The great Bitcoin/crypto die-off continues

The great Bitcoin/crypto die-off continues, with Bitcoin having dropped over $10,000 in the past week alone, with no end in sight to the selling. The >$100k price targets as promised by the useless analysts and experts is never happening, just as they were wrong in 2018, 2021, and 2022. What happened to $100k, Mr. Lee? 2026 it is now? Keep trying. He will get it right eventually…as in never.

MicroStrategy (MSTR) stock has lost a third of its value over the past 2 days, from $1,800/share to $1,200. Saylor always comes off as an unstable genius in his videos. Like he thinks he is in control, but the building is on fire or soon to be on fire. “I’ll keep raising debt to buy more! What can possibly go wrong?”

When Bitcoin crashes back to $20k, MSTR will be in a far worse position than before, having added to its debt burden to buy above $60k. So it will have its existing debts plus new debts. As I said last week, the smart thing would have been to raise the cash to keep on the sidelines to buy at a much lower price (like how there are different-sized infinities in math, buying at $60k is 3x as stupid as $20k yet still infinitely stupid).

To my credit I didn’t get swayed by the hype. I stood my ground and watched the wave crest and fall. “We’ve” been through this before. We know how it ends–it always does. People like me tend to keep being right as fads and cycles come and go. ‘Tried and true’ will almost always beat ‘new and improved’.

Last week when crypto mania reached another climax, with promise or sight of riches within arm’s reach, the rug was pulled out by those same people who were hyping it to begin with. They told the public it would go to $100k–but knowing it wouldn’t or that someone else would beat them to it–sold at $70-74k. It is because of the avarice and stupidity of the public that the scam keeps thriving.

There are two ways to win at a shell game: either to not play, or exit the game before your opponent does. A pyramid scheme will never have enough new money to pay off the earlier investors…this is a mathematical fact. The profits for a few come from the losses of many, sorta like the 2008 banking crisis, in which millions of taxpayers socialized the losses of those at the top.

Yes, I know, it’s still higher than it was last year, but it will be sub $20-25k again, probably later this year or early next year easily. It’s a repeat of 2022 all over again. The chart pattern is identical to 2022, where it tops out and then falls in cascades/waves, without much of any recovery. Soon will come the crypto hedge fund blow-ups, another major exchange failure (like FTX in 2022), another ‘crypto king’ dethroned…You can set your watch to it.

The salesmen will come up with new narratives, like how ETF demand means that thousands of Bitcoin must be bought on the open market, yet there will always be enough Bitcoin to be dumped to drive the price much lower. As of writing this, there are 19,657,706 Bitcoin in existence. It’s impossible for MicroStrategy or Blackrock, which combined own only 400k Bitcoin, to ever buy enough to prevent even a small fraction of those nineteen-million or so Bitcoin from entering the market and pummeling the price.

Just like how every Marvel movie ends with a cliffhanger or plot hole that keeps the door open to a sequel, the crypto storyline is always building on itself, justifying its existence through some new iteration. In 2017 the narrative was mass adoption by merchants, which never came to be. Or ICOs (remember those?). Or the ‘lightning network’. In 2020-2022 it was Defi and NFTs. In 2023 it was ETFs. It’s always something. Now it’s ‘the halving’. Maybe it will be AI next? Whatever it is, the ride or insanity never stops.