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🥜 How high?
PLUS: FTX saga continues
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What we’ve cooked up for you today…
🏦 This could be huge
⛰️ How high are we going?
📉 The end
💰 And more…
MARKET WATCH ⚖️
Prices as at 3:55am ET
Only the top 20 coins measured by market cap feature in this section
THIS COULD BE HUGE 🏦
BREAKING: US bankruptcy judge approves FTX reorganization plan, two years after the exchange's collapse
It’s only taken two years…
But FTX customers are finally getting some of their 2022 losses back.
A U.S. court has just approved FTX’s bankruptcy plan.
With this plan customers can expect to receive repayments worth 118% of the value of their holdings at the time FTX filed for bankruptcy. (November 2022)
Total repayments are approximately $16 billion.
And at first glance that sounds insanely good for FTX customers.
But there’s a catch…
These are cash only repayments…
At the time FTX went bankrupt, Bitcoin was trading at ~$15,000.
Which means customer repayments will be significantly less in dollar terms compared to what they actually lost. (If they held onto crypto from 2022 to now) 🥹
But at the end of the day, something is better than nothing right?
Here’s what FTX CEO John Ray had to say:
"Today's achievement is only possible because of the experience and tireless work of the team of professionals supporting this case, who have recovered billions of dollars by rebuilding FTX's books from the ground up and from there marshalling assets from around the globe."
If you’re wondering why FTX couldn’t make in-kind repayments to their customers, check this stat out:
At the time of filing for bankruptcy, FTX held only 0.1% of the Bitcoin that its customers believed they had deposited onto the exchange.
However, the official repayment date has not been announced yet.
But when these repayments are made, things could get real crazy. 🚀
Keep in mind a large percentage of this $16 billion will likely be rotated back into Bitcoin and crypto…
There’s even rumours that repayments will be made in stablecoins. 👀
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JUST HOW HIGH ARE WE GOING? ⛰️
Over our current cycle, how high is Bitcoin going to go?
That’s the billion dollar question.
Are we going to get an exponential rise to $500k, before a sharp decline?
Or do we slowly grind up to $150k?
That’s what mathematician, Fred Krueger, broke down in his latest update.
Bitcoin is known for going exponential in the second half of its 4-year cycle, which we are in now:
“What happens in these bull markets & we've had 3 of them, so it's not an enormous amount of data, is that we have a very unsustainable, exponential rise and it really is exponential.”
Bitcoin goes parabolic, everyone is euphoric.
Then, the music stops.
The bubble pops and we get 50-90% drawdowns in crypto prices, across the board.
“It's this sort of exponential thing - the bubble will pop, you know it's going to pop and it does pop. The problem is you just don't know when it's going to pop.”
With his math background, Fred is a huge proponent of the Bitcoin Power Law model.
The Power Law model is a pricing model that predicts the price of Bitcoin as if it were bound by the laws of physics.
It’s also by far the most accurate Bitcoin pricing model discovered to date.
Unfortunately, Fred doesn’t believe the Power Law model will help in pinpointing where Bitcoin will top out:
“Unfortunately the Power Law, I don't think tells you that much about when it's going to pop. We still haven't had enough bubbles and I think they're just notoriously hard to time.”
So Fred’s final answer?
“The answer is: I don't know.”
Fred doesn’t know when Bitcoin will top out.
No one does.
If they claim to, they are lying.
However, Fred does believe there’s an optimal strategy to navigate bull-runs:
“The best way to play this, in my opinion, is to use a Kelly Criterion automatic rebalancing strategy. Let's say you go full Kelly and opt for a 70% allocation -- if the market does explode next year, you sell to exactly that 70% allocation. The more it goes it up, the more you sell. No need to "time the top". And no need to sell your entire stack. Just re-balance.”
The more simple strategy?
Follow Michael Saylor’s strategy:
You do not sell your Bitcoin.
It’s Rule 20 of Saylor’s 21 Rules for Bitcoin, unveiled in his 2024 Bitcoin Prague keynote.
That’s the strategy we’ll be following. 🍾
THE END 📉
The 3 week inflow streak has come to an end. 😥
Last week digital asset funds experienced net outflows of $147 million.
Let’s break it down.
As always, the focus was on Bitcoin with outflows of $159 million for the week.
Ethereum also saw outflows of $28.9 million.
However…
Solana bucked the trend and actually had a solid week, seeing $5.3 million in net inflows.
Short-Bitcoin also experienced inflows of $2.8 million for the week. (investors betting that the price of Bitcoin will fall)
The United States saw $209 million in outflows last week.
Germany, Hong Kong and Sweden also experienced outflows of $8.3m, $7.3m & $2.1m respectively.
Whilst Canada, Switzerland and Australia saw inflows of $34.9m, $43.0m & $2.0m respectively.
The outflows that we saw last week are likely a result of the rising tensions in the middle east.
When specifically looking at the US Bitcoin ETFs, they only experienced outflows on Tuesday, Wednesday and Thursday of last week. (Monday and Friday saw inflows of $61.3m & $25.6m respectively)
But things have seemingly turned around now.
This Monday, the Bitcoin ETFs saw net inflows of $233.8 million.
Fingers crossed we see inflows like this throughout the rest of the week. 🤞
CRACKING CRYPTO 🥜
Ethereum proposes 33% transaction increase with EIP 7781 to boost network efficiency. Proposed Ethereum EIP 77781 changes promise boost in efficiency and transaction speed.
Crypto adoption on track to hit 8% by 2025. Institutional interest and economic uncertainty are driving forces behind the accelerated global adoption of cryptocurrencies.
MicroStrategy Surges to 6-Month High as Bitcoin Wrestles With Key Moving Average. NEAR, UNI and APT led crypto gains, while bitcoin faded after pushing through $64,000 earlier in the day.
Revolut prevented $13.5 million in crypto losses for customers via fraud protection measures. U.K.-based fintech giant Revolut said it prevented nearly $13.5 million in crypto losses for customers via enhanced fraud protection measures.
WHAT WE’RE READING 📚
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Your Next Breakthrough (link) - Personal growth with Mark Manson
The Neuron (link) - AI trends and tools to keep you ahead
CAN YOU CRACK THIS NUT? ✍️
Select your answer below and you’ll be redirected to the results page. (answer explanation can be found after “Meme Corner”)
How often is the difficulty adjustment in Bitcoin?(approximately) |
MEME CORNER 😂
Because what would the crypto world be without its share of memes?
Trivia Answer: B) 2 weeks 🥳
Every two weeks, Bitcoin will self-adjust its mining difficulty. This is to keep blocktime at approximately 10 minutes.
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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.
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