Barbershop Talk
Daily Ramble
I went to the barber today. We were talking about how wonky the world had gotten. Specifically, she was saying how the vaccine in Portugal wasn’t going to be mandatory, but of course, only those who’d been vaccinated will be allowed into public events. You know, what’s old is new, and wah-lah, the scarlet letter is en vogue again. Luckily, there’s a vaccine shortage in Portugal with no resolution in sight. It pays to be the tail on the geopolitical dog sometimes.
That became the launching point for discussing why the world is so bloody weird. I gave her my pet theory that it’s because the financial system is in the midst of imploding due to unabashed money printing. She went on to tell me how shocked she was to learn the US didn’t have much gold backing the dollar any longer. I clued her in that it hadn’t had any gold backing the dollar since 1971. Nor has any major fiat currency. By the end of the conversation, she was planning to learn everything she could about Bitcoin. She liked the idea that at least energy backs Bitcoin tying it to physical reality in some way.
As I biked home, I thought about how stinking early you and I are at this point. Like my barber, I’d bet my left pinky toe that there’s a good chunk of the population who believe the fiat monetary system has something backing it beyond our faith in the government issuing it. It’s taken a lot of societal pain to get folks to look up from their day-to-day reality and begin to question the whole game. But the good news is that it’s starting. One honest, hard-working person at a time is realizing that the central banks of the world are stealing their money, a proxy for our time, through inflation. By god, when those chickens come home to roost, the outrage that’ll come will dwarf any of the anger we’ve seen thus far — and the price of Bitcoin will go up.
Favorite Thing on the Interwebs Today
Thanks for pointing me towards a good laugh today, Toby!
Bitcoin Price Prediction
Yesterday: $53.6k - $59k
Today: $49.5k - $56k
Tomorrow: $48k - $56k
The pivot I anticipated holding yesterday didn’t, making my downside predictions off base. Price pushed up to $57k, and instead of consolidating and pushing on, it was soundly rejected, going clear down to $50.5k. Again, the price is trying to pivot here, but I’m split 50/50 if it’s able to or if we need to push down into the sub $50k region, which should act as strong support. Either way, the fact that sentiment is getting increasingly bearish means fear is growing in the marketplace, increasing our bottoming odds. Even if we bounced between $50k-$62k for the next couple of months, we’d still be looking quite good.
On the fundamentals side, many eyes have been focused on the open interest in Options at the moment. Options are a derivative trading tool and beyond the scope of explanation here. What’s important to note is that there’s a lot of money riding on what happens to Bitcoin’s price in the next two days. The movement of that money has a way of keeping Bitcoin’s price constrained until it’s over. We could see some fireworks in the next couple of days, but I think most likely we close the week around $50k and push upward next week.
Bitcoin Q & A
Q: How does Bitcoin send and receive transactions?
A: Bitcoin nodes send and receive transactions.
A transaction removes some amount of Bitcoin from one wallet and places it in another wallet. New transactions make their way, node by node, across the network where miners pick them up. The miners are responsible for taking each transaction and bundling it into a block, which is then mined. (For now, think of the miner as someone who’s rewarded in new Bitcoin to create a valid block.)
The new block is sent back across the network. Each node independently verifies the block and adds it to the blockchain stored at that node. This is how all nodes in the network verify each transaction without any central point of control.
Thanks for reading,
Kent
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