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In This Issue:
Predictions Are Pointless
Boring Bitcoin
Ethereum At Crucial Support
Central Bank Jawboning Has Little Effect
The Odds of Being Here
This New Proposed Tax Rule Is Not Good
SBF Hit With 4 Million Pages Of Discovery
OnlyFans Is A Fan Of Ethereum
Bitcoin Is Not Ready To Be Legal Tender, Use It For Savings | Robert Breedlove
Predictions Are Pointless
Late last year, I wrote one of my favorite newsletters titled, “Bold (Bad) Predictions,” in which I addressed the most notable failed predictions that were supposed to come true by the year-end.
Let’s briefly recap the predictions in that letter and revisit why its lesson are once again relevant today. Below are a few of the predictions I shared in that letter. While not all of them were focused on the year 2022, they do have one thing in common: a striking lack of accuracy.
Tim Draper - $250,000 by the end of 2020 and then $250,000 by the end of 2022
PlanB - $98,000 by November 2022 and $100,000 by 2023
Willy Woo - $100,000 by the end of 2022
Peter Schiff - Crypto will go extinct in 2022
Antoni Trenchev - $100,000 by early 2023
Scott Melker - I expect new all-time highs in 2022 (I never gave a number)
If you want to read the article I based the newsletter off of, you can view it HERE.
Sure enough, not even a year has passed and there is already a wave of new predictions, as if predictions now magically make sense. Let’s take a look at what the class of 2023 is predicting for the near future.
Pantera Capital - $148,000 after the halving
Fundstrat - $180,000 before the halving
Blockware Solutions - $400,000 in the upcoming halving epoch
Matrixport - $125,000 by the end of 2024
Standard Chartered - $120,00 by the end of 2024
I've held a critical position on predictions in the past, and I'm committed to upholding that tradition.
So, let's dive in.
First, you'll notice a shift this time: predictions are emerging predominantly from firms rather than individuals. This could be attributed to the growing landscape, but there's an element of humor in how we've collectively stumbled through the past decade. It's as if institutions are now volunteering to be the punchline.
What also catches the eye about these predictions is their fixation on familiar narratives — ETF approvals, the halvening, the four-year cycle. Yet, what escapes their grasp is the realization that future events will sculpt future prices, defying our present musings. It's a straightforward truth, the very reason why predictions invariably miss the mark. China's unforeseen Bitcoin mining ban, Tesla's dive into Bitcoin, the abrupt implosion of half the crypto realm — these curveballs reshaped the price landscape, blindsiding even the most astute observers.
Most of these extensively debated Bitcoin prophecies are bound to falter, maybe even to our advantage, albeit unintentionally. Think back to the pre-2017 bull run days, a time when the notion of Bitcoin surpassing five figures seemed implausible, not to mention its surge to $20,000. The beauty of 2017 was that early predictions were shortsighted and lagging predictions were farsighted. This sparks a query: could the contemporary predictions be devoid of foresight, much like their 2017 predecessors? Are these projections underestimating the potential, conceivably overly cautious?
I’ve learned my lesson and won't go anywhere near answering that question, but I'll venture to admit that a positive response isn't beyond the realm of possibility, though I'll leave it at that. The essence of this introduction is that the multitude of predictions being tossed around hold little to no value. The annals of history remind us that under the influence of the right narrative, Bitcoin can plummet well beneath our most modest anticipations, yet also soar far beyond even our loftiest visions. It's a truth as uncomplicated as it is profound.
Boring Bitcoin
Last week closed as a doji or spinning top, indicating indecision and a failure of either bulls or bears to push price. This usually indicates that more sideways action is likely, but is viewed by some as an early reversal sign.
We are now well below the 200 MA, with closes under, meaning it is clearly resistance. This is also the case on the daily chart. This is only the second time in history that Bitcoin has been below both, the first time being the 3AC collapse, which you can see on the far left of the chart above. That was the only time the weekly 200MA had broken down for more than a week in history.
You can see that the 50 AM and 200 MA are still both curled up at the moment, which is a positive signal. Neither have rolled over.
Volume is EXTREMELY low. This reminds me very much of 2019, when there was zero interest in crypto. Pre halving years have all had a similar pattern.
I am still waiting for bullish divergence on the daily chart. The good news is that we will very likely see it if we get a daily close below $25,900. The bad news is that all of this sideways price action has effectively managed to reset RSI out of oversold on most time frames. Those historic lows are long gone and there’s plenty of room for more downside on almost every time frame.
I want to see this divergence, clear as day.
Ethereum At Crucial Support
The Ethereum monthly chart shows that Ethereum is at a crucial ascending blue support. This is a “make or break” type of line for the coin, so bulls really want to see this holding on the monthly.
This is where technical analysis gets interesting. Bulls will see a bullish ascending triangle (black line on top), which is a series of higher lows consolidating against a flat resistance.
Bears will see an ascending wedge (blue line on top) and say that break down is imminent.
Central Bank Jawboning Has Little Effect
European stocks began the week on a high note, following Wall Street's gains last Friday, buoyed by cautious remarks from central bank leaders at Jackson Hole. Tech stocks in Europe particularly benefited, as neither the Federal Reserve nor the European Central Bank signaled any immediate changes in interest rate policy. UK markets were closed for a bank holiday, so trading volumes were expected to be lower. In the U.S., stocks and Treasury yields rose last Friday after Fed Chair Jerome Powell indicated a cautious approach to raising interest rates, backed by data-driven decisions. Meanwhile, 3M Co.'s stock jumped 4% on news of a $5.5 billion legal settlement. Asian markets also gained, although Chinese stocks showed mixed results despite Beijing's efforts to boost the markets.
Key events this week:
US Conference Board consumer confidence, Tuesday
Eurozone economic confidence, consumer confidence, Wednesday
US GDP, wholesale inventories, pending home sales, Wednesday
China manufacturing PMI, non-manufacturing PMI, Thursday
Japan industrial production, retail sales, Thursday
Eurozone CPI, unemployment, Thursday
ECB publishes account of July monetary policy meeting, Thursday
US personal spending and income, initial jobless claims, Thursday
China Caixin manufacturing PMI, Friday
Eurozone S&P Global Eurozone Manufacturing PMI, Friday
South African central bank governor Lesetja Kganyago, Atlanta Fed President Raphael Bostic, BOE’s Huw Pill, IMF’s Gita Gopinath on panel at the South African Reserve Bank conference, Friday
Boston Fed President Susan Collins speaks at virtual event, Friday
US unemployment, nonfarm payrolls, light vehicle sales, ISM manufacturing, construction spending, Friday
Some of the main moves in markets:
Stocks
The Stoxx Europe 600 rose 0.6% as of 9:46 a.m. London time
S&P 500 futures rose 0.2%
Nasdaq 100 futures rose 0.3%
Futures on the Dow Jones Industrial Average rose 0.3%
The MSCI Asia Pacific Index rose 1%
The MSCI Emerging Markets Index rose 0.6%
Currencies
The Bloomberg Dollar Spot Index was little changed
The euro was little changed at $1.0804
The Japanese yen was little changed at 146.52 per dollar
The offshore yuan was little changed at 7.3018 per dollar
The British pound was little changed at $1.2576
Cryptocurrencies
Bitcoin fell 0.5% to $25,960.03
Ether fell 0.8% to $1,641.45
Bonds
The yield on 10-year Treasuries declined two basis points to 4.22%
Germany’s 10-year yield advanced one basis point to 2.58%
Britain’s 10-year yield advanced two basis points to 4.44%
Commodities
Brent crude rose 0.3% to $84.70 a barrel
Spot gold was little changed
The Odds Of Being Here
This tweet serves as a reminder of how privileged we are to be here. I know some days it doesn’t seem like it, but we are all a part of something special. Revolutions take time.
This New Proposed Tax Rule Is Not Good
Once again, the crypto space, and DeFi in particular, are being threatened by impossible requirements for crypto exchanges, hosted wallet providers, and payment processors. According to the new tax guidance from the U.S. Treasury Department, brokers of all types of digital assets, including stablecoins, cryptocurrencies, and NFTs would be required to collect and share information about their customers with the IRS. Supposedly, the proposal is part of an effort to address tax evasion in the digital asset sector, but we all know it’s really just a direct attack. The good news is that the requirements if they stick, won't go into effect until 2025, which means there is a lot of time to erase or edit these demands. In the meantime, none of the incoming requirements are in effect, so it's business as usual.
SBF Hit With 4 Million Pages Of Discovery
U.S. prosecutors are dumping millions of pages of discovery documents on SBF (Sam Bankman-Fried) as if they were a shitcoin, prompting numerous objections from his lawyers regarding the timing and volume of the materials. Just recently, the government introduced an additional 4 million pages of evidence, compounding an already substantial collection spanning terabytes of data. The challenge is further exacerbated by SBF's detention, which is restricting his internet access and impeding his ability to effectively navigate through this massive trove of files. The prosecutors' tactics definitely don’t sound fair, but I don't really feel like complaining in this instance. Too bad, so sad.
OnlyFans Is A Fan Of Ethereum
My 2023 Bingo card did not have a square for an adult content platform investing millions into Ethereum, but in any case, props to OnlyFans for being financially progressive. According to the financial filing, OnlyFans purchased $19.889 million worth of Ethereum, which must have been somewhere near the top because the purchase led to an impairment loss of $8.455 million by November 30, 2022. Not all hope is lost though, because the current value stands at $11.434 million, representing a 42.53% decrease. Investment aside, it may be forgotten at this point, but in February of 2022, OnlyFans introduced a feature enabling users to showcase Ethereum-based NFTs as profile images. I guess OnlyFans is also in the business of getting F***ed by crypto… just kidding.
Bitcoin Is Not Ready To Be Legal Tender, Use It For Savings | Robert Breedlove
Robert Breedlove, the host of the What Is Money Show, and one of the greatest minds in crypto, discusses the essence of Bitcoin. He explains why he thinks it is too early to use it as a legal tender, and use it as a store of value instead, and why Bitcoin is not a simple concept.
In this episode with Robert, we discussed:
What is BlackRock for Bitcoin?
Collaborative custody
Argentina, central banks & Bitcoin
Bitcoin savings account
US exports inflation
Bitcoin vs. crypto
Bitcoin is not a simple concept
Advantages of open networks
Building on Bitcoin
Energy & ESG
Demonizing Bitcoin
The views and opinions expressed here are solely my own and should in no way be interpreted as financial advice. Every investment and trading move involves risk. You should conduct your own research when making a decision. I am not a financial advisor. Nothing contained in this e-mail constitutes or shall be construed as an offering of financial instruments or as investment advice or recommendations of an investment strategy or whether or not to "Buy," "Sell," or "Hold" an investment.