Mark Jeftovic: Bitcoin Is The “Short The Status-Quo” Trade

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by John Rubino, Dollar Collapse:

From Mark Jeftovic at BombThrower.com:

During one particular nasty down-day during the April – May crypto-mini winter, I put out an email alert to my premium list telling everybody to remain calm and keep the bigger picture in mind. At the time I said something like “It is not my intention to step in with a calming letter every time cryptos get beat up”.

Since then, we’ve gone on to fresh all-time highs and when cryptos did start moving again, it happened very fast.

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So here we are again, we’ve been pondering for a few issues on whether cryptos will come off with the wider markets now that The Fed is pretending to take the punchbowl away.

On top of that, the Russian Central Bank released a report calling for a blanket ban on cryptos. For some reason, when flat out authoritarian states like China or Russia come out against emancipatory non-state money, people take it as a bearish sign. What did you think they were going to do? Nevermind that the Russian news doesn’t amount to a Bitcoin ban, it states the central bank’s recommendation on Bitcoin. Hardly surprising, given that Bitcoin is a non-state monetary system.

So the wider markets are imploding. TLSA, NFLX, ARKK, it’s a total sh*tshow. Cryptos beat up as well. Coinbase, who we already know from previous quarters actually experience increased transaction revenues during times like this, is under $200/share and now trades at a P/E of 14.

We know from past issues of TCC (citing their own shareholder letters) that Coinbase’s revenues increase during episodes of volatility. I bought more COIN on Friday afternoon.

So even though I said I wouldn’t make it a habit to do pep talks during drawdowns, we do have quite a lot of new subscribers since last year’s crypto mini-winter. I will bring your attention to a couple things.

This is an infographic of Bitcoin corrections by year since 2012:

Measured from the high at around $68.5K USD, we’re off around 44%.

I’ve seen worse. Lot’s of times. We will see worse in the future. We may even see worse now. This is what an unfettered, unmanipulated, non-curated market looks like. (It is also worth noting that Bitcoin is, in a typical year, good for about four decent sized pullbacks of 20% or so. Every year).

What I also know is that if the Fed raises rates 4 or 5 or even 7 times, if they come out with a 50bpt “surpise” hike in March, then it means that somewhere along the line the decision has been made to completely destroy the entire global financial system. Because that is what the outcome will be.

If that’s the case, there will be (for starters) a 400 Trillion dollar exodus from the global bond market, and at least some of it is going to flee to where central banks and governments can’t touch it: crypto and precious metals.

As Greg Foss put it in that What Bitcoin Did interview I linked our last issue: Clever hedge funds think the pair trade to be in is: long equities / short Bitcoin (what Foss calls “hedged and wedged”).

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