GM and welcome to The Crypto Nutshell! 🫶 🥜 

The crypto newsletter more invigorating than realizing you've developed an unbreakable shield and the responsibility to protect freedom... 🛡️🦅

Today, we’ll discuss:

• Bitcoin’s September performance isn’t great… 😬

• Crypto expert: The summer trading lull 🌅 

• Breaking down exchange balances ⚖️

• And more…

MARKET WATCH ⚖️

Only the top 20 coins measured by market cap feature in this section

BITCOIN’S WORST MONTH 😱 

Did you know that September is statistically Bitcoin’s worst performing month?

6 years running, September has always been a terrible month for Bitcoin. 📉

Here’s the real crazy part. September has only seen positive return’s 3 times in the entire history of Bitcoin. These were in 2012, 2015 and 2016.

That’s wild. 🤯

Don’t be alarmed if we see Bitcoin’s price dip even further in the short term. If history repeats, as it so often does with Bitcoin - it’s more than likely.

The only positive we can take from this (if there can be any) is that 2022’s September was a relatively small dip at -2.73%. Maybe we see a dip of this magnitude again?

We thought the chart below was interesting. But remember, just because a month has seen negative returns historically, doesn’t guarantee it will have negative returns again this year. Take April 2023 as an example.

Who knows if this trend of negative September’s will continue…

Just remember that we warned you… 🗓️ 👻 

TOGETHER WITH THE BRRR 🤖 

Do you want to sound smart in front of your boss?

We’ve got you covered on crypto. But if you want to be up to date with all the latest in stocks and A.I - The BRRR has you covered.

They’ll help you print money. Like the U.S government. 🖨️

The best part?

Once again, they’re totally free.

Click that beautiful subscribe button and it’ll automatically subscribe you to their list.

If they’re not your cup of tea? You can always unsub. Major Key. 🔑 

EXPERT OF THE DAY 💰

Real Vision founder and macroeconomic expert Raoul Pal is extremely bullish on Crypto, but specifically Solana, Ethereum & Bitcoin. In that order. 🤔

Raoul believes that Solana will out-perform both Ethereum and Bitcoin. Yet 90% of his portfolio is weighted in ETH. Despite thinking Solana performs the best, he still believes that Ethereum has the best risk to reward ratio.

In his latest ask me anything, he broke down why Bitcoin & crypto has been largely flat over the last few months. However, this won't last long as he believes quarter 4 is where things start to erupt.

He also revealed his top 3 trades.

Unsurprisingly they were:

• Crypto 🪙 

• Technology Stocks 🤖 

• Copper 🥉 

Why has Bitcoin & the crypto market in general been so flat & boring over the last 2 months?

Raoul believes the answer is simple. It’s a classic summer lull. ☀️

Everyone is on holiday and out of office, not buying or trading crypto or anything for that matter.

There’s no new money around. Raoul argues in a summer market, you need patience.

When will things pick back up?

Raoul has a thesis that after we get through August / September, we are going to get more cowbell. AKA - more money printing.

He believes the FED is going to overshoot inflation, with inflation falling under 2%. This will be used as an excuse to pause or cut rates and then… print more money. 🖨️ 💴 

Raoul is predicting this to play out in quarter 4 this year. (October - December)

We then have the spot Bitcoin ETF approval to look forward to in early 2024 & the Bitcoin halving next April.

Hold on to your seatbelts, because volatility is coming. The next 6 months will be big. 🚀 

Nutty’s takeaway: A summer lull with prices fairly stable and not much news flow is good for one thing & one thing only. Accumulating. 😉

Don’t be the sucker who’s FOMOing in when everyone’s talking about Bitcoin again and we have insane swings in price.

Lulls are for accumulation. 👝

ON CHAIN DATA DIVE 📊

The collapse of FTX gave everyone a bit of a fright (to say the least…).

It’s becoming more and more common for investors to move there coins onto cold storage. Regardless, exchanges are still the focal point of the Bitcoin Network, today we’ll be diving into Exchange balances and Net Flows to find out how crucial they really are.

The supply of Bitcoin held on exchanges peaked all the way back in March 2020 at 3.203 million Bitcoin. Since then it’s been a steady decline.

In fact just this week the total exchange balances reached a five year low of 2.256 million Bitcoin. 😮

What’s even crazier is the dominance of the top 3 exchanges, combined they account for ~1.5 million Bitcoin or ~66.49% of the total amount held on exchanges.

• Binance: 691.2k BTC

• Coinbase: 439.8k BTC

• Bitfinex: 320.7k BTC

Glassnode reports that the daily transfer volume of Bitcoin (entity adjusted) is 122,000. Exchange related activities (inflows/outflows) make up 54% of this daily volume.

The chart below breaks this down. The blue area represents exchange inflows and outflows. The orange area represents the total daily volume of Bitcoin. And the red line represents the ratio between Exchange flows and total volume.

Exchange dominance reached 58% in June 2021 before falling sharply all the way down to 33% in October 2022. From here, we’ve seen exchange dominance recover from the impact of the FTX fallout all the way back up to 54%.

The chart below breaks these volumes down even further:

• 🟠 Non-exchange related volume

• 🔵 All exchange related flows (inflows and outflows)

• 🟣 Funds transferred to/from whales (1k+ BTC) and exchanges

• 🔴 Inter-exchange flows

Inter-exchange flows are relatively flat at ~7.5% of total on-chain volume. The whale-exchange portion has recently reached a new high of 17.9%. Interestingly, overall dominance of exchange related flows are approaching all-time highs. 📈

Nutty’s Takeaway: The first chart shows us that exchange balances have been decreasing since March 2020. The second chart shows us that we’ve seen an increase in exchange related activities such as inflows and outflows (likely a large amount of outflows as the exchange balance is declining).

Clearly investors are choosing to look after their coins themselves in cold wallets. Trust in the safety and security of exchanges has been falling ever since the collapse of FTX.

Bottom line: Bitcoin is still flooding out of exchanges which bodes well for its price. Coins held in cold wallets are much more likely to be held for longer periods of time as there is another degree of separation between selling.

Caveman takeaway: Indicators suggest Bitcoin go up. Ooga Booga. 🍖 

CRACKING CRYPTO 🥜

TRIVIA TIME ✍️

What is the total crypto market cap right now?

• A) $1.01 Trillion

• B) $1.05 Trillion

• C) $1.02 Trillion

• D) $1.07 Trillion

Find out the answer at the bottom of this newsletter 😀

MEME CORNER 😂

Because what would the crypto world be without its share of memes?

Trivia Answer: B) $1.05 Trillion 🎉

According to CoinMarketCap, the entire crypto market cap is currently ~$1.05 Trillion.

NUTCASE REVIEW OF THE DAY 🔍

DISCLAIMER: The content of this newsletter is not financial advice. This newsletter is strictly educational and is not investment advice. Please be careful and do your own research.