The Pomp Podcast - #951 Will Bitcoin Continue To Fall To $30k? - BTC On-Chain Analytics

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 today's episode will clemente couldn't join me for our weekly sit down so instead i just break down all of the charts that he put together i hope that you enjoy this and please bear with me as obviously i'm nowhere near as astute in these metrics as will but i'm doing my best to keep up so before we get into this episode, though, I want to quickly talk about our sponsors. Today's episode is brought to you by Coinbase Wallet, your key to the world of crypto. Crypto isn't made to just buy, sell, and hold. With Coinbase Wallet, you can do so much more. Collect more NFTs, earn more

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Starting point is 00:03:30 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. What's up, guys? Bang, bang. This is the overview of what happened in the Bitcoin market over the last week. Let's jump right in. First, Bitcoin's been trading around $36,000 or so. There's a lot of volatility across asset classes, but Bitcoin actually holding up pretty well compared to the rest of the market.

Starting point is 00:04:08 If we then go look at the actual Bitcoin network stats themselves, what we'll find is that Bitcoin is about a $700 billion asset. The inflation rate unchanged, still at 1.77%. Over 90% of Bitcoin has already been issued and is in the current circulating supply. As we look at the real exchange volume, you can see $5.71 billion trading every 24 hours. That mining reward value, that means that miners were paid $33 million over the last 24 hours to help secure the most decentralized secure computing network in the world. The GBTC premium has turned to a discount It's at negative 33%. Bitcoin's still almost 50% down from its all-time high, but it's up about 9% or so from the local cycle low. If we then go ahead and we take a look and compare some of these

Starting point is 00:04:54 asset classes, it gets kind of nasty. Over the last year, Bitcoin is down 36%. The S&P 500 is also negative at negative 2%. Gold holding strong at plus 5%. But if you go to any other time period, two through 10 years, Bitcoin absolutely destroying the returns of both gold and the S&P 500. If we then take a look at what exactly is going on with the Bitcoin price, we see here that the Bitcoin price has only been above this level for 400 days. If you bought Bitcoin 91% of the time of its life and held till today, you're still in the money. But if you happen to buy it in the 8.2% of the days where it was actually higher than today, you're underwater. So naturally paying attention to that stat continues to be important. Then let's go ahead and take a look at the side

Starting point is 00:05:39 by side comparison of each one of these assets. We've got Bitcoin, gold, the S&P 500, NASDAQ, and TLT. We see that the 10-year compound annual growth rate, still 142% for Bitcoin, drastically outperforming any of the other assets. If we then take a look at the five-year Sharpe ratio, we see that Bitcoin coming in at over 1.5, still making it an attractive asset to put into any portfolio, especially if you're looking for non-correlated assets. Bitcoin continues to be the apex predator of financial markets from that regard.

Starting point is 00:06:09 Now let's go ahead and take a look. Will Clemente and the Blockware team putting together a fantastic breakdown of various statistics throughout this past week. I highly suggest that you go subscribe to their email. As Will and the team points out, Bitcoin had a really volatile week. But of course, if we start to look

Starting point is 00:06:24 at some of the underlying metrics, it tells a very interesting story. first we have the 180 weekly exponential whole moving average this essentially is a moving average that weights the factors to recent price action it just turned red for only the fourth time in bitcoin history meaning the moving average is actually declining rather than increasing another indicator that they've been looking at for a long time now is the short-term holder cost basis or realized price that currently sits somewhere around forty six thousand nine hundred And bear markets typically involve multiple failed underside retests of that price point.

Starting point is 00:06:58 And so what we see is that once again, it went ahead, it tested that short-term holder cost basis, and it rejected it right off of the trend line. If we then go ahead and we take a look, the Blockware team still views the $30,000 mark or somewhere in that low 30,000s as the place where likely we will see some sort of reset and visit that area that is based on a bunch of on-chain macro oscillators, all saying it's likely to retest somewhere in that low 30,000 range. The correlation to the NASDAQ remains extremely high as market participants put Bitcoin in with tech and all their other risk-on assets. Then if we take a look at the DXY, we see that that's pushing towards multi-year highs, and Bitcoin has seen a sharp inverse correlation to that dollar

Starting point is 00:07:44 index. So let's then jump into the network statistics. All of those continue to decline, unfortunately. It's showing a decrease in speculative retail and exuberance in the market. Then we jump to the actual transfer volume dominated by transactions below $10,000, and that's also seen a perpetual decline. Again, Will and the team pointing out that this indicates a transaction batching by exchanges paired with a primary decrease in bull market retail market participants. Then lastly, let's jump and look at the long-term holder dynamics. What we can see years, despite that macro backdrop, under the surface, crypto natives are still holding on tight. The amount of supply hasn't moved in at least one year, continues to grind to new all-time

Starting point is 00:08:27 highs. And the long-term holder supply is also increasing, which is very interesting when compared to their cost basis. The rate of decline in long-term holder cost basis is the sharpest by far in Bitcoin's history. And when it's paired with an increase in the holdings, it shows a level of adoption from top buyers to long-term holders. Now, as we continue to look at various metrics, Will and the Blockware team continue to do a great job at all the on-chain derivative analysis. But ultimately, if you just look at the sentiment as well, you can see it all over the market. Stocks, commodities, real estate, Bitcoin, and crypto at large. Everyone is super, super bearish. And so I tend to think that the fear is actually overstated. People need to be aware.

Starting point is 00:09:10 They need to be prepared. But I don't think that stocks or crypto, Bitcoin, real estate, or commodities go down forever. I tend to think that at the all-time highs, people get over exuberant. They actually get over their skis and they think that we're going up forever. The same thing happens when we get into the bottom of these markets as well. People start to get really, really fearful. They start throwing out all kinds of crazy numbers they think we'll visit. But ultimately what ends up happening is that we bottom well before the most fearful believe. And so ultimately what you have to do is ask yourself, am I a trader? Am I trying to time markets?

Starting point is 00:09:44 Or am I simply trying to dollar cost average into great assets, regardless of what the financial market is? And ultimately what we've seen in the low cost indexing in stocks or in real estate and even in Bitcoin is usually the people that just dollar cost average into assets. They have a really long time horizon. They don't try to outsmart the market by day trading, and they simply don't care about short-term price movements. They tend to just end up performing better

Starting point is 00:10:09 over those long time horizons. And so ask yourself, who are you? But one thing I would still suggest, regardless of whether you're a long-term investor or you're a day trader, paying attention to these metrics is important. The on-chain metrics tell us a whole bunch of stuff about what's happening in the market.

Starting point is 00:10:25 And of course, when there's fear, uncertainty, and chaos in financial markets, the more information you have, usually the better informed you are. And that can be a really great way to calm your nerves calm down, breathe and relax. Because ultimately, information ends up driving information ends up driving patience. And patience is what a lot of people could use right now. I hope that you enjoy these overviews. This past week was a real volatile one.

Starting point is 00:10:53 I'll talk to you next Saturday and hopefully we'll have better news. But until then, I hope that you guys have a great week. Thanks so much for listening to today's episode. I really hope you guys enjoyed this one. Make sure you're subscribed on Apple, Spotify, or your favorite podcast player. And if you're looking to try to transition to get a new job in the Bitcoin or crypto industry, we've got you covered. Head over to pompscryptocourse.com. We've developed a curriculum with the top teams across the industry. It's a three-week intensive training program with over 50 events packed into that three-week time period. Go to pompscryptocourse.com to learn more and I'll meet you guys for the next episode.

The Pomp Podcast - #951 Will Bitcoin Continue To Fall To $30k? - BTC On-Chain Analytics

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