Short term pain, Longterm gain, Bitcoin

Bitcoin is halfway through 2022 today and it is -35% year to date.  That is better than the Nasdaq but obviously not a good first half of 2022!  Every four years Bitcoin brings the pain (2014, 2018, 2022).  Today, and on Sunday Bitcoin is up.  Yet, as we expected, the rally is not holding.  Emotionally, this is more disheartening than in the past because the economy is much worse now than in 2018 or 2014!  

 

Looking at the M2 money supply chart which is now discontinued, we have another source to get the information.  Money supply tripled in 24 years (1985 – 2009).  Now it has tripled again in just 13 years (2009 – present).  By that math M2 will triple to $66 trillion in 6.5 years (by late 2028).  Rest assured, if that happens, Bitcoin will be the only life boat, safe haven asset to ride out that kind of inflation.  By then, we could be seeing 50% annual inflation!  See the chart below: 
 

As inflation has soured to 8.5% CPI from 1.4% a year ago, personal savings rates are at all time lows, dating back to 2008.  That was the middle of the great financial recession that cost trillions in invested assets and millions of jobs lost.  

 

 

So, if we look at where the economy is right now, in Bitcoin terms.  This is uncharted territory.  Bitcoin was born out of the 2008 great financial recession.  The first coins were mined on January 5, 2009.  It was the first currency with no central authority controlling it, backed by the energy grid.  Today, Bitcoin is over 70% renewable energy and uses up flare gas and waste gas to power it’s ASIC miners.  This would otherwise be wasted energy.  So, Bitcoin is truly helping the environment, while creating the hardest, scarcest money ever created in the history of mankind.  Yet, this year is a bear market year.  The reason could be multi faceted.  We see Bitcoin as rhythmic, after enough time passes after the halving (May 11, 2020).  Bitcoin prices begin to capitulate and eventually Bitcoin miners have to capitulate which excelerates prices dropping.  We believe that is the next phase in this cycle.  We have always maintained that the super cycle was NOT real.  We thought Bitcoin would hit $130K to $190K in the bull cycle and it only hit $69K!  Yes, this is unfortunate.  We believe the main reason why is manipulation caused by the SEC  approveing a Future’s ETF but not approving a Spot ETF for Bitcoin.  Now there is a lawsuit from Grayscale Bitcoin Trust to get this approval.  We believe once this approval goes through, Bitcoin could really run up in the next cycle (2024, 2025).  Here is proof in the charts why we are calling 2022 the bear market cycle.  Yes we were a little late in that, however, many disagree that this is the bear market.  This next chart shows the 3 day death cross.  The shorter moving average dropping below the longer (older) moving average.  Bitcoin has now come closer to the green line and not crossed it, thereby testing it as resistance.  Here is the chart below:

 

 

These charts speak the truth.  Below is a chart showing the history of the Bitcoin price touching the 200 day moving average, currently at $22K:

 

 

Thanks to Steve Courtney for this chart above.

 

In this next chart we can see the wicks below the 200 day moving average.  It happened twice in 2015, and once in March 2020.  We see this happening later this summer.  A wick to $14K maybe $15K.  Who knows how long it will stay down there.  That will be the generational buying opportunity.  Buying when Bitcoin is cheaper than at anytime in a 2.5 or 3 year window of time, is a generational buying opportunity.  The most money is made in Bitcoin bear markets!  See the chart below:

 

 

Buying below the 200 day moving average or very close to it, even above it.  That is how to maximize gains with the least risk.  In bear markets, Bitcoin has gone below the 200 day moving average by 22% on average, 3 times.  It rode on the 200 day moving average once, in 2018.  It dropped well below it, in 2015 twice and in 2020 once.  Spotting these bottoms is critical!  We have been better at that than spotting the tops of the bull markets.  

 

Never bet against Bitcoin.  In 2024 and 2025, it will be hundreds of thousands per coin.  Too soon to predict.  In the future, we will be more conservative on those top predictions.  They are more volatile, and hard to guess than the bottoms.  Here is a tweet from Tuur Demeester about betting 300 BTC in 2014 vs 1 Berkshire Hathaway share.  Now, the Bitcoiner that got the 300 Bitcoins, 8 years ago, is 30 times ahead of the person getting the 1 Berkshire share.  The scarcity, and programmatic halving cycle that garauntees this scarcity, ensures that Bitcoin outruns other assets (Berkshire Hathaway):

 

 

Selling Bitcoin at these low prices today, IS betting against Bitcoin.  Large miners are forced to sell to stay in business.  The rest of us do not have that issue.  Hold Bitcoin, and buy it under $20K whenever it gets there.  This is not financial advise, and we are not financial advisors.  The more research into Bitcoin you do, the more you will have the required conviction to stay in Bitcoin, and prepare for these dips as we are experiencing now.  Sometimes, if you see it early enough, it could be a year of waiting for the bottom of the bear market cycle to come in to view.  Right now, we are not there yet.  Many disagree with us.  However, 6 times the historic Bitcoin charts have shown confluence around $14K to $13.7K.  Perhaps the price won’t get this low but it will go no lower even in the worst case.  This could take months to sort out.  There will be fake outs!  With high levels of research, comes high levels of conviction.

 

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.