Fundamentals Report for 11/29/2019 - #65

11/29/19 | Issue #65 | Block 605,938 | Disclaimer
~167 Days Until Halvening
.825 on the Mayer Multiple

TOP STORIES

#OkBitcoiner and ETheranos

It was a horrible week for ethereum. Earlier in the week, Adam Back compared it to Theranos, making ethereum folks lose their collective minds and sparking several articles to be written. On Wednesday, I responded to a Vitalik tweet accusing Ethereum of being centralized around him personally, urging him to step back from the project to save any decentralization going forward.

There’s no denying the validity of the fact that it’s centralized around him, and ethereum folks know it. I remember some insider commenting earlier this year, that the worst thing that could happen to ethereum was if something happened to Vitalik. And don’t forget, in 2017 the rumor of Vitalik’s death marked the week of Ethereum’s ATH vs bitcoin!

His response to my tweet was “ok bitcoiner”. He couldn’t respond to the essence of the critique, so he tries to silence me with a spin on the beautiful “ok boomer” meme. Very toxic of him, not inclusive at all. Being called a bitcoiner of course, is a huge compliment.

Ethereum is struggling here. Their narrative is played out, competition is stiff with Tron being used for the new PoloniDex, and the future looks bleak with at least 2 more years of upgrading a system while in flight to a solution that is highly suspect in the first place. The ETH/BTC price shows this and has continued to fall to the 0.02 btc handle at time of writing.

Europe

Continuing the theme of nation-state involvement being the next great wave in the space, the World Economic Forum released a blog post entitled, This digital currency could build a more sustainable global economy, where they lay out an argument for “stablecoins and the technology underlying them” to form a new global monetary order to replace the USD.

Also along these lines, a new law in Germany is halfway through the approval process which would make it legal for banks to hold bitcoin directly instead of contracting with a third party. Many countries are starting to open their arms to bitcoin.

As I wrote in the Bitcoin Pulse on the 27th,

“The Blockchain scam is almost perfectly designed to trick bureaucrats. They are infamously tech illiterate AND have no business incentive or way to evaluate costs in their investments. It’s going to get weird.”

PRICE

Weekly BMI | 1 : Slightly bullish

What can I say, this past week has been text book. A perfect IH&S with bullish divergence, the back test of $7400 and then the break out. Currently, we are approaching an area of higher resistance between $8050 and $8200. I don’t think it will race right through that, It’ll probably take a few days. But price should at least test $8200 this week. If we break above that, significantly higher levels are likely.

MINING

The difficulty adjustment in approximately 1 week is estimated to be -2.5%. Pictured below is an updated image from ByteTree showing first spends coming down from last week. We will be watching this metric to see if it is an useful indicator for price moves.

ALTCOINS

ETH chart without further comment.

MACRO

My macro thesis has three legs, 1) the dollar will strengthen relative to other fiat currencies, 2) the next financial crisis is already underway in China, and 3) oil prices are going much lower. Here are some quick stories about all three.

In the below chart, the dollar is maintaining this price channel, and pushing up on the 100 level.

We are currently getting more financial news out of China than normal, detailing “rural bank runs to surging consumer indebtedness and an unprecedented bond restructuring, mounting signs of financial stress.” I believe the reason for this is because the economy is so bad for the CCP they can’t hide it from their people, and they have a willing scapegoat in Trump’s trade war.

Also in China we see a desperate scramble for financing, as “China has ordered local governments to speed up the issuance of debt earmarked for infrastructure projects, so that the proceeds can be invested early in 2020 to help shore up the slowing economy.”

Lastly, oil plunged today, down over 5% at the time of writing, to $55.04, on a quotes out the Saudi that OPEC members are opposing production cuts and allegations some members might already be exceeding their production limits. I’ve talked about this exact scenario previously in my content.

MISCELLANEOUS

Blocks continue to be full and payment in 2019 have been approximately 25-35% higher than in 2018.