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- Weekly Rundown - January 14, 2024
Is it just me, or does it seem like the ETF approvals came ages ago? And why is the market going DOWN, not up? Is it time to buy the dip? Or sell now to buy lower?
All good questions. Did you see my market update from January 10, 2024?
If not, get it now. It’ll help you answer those questions.
Also, check out the January 4, 2024 update, too. One goes with the other, though they cover different aspects of the market.
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I pointed out a bearish, short-term trading pattern in last week's rundown. Some people unsubscribed upon the sight of it. They couldn’t believe bitcoin’s price could go down this week and possibly more in the next few weeks. Yet, here we are.
Let’s give it another week or two before we start making any judgments about whether the sky is falling or whether this is just a little bump on the road to greatness.
In any event, we have bigger opportunities to pursue. A 13% drop in four days? Trivial. A potential further drop of 25% over the next few weeks? Standard stuff in bull and bear markets.
If you follow my plan, you win whichever path the market takes. Your decisions are easy—three lines on the chart tell you when to buy and two metrics tell you when to sell.
Along the way, you’ll get my analysis and commentary, including tips and advice about buying, selling, altcoins, and other ways to navigate the market.
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Bottom line: at the height of bitcoin’s ETF pump, Microstrategy’s bitcoin was worth $9 billion while the corporation’s market cap was $8 billion. In other words, “the market” valued Saylor’s bitcoin more than it valued his company. With Bitcoin ETFs, the market may consider Microstrategy even less valuable because people can buy exposure to the asset without buying MSTR (Microstrategy’s stock).
My take: Blockworks says Microstrategy is “generally profitable,” which is a, er, generous description. Macrotrends paints a mixed picture and when you look at simple “money in / money out” (not Wall Street accounting metrics), its core business loses money most years. Ironically, Warren Buffett’s mentor, Benjamin Graham, would call MSTR a value investment because its shares trade for less than its “book value,” a simple measure of assets and liabilities. Graham made a fortune buying businesses below their book value after the 1929 crash. It’s a powerful investing concept.
Finally, MSTR is a worthwhile investment.
Why you should care: one more sign that MSTR’s value comes from its bitcoin, not its business. Invest wisely!
After US regulators approved the spot bitcoin ETFs, a slew of large asset managers announced they would not let their clients buy those funds.
Earlier this week, Thinking Crypto put this news in perspective. Watch this video for more on that.
Bottom line: Satoshi would hate bitcoin ETFs.
My take: I agree. ETFs create a strange duality, as I discussed in my book Bitcoin or Bust. They give legacy financial institutions a reason to advocate for crypto, a technology that will destroy them.
But Wall Street can’t make money off of a decentralized, permissionless, anti-fragile money system that funds itself and is accessible to everybody. That’s literally the opposite of its business model. It can, however, make money from charging people for access to financial opportunities—which is literally its business model.
Time will tell how this turns out for bitcoin or Wall Street, but it’s far from anything that the OGs should want.
Why you should care: if you care about financial liberty and self-sovereignty, these ETFs are a moment of reflection, as the author says, to “ask ourselves what exactly we have won with this supposed victory.”
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