A Monster Move in Bitcoin

The Halving Approaches [Morning Reckoning] April 09, 2024 [WEBSITE]( | [UNSUBSCRIBE]( A Monster Move in Bitcoin Baltimore, Maryland April 09, 2024 [Greg Guenthner] GREG GUENTHNER Good Morning Reader, As Bitcoin once again approaches new highs this week, let’s take a moment to dissect crypto’s incredible 2024 rally — and where it might go from here. First up: some eye-popping statistics: Bitcoin has rallied 70% year-to-date, and nearly 160% over the trailing 12 months. It finally posted a new high in March after eclipsing $73,000, its first all-time high following the ugly “crypto winter” bear market that began in early 2022. Bitcoin has now gained more than 350% off its bear market lows. And it doesn’t appear to be slowing down anytime soon… Crypto speculators are now looking toward this month’s main event: the halving. Will the halving lead us to the promised land? Or will it turn out to be a non-event? Let’s dig into the details… First, what is the halving? It takes a certain amount of processing power to mine Bitcoin. Currently, Bitcoin is mined at a rate of 900 per day. After the halving, that rate will drop to 450 a day. According to our intrepid crypto expert Chris Campbell, the halving will occur at block height 840,000 (block height is the number of blocks connected in blockchain). Chris notes that there are many variables in the halving equation, including hash rate changes, difficulty adjustments, etc. that can affect how long it takes to reach 840,000. So we won’t know the exact day or moment until it happens. Our best guess is sometime between April 18 - 22. That gives us less than two weeks until the big event. And after the halving takes place, the new supply of bitcoin will get crunched — while demand is ratcheting higher as the bull run continues. I can’t speak on the intricacies of the crypto ecosystem or any technical details of the halving. But I can discuss price, trends, and trading strategy — all of which are critical when dealing with a volatile asset such as Bitcoin. Since this isn’t the first halving, we actually have a short track record to review. This is good news for the Bitcoin bulls because the past 3 halving events have led to a massive run-up in price. [Claim a copy of the most dangerous book in America right now.]( This is the only book I’ve ever read that brings to life the horrifying fallout of a massive international currency war. In fact, I’m offering to send you a copy for free today as a way to help prepare you for what could happen next. But, once we are out, they could be gone for good. [Simply click here now]( [LEARN MORE]( While a perfect 3-for-3 record is encouraging, it’s not statistically significant. So it doesn't guarantee we’ll see a massive bump later this month in the post-halving crypto landscape. Still, I like our chances for the rally to continue based purely on the fact that Bitcoin has been constructively consolidating for the past month — and it’s now beginning to press toward the top of its range. If there’s one thing that’s almost always bullish, it’s new highs. But I also understand if some investors are skittish when it comes to how Bitcoin might react to a major news event. If recent history is our guide, price action could get a little messy. What if Crypto Investors Sell the News? With the halving approaching, you might be worried Bitcoin is barreling toward a sell-the-news event that will result in a nasty pullback — or worse! Sure, it’s possible. We don’t have to go too far back to find another Bitcoin event that led to some downside volatility… We just witnessed a chaotic Bitcoin news cycle back in January when the SEC officially approved the first US-listed Bitcoin ETFs. The announcement sparked plenty of excitement throughout crypto exchanges and news providers, as well as the broader investing community. The mainstream media even dubbed the approval a watershed moment for Bitcoin and the broader crypto industry. For traders attempting to play the news, this watershed moment failed to yield spectacular gains immediately following the announcement. Instead, the new crypto ETFs started to fall. Bitcoin also failed to hold its gains. In fact, the ETF approval hype led to an ugly $10,000-plus Bitcoin drop that took two weeks to play out. But the drop was short-lived. Bitcoin found a floor near $40K, pivoted and broke to new highs by mid-February. Yes, some traders attempting to play a very short-term bump at the ETC approval announcement might have taken some losses. But anyone who was early enough and had the fortitude to hold onto their position through the volatility did just fine. The assets always change. But we can count on investor behavior to stay the same, whether we’re dealing with tech stocks, commodities, or crypto. Assets like crypto that produce bigger moves over shorter time frames are going to be more volatile than slower-moving stocks and sectors. Bitcoin will always get too far ahead of itself as positive momentum builds. Conversely, it will probably overshoot to the downside during corrections and pullbacks. Again, this is normal behavior. If we expect big swings in both directions before we jump in the crypto deep end, we’re less likely to fill our portfolios with poorly timed trades. And we probably won’t have to worry about the next shakeout scaring us out of perfectly viable positions. Here’s What to Do Next… Big, obvious news catalysts can cause a lot of stress if you aren’t prepared. As the halving approaches, remember the following… Bitcoin is somewhere in the middle of a powerful bull cycle. It has just recently posted new highs after coming out of a bear market. We’re probably not at the end of this secular bull run just yet. Next, we need to accept that the faster the rally, the more volatility we will likely encounter. It’s the price we pay for playing the crypto market. Know your time frame and goals for any trade before you enter your position. Smart planning will help you weather any potential storms along the way. Finally, don’t allow a quick reaction to a news event to catch you off guard. Sharp moves happen as markets quickly absorb new information. Stay alert and understand that we might see some fake outs — higher and lower — before Bitcoin settles into its “new normal.” Finally, buckle up and enjoy the ride! This monster Bitcoin rally isn’t over yet. Best, [Greg Guenthner] Greg Guenthner Contributing Editor, Morning Reckoning feedback@dailyreckoning.com [Nearing Retirement? Claim This Exclusive $1 Book Offer Right Away!]( [Click here to learn more]( “The Banker” is a hedge fund titan who spent years helping America’s richest families grow even richer. [And today, for the first time ever, he wants to send you his new book – where you’ll find 36 of his never-before-revealed income and wealth generating secrets](. If the potential at steady, predictable income (as well the chance at a few nice, quick windfalls) interests you, then I urge you to act right away. [== > Click here now to claim this exclusive $1 book offer](. [LEARN MORE]( In Case You Missed It… “Get Out of Africa!” Sean Ring, Editor [Sean Ring] SEAN RING Good morning Reader, In this little-known part of Africa, France and the United States are in the process of getting kicked out. Usually, no one would care other than the pearl-clutching elite wondering why the natives rejected their particular brand of imperialism. But this casting out has far-reaching implications, as nature abhors a vacuum. Of course, Russia and China will fill that vacuum. But first, let’s name and define this ribbon of land: The Sahel. Credit: [WorldAtlas]( What is the Sahel? The Sahel is a semi-arid African region stretching from Senegal to Eritrea, forming a transitional zone between the Sahara Desert to the north and tropical savannas to the south. The area is important due to environmental, political, and security challenges. The Sahel is characterized by a tropical semi-arid climate and is known for its natural pasture, low-growing grass, tall herbaceous perennials, thorny shrubs, and acacia and baobab trees. This region has faced significant issues such as droughts, desertification, soil erosion, and overpopulation, leading to environmental degradation and humanitarian crises. The Sahel has been a focal point for jihadist attacks, armed groups, and rebel movements, particularly affecting countries like Mali, Niger, Burkina Faso, Chad, and Mauritania. Efforts like the Sahel Alliance have been established to address these issues and promote sustainable development, peace, and security in the Sahel region by mobilizing resources, implementing projects, and fostering cooperation among various stakeholders. And yet, the Alliance hasn’t succeeded in doing much of anything. Now, there’s a new organization in the area. But first, let’s look at France’s history in the Sahel. France’s History in the Region. France's relationship with the Sahel countries of Niger, Burkina Faso, and Mali is deeply rooted in their shared history as part of the French colonial empire, and it continued to evolve in the post-colonial era until recently. These complex and multifaceted relationships encompass economic, military, and political dimensions. Niger, Burkina Faso, and Mali were all once part of French West Africa, a federation of eight French colonial territories in Africa. They gained independence from France in 1960, but the legacy of French colonialism has profoundly influenced their political, social, and economic structures. After gaining independence, these countries maintained close ties with France. The relationship has often been criticized for embodying elements of "Françafrique," a term that describes France's ongoing influence in its former African colonies through political, economic, and military means. This influence is seen in the continuation of French business interests, military presence, and political support for specific regimes. France was a significant economic partner for these Sahel countries, involved in various sectors such as mining (especially uranium in Niger), agriculture, and services. French aid and investment were substantial, though they have sometimes been criticized for favoring French interests and contributing to a dependency relationship. France also runs the currency CFA Franc, which binds France to the region. I’ve written about the CFA franc before [here](. But a few reasons why this currency is such a misery for West Africa are as follows: First, the peg to the euro makes it damn near impossible for African countries to devalue their currencies in times of economic crisis. This makes it more difficult for them to export goods and services and attract foreign investment. Second, the CFA franc is not freely convertible and cannot be freely traded on the open market. This makes it difficult for African businesses to operate internationally or get a credit line. Third, the French government manages the CFA franc, not those African countries. This gives France control over the economies of the CFA franc countries. This control prevents these countries from developing their economies independently. The Sahel is also facing severe security challenges due to the presence of various armed groups, including jihadist organizations linked to Al-Qaeda and ISIS. France was actively involved in military operations in the region to combat these groups: - Operation Serval (2013): This operation was launched in Mali to push back jihadist groups that had taken control of the northern part of the country. It was considered mainly successful in its immediate goal. - Operation Barkhane (2014-2022): Succeeded Operation Serval, expanding the French military presence to other Sahel countries, including Burkina Faso and Niger, aiming to fight against jihadist groups across the region. - European Task Force Takuba: Following Barkhane, France also led efforts to create a European special forces task force to work alongside the Malian army and international partners. France's political relationships with these countries have been subject to fluctuations, often influenced by internal politics within the Sahel countries, changes in the French government, and evolving security situations. While France has historically supported governments in the region, there is growing anti-French sentiment among parts of the population, exacerbated by security issues, former colonial ties, and perceptions of French interference. Recent years have seen significant shifts. For example, in Mali, relations with France have deteriorated following military coups and the Malian government's engagement with Russian military contractors. I’ll speak more about Russia later. France announced the withdrawal of its troops from Mali in August 2022, Burkina Faso in February 2023, and Mali in August 2023, marking a significant shift in its military engagement in the region. The United States Quickly Enters and Exits. According to [Pepe Escobar]( (bolds mine): Obviously, no one in the US Beltway has been paying due attention to the Russia–Africa diplomatic flurry since last year, involving all key players from the Sahel to the new African BRICS members Egypt and Ethiopia. In sharp contrast to its prior regard of Niger as a staunch ally in the Sahel, Washington is now forced to present a calendar date to get its troops out of Niger – after a military cooperation deal was annulled. The Pentagon cannot be involved in military training in Nigerien territory anymore. There are two key bases – in Agadez and Niamey – which the Pentagon spent over $150 million to build. Niamey was finished only in 2019 and is managed by the US military's African Command, AFRICOM. Operational objectives are, predictably, shrouded in mystery. The Niamey base is essentially an intel center, processing data collected by MQ-9 Reaper drones. The US Air Force also uses the Dirkou Aerodrome as a base for operations in the Sahel. Now things get really exciting, because the presence of a de facto CIA drone base in Dirkou, manned by a handful of operatives, is not even acknowledged. This dark base allows intel collection everywhere in Central Africa, from west to north. Call it another classic example of former CIA director Mike Pompeo's "We Lie, We Cheat, We Steal." There are roughly 1,000 US troops in Niger who may soon face ejection. The Americans are trying everything to stem the bleeding. Only this month, US Undersecretary of State for Africa Molly Phee visited Niger twice. Losing bases in Niger will translate into Washington following Paris in losing control of the Sahel – as Niger gets closer to Russia and Iran. These bases are not essential to exercise surveillance over the Bab al-Mandeb; it's all about the Sahel, with drones operating on their limit and violating every sovereign air space in sight. Clearly, Western imperialism is off the cards for this part of sub-Saharan Africa. What’s Russia Got to Do With It? Of course, the US blames its favorite boogeyman, Russia! But this time, it’s not without cause. The Russians saw a vast opportunity and leaped at it. Again, from Escobar: Russia, diplomatically, and China, commercially, plus the full weight of the Russia–China strategic partnership, are clearly focused on the long game – counting on Africa as a whole as a key multipolar player. Additional evidence was provided once again during the multipolar conference last month in Moscow, where charismatic pan-African leader Kemi Seba from Benin was one of the superstars. Pan-Eurasian diplomatic circles even allow themselves to joke about the recent hissy fits by Le Petit Roi [President Macron] in Paris. The utter humiliation of France in the Sahel is likely one of the drivers of Macron's chest-thumping threats to send French troops to Ukraine – who would be turned into steak tartare by the Russians in record time – and his eagerness to support Armenia's current Russophobic stunts. Historically, the fact remains, that Africans considered the former USSR much more pliable and even supportive when it came to siphoning natural resources; that goodwill has now also been transferred to China. And now we have a new club in western Africa. The Alliance of the Sahel States. The Alliance of Sahel States is a mutual defense pact established by Burkina Faso, Mali, and Niger. It was formed by signing the Liptako-Gourma Charter on September 16, 2023, in Bamako. This alliance aims to provide collective defense and mutual assistance among the member countries in the face of security threats, armed rebellion, or external aggression. The agreement binds the signatories to assist each other, including militarily, in the event of an attack on any of them. The creation of this alliance was driven by the need to address the security crisis in the Sahel region, mainly due to the jihadist insurgency that has plagued the area since the early 2000s. The member states have experienced military coups and deteriorating relations with international bodies like The Economic Community of West African States (ECOWAS). The Alliance of Sahel States was established as a response to the ongoing security challenges in the region and the withdrawal of French military forces from Operation Barkhane in 2022. Wrap Up Make no mistake, this is one of the poorest regions on earth. But it’s mineral-rich, and Russia and China want in. This is just one more example of the world slipping through the West’s fingers. All the best, [Sean Ring] Sean Ring Contributing Editor, The Morning Reckoning feedback@dailyreckoning.com X (formerly Twitter): [@seaniechaos]( Thank you for reading The Morning Reckoning! We greatly value your questions and comments. Please send all feedback to [feedback@dailyreckoning.com.](mailto:dr@dailyreckoning.com) [Greg Guenthner] [Greg Guenthner, CMT,]( is chief strategist at Forge Research Group. 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