The Pomp Podcast - #972 Will The Bitcoin Bear Market Continue Through The Summer?

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. We try our best to go through the on-chain metrics and explain what the hell is happening with Bitcoin and why has the price been falling. 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.

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Starting point is 00:03:28 that has recurring revenue, sign up at pipe.com slash pomp. Again, pipe.com slash pomp to start trading today. What's up, guys? Bang, bang. I hope that you're enjoying these weekly overviews the Bitcoin market, and this past week was one for the record books. Let's take a look at exactly what's going on. First, we're going to look at Bitcoin's price, sitting right around $29,000. It's been a little volatility, but it's down about 4% in the last 24 hours. If we then go ahead and take a look at Bitcoin statistics, we can see that the market cap is trading around $550 billion. Again, still staying with that inflation rate of about 1.77%, and over 90% of the 21 million Bitcoin have been actually issued into the circulating supply. We can see that the real

Starting point is 00:04:31 exchange volume here is just over $3 billion. There's over a million active addresses and miners have been paid $26.5 million over the last 24 hours to continue securing the most decentralized secure computing network in the world. Bitcoin is now down about 57% from its all-time high, but it's up 12% from that recent cycle low. If we then go ahead and we take a look, we can see that Bitcoin is down 25% over the last year. Gold is also down as is the S&P 500, But over any other timeline, two to 10 years, we can see that Bitcoin continues to drastically outperform both gold and the S&P 500. And then if we kind of look even closer at the Bitcoin price, we can see at this $29,000 level that there's spent in Bitcoin's history only 496 days where

Starting point is 00:05:16 it's traded at a higher price. That means that about 89% of Bitcoin's life was lower. And if you bought during those days and had until now, you would be in profit. Then if we go take a look at the compound annual growth rate, we can see that Bitcoin's compound annual growth rate over the last 10 years sits at 137%, absolutely destroying gold, S&P 500, NASDAQ, or TLT. And then that five-year Sharpe ratio sitting at 1.24, still drastically better than any other asset in these comparisons. Looking at these key market statistics of Bitcoin are great, but obviously Bitcoin also provides on-chain metrics. There's nobody better in the game than the folks over at Blockware, Will Clemente, putting out some great research this week.

Starting point is 00:05:56 we can see here that Bitcoin's price is starting to approach that 200 weekly moving average, that blue line just dropping closer and closer to that price. Then if we take a look at this next one and the on-chain price levels, we can see that the short-term holder realized price, which is in light blue, we're underneath that, meaning the short-term holders are likely underwater. But Bitcoin's price still moving closer and closer to that aggregated realized price, which sits around $24,000 or so. That historically has served as a great point. Whenever Bitcoin's price gets near that, it usually can signal that we're close to a bottom. Then, of course, the MVRVZ score.

Starting point is 00:06:30 You can see here on the far right, Bitcoin's price dragging that further and further down towards that green zone. Then if we look at the future's perpetual funding rate, really, there's not much to see here. It's just kind of sitting neutral. There's not a ton of volatility to the upside or the downside, which is important to understand. One thing that the Blockware team has identified, which I think is super interesting, is this idea of a geographic premium. In this week's newsletter, they went ahead and they talked about how the Asian trading hours actually are putting a massive premium on price.

Starting point is 00:06:59 We've seen this before. As they wrote, Asia's dominated this market for the last two years. They sold the early 2021 top. They bought the summer bottom. They sold the first pump off the summer lows. They bought the dip to 40K, and then they were selling heavily in November.

Starting point is 00:07:12 And so Asia continues to be at the forefront of the market. And right now they're placing a premium on the price in today's market. Then let's go look at the Bitcoin whale holding. what we can see is that Bitcoin whale holdings obviously were drastically impacted by the Luna Foundation Guard having 80,000 Bitcoin reserves. But as they started to sell, it pulled that number down. So what Blockware did was they went in and they pulled out the LFG 80,000 Bitcoin reserves number. So this is looking at whales, not including that organization. And you can see that both the

Starting point is 00:07:43 increase and subsequent decline in whale holdings, those are much more muted now. Then let's go take a look at the supply held by retail. And as you can see in this green line going up into the right all the way to the far side, it's just going vertical now. We're seeing more and more retail. They not only are continuing just to stack sats and kind of dollar cost average in, but they're obviously taking big purchases at these price levels. And then lastly, one of the most important metrics in the entire market is how much of Bitcoin supply has not moved in at least a year. And right now we're sitting at an all time high, over 65% of all Bitcoin in circulation has not moved in the last 12 months. And of course, it's not just about Bitcoin itself. Somehow gold has

Starting point is 00:08:22 gold mining stocks. We should also take a look at Bitcoin and then the Bitcoin miners. Dylan Leclerc over at Bitcoin Magazine, he had a great point. He said that the publicly traded Bitcoin miners in BTC terms continue to crash over the last six months. These have gotten killed because equity multiples have compressed and hash rate has risen while Bitcoin's price has continued to fall. Now, nobody knows what's going to happen in the future, but what we do know is that there's a macro backdrop to Bitcoin right now. There's tons and tons of speculation about what the Federal Reserve is going to do, and they seem to be in control. As they've continued to raise interest rates, as they said they would, tons of assets have all sold off. Stocks, bonds, real estate,

Starting point is 00:09:00 and much more. And Bitcoin hasn't been safe from that. But of course, the big question in all of global finance right now is, will the Federal Reserve continue to increase interest rates? Will they pursue 50 basis point hikes? Or will they at some point have to cool off, maybe pause all those interest rate hikes that are planned. Or maybe they'll actually even give us an interest rate cut before the end of the year. I don't know what's going to happen, but what I do know is that just like in a liquidity crisis

Starting point is 00:09:24 where all asset prices start to correlate towards one, that's the exact same thing that happens when we enter into these quantitative tightening periods. And so naturally the Federal Reserve's in control and it seems like everything is just one big trade. Bitcoin holding up very, very well though, only down about 60% or so from its all-time high. It's doing much better than many of the riskiest tech stocks.

Starting point is 00:09:46 And so the million-dollar question is going to be, what is the Federal Reserve going to do? As always, I hope that you guys enjoy these. And, of course, we'll be back next week with many more breakdowns around the Bitcoin key statistics, the on-chain metrics, and any other metrics or data that we find interesting. Until next week, I hope to see you guys on the internet. Thanks so much for listening to today's episode.

Starting point is 00:10:07 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 palmscryptocourse.com. We've developed a curriculum with the top teams across the industry.

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The Pomp Podcast - #972 Will The Bitcoin Bear Market Continue Through The Summer?

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