Bitcoin dumped last week and through the weekend, but found support at the $44K level which is represented in this chart below:
Below is a logarithmic chart of US national debt going back 121 years. Log charts really let the data speak for itself:
In the next chart below, we can see that the logarithmic chart of Bitcoin price action going back to 2013 is usually extremely bullish. It only works for the investor if they play Bitcoin longterm and hold through some of these dips. There are plenty of short term traders out there who do well. But the risk is very high to lose their Bitcoin, or most of it. Not a risk Neutral ATM is willing to take. Thus, we hold long term and invest somewhat in other scarce assets only when Bitcoin hits a bull market cycle top. We also plan to buy back in as much as possible when Bitcoin hits the 200 day moving average. This is why we spent all of last week and some of the week before writing about how important it is to ignore price action as much as possible. We know that is very hard to do. Price action brings about an emotional response. Investing is best when emotion is left out of it. Panic buying or selling, both yield bad results. Here is Bitcoin’s log chart back to 2013. This should demonstrate why it is so important to hold Bitcoin longterm. Even when it dips:
It is also important to understand global macro economic trends and why they happen. In the last month since Biden came into the White House. The US has ended some policies like the Keystone Excel Pipeline and joined the Paris Climate accords again. What is the motivation behind that? It’s not oil, it’s the petrodollar. When oil is purchased from Saudi Arabia, it kicks off a chain reaction which ends up strengthening the US dollar. Energy independence does not strengthen the US dollar as much.
If the USD begins to bounce back from it’s low of 89 on the DXY chart. The reason will be it was buoyed by the petrodollar. Saudi Arabia begins this process and as long as that is a major source of oil to the US, the petrodollar is alive and well. There are strings attached, of course. One of those is the over abundance of USD (Money Stock) housed as bank reserves by the Fed. Remember, from previous blogs, US central bank buys US treasuries, then they get converted into bank reserves. These bank reserves are used to loan money to fortune 500 companies but not to small businesses. This creates the cantillon effect. This effect happens when the only companies or individuals with access to capital are the ones closest to the money printer, which in the US is the Fed. This all creates a feedback loop and incentivizes more wreckless money printing and QE. If the money supply grows enough, high inflation can set in. This is the US in 2020 and into 2021. Bitcoin is THE safehaven asset protecting investors from the effects of the petrodollar, inflation, and the Cantillon effect. The chart below explains this well:
"Fed policies absolutely do not add to inequality" - Jay Powell
Neutral ATM buys and sells Bitcoin as little as $20 at a time! You do NOT have to buy an entire Bitcoin. Neutral ATM is here to get everyone off of zero Bitcoin.
Give Neutral ATM a try. We have low rates, convenient locations and we are expanding. Contact Neutral ATM, we will answer all your questions about Bitcoin and using our ATM machines. Find a Neutral ATM Bitcoin machine location near you.