Bullish News for Bitcoin Amid Slumping Crypto Market
Bullish News for Bitcoin Amid Slumping Crypto Market
Amidst the recent turmoil in the crypto market, Bitcoin has shown resilience by posting a modest 5% increase in the month of July. Although the price fluctuated between $53,000 and $72,000, it closed the month at $65,000, offering a glimmer of hope to investors. Nevertheless, the market’s unpredictability suggests the possibility of more sluggish periods for Bitcoin in the near future.
The recent Bitcoin Nashville conference brought positive developments, featuring uplifting speeches on the future of Bitcoin in the United States by influential figures such as high-profile senators, members of Congress, Donald Trump, and RFK Jr. In this edition, we’ll delve into the current state of Bitcoin and the crypto market, and explore what lies ahead in the month of August and beyond.
Bitcoin Remains Range Bound
Since April, Bitcoin has been confined within a trading range, a departure from its typical behavior at this stage of the cycle. The consolidation is most likely due to the accelerated pace that Bitcoin ran to all time highs prior to the halving. This trend is anticipated to persist, especially given that August and September are historically slow months for Bitcoin. Nonetheless, this presents an opportunity for investors to acquire more Bitcoin at prices below $64,000.
During slow periods, many market participants lose interest, while major players continue to accumulate. This often leads to market fluctuations that shake out holders without conviction. However, vigilant observation of the market can enable investors to accumulate Bitcoin, mimicking the strategies of large-scale players. Despite intermittent market upswings, exercising patience and maintaining a long-term perspective are crucial.
Altcoins Take a Beating
Although Bitcoin has remained range bound, the broader crypto market has experienced a downturn, causing most altcoins to lose significant value, ranging between 25% and 80%. Bitcoin’s dominance has increased to 57%, leading to a reduction in liquidity for altcoins. This, combined with the plethora of new coins and tokens entering the market, has resulted in a thinner market overall.
On-chain data indicates that major players are beginning to place limit buy orders to accumulate altcoins at these reduced prices. However, substantial gains in the altcoin market are unlikely until Bitcoin achieves new all-time highs. One exception to this trend is Solana, which has shown resilience against its Bitcoin valuation and maintained a decent dollar valuation. This positive performance positions SOL as a potential leading layer one blockchain due to its rapid transaction speeds and user-friendly features.
Given the current market conditions, it is advisable to prioritize Bitcoin and reserve some capital to invest in altcoins at a more opportune time. Until Bitcoin dominance falls below 50%, there are limited coins with the potential to outperform Bitcoin.
Bitcoin Nashville Conference
The Bitcoin Nashville conference underscored the increasing political significance of Bitcoin in the United States. Noteworthy attendees included Donald Trump and RFK Jr., who articulated plans to designate Bitcoin as a strategic reserve asset for the nation, potentially reducing the available supply and bolstering its value.
Several senators and members of Congress participated in the conference as well. Senator Cynthia Lumis from Wyoming introduced a bill she authored, aiming to designate Bitcoin as a strategic reserve for the US Treasury. The proposed legislation would mandate the government to accumulate 1 million Bitcoins over 20 years to offset the federal debt. While the bill was officially submitted on August 1st, its future reception in Congress remains uncertain.
Financial services and asset management firm Cantor Fitzgerald announced the launch of a comprehensive lending program that enables clients to secure loans using Bitcoin as collateral. This initiative incentivizes Bitcoin retention and circumvents taxes that would otherwise be triggered by selling Bitcoin. Additionally, El Salvador plans to establish a Bitcoin National Bank for issuing collateralized Bitcoin loans, potentially revolutionizing the finance industry.
At the conference, Swan Bitcoin premiered “God Bless Bitcoin,” a compelling documentary that underscores the global necessity for Bitcoin. The film features interviews with prominent financial experts in the cryptocurrency realm. Watch the full documentary here
The event generated considerable enthusiasm within the Bitcoin community, as evidenced by a price surge to $70,000 shortly after the conference concluded. With favorable political developments and forthcoming financial products such as ETFs and collateralized loans, Bitcoin’s future appears promising. Michael Saylor, the founder of MicroStrategy, delivered an optimistic outlook on Bitcoin’s trajectory, outlining strategies for corporations and sovereign states to fortify their financial positions by incorporating Bitcoin as a treasury asset. You can access his presentation here.
The US and Global Economy Slip into Recession
While no government will openly admit to or speak about a recession, the data and metrics all indicate that we are in one. China has experienced several bank collapses, its real estate market is in ruins, and global trade has slowed. The European Union and Canada were the first to cut interest rates as their economies have slowed to a crawl. Germany, the economic engine of Europe, has seen a massive fall in production and has been in a recession since the beginning of the year.
The United States, for all intents and purposes, is also in a recession. Although it is mild for now, the economy is rapidly slowing, unemployment is growing, full-time jobs have nearly disappeared, commercial real estate is on the brink of collapse, and the housing market is beginning to suffer. The behind-the-scenes efforts of the Treasury Department and the Federal Reserve to keep the economy running will likely only deepen the recession once it fully takes effect.
During the July 31st Fed meeting, Fed Chair Jerome Powell hinted that rate cuts would be coming in September. While this may boost asset prices, swift and substantial rate cuts often trigger significant sell-offs in the stock market, commodities, and the housing market. The mistake that some investors are making is believing that this time will be different. In my view, we have until March 2025 at best before economic chaos ensues in the United States – this could potentially happen as early as November this year.
Billionaires, Banks, and Bitcoin – Preparing for a Recession
In the past nine months, billionaires such as Warren Buffett, Jeff Bezos, Michael Dell, Michael Saylor, and Mark Zuckerberg have been pulling billions of dollars out of the stock market, holding large amounts of cash in anticipation of a collapse. Banks have started buying treasuries, particularly in the two and ten-year range, which has led to lower interest rates and the yield curve uninverting, a sign traditionally associated with an impending recession.
You can choose to engage in the markets, as there usually is a “melt-up” period before a crash, offering potential gains by the end of the year. However, having a robust exit strategy is essential to avoid being trapped. Watch the yield curve and overall market sentiment closely – a crash often occurs when everyone is buying with the belief that prices can only go up.
How Will Bitcoin Fare in a Recession?
Although we lack comprehensive data on how Bitcoin behaves in a deep recession or economic crisis, the 2020 market crash due to the pandemic can provide some insights. If a crisis similar to the 2008 Great Financial Crisis occurs, where all assets experienced significant declines, Bitcoin could potentially lose 50% to 60% of its value in a matter of weeks. However, it is possible that both gold and Bitcoin, being resilient hard assets, could recover swiftly post-crisis leaving stocks behind. A severe financial crisis might propel Bitcoin towards mass adoption, with the potential to rival gold or even equity markets in valuation.
US Banks Currently Have 10 Times the Unrealized Losses as in the 2008 GFC
August Outlook
Bitcoin and the crypto markets are unlikely to make significant moves in August, with Bitcoin expected to continue in a range and BTC dominance likely remaining above 55%. Most altcoins will probably remain subdued unless a major unexpected event occurs. Keep engaged and remain vigilant during this volatile period as the global economy teeters on the verge. For those with a long-term horizon of five years or more, consider accumulating Bitcoin periodically, as the best time to invest in Bitcoin is always now.
As always, it’s important to conduct your own research and this is not intended as financial advice.
Links & Tutorials
Bitcoin Education Resources
Hope.com – Learn more about Bitcoin and how to use BTC to protect your wealth.
The Bitcoin Standard – Book by Saifedean Ammous – a must-read!
The Bitcoin Way – Go bankless! Bitcoin education and services to help you custody your Bitcoin safely and securely.
Swan Bitcoin – Bitcoin exchange, IRAs and institutional-grade custody solutions
River Financial – Bitcoin exchange and institutional-grade custody solutions
God Bless Bitcoin – Full Length Documentary
Freedom People Resources
People Pay – Accept Bitcoin payments for your business
Chainrecorder – Prove ownership immutably by recording your documents on the Bitcoin blockchain
U.S. Regulated Exchanges (Fiat Onramps)
Coinbase – Using Coinbase Advance Video
Kraken – Using Kraken Pro Video
KYC Credentials Outside the U.S.
Palau ID – Foreign residence to pass KYC on foreign exchanges.
KYC Exchanges that Accept Palau ID (Must Use VPN – Costa Rica, Columbia, Mexico, Panama)
No KYC Exchanges (Must Use VPN – Costa Rica, Columbia, Mexico, Panama)
DEXs (Decentralized Exchanges) – Best Wallet To Use
Jupiter – Video Solana Ecosystem – Phantom Wallet
Whales Market – Solana OTC Trade Desk – Phantom Wallet
Thorswap – Swap native assets cross-chain (BTC for ETH etc..) and a very unique decentralized Bitcoin lending platform. Works best with the XDefi Browser Wallet.
Decentralized Bitcoin lending platform. Thorswap Overview VideoLoans On Thorswap Video
Osmosis – Cosmos Ecosystem – Rabby, Metamask
Spooky Swap -Fantom – Rabby, Metamask
Trader Joe – Avalanche Ecosystem – Rabby, Metamask
Crypto Market and Portfolio Tracking
CoinGecko for portfolio tracking and up-to-date prices
CoinMarketCap – Crypto Prices
Banter Bubbles – Crypto Prices – Social Sentiment
Trading View – Chart all Markets and trading pairs Tradingview Tutorial Video
Storage – Not your keys, Not your crypto!
Cold Storage Wallets (Secure Long-Term Storage of Your Crypto)
Cold Card (Bitcoin Only) – Video
Hot Wallets (Lower Security – interact with DAPPS and Smart Contracts)
XDefi Browser Wallet – Video1 Video 2
Exodus – VideosWarning-If you have a wallet and an NFT has been sent to your wallet that you did not mint or purchase.. NEVER click on it. Many have malicious code that can drain your wallet! – BE CAREFUL
Stay Free!
Kury
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