Wall Street is Suppressing Bitcoin! (BTC Short Squeeze?) – Last Week Crypto
But what does this september have in store for us, hello, im, crypto, casey and welcome to another episode of last week? Crypto every sunday we review the performance of the largest cryptocurrencies top gainers, as well as the latest global news stories affecting the crypto markets. This past week this week, we will discuss a few economic events influencing the crypto markets, whether september will prove bearish or bullish for bitcoins price. What just happened with the supply of ether and how wall street could be massively suppressing the price of bitcoin. This weeks, episode is brought to you by crypto.com and exchanged with over 100 different cryptocurrencies in over 20 different fiat currencies on krypto.coms mobile app. You can buy crypto with bank transfers, credit debit cards or crypto at true cost, with no markups. They also have a desktop exchange that is solely for crypto to crypto trading. If you use the link below to sign up for krypto.com youll receive 25 worth of cryptocurrency for free when you use the referral code, crypto casey all while supporting the channel also every wednesday. I conduct a weekly ama or ask me anything at instagram.com, crypto casey, so use the link to my one and only official instagram account listed in the description area below to follow me and ask me anything. You want every wednesday cool last week, crypto go Music. Looking at the top cryptocurrencies by market cap bitcoin up 1.9 percent eth on a tear up 19.
1 percent cardano, finally, cooling off a bit down 2.2 percent and finance coin up 0.6. Looking at the top gainers this week, bitcoin cash abc a top gainer. Yet again, this week up an insane 287.3 percent phantom up 113.4 percent iota a blast from the past up 71.4 percent and solana still cranking up 59.8. Nice lets do a quick recap of some of the less interesting economic events influencing the crypto markets by proxy. As we discussed last week, did the optimism surrounding the impending jobs report pan out not exactly jobs. Report disappoints only 000 positions added versus expectations of 720 000. and weak job gains. Leave washington on high alert. The federal reserve and white house had hoped for strong job gains, and the august report did not deliver that makes coming numbers. Critical incoming numbers refers to the release of the cpi or consumer price index report on september 14th. That will likely further stoke inflation concerns which, in tandem with the jobs report, numbers, will dictate what is likely to play out at the fomc or federal open market committee. Meeting on september 22nd, the two taper or not to taper conundrum in the short term, will likely resolve to the latter, meaning the fed will probably not start tapering anytime soon and by tapering we mean that the fed will continue buying bonds to keep the money supply Flush and interest rates, or the cost of our money, pretty much non existent weve, dug into that quite a bit over the past few weeks.
So basically it means a bullish sentiment in the traditional stock markets will likely continue in the short term, even though its becoming quite clear that more liquidity is not having an impact on jobs, managing inflation or anything really, except keeping reverse repo activity high and keeping the Stock market propped up which by proxy keeps the crypto markets rocking for now sweet next lets think about if september 2021 will defy historically bearish performance or capitulate. So over the past eight years september harbors an average of a negative eight percent price decrease for bitcoin. With the exception of only two out of the past eight years in 2015, the price of bitcoin in september went up four percent, and in 2016 the price of bitcoin went up 7.5. So what about this year in 2021? Well, so far bitcoin has performed contrary to previous years months. However, there seems to be a fairly equal split between people with bull versus bear sentiment. Some are calling for a peak in bitcoins price around september 27th, where the golden 51 49 ratio predicts the end of the bitcoin full cycle, while others turn to the bitcoin stock to flow model which predicts 100k per bitcoin by christmas. Note here that we are currently between a bottom and top, this model also predicts bitcoin could reach a floor of 43 000 per bitcoin at the end of september, as usual, its anybodys guess when trying to predict the short term price of bitcoin and when the bull Cycle will end assuming its still raging in the first place, so lets break down this interesting revelation.
Ive been pondering after watching an interview with avanti bank founder caitlin, long into different concepts that paints an extremely bullish scenario for the price of bitcoin, short and long term concept. One equity versus debt based money, bitcoin is equity, based money, meaning there is real underlying asset behind the value of the money determined by the free market and before the us went off the gold standard. The us was an equity financed economy until 1968, meaning all of the debt borrowed by corporations outside of the financial realm was backed by real savings. Basically, the total dollar value of savings made by individuals and companies in the real economy equaled, the total amount of debt corporations borrowed to grow their businesses. During this time, we were saving more of the money that we earned rather than using it to consume or buy products and services, so we consumed less than we produced. Also, during this time, debt in the u.s economy was backed by real u.s dollars and u.s dollars were backed by gold. Hence the equity based monetary system, where money was backed by underlying assets. After we abandoned the gold standard, the u.s turned into a debt based economy and started using circulation, credit or fractional reserve banking, and, if youd like to learn more about the fractional reserve banking system and the current structure of the traditional financial ecosystem check out. My video breaking it down for beginners by clicking on the link above in a debt based economy that uses circulation, credit or fractional reserve banking instead of debt being completely backed by 100 cash.
The banks are allowed to keep only a fraction of the cash and lend out the rest in advent, for example, lets say for every 100 you deposit into your account per the fractional reserve banking system. The bank only has to keep 10 of the total deposit and is allowed to land out the rest. This fraction of deposits banks are required to maintain are known as reserves, so the 10 fraction of the 100 you deposit into your bank, account, is held as reserves and the fraction of deposits banks are required to maintain are known as reserve requirements. Hence the term fractional reserve banking, so since bitcoin has garnered the attention of the traditional financial sector, wall street has started to treat bitcoin an equity based instrument as a debt based one by piling debt claims on it. Lets explore this in our next concept concept: two real demand versus artificial supply. If you watch this channel frequently, you know that prices of assets like gold and bitcoin are determined by supply and demand. When demand is high and the supply is low, we see the price of assets increase when demand is low and the supply is high. We will see the price of an asset decrease but theres something interesting going on here. Wall street is treating bitcoin the same way. They treat gold, except in the scenario of gold. They have the market supply cornered and can largely control it. For now, however, with bitcoin its not the case at all, lets talk about how wall street has been suppressing the price of gold for years by piling debt claims on it and how they have potentially been suppressing the price of bitcoin using the same antics.
The long and short with gold is that there are more paper claims to gold than actual physical gold sure people can buy and store physical gold themselves. However, most of the gold people own is just a paper saying that they own x amount of gold and its stored in some vault in another country. Thinking back to the relationship of the price of assets and supply versus demand. Imagine if the real demand for gold is being met and satisfied with an artificial supply of gold, yep thats, absolutely how the gold market works, the upper hand wall street has in the gold market. Is they pretty much own operate and control the clearinghouses wall street controls? Most of the gold in the world and by wall street i mean all of the global banks, the central banks and the lbma or london bullion market association control most of the underlying collateral gold, not individuals. So as people want to redeem their actual gold wall, street and banks can pretty much trade with each other and fulfill any demand because they control the actual supply. This, however, is not the case with bitcoin. The opposite is true. With bitcoin, most bitcoin is owned and controlled by individuals, but first lets talk about the similarities between wall streets relationship with gold and bitcoin, just like with gold. Currently, there are more paper claims to bitcoin than actual bitcoin. How is it so well with the introduction of leverage margin and futures trading cryptocurrency, basically with wall street, applying old debt based activity to an equity based money system? Bitcoin is heavily rehypothecated and if you want to learn more about reuplocation of cryptocurrency in the crypto markets, click on the link above to watch my video guide explaining it so instead of wall street owning operating and controlling the supply bitcoin in the event of a run On bitcoin, there absolutely will not be enough bitcoin to fulfill demand, because most bitcoin is actually stored in privately owned, wallets off of exchanges and out of circulation.
So lets imagine a scenario where wall street has largely shortened bitcoin, meaning they expect the price to go down. But then the price goes up and wall street is forced to close their positions, regardless of the price of bitcoin. That could be a problem. Bitcoin is currently scarce on exchanges and during bull markets like what we are likely still in at the moment. Bitcoin gets even more scarce, so if a big intermediary, like coinbase, binance or bifidex, with lots of open leveraged short positions, experience a classic run on the bank for bitcoin and theres, not enough of the underlying collateral to deliver the price of bitcoin could spike and spike By a lot, these big institutions with short positions, would be desperately trying to find collateral or bitcoin that they ultimately wouldnt be able to get because it simply doesnt exist in circulation. Wall, street and institutions do not own or control most bitcoin, and never will. At this point, its far too late, when you look at the current amount of bitcoin in circulation and the velocity at which new bitcoin is minted, so lets think about it. If there is real demand for bitcoin and its being met and satisfied with an artificially inflated supply of available bitcoin, what is the true price and value of bitcoin? Well, it should be much much higher if you create an artificial supply of something which wall street has done with gold and is now doing with bitcoin all else.
Equal, the price of the asset is suppressed and, according to caitlyn long, if but more likely, when a short squeeze occurs, bitcoin hodlers will have the last laugh. This is why its so important to make sure you are transferring your crypto off of exchanges to hold safely in a cold storage hardware wallet you can scroll down to the description area below to access the correct and official sites of my recommended hardware wallets bc. Vault is my personal favorite. Another option is the ledger: nano backup pack so scroll down to check them out, protecting your ability to generate income, so you can buy more. Bitcoin is another important thing to consider. So if youd like to learn more about the advanced technical concepts of blockchain and become a developer in the space check out ivan on techs academy, if you use the link below you, can access the academy at a discounted price, so scroll down to check it out. Cool and as if real demand for bitcoin being met with an artificially high supply due to leverage and rehabilitation causing price suppression, isnt exciting enough check this out, more ethereum has been burned than minted. In the past 24 hours eip1559 was supposed to bring deflationary pressure to the network and its working ethereum records negative daily issuance for the first time after eip1559. So as the bitcoin supply slowly increases at about 1.77 inflation rate, the ether supply is shrinking, hence deflation. So imagine how much havoc an eth short squeeze would wreak on its price awesome.
Well, that was last week crypto with me cryptocasey, if you enjoyed the episode, please make sure to like this video and subscribe to my channel for more crypto content. So what do you think of the possibility of wall street suppressing the price of bitcoin? Could a wall street bets esque effort to get as many people as possible to transfer their bitcoin from exchanges to their own private wallets and taking an advantage of a potential short squeeze possible is the short squeeze of all short squeezes on the horizon.