Silence Is F*cking Golden, Llyod
Hands down, one of the better Ari Gold quotes. But gold was so 2006; it’s all about Bitcoin today. The OG crypto has dropped over 40% over the last three months. Meanwhile seemingly every other asset has gone up & to the right: stocks, oil, gold, you name it. This was Bitcoin’s worst quarter since Q4 2018 — yet no one is really talking about this. This silence is golden.
When the price of Bitcoin doubles, everyone & their mother (mine included) is talking about it. This hype drives others to join the party & buy Bitcoin out of FOMO, clouding the true sentiment and value. Hype makes things hazy. But now with prices 40% off its high, speculation and watercooler talk have slowed. And most importantly, front page media headlines on Bitcoin have slowed as well. Again, this silence is golden.
You see, it’s when Bitcoin is silent when it says the most. It tells us what price levels are being supported when FOMO traders aren’t involved. We’re in the middle of a low point for Bitcoin. Not necessarily the price low point, but the sentiment low point. Over the last month, you’ve had China crackdown on its Bitcoin mining operations, India has pressured its banks to avoid dealing with Bitcoin, and regulatory bodies in the US are expressing more & more concern over the lack of governance of cryptocurrencies. Yet, here we are, at $35,000 BTC. Yes, down 40%+ off its high 3 months ago. But still up 3x from this time last year.
Bitcoin could still be cut in half from these levels. But consider me a buyer. The price of bitcoin this quarter is irrelevant. The price next year is irrelevant. Where will we be in three, five, ten years time? That’s what matters. With this support level around $30,000 we’ve been seeing, it’s hard to think Bitcoin will trade for less than that for sustained periods of time going forward.
Robinhood follow up: Last week we touched on the Robinhood IPO. After diving further into its filling documents, one number stood out as alarming. More than one-third of its crypto-related revenue came from Dogecoin transactions, or nearly 6% of its total revenue(!). Yes, be quiet, 6% is meaningful. If someone said they spent 6% of their time with Jeffery Epstein, you’d be concerned. If 6% of your paycheck was paid in US Postal Stamps, you’d be concerned.
By: Edward L. Sherfey, III, CFA
What I’m listening to: TWO LANES — Never Enough / Lights (Piano Versions). Two brothers out of Berlin bringing the piano-based lowkey tech vibes and brain food coming to kick off this short week.
Obvious Disclaimer: I am not a financial advisor. All opinions expressed in this article are solely my own opinions and do not reflect the opinions of any other entities of mine. This article is for informational purposes only and should not be replied upon for investment decisions, advice, or recommendations. I may maintain positions in any of the securities mentioned this article.
