? Yes. Novel? No. Consequences? Also no. Perfect top signal? Probably
Rent
“Why yes Karen, rents ARE rising in all 30 US metro areas, and yes it IS the first time they hit a double-digit rise but NO, inflation is under control and temporary, why do you ask?”
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.
Guest Charts
Enjoy these two charts. I found the first one particularly intriguing as it suggests a higher floor than I would have expected (I would have said $30k)
This one just speaks to the fact that patience is key when buying Bitcoin. Yes, it can dip but we are currently not at the frothy levels where it will take years to recover.
Bitcoin Surfing
Price kept pretty close to the Water surface this week (currently $45.9k) and the Board has come up to meet price, hopefully giving it some footing.
The Sand level (at $17.1k) is slowly rising towards the previous all-time high. I think $20k Bitcoin is gone forever.
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.
Dip Fishing
Did you set a dip-fishing order at $44,500 last week?
If yes, good for you.
The fast average (blue line) is still below the slow average (red line) which means we are still in technically bearish territory (which we entered last week, see red circle in the closeup).
The markets seem to be somewhat on edge as China’s Evergrande meltdown continues to evolve. We’ll see if the Chinese government is willing and able to contain it, if you’re feeling bold you may want to set a buy order around $40k this week.
The Calm Chart
September looking pretty calm so far, perhaps gathering strength for end-of-year fireworks?
Take two deep breaths as you drink in the calm chart.
The strongest hands are built TOGETHER.
I help smart, busy individuals and their families develop the foundational understanding to invest in Bitcoin safely and confidently.
All it takes is 5 conversations.
DON’T TRUST, VERIFY
Always DYOR (Do Your Own Research)
I am not a financial, tax or legal advisor. All of my content is intended for educational purposes and should not be construed as financial advice
2021.36 - Official
Single Issue • Legalization • Ich Bin Bitcoiner • Institutions Bitcoining • Mining Fever • SEC Won’t Let Me Be • Massive Stones • Tether Me This • Evergrande • NFW • Worthless! • Unpack Deese • Vaxxed Money?
TLDR:
On Sep 7,2021 Bitcoin became legal tender in El Salvador. The process was rushed and far from flawless, but breaking through the fiat monetary barrier required momentum above all else. ¡Felicidades El Salvador!
THE STANCE
My opinion on where the ball might be heading.
At this point, chances are you’ve already heard that Bitcoin dumped on its first day as legal tender in El Salvador (where “dumped” means to levels last seen one month ago).
It’s amazing how a tale of struggle can be seen in a single, solitary candle.
This simple graph is a picture of history being made.
September 7, 2021 - The El Salvador Candle.
Perhaps you even read some first hand accounts of Bitcoin’s first day as legal tender in El Salvador, like how McDonalds now shows prices in sats .
Or, if you don’t spend a lot of time on Bitcoin Twitter, perhaps you missed it and haven’t read any first hand accounts of the transition yet.
Having a nation state adopt a new currency is no small matter under any circumstance. Doing so while said adoption depends on a relatively nascent technological layer on top of said currency was a bold —and yes, we can say somewhat reckless move. But the first mover was going to have to take a plunge.
And yes, of course there were hiccups the first day and much remains to be done, etc etc.
But the real test for Bitcoin in El Salvador was singular: Don’t fail.
And that it did not.
Whether you spent the day in celebration or blissfully unaware of what was happening, something has shifted ever so slightly in the Matrix. The full consequences of September 7th will not be immediately obvious and may take decades to play out.
But the game has officially changed.
Welcome to Bitcoin, Nation-State Adoption Edition. Buckle up, it’s bound to get wild.
LONG BITCOIN
Recent news that keeps me bullish on Bitcoin —"long / bullish" means you have the expectation something will rise in value.
Single Issue
There’s an emerging phenomenon that only a few politicians around the world are starting to recognize. The single-issue voter, where that one issue is Bitcoin. Expect this to be a global, clearly identified political force in the next few years.
Legalization
On the heels of Bitcoin becoming legal tender in El Salvador, several countries are moving towards clearer frameworks for Bitcoin to be legally recognized in their countries.
Panama is also working on introducing crypto-friendly legislation:
Ich Bin Bitcoiner
Germany now outpaces the US in total number of Bitcoin nodes. There’s really very little excuse for not running a Bitcoin node these days, it’s neither very difficult or expensive.
Institutions Bitcoining
As is becoming custom every week, we keep hearing of large institutions (and/or their executives) staking positions in Bitcoin
Mining Fever
Bitcoin mining is starting to be taken seriously by big, forward-looking players in oil and gas. Eventually everyone in the industry will want in on the action, but given the current chip scarcity and across-the-board supply chain challenges, it will probably be a while before miner production outstrips demand.
If you want to learn more about the chip shortage here’s an excellent Verge interview on with Harvard professor Willy Shih.
CRYPTO WARS
crypto- | ˈˌkrɪpˌtoʊ | concealed; secret.
The monopoly over fiat money will not be given up without a fight.
SEC Won’t Let Me Be
It seems the SEC is going after Coinbase on account of their lending product. I’m not a huge fan of Coinbase personally, but it does seem an odd choice given other, seemingly more egregious, players out there.
CEO Brian Armstrong was not amused and fired off an interesting thread.
Massive Stones
Say what you will about Bitfinex, they are undeniably ambitious and bold.
The exchange will give its users the ability to invest in tokenized securities (like bonds or capital raises), that small to mid-sized companies will list directly with the exchange, in some sense offering them an alternative track to “go public”.
This is different to investing in tokenized versions of already-public stocks (which is offered by other exchanges).
This tweet links to an article that describes the platforms ambitions, worth reading if you are interested:
““We are basically trying to eat the lunch of London Stock Exchange and other traditional stock exchanges” ”
The Bitfinex platform will not be available to residents of the US and other jurisdictions.
Tether Me This
Speaking of Bitfinex, regulators have had Tether in the crosshairs for a while now and the long-anticipated stablecoin crackdown (with Tether as the main course) by US regulators seems to be growing closer.
Much ink has been spilled on just how backed/unbacked Tether might be. We already know it’s not backed 1 to 1 by USD as they initially claimed, but rather, if their official statements are to be believed, by a combination of financial instruments with varying degree of risk. The potential impact a Tether implosion could have a significant effect on the crypto market in general and on the price of Bitcoin in particular. Regulators are concerned that it could spill over into traditional financial markets and want to take a closer look
Perhaps this review will finally rip the band-aid off and we’ll get to find out what’s behind the curtain, but regulators may have to stand in line…
Evergrande
There are unsubstantiated rumors that Tether owns a significant amount of debt from Evergrande, a recently collapsing Chinese real-estate giant.
It the rumors are true, then Tether’s backing (already in question) just became substantially weaker.
Regardless of the potential Tether link, the Evergrande news is worth keeping in your radar as its downfall could spill over to other sectors and markets.
NFW
NFTs seem to be all the rage lately and while the idea seems cool, the reality under the hood is a bit more sketchy.
The basic premise of an NFT is that they allows a creator to assign digital ownership to things, be they physical or digital.
Their use with digital artwork/collectibles theoretically renders them scarce, so even if anyone can easily make a copy of your JPG you acquire the bragging rights for having ownership of the original copy.
Theoretically, they can also be used to “tokenize” IDs, certificates of ownership (say the deed to your house) and many other applications that will be truly interesting if someone can figure out how to actually make them work.
A full treaty on NFTs is way beyond the scope of this newsletter but in my eyes this is one of those “sounds great on paper, doesn’t quite work that way in reality” type of situations
But clearly, I’m an idiot who doesn’t know what he’s talking about because someone just bought this crappy clipart for over 2 million dollars:
The market can’t be wrong (right?).
To add insult to injury, other “collectors”, like Tron’s Justin Sun paid six-digits for variations of the same JPG
One of my favorite examples of NFT mania has to be the destroyed diamond. It all started innocently enough with a tweet by PhD economist Tascha:
Technically, she’s right. The NFT itself didn’t change, the underlying asset did. In my view the NFT remains equally worthless throughout the exercise. So, I guess it depends on whether one is viewing the NFT as a work of art or as a type of ID for the diamond.
In any case, the tweet generated a stir including some, ahem, “pushback” from Bitcoiners.
Undeterred, Tascha decided to try out her hypothesis and purchased a $5k diamond and attempted —in a precious moment that perfectly encapsulated this whole exercise for me— to destroy the diamond …with a hammer. Brave and stunning.
After the shocking discovery that diamonds are really hard, she proceeded to go looking for help and claims she finally managed to get someone to do it (for some reason she didn’t film the destruction itself, which I thought was the whole point) and proceeded to shred the diamond’s certificate of authenticity and made an NTF from the remains.
For all the fun I could poke at Tascha, she’ll be crying all the way to the bank. At the time of this writing, the NFT of the destroyed $5k diamond was priced at above $140k.
“Ohmygawd it turns out that destroying the diamond actually added massive value to it!, or was it the tokenization that did it?”
If you want a better understanding of why honest NFTs (ones that can deliver on their promise) are not quite here yet, I highly recommend this thread by Gigi:
In the meantime, you can bet I’m going to spend sometime crafting some NFTs, what should I destroy?
Worthless!
Speaking of worthless things, Billionaire John Paulson made some comments about crypto that I believe were on point —if you understand that Bitcoin is not crypto.
“Cryptocurrencies, regardless of where they’re trading today, will eventually prove to be worthless. Once the exuberance wears off, or liquidity dries up, they will go to zero. I wouldn’t recommend anyone invest in cryptocurrencies.” —John Paulson
It’s amazing how often negative crypto coverage gets labeled as “Bitcoin” and how often positive Bitcoin news is labeled as “crypto”. Once you see it, you won’t be able to unsee it.
SHORT FIAT
Recent news that makes me bearish on the legacy financial system —"short / bearish" means betting it will go down in value.
Unpack Deese
Bald-faced liar White House Director of the National Economic Council Brian Deese, in a remarkable display of chutzpah proceeded to explain how —if you unpack it his way— inflation is really not that high. I mean, who eats beef, pork or poultry these days amirite?
Vaxxed Money?
Authoritarianism, coming soon to a bank near you…
Please be clear: this is not about your health. The vaccine is simply a topic that musters enough indignation and outrage to serve as a “good enough” excuse to try to push these types of draconian controls forward (hopefully) without the people dusting off the pitchforks. It sets the precedent for authorities to be able to dictate your ability to move, spend, associate and communicate.
Regardless of your vaccination status, this should concern you. Vaccinate your money against authoritarianism by storing it in the one vehicle that governments will not be able to freeze or seize.
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.
Bitcoin Surfing:
Bitcoin pumped as the euphoria of September 7th approached and proceeded to dump promptly on the day, giving back some recent gains.
Looking closer at the Bitcoin Surfing chart, we see price dipped into the water (water surface at $45.9k) and bounced back keeping close to the surface. The board is rising up to meet price ($45.2k) and could provide some support, however a closer look at the Dip Fishing chart suggests we may not be going higher just yet…
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.
Dip Fishing:
Did you catch the dip near $44.5k last week?
If not, you may get another shot this week.
See that thin blue line crossing the thicker red line in the closeup? That’s the 10-day moving average crossing the (slower) 20-day moving average. This is not worrisome but is typically is considered bearish (downward trending).
$44.5k seems to be hold its own as a support though. I don’t expect us to revisit $39.5k soon (unless there’s some scary news) but if you’re feeling lucky you could place an order just above.
Each candle in the chart represents one day.
The candles are “Heikin Ashi” style which means they are based on average prices (this makes upward/downward trends easier to see)
The support and resistance lines are imaginary and arbitrary, drawing them is more art than science and should not be considered authoritative but rather guidelines.
My favorite analogy for Support/Resistance is the frozen surface of a lake: When a price is below the surface it will experience “resistance” trying to cross above it. Once it’s above the surface it will act as a “support”.
The strength of the support/resistance is like the thickness of the ice.
The Calm Chart
So far, nothing extraordinary has happened this month price-wise.
Take two deep breaths and drink in the calm chart. We’re going to be OK.
Each candle in this chart represents one month.
It’s important to note this chart is in Log scale —this means that each “tick” up represents a doubling in price
(ie. the distance between $10 and $20 is the same as between $20k and $40k)
The strongest hands are built TOGETHER.
I help smart, busy individuals and their families develop the foundational understanding to invest in Bitcoin safely and confidently.
All it takes is a five conversations.
DON’T TRUST, VERIFY
Always DYOR (Do Your Own Research)
I am not a financial, tax or legal advisor. All of my content is intended for educational purposes and should not be construed as financial advice
2021.35 - Encore
September 7 • Trust in El Salvador • Dorsey’s Handwork • Moar Mining • All Together? • Revolving Doors • He He Heeyyy • Orange Man Not a Fan • If Only • ApplePay Banned? • Goodbye Oz
TLDR:
The 10 second summary:
Six weeks after hitting $30k Bitcoin is back above $50k Before you know it, we’ll see another parabolic advance. Are you in position for it? Or will you be waiting for the encore?
THE STANCE
My opinion on where the ball might be heading.
Bitcoin is back above $50k and sentiment across the board seems highly bullish. Normally this means degens place a ton of high-leverage long bids and whales force a dip to liquidate them.
But regardless of the short term fluctuations, it should be abundantly clear that we are heading much higher, probably not very long from now.
My perspective is that of a long-term hodler. I don’t concern myself too much with speculating whether “the big pump” will happen this week or the next. I simply know Bitcoin is massively undervalued and sooner or later the market will catch up to it.
Bitcoin returning to $50k after hitting $30k less than 6 weeks ago —with a backdrop of China and other countries throwing as much FUD as they could at it— merely suggests that the time draws near when Bitcoin does its thing and blows everything out of the water again.
If you haven’t started stacking, chances are you’re going to miss this one. I hope you pay attention and be better prepared for the next encore a few years from now.
LONG BITCOIN
Recent news that keeps me bullish on Bitcoin —"long / bullish" means you have the expectation something will rise in value.
September 7
Tomorrow, Sep 7th marks the date Bitcoin becomes legal tender in El Salvador and Bitcoiners are planning on celebrating by buying $30 at the same time on that date. Join us!
Trust in El Salvador
A new trust was approved in El Salvador to support the country’s (optional) adoption of Bitcoin as legal tender later this week.
The funds $150M were repurposed from a $500M loan by the Central American Bank for Economic Integration. Part of the funds will be used to roll out the new Chivo Wallet ATMs as well as incentivize and educate the citizens on using Chivo.
It seems the rollout is provoking some FOMO in a certain Mexican billionaire.
Ricardo Salinas whose group owns (among other things) a large chain of house appliance stores in Mexico called Elektra is apparently working on getting lightning payments up and running in his stores.
Dorsey’s Handwork
Jack Dorsey (CEO of Twitter and Square) has been living up to his word of helping push Bitcoin forward. His teams are working on integrating Bitcoin into Twitter and making it easier to turn fiat into Bitcoin without decentralized parties:
Twitter is Beta testing the ability to enable users to send each other sats via lightning:
TBD is a recent Bitcoin-focused initiative backed by Jack Dorsey that has been somewhat shrouded in mystery. It seems to have found its purpose though:
Moar Mining
The race to acquire ASICs (the specialized computers used to mine Bitcoin) continues unabated and hash-rate (the measure of how many miners are active) has made a strong recovery since the exodus from China a few months back.
CRYPTO WARS
crypto- | ˈˌkrɪpˌtoʊ | concealed; secret.
The monopoly over fiat money will not be given up without a fight.
All Together?
SEC’s Gary Gensler is trying to push for regulators around the world to harmonize around crypto regulation. I see his point, but good luck with that.
Revolving Doors
The incestuous relationship between financial regulators and Goldman Sachs large US financial institutions is well documented. In a predictable twist, the revolving doors are now pointed at crypto companies too.
However, these crypto jobs seem less sticky than their traditional counterparts.
It’s undeniable that Binance has been under scrutiny recently and not just in the USA.
BlockFi has not gone entirely unnoticed by regulators either.
That was quick:
A paranoid person would assume that a whiff of regulatory crackdowns is prompting these quick defections, but maybe the guys just didn’t feel comfortable in hoodies.
He He Heeyyy
If you have never seen Carlos Matos’ NY Bitconnect pitch you owe yourself 3 minutes to enjoy this scammer classic and round out your Bitcoin education.
The SEC announced action against Bitcoinnect and —well-deserved though it may be— it is surprising given that this scam has been dead for years now, whereas many others are still operating out in the open.
Speaking of scams…
And I’m not sure, do exploits count as scams?
Orange Man Not a Fan
President Trump is no fan of Bitcoin. I don’t think he’s researched it at any length but he understands enough to get one thing almost right: it threatens the dollar’s hegemony.
Bitcoin is not really a threat to the dollar specifically or even fiat —debt-based currency has self-destruction built into its DNA— but by providing an exit hatch, Bitcoin does threaten whatever solution the powers that be intend to propose once fiat’s cracks become impossible to ignore.
SHORT FIAT
Recent news that makes me bearish on the legacy financial system —"short / bearish" means betting it will go down in value.
If Only
Chairman Powell was quoted by the New York Times demonstrating (or faking) a complete lack of understanding about Bitcoin.
It’s always sad when top brass in any organization, let alone The Fed, leaves you wondering “are they that stupid, or is it that they think we’re that stupid?”
Applepay Banned?
No, not exactly, but South Korea does want to end Apple and Google’s stranglehold on the payment options on their platforms.
This is a great move by Korea, we’ll see if any other countries emulate it. Needless to say, this opens the chance for Bitcoin to sneak in there before either of the tech giants formally adopts it.
Goodbye Oz
In saddening news, it seems Australia’s rulers are bent on implementing a Chinese-flavored dictatorship on their citizens, complete the elimination of private access to the internet and social media scores, which they are now being actively contemplated.
If they implement this, a CBDC will surely follow, giving the government control of where, when and how fast citizens use their money.
If you are an Australian and don’t fancy a non-optional visit to the shiny new concentration camps isolation centers you’d better be stacking Bitcoin hard.
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.
Guest Chart
An updated version of this chart, which I love, was just published and I thought I’d share some fresh hopium with you:
Bitcoin Surfing
Bitcoin managed to keep itself above water although it almost “dipped it’s toes” with a weekly low of $46.5k (water level currently just above $46k).
Bitcoin’s “surf board” is rising up fast (currently just under $46k) and will hopefully give it additional support once they touch again.
A lot of people are expecting big moves soon which is often a sign they won’t happen.
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.
Dip Fishing
Third time was a charm and we finally managed to break through $50k, we’ll see if it becomes a new support. Unless we see a very strong move up this week, I’d be surprised if we didn’t re-test $50k before attacking $55k.
Here’s some recent context about where Bitcoin seems to be in terms of price action.
The Calm Chart
August closed out as a modest but proud green candle.
Take two deep breaths as you drink in this chart and realize we’ll be heading higher not too long from now.
Strong hands are best built TOGETHER.
I work with families, groups and individuals, helping them develop the knowledge and confidence to invest in Bitcoin safely.
All it takes is a few conversations.
Schedule a call to see if one of my plans is a good fit for you.