Absurd
Daily Ramble
It’s summer in Portugal. While that’s true of the entire northern hemisphere, there’s something special that happens in Sintra when the weather is that perfect kind of warm, there’s not a breath of wind, and everyone and their dog heads to the beach to hang out, take some sun, and frolic in the cold waters of the European Atlantic. “Take some sun” is not the way it’s typically said in English, but it’s a turn of phrase that makes too much sense to me now, so I’ve gone ahead and adopted the straggler.
Slightly sunburned, with a surf sore body, it was apropos to come across this reminder today.
As much as I like the process of being productive, living in a culture that elevates chill-out time to celebrity status is a great balance — it’s easy for me to overdo it.
But what I wanted to Ramble about today is the heinous video I shared below. By now, I’m sure you’ve seen it as well if you haven’t been off under a rock somewhere this last weekend. Pemex, a Mexican state-owned energy company, experienced a gas pipeline explosion underwater in the Gulf of Mexico off the shore from Cancun. It’s a hellish scene to witness, and I’m glad to hear it’s now been brought under control. Unfortunately, however, there are some facts about the situation that are being inaccurately thrown around.
Pemex is a state-owned company, not a corporation, as is being popularly misreported. It’s $114B in debt — the largest of any major oil-producing company. From what I’ve gathered, financial distributions from Pemex fund almost 30% of Mexico’s budget. Pemex is not a profitable company and is under-investing in its infrastructure as a result. Since it is owned by the Mexican government, I have a tough time calling Pemex a capitalistic endeavor. More accurately, it seems like Pemex is the single most important source of funding, keeping the Mexican government afloat and the cartels from running the show.
No matter how it’s sliced, energy is a tricky business. There’s no way we get energy without impacting life on our planet in some way or another. But seeing things like this reminds me of the absurd amount of risk we take upon ourselves and the planet to move our vehicles around.
Shocking Things on the Interweb
If you haven’t seen this yet, you must. It’s not Hollywood, but it looks like it was lifted straight from the plot of Hell Boy.
Bitcoin Price Prediction
Weekend: $28k - $36k
Today: $32.8k - $34.7k
Tomorrow: $32k - $36k
Bitcoin did prove to be volatile this weekend after $34k was broken on Saturday. The price marched up to $36k only to be soundly rejected by the bears. Price is now trading just above $34k with bearish momentum — meaning there’s pressure on the bulls to step up. The bulls want to see the day close above $33.8k or the weekend’s efforts to drive price up will have been for naught.
Zooming out, we continue to be forming a high time frame bottom here, but we’re not out of the woods. A weekly close below $34.7k, which has held for seven weeks, would introduce tremendous downside risk. Looking at it from market fundamentals, GBTC is a publicly-traded fund unlocking substantial shares related to Bitcoin this week, i.e., volatility incoming. All-in-all, I suspect we’ll get either a break out or break down this week.
Bitcoin Q & A
Q: Did Bitcoin survive the largest network change in its 12 year history?
A: Yes.
On Friday, the Bitcoin network underwent the largest difficulty adjustment in its 12 years of history: a decrease of 28%. The difficulty was reduced by 28% because blocks were being generated much longer than ten minutes, which is the protocol’s target. Blocks were generated more slowly because a tremendous amount of Chinese mining was halted by the Chinese Communist Party. Already, blocks are generated at 12 minutes instead of the 25 minutes seen right before the adjustment.
Bottom line: the last few weeks have been a testament to Bitcoin’s anti-fragility.
Thanks for reading,
Kent
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