Item #1: U.S. Government dumps more Bitcoin
Some 19,800 BTC linked to Silk Road were moved to Coinbase Prime on Monday, blockchain data shows, possibly foreshadowing the U.S. government selling the seized assets.
BTC dipped below $96,000 following the transfer.
The U.S. Marshals Service, a division of the DOJ, announced a partnership with Coinbase Prime to “safeguard and trade” the government’s large-cap digital assets.
This is playing out exactly as I said it would earlier this year when I posited a link between the U.S. government selling its Silk Road coins (those originally belonging to James Zhong who was arrested in 2021; the Ulbricht coins were auctioned in 2014 to a private buyer), Coinbase, and Bitcoin falling during office hours on the East Coast when employees wake up to sell Bitcoin on Coinbase, typically between 4:00 AM to 12:00 PM PST when Bitcoin is weakest relative to the Nasdaq.
Note how the news broke during market hours, when my method calls to be short, and sure enough I was short that day. This has led to a return of the divergence of Bitcoin being weak relative to stocks.
After a small setback in November as Bitcoin surged, the method is working great again and will continue to work for the foreseeable future as the U.S. government continues to dump its massive stash, keeping a lid on the price for many months at a time as it had done in March-October 2023 and from March- October 2024 (note the pattern?). Each of these long stretches of the price falling or being flat coincides with the government selling its stash.
On April 3, 2024, the U.S. moved $2 billion of Silk Road coins to Coinbase. This was when Bitcoin was at $65,000. Bitcoin would stay rangebound until Trump’s win seven months later.
On March 31st, 2023 the U.S. government again moved $1 billion of Silk Road coins to Coinbase for selling. This was when Bitcoin was around $22,000. Like above, it would remain in a $5k range for the next 7 months, until rallying again on October to $30,000.
Such selling puts a definite lid on the price of Bitcoin for many months at a time. The evidence is clear.
Regarding the common argument that this selling represents only a small fraction of Bitcoin’s total daily volume and thus should be inconsequential, this is wrong. Coinbase selling moves the market even if it’s small relative to total Bitcoin volume for that specified time frame. How is this possible? Much of the apparent Bitcoin liquidity is copycat volume. Coinbase leads the selling and others follow. If the U.S. government sells, say, $50 million of Bitcoin on Coinbase, this will cause a dip in the price that will be mimicked by traders on other exchanges, who will also sell in sympathy to eliminate the arbitrage opportunity. So the actual liquidity in the Bitcoin market is much less than it otherwise appears due to all the copycat traders and volume. Much of Bitcoin’s liquidity is an illusion. It’s a subtle point, but it’s why I am so well paid in order to figure this stuff out when no one else can.
To be the only person to tie together all three of these when no one else had done so is evidence of high IQ and superior pattern recognition it entails. As I said before, my method works whether Bitcoin is at $25k or $60k or $90k. The absolute price does not matter.
Neither will the anticipated Trump Bitcoin reserve help. The selling will continue, as Trump has neither the power nor inclination to do anything about it. Seized Bitcoin belong to the public. Trump cannot just divert those funds without congressional approval. And this assumes Trump actually follows through with plans for a Bitcoin reserve and that it gets enough votes. I predict neither.
Item #2: As I also predicted, Trump has embraced Mark Zuckerberg with open arms, scheduling a Mar-a-Lago meeting with the Meta CEO. This has led to Meta stock rising from $580 to $615 on this development, which is a record high for Meta stock. By being long tech stocks, such as FBL, which is a 2x leveraged version of Meta, I have profited from this.
Here is what I wrote on July 2024:
‘Big tech’ companies will also thrive. Tax cuts, stimulus, and deregulation are a bigger tailwind than the headwind of tariffs. Trump knows that Silicon Valley is a major source of money and influence and is the future economically (not those coal towns or factory jobs politicians love to romanticize about), so pleasing tech people is very important even if there is ideological friction. Tech companies are bigger contributor to the stock market, too, compared to a decade ago. Nvidia is something like 7% of the S&P 500 now, which is a record for any individual stocks, surpassing even Apple.
Trump cares much more about the opinions of people who have influence and power, like Zuckerberg, than ideological conformity or purity. Trump knows that ‘big tech’ is the future and wants to win over Silicon Valley billionaires, who have the power. This has led to grumbling by the likes of Nick Fuentes and others about selling out. Anyone who is surprised by Trump doing this does not know Trump well. It’s funny how so many people who spend so much time following politics are surprised by Trump’s choices or still not getting it. Trump has been a power broker his whole life. He’s drawn to power, and his whole life revolves around either creating power for himself or appealing to those who have it. Right-wing ideologues typically do not get far in American politics. They do better elsewhere like in parliamentary systems but not here. Left-wingers do better, but even then still have the problem of losing the middle.
Item #3 Indeed, tech stocks have surged since Trump’s win:
https://i.imgur.com/nIiiLdG.gif
I was also right about the stock market ignoring proposed tariffs despite all the media hype and doom and gloom by so-called experts (the same useless experts and media who were wrong in 2016-2017). The economic impact will be tiny. No one is losing sleep over it.