Bitcoin Supply Shock 2

Now there is proof that there is a higher percent of Bitcoin supply, that hasn’t been moved out of a cold wallet in a year or more.  The last time (early 2021) this was the case, Bitcoin pumped 700%.  See this chart below:

 

 

This next chart shows us the Bitcoin exchange balance dropping steadily as price is moving up, this last 5 days or so:

 

 

The further the Bitcoin exchange balances drop lower, the more this supply shock effects the price.  This supply shock which has pushed a 21% price increase in Bitcoin, over the last month.  This has led to many price predictions for the Bitcoin price.  Our favorite chart by far is Lyn Alden’s.  She is so smart, and gives the best global macro economic explanations.  Which makes her predictive chart on the Bitcoin price, that much more hilarious.  Dry humor is the best!  Here is the chart below:

 

 

Ha Ha!  Anyway, the best thing we can look at to predict Bitcoin future price, is the global macro environment right now.  This points everything to Bitcoin.  The reason for this, is all the censorship and currency seizure.  Canada did it to the truckers at the trucker rally in Ottawa.  The US did it to Russia by freezing their assets held in the US, and sanctioning Russia so that they could not have access to a significant percentage of their treasury held in USD.  This signal has been heard by China, Saudi Arabia, India, Brazil and other countries.  Now Oil is trading in Rubles, Bitcoin, and soon once the petroyuan negociations are finalized, Yuan.  Not USD.  This will ultimately crash the USD and usher in CBDC, central bank digital currency.  CBDC will ultimately prove to be a massive encroachment on privacy (health and financial), and will violate human rights.  Eventually, this will lead to more Bitcoin adoption, because it is truly scarce, and gives protection from censorship and seizure.  Dedollarizatoin has begun to go global.  It will likely be increased in scope later into 2022.  We cannot say how all of this will play out in the end.  We do know, these privacy violations, and sanctions being established by governments sets a precedent.  This precedent will live on, and it has long range ripple effects.  Trust in government has been lost, trust in currencies has been lost.  Even Larry Fink of Blackrock agrees.  He is a globalist elite member, and the last person we would think would endorse Bitcoin.  Yet here is an article about what he said on Monday:

 

“In one of his first comments on cryptocurrencies, Fink drew attention to the Ukraine war’s “potential impact on accelerating digital currencies . . . A global digital payment system, thoughtfully designed, can enhance the settlement of international transactions while reducing the risk of money laundering and corruption.” The pendulum of globalisation is swinging back, He told investors that, owing to increasing client interest, BlackRock was studying digital currencies, and the underlying technology.”  Blackrock has an AUM of $10 trillion.  At some point a percentage of that will likely be invested in Bitcoin.  The regulatory clarity is coming in now and institutional money is flowing into Bitcoin because it offers what no fiat currency can offer.  Peace of mind that the investment money will not be seized, censored, or sanctioned.  That the investment money will not be devalued by inflation.  Yes Bitcoin goes up, and down in value.  We all know it is volatile.  That is why it should be a long term investment.  

 

The economy is on very shaky ground right now.  This next chart shows how bad it is, although it is a very busy chart.  The 2 year bond yields are the orange line.  The Fed Fund Rate is the blue line that drops to the bottom of the chart.  The 10 and 30 year bond yields start higher than the 2 year yield but end up close to or below it on the right side of the chart.  This is the single biggest indicator a stock and real estate crash is eminent.2 year yields should not be higher than 10 year, and 5 year yields should not be higher than 30 year bond yields.  The bottom quarter of this chart show CPI inflation now at 7.91 %, highest in 40 years!  The Fed just raised 25 bps and are now beginning to discuss a 50 bps rate hike in May.  Into almost 8% CPI inflation.  The Fed cannot catch up with the inflation.  These rate hikes will slow down investment and the market will crash due to this.  Bitcoin, and Gold are still the best flight to safety risk assets.  Bitcoin happens to outperform Gold 10 to 1!  Therefore, the main flight to safety as this is all going down is Bitcoin.  Here is the chart below:

 

 

Earlier this week our blog discussed how Blackrock, through mortgage backed securities (MBS), own 33% of the homes being sold in the US.  They are going from single family owned homes to rentals.  If there is quantitative tightening these assets will have to be sold on the open market fast.  This is what would kickoff a cascade of selling in Real Estate.  Case Shiller Home Price Index has skyrocketed to 19.2% for 2021.  See below:

 

 

If a deflationary crash does happen, Fed money printing and stimulus would have to increase as we have seen in the recent past.  Modern monetary theory requires money printing to paper over credit market collapses.  In order to keep the pain from spreading as fast, into other markets.  We saw this in 2000 and in 2008.  This will be what propels Bitcoin up, whenever things do get to this point.  We would expect by then this Bitcoin bull market will have fizzled out, and Bitcoin would be into the next cycle by that time.  Therefore, timeframes are impossible to predict because we don’t know when this stock market/ real estate crash will happen.  It is going to, and we all have to prepare now.  We are not financial advisors and this is not financial advise.  This crash is so predictable, we can see it coming from a mile away.  It is clear, Bitcoin is the lifeboat.  The supply shock is here, Bitcoin will likely climb fast this year to a climax.  Maybe that will happen into 2023?  We don’t know the time frames.  When will this expected stock market/real estate crash come together? That timing could change a lot of things.  All we can do is prepare.  Institutional investors are preparing, even Blackrock!

 

Neutral ATM is here to get everyone off of zero Bitcoin.

 

Give Neutral ATM a try.  We have low rates, convenient locations and we are expanding. Contact Neutral ATM, we will answer all your questions about Bitcoin and using our ATM machines. Find a Neutral ATM Bitcoin machine location near you.