Fundamentals Report #88

May 8, 2020  |  Issue #88  |  Block 629,528  |  Disclaimer

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Vital Stats

Days until halving:  3
Mayer Multiple:  1.24
Est. Difficulty Adjustment:  +2.0% in 13 days
Prev Adj:  +0.9%
Weekly price H/L:  $10079 / $8533
Sats/$1 USD:  10,010 sats
Finney (1/10,000 btc):   $0.98

Market Commentary

The halving hype has entirely taken over. It makes up about 50% of my twitter feed. The problem is most people haven't witnessed a halving before. It's very exciting your first time, it's such a unique monetary phenomenon, you think 'this has to moon the price.' You celebrate and watch the countdown, but then it turns out to be just another day. It takes a long time for the restricted supply to get priced in, after the fact.

Another interesting thing happening right now is the natural merging of the stock-to-flow model with the hard money narrative. It's a no-brainer combination and extremely powerful in the minds of the masses. This merging is symbolized by the Stephan Livera podcast episode 171 featuring both @100trillionUSD and @saifedean.

Other Top Stories

Paul Tudor Jones Buys Bitcoin as a Hedge Against Inflation
A very big development, legendary macro investor Paul Tudor Jones and his hedge fund Tudor Investment Co is hedging inflation with bitcoin. He is using bitcoin cash settled futures, but simply giving bitcoin a huge boost in confidence. Hedge funds in particular are a great target for bitcoin as collateral in the same way as gold is becoming popular. In other words, bitcoin is infiltrating the base layer of the monetary system.

Bitmex to block all Japan users due to new law in their country
This is bad news the previous king of the Bitcoin exchanges, but good news for the distribution of trading volume. Bitmex will continue to a major player, but they are no longer the 500 lb gorilla anymore.

Report: Square’s CashApp and Grayscale Consumed Over 50% of Bitcoin Mined Q1 2020

Europe’s Largest Private Hospital Operator Fresenius Hit by Ransomware
Ransomware is on the rise. Hospitals in Colorado have been hit hard recently during the outbreak, and now this. We will being including more of these stories in the future, because it's a large and growing part of the ecosystem.

Price

Weekly BMI |  -1 : Slightly bearish

The price pump is very exciting, but if you are a trader, this is the time to be careful. Major anticipation has caused the price to rise 160% from the March lows, but the supply restriction won't be immediately felt at the halving. This is a classic 'buy the rumor, sell the news' scenario, which I detailed further in yesterday's Bitcoin Pulse to member newsletter subscribers.

Looking to the chart, we can see the spectacular rise toward an area with several trends converging. The horizontal level of the recent tops in Oct and Feb, the diagonal trend from the ATH, and the halving all meeting up around $10,200. It's unlikely that we crash right through this level and stay above it. We're calling for a pull back post-halving as price begins waiting for the supply restriction to kick in.

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Development

Stablecoins

Tether supply is exploding, now over $8 billion! Its market cap is quickly approaching that of Ripple the huge scam. Tether is the real silver to bitcoin's gold.

Another interesting Tether product is UAUT, gold tether. It has been growing steadily, already in the top 70 altcoins, with a market cap of 50,000 gold oz, or $85 million. We will be watching it closely as well.

Macro

There are two enormous fat tail risks people do not appreciate. One is a devaluation in the Yuan caused by a collapse in China, the second is a Eurozone fracure. The latter is closer than most people want to believe.

Below is a chart of the EUR/USD. There is a very important trend line that could break any day. If/when that happens, it will be very bad news for the EU.

Miscellaneous

Google Trends is popping!  Searches for the halving are off the chart and "buy bitcoin" is starting to lift off.

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Written by Ansel Lindner and Jeff See