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The Perfect (Sh*t)Storm - July 2024 (#27)

The Perfect (Sh*t)Storm - July 2024 (#27)

When cometh the banana zone???

Brent Crosby
July 10, 2024

The Perfect (Sh*t)Storm - July 2024 (#27)

HIIII-DE-HO dear reader! Hope everyone’s Summer has been filled with friends, food, and tom-foolery so far. Your dude Brent hopes today’s issue will explain what’s going on and sooth your weary nerves a bit. And if not, I hope this quick video will do the trick. If that doesn’t work I don’t know what does… Lets go!!!

Motivation

You learn more when things go wrong.

-David E. Kelley

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Money

TLDR; Heavy sell pressure from Mt. Gox creditors, Germany, and U.S. as of late caused Bitcoin to dip hard. This is temporary and likely a good buying opportunity. I’d guess prices go bananas after the summer.

This last week was a complete crap sandwich for cryptoassets. This is largely due to enormous sell pressure. Understanding that sell pressure makes it pretty easy to wrap your head around why crypto, and Bitcoin especially, crapped the bed.

First, you’ve gotta understand what happened with Mt. Gox. About a decade ago virtually all bitcoin trading was done on a site called Mt. Gox. This site was in no way suited to be a fully functional Bitcoin exchange (it was originally an online trading site for those ULTRA NERDY Magic the Gathering trading cards for cryin’ out loud). So they of course quickly collapsed. This was back in Bitcoin’s nascent days and as such bitcoin was only worth a couple hundred bucks. When this exchange went under, everyone’s money became trapped in litigation. And a full TEN YEARS later clients are now getting their money back. Keep in mind that in that time Bitcoin has gone up around 9,000%!!! Yes you read that right. So of course there’s some people selling now that their getting their bitcoin back lol. And that is a big part of the sell pressure. Hard to say how much will be sold, but the Mt. Gox pile alone is worth around 8 billion!

Next, the country of Germany is also selling bitcoin. Germany has seized bitcoin from criminals and bad actors and has decided now is the time to sell. The scary part? The Germans own over 2 billion bitcoin! So of course this spooked markets.

Finally, the U.S. is also selling and has over 12 billion bitcoin. All this combined makes for a lot more sells than buys… for now. Keep in mind the total value of all Bitcoin is about 1.1 Trillion. So the stash of Mt. Gox creditors, Germany, and the U.S. only represents around 2% of the total Bitcoin market. So I’d expect Bitcoin prices (and all cryptoassets, as they follow Bitcoin’s lead) to remain down until the sell pressure wears off.

Just keep it all in perspective… and pray history repeats itself…

While it looks ugly right now… I’d encourage you to zoom out and look at the big picture. This is likely just a blip. I’d personally think of it as a buying opportunity that probably won’t last very long. I think this is the last awful drawdown before THE BANANA ZONE cometh! Usually the summer doldrums are not great for crypto and then thereafter things kick into high gear. Really hope I’m right!