The Bitcoin Narrative, Part III

The important one to read ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ March 12, 2024  |  [Sign Up]( The Bitcoin Narrative, Part III “It’s gold for nerds.” —Stephen Colbert [Special Reminder: In case you missed our late-day announcement yesterday, [The Real October Surprise]( The Essential Investor has merged with legacy contributors to Agora Financial. The new, larger, more inclusive project is called The Grey Swan Investment Fraternity. If you’re interested in the scope and benefits of our new endeavor, please see what prompted us to merge [here](. If you’ve been a member of The Essential Investor, please keep an eye out for your new benefits.] Dear Reader, March 12, 2024 – We begin today with a few notable and historic market prices: gold and Bitcoin. A fusion of narratives is afoot… Last Friday, gold set a new record high of nearly $2,200 an ounce. Midas is up 21% in the past 5 months. Today, it’s trading slightly lower: That said, adjusted for inflation, gold has yet to reach the nominal price obtained quickly in the early ‘80s. As long-time readers know, we’ve been recommending gold since our first forecasts in 1999 during the height of the dot.com bubble. Our suggestion to buy gold when it was trading at lows in 1999 paid off handsomely for decades. In yesterday’s missive, the OG gold bug, Mr. Piepenburg explained in great detail why gold is getting renewed interest. We’ve also just published the third edition of Demise of the Dollar. Our outlook hasn’t changed much since our first forecasts in the early 2000s. But the digits – federal deficits, the national debt – have grown substantially larger. In our view, there’s still room in the current rally. Our current forecast is for gold to break through its “resistance” around $2100 and settle in around $3000 or slightly above. Most recently, Bitcoin as a proxy for all cryptocurrencies has joined the narrative. We cover it a bit in Demise, but because the book was printed nearly a year ago we did not include the most recent developments. 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In early trading this morning, Bitcoin retreated a bit from its own historic high of $70,832 set yesterday. Anyone trading crypto is well-versed in its historic volatility. Bitcoin is only a decade-and-a-half old, so the kinks haven’t been entirely worked out. BTC, blockchain, crypto behave like any historic innovation in a market. They are subject to great bouts of imagination, enthusiasm, and speculation driving prices up. And down. Enthusiasm works in reverse, too. Greed and fear drive speculative markets. But today, there’s more to the story. Our advice is still to heed the dictum “fear of missing out is not an investment strategy.” Don’t chase this rally unless you know what you’re getting into. Still, the most recent additions to the Bitcoin narrative are likely going to represent a substantial game changer. There are 19 new ETFs trading on Wall Street. The first SEC-approved ETFs from BlackRock, Fidelity, Ark Invest, WisdomTree, and Grayscale began trading on January 11, 2024. The infusion of capital helps to explain Bitcoin’s latest run up to historic highs. And there is still room to run as institutional traders get the go-ahead to pour money into these ETFs. “Bitcoin faces a ‘sell-side liquidity crisis’ by September if institutional inflows continue,” says Ki Young Ju, founder and CEO of on-chain analytics platform CryptoQuant. In a thread yesterday, Ki predicted a BTC supply watershed “within six months.” Credit where it’s due, we were made aware of Ki’s thread by William Suberg writing at Cointelegraph.com. Suberg continues: Bitcoin as an institutional investment allocation is [only just getting started]( industry participants have said, as United States-based spot Bitcoin exchange-traded funds (ETFs) gain momentum. Now holding nearly $30 billion, they have become the most successful ETF launch in history. Should the trend continue, however, a new phenomenon could arise where there will not be enough BTC available to meet demand. “Bears can’t win this game until spot Bitcoin ETF inflow stops,” Ki summarized. He noted that ETFs alone put away more than 30,000 BTC last week, and with 3 million BTC in exchange and miner wallets, the odds of a supply-induced price shock become clear. Ki Young Ju is only one of a set. So-called “crypto influencers” on X have also been urging their followers to snap up Bitcoin and gold because of the risk posed by the ever-rising national debt in the United States. Given the awful tenor of progressive and political politics in the U.S., that risk is not going to mitigate any time soon. And this is where “the twain shall meet,” as Samuel Clemens would say. The gold and Bitcoin narratives thrive on similar concerns. “We’re in the looting-the-treasury phase of imperial collapse,” Balaji Srinivasan wrote in a different thread on X yesterday. Sirnivasan, the former Chief Technology Officer (CTO) of Coinbase with 994,000 followers on X, is singing our tune. Srinivasan argued that government debt and wasteful spending continue to grow rapidly at unsustainable levels. “Entrepreneur and angel investor Balaji argued that Bitcoin is the only realistic solution to escape the inevitability of unsustainable government spending and potential asset confiscation,” writes Martin Young on Cointelegraph. “Srinivasan,” Young continues, “a general partner at Andreessen Horowitz, said there are four approaches to the problem: Deny it is happening. Fix it through political processes. Give up, and “simply feed yourself at the trough.” Or: “Starve the beast with Bitcoin, which is money they can’t easily seize or print.” “The last… ‘Starve the beast’... is radical but actually realistic,” Balaji writes. The Bitcoin narrative is not likely to go away anytime soon. So it goes, Addison Wiggin, The Wiggin Sessions P.S. Other than our own analysis of long-term price trends, we lay no claim to trading success in short-term price movements. That’s why we’ve recently invited Mark Jeftovic, author of The Crypto Capitalist Manifesto, to join [The Grey Swan Investment Fraternity](. He’s agreed to join us. The ‘deets’, as they say, are in the works.  Here’s a bit a of a teaser from Mark’s introduction just to whet your whistle: The Historical Thesis Upon Which Conviction is Built - Mark Jeftovic, [The Crypto Capitalist Manifesto]( The crypto space operates at a faster pace than most. Timeframes are compressed. It’s like a passage out of an early William Gibson story, which I’ll paraphrase here: “Crypto-currencies are like a deranged experiment in monetary Darwinism, designed by a bored researcher who kept one thumb permanently on the fast- forward button...” Volatility is more intense. Cryptos can drop 20% overnight. They can 10X in a few months. It is all, in a word, unprecedented. However, there are analogs in history to this period in time and from these analogs we can derive an underlying crypto thesis that describes what is happening. If we have a coherent mental model that seems to make sense as events unfold, then we can build conviction in our investing thesis. With conviction, we can look through the volatility and use it to our advantage. Warren Buffett is frequently credited for saying “buy when others are fearful, and sell when others are greedy.” He was actually paraphrasing something that was said nearly a century earlier by the Wall Street trading legend Jesse Livermore. In the venerable classic “Reminisces of a Stock Operator,” Livermore’s biographer Edwin Lefevre quoted him as saying, “The successful trader has to fight these two deep-seated instincts. He has to reverse what you might call his natural impulses. Instead of hoping he must fear; instead of fearing he must hope.” This reversal cannot be accomplished without having conviction in an underlying mental model that is stronger than our psychologically hard-wired instincts. -[Mark Jeftovic, The Crypto Capitalist]( Please send your comments, reactions, opprobrium, vitriol and praise to: addison@greyswanfraternity.com The Daily Missive from The Wiggin Sessions is committed to protecting and respecting your privacy. We do not rent or share your email address. By submitting your email address, you consent to The Wiggn Sessions delivering daily email issues and advertisements. To end your The Daily Missive from The Wiggin Sessions e-mail subscription and associated external offers sent from The Daily Missive from The Wiggin Sessions, feel free to [click here.]( Please read our [Privacy Statement.]( For any further comments or concerns please email us at feedback@wigginsessions.com. 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