The Pomp Podcast - #1028 Bitcoin Just Experienced It’s Worst Quarter In A Decade - BTC On-Chain

Starting point is 00:00:00 What's up, everyone? This is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Now let's kick this thing off. In this episode, I break down the past week in Bitcoin, including on-chain metrics, various tweets that I find interesting, and any other information that I think will help you get up to speed on what's actually occurring in real time. I really enjoy these episodes, and I hope that you guys enjoy them as well. Before I get into this episode, though, I first want to talk about our sponsors. This episode is brought to you by FTX US. FTX.US is the safe, regulated way to buy and sell Bitcoin and other digital assets. You can trade crypto

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Starting point is 00:02:41 and hardware crypto wallet. Go to exodus.com slash pomp today. Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only. The Bitcoin market had another wild week. There's contagion everywhere. The price keeps dipping down below $20,000. And everyone's asking what the hell is going on with the decentralized digital currency? Well, in this week's update, hopefully we'll clear up all those

Starting point is 00:03:22 answers. All right, let's get into it and start looking out at Bitcoin first. What we can see here is that Bitcoin trading just above $19,000 right now. Then we can go ahead and take a look at the actual network itself. And what we see there is that the market cap is now trading well below $400 billion. We know that the inflation rate is only at 1.76%, which is in deep contrast to the US dollar inflation rate, somewhere around 8.5%. The supply of Bitcoin issued into the circulating supplies stands at 90%. And of course, real exchange volume is at $5.46 billion over the last 24 hours. We know that miners, their revenue has been dropping drastically. They're only being paid about $17.7 million in the last 24 hours to continue to secure the most powerful computer

Starting point is 00:04:07 network in the world. GBTC premium has actually flipped to a discount and has been widening at an aggressive rate and now sits at minus 36% to NAV. And of course, Bitcoin down about 72% from its previous all-time high back in November. Then we can go ahead and we can take a look at price comparison between Bitcoin Gold and the S&P 500. Bitcoin down 43% from just one year ago. gold sitting at plus 1% and the S&P 500 down 13%. But over any other timeline between two years and 10 years, Bitcoin has drastically outperformed these other assets. Then we can take a look here and see the closing history of Bitcoin. 557 days out of all of Bitcoin's life, it's actually closed at a higher level. That means for 88% of Bitcoin's life, if you had bought it and held it till today,

Starting point is 00:04:54 you would be in profit. If we line up Bitcoin compared to assets like gold, S&P 500, NASDAQ, in TLT. We can see that the compound annual growth rate over the last decade sitting at 122% drastically outperforms any of the other assets. We can also see that the five-year sharp ratio at over one is something to continue to make it an attractive asset as to why people may want to put it into their portfolio. Now, of course, these individual network metrics and things around the price itself only tell one part of the story. If we take a look at Blockware doing some great research over there in their newsletter on a weekly basis. We can see that they've taken a deep dive with Will Clemente on all the on-chain analytics. Let's get right into what they've got.

Starting point is 00:05:36 In terms of the monthly performance of Bitcoin, the last two months, it's the worst stretch in the history of Bitcoin. Not something to celebrate. We then can take a look and Will's been talking about the death spiral of Terra Luna for quite a while. His question all the way back in May was, where will the contagion show up from the UST meltdown? How many crypto funds and projects were holding UST, how many custodians lending clients funds in Anchor, etc. This is crypto's Bear Stearns Lehman Brothers moment. But here there are no government bailouts. And that was quite a forward looking thing. We can see a lot of the problems showing up across the market, all sorts of margin calls and unraveling of tons and tons of leverage. You can see it showing up

Starting point is 00:06:16 here in the correlation between Bitcoin and other altcoins. This is showing you the market caps and how they're coming de-pegged or decoupled from all of those altcoins. Then next, we can look at the exchange net position change. And what we see here is because so much complexity is in the market, there's so much fear and uncertainty, people are nervous. This is the largest depletion of coins from exchanges in Bitcoin's history, according to Blockware. Next up, we can see the capitulation being reflected across realized losses, net unrealized profit and loss, and spent output profit ratio here we have the entity adjusted net unrealized profit and loss down big next up we can see that the net realized profit loss also significantly down and then

Starting point is 00:07:02 lastly you can see the entity adjusted sopro with a 14-day moving average also falling off a cliff after that we can go and see that the capitulation from miners it's already here we continue to see lower bitcoin price driving higher hash rate and difficulty and higher energy costs that puts the pressure on those miners and their margins hash price is now its lowest since october of 2020 according to will and hash ribbons have crossed and now it's showing that miners are feeling the pressure and a lot of them are gonna have to unplug their machines and they might have to sell some of their coins as well but one bright spot in all of this is marad posting this chart right here in his return to Twitter, showing that there is a ton of dry powder in the top. You have the Bitcoin price

Starting point is 00:07:45 going down, but at the same time, you can see USDT and USDC, two of the leading stable coins, tons and tons and tons of dry powder sitting on the sidelines, just waiting to be deployed into Bitcoin once people feel like we're at the bottom. Next up, we can see that Bitcoin's market price is now below the realized price, looking here at the MVRVZ score. And that means the market capitalization based on the last time coins were moved on chain is higher than where their price is today. The market's underwater in aggregate, and that shows that a lot of people look at these as buying opportunities. Of course, we can take a look at the four-year trend. Only the fourth time ever, Bitcoin is trading below that four-year trend. That signals somewhere

Starting point is 00:08:29 near a bottom in the past. About 3% of Bitcoin's existence has traded below where its 200-day moving average and below realized price as well. Well, that's where we sit right now. So that gives us a sense that we are at very, very depressed levels from a price to value standpoint, and a lot of people are starting to get excited. Now, of course, nobody knows what the future holds, but what we do know is over the last couple of weeks, there has been massive chaos across the market. Bitcoin's price has fallen off a cliff, and we continue to see contagion throughout the market. There are multiple centralized lenders who are in trouble, and there's also a ton of pressure from funds at the end of the first half of the year going ahead and selling their assets,

Starting point is 00:09:12 rebalancing, or giving redemptions to their LPs. Where we go from here is anyone's guess, but a massive part of it is the macro environment and the Federal Reserve's continued commitment to go ahead and conduct quantitative tightening. They're raising interest rates and they're selling assets off their balance sheet. That macro story overlaid on the micro story of Bitcoin has a lot of people paying attention. They want to understand what exactly is going to occur. In the next three days, the banks are closed for the July 4th weekend here in the United States of America.

Starting point is 00:09:42 And that means that a lot of people aren't going to be able to get fiat currency onto the crypto exchanges. The last time we had a three-day bank holiday, all of a sudden, the prices fell pretty significantly. Was it because of the bank holiday or was it because of the contagion in the market? It's hard to parse those two things apart.

Starting point is 00:09:58 And so pay attention this weekend. We'll see what happens. But I think that there should be some pressure downwards on the Bitcoin price. Of course, that doesn't mean that Bitcoin's going to zero. It's not going to disappear. All we are watching is short-term pressures at the expense of the long-term viability of Bitcoin. Bitcoin is not going away.

Starting point is 00:10:17 Bitcoin will continue to do exactly what it was designed to do. It's the strongest computer network in the world. It has a programmatic monetary policy. There's a lot of people around the globe who find that incredibly valuable. I hope you guys enjoy these weekly updates and we'll go ahead and see you guys next Saturday. Go to pompscryptocourse.com to learn more, and I'll meet you guys for the next episode.

The Pomp Podcast - #1028 Bitcoin Just Experienced It’s Worst Quarter In A Decade - BTC On-Chain

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