#1020 When Will Bitcoin Miner Capitulation End? - BTC On-Chain Analytics

In today's episode, I break down Bitcoin On-Chain Analytics. I'm usually joined by WiIl Clemente on Saturdays to discuss his research through articulating his weekly newsletter. Unfortunately, Will was unable to join us this week. Instead, I go through the Blockware Newsletter and discuss the on-chain data. In this weeks update, I talk about the Fed Funds Rate, Future Market Expectations, Miner Selling, The continued de-leveraging, and when the Bitcoin bottom may be in. To see the video with the corresponding charts referenced throughout the interview, go to my Anthony Pompliano YouTube Channel. ======================= Today’s episode is sponsored by Abra. Based in California and backed by top VC firms, Abra is an all-in-one simple, secure app that allows you to trade over 110 cryptocurrencies, get 0% interest loans using your crypto as collateral and earn interest with up to 14% APY on stablecoins and 8.15% APY on Bitcoin. Join nearly 2 million users by downloading Abra from the Google Play or Apple App store. If you download the app today, you will get $15 in free crypto once you fund your account. You came, you invested — now conquer. ======================= The number one name in NFT domains and the world’s most powerful wallet are teaming up to bring something new to the crypto and Web3 world: That’s right, Unstoppable Domains and Blockchain.com partnered to create NFT domain names ending in . Blockchain. It’s the perfect ending to show that you’re a believer in a decentralized future. The Blockchain.com community can get one, for free by signing up for the waitlist here. Free NFT domains provide all the benefits of premium Unstoppable Domains, including fee-free, lifelong ownership. Don’t have a Blockchain.com wallet? No worries, these new domains are available to everyone for as low as $5. Either sign up for a free blockchain.wallet or visit Unstoppabledomains.com to buy your domain today. ======================= Crypto is all about giving the power back to the people and our sponsor, Pipe, is doing that in a big way. Pipe is the world’s first trading platform that allows you to trade recurring revenue streams for up-front capital. And with Pipe’s new API, companies with recurring revenue can build seamless, embedded financing options into their platforms. One of the most interesting uses for Pipe’s new API right now is Compass Mining’s “Mine Now, Pay Later” which powers payment plans on bitcoin mining hardware so more miners can start or scale with a smaller up-front investment. Whether you’re looking for mining hardware or scaling any business with recurring revenue, check out Pipe to access growth capital with: No loans. No dilution. No restrictive covenants or warrants. Just growth on your terms And right now, Pomp Podcast listeners can access tens of thousands of dollars even millions fee-free for 12 months. Whether you are a bitcoin mining company looking to enable financing for your customers or a SaaS, DTC, or any business that has recurring revenue, sign up at http://pipe.com/pomp to start trading today. =======================

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:02Anthony Pompliano?

  What's up everyone, this is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Now let's kick this thing off. In today's episode, Will Clemente couldn't join me for our weekly sit down, so instead I just break down all of the charts that he put together. I hope that you enjoy this and please bear with me, as obviously I'm nowhere near as astute in these metrics as Will, but I'm doing my best to keep up. So before we get into this episode, though, I want to quickly talk about our sponsors. Today's episode is sponsored by Abra. They're based in California and they're backed by top VC firms. Abra is an all-in-one, simple, secure app that allows you to trade over 110 cryptocurrencies, get 0% interest loans

• 0:43Anthony Pompliano?

  using your crypto as collateral, and earn interest with up to 13% APY on stablecoins and 7.15% APY on Bitcoin. You can join nearly 2 million users by downloading Abra from the Google Play or Apple App Store. If you download the app today, you will get $15 in free crypto once you fund your account. You came, you invested, now conquer. Abra, conquer crypto. Go check it out today. This episode is brought to you by Unstoppable Domains. They recently launched an awesome feature to level up your unstoppable domain's profile. It's called badges. They translate wallet activity into achievements, so celebrating, reliving, and sharing your crypto story has never been easier. Before, these stories were buried in transaction logs that were

• 1:25Anthony Pompliano?

  hard to read, making them difficult to find and understand as well. But since unstoppable domain badges are awarded based on your wallet activity, they're a super fun, easy way to build on-chain reputation just by doing what you do, like supporting NFT projects, collecting domains, or holding crypto. Unstoppable domain owners can activate badges from their account profile page right now. If you haven't minted an NFT domain yet, go to unstoppabledomains.com right now to own your name, starting as low as $5. Again, head over to unstoppabledomains.com right now to get started. Today's episode is brought to you by Pipe. Crypto is all about giving the power back to the people, and our sponsor Pipe is doing that in a big way. Pipe is the world's first trading platform that allows you to trade recurring revenue streams for upfront capital.

• 2:10Anthony Pompliano?

  Pipe's new API, companies with recurring revenue can build seamless embedded financing options into their platforms. One of the most interesting uses for Pipe's new API right now is Compass Mining's "Mine Now, Pay Later," which powers payment plans on Bitcoin mining hardware so more miners can start or scale with a smaller upfront investment. Whether you're looking for mining hardware or scaling any business with recurring revenue, check out Pipe to access growth capital with no loans, no dilution, no restrictive covenants or warrants, just growth on your terms. And right now, Pomp Podcast listeners can access tens of thousands of dollars, even millions, fee-free for 12 months. Whether you are a Bitcoin mining company looking to enable financing for your customers,

• 2:54Anthony Pompliano?

  or a SaaS, DTC, or any business that has recurring revenue, sign up at pipe.com/pomp. Again, pipe.com/pomp to start trading today.

• 3:05Speaker 01

  Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only.

• 3:29Anthony Pompliano?

  This week was another wild one in the Bitcoin market. We continue to see the price fall and there's lots of uncertainty, doubt, and fear. The Bitcoin critics seem to be taking a victory lap. They think they're dancing on graves. And the big question, is Bitcoin over? Or will it come back as it has every time before? As we can see here, Bitcoin currently trading just over $21,000, up about 1.3% over the last 24 hours. Then you can see that the market cap has dramatically dropped, down only around $400 billion or so. Now remember, Bitcoin's inflation rate's still sitting at 1.76% and over 90% of the 21 million Bitcoin have been issued already. You can see real exchange volumes coming in at $4.1 billion.

• 4:11Anthony Pompliano?

  The mining reward, miners being paid just under $20 million every 24 hours to continue to secure the most decentralized, secure computing network in the world. GBTC, the discount, all the way down to 34% to NAV now, which is a major issue in the industry. And of course Bitcoin down just under 70% from its all time high. If we then take a look comparing Bitcoin, gold and the S and P 500, you can see that Bitcoin is down 35% from just one year ago. But if you zoom out to only any other timeframe from two years to 10 years, Bitcoin continues to absolutely dominate all of the other assets. Then we can go look at Bitcoin prices closing history and sitting at $21,348. Bitcoin traded higher for 539 days.

• 4:56Anthony Pompliano?

  If you had bought Bitcoin and held it for 89% of its life until today, you'd be in the money. But about 11% of the time, you wouldn't be. Last but not least, we can compare Bitcoin, gold, S and P 500, NASDAQ and TLT. You can see that the compound annual growth rate of Bitcoin, 124% still dominating all of the other assets. And then lastly, the sharp ratio, five year basis, sitting just around one. And that is much, much more attractive than the other assets. Next, we can take a look at this data point, which was provided by Sven Henrich, where he said, only one more rate hike and we're at or exceeding the historic Fed capitulation trend. As the ever increasing debt construct brings about a recession and the Fed has to intervene by cutting rates.

• 5:41Anthony Pompliano?

  You can see that red line there, just down only. If the Fed continues to hike interest rates, things may start to break. That then leads to thinking about what the future market expectations are. And what we can see is for December 2023, the Fed funds rate has fallen by 60 basis points over the last nine days, according to Dylan Leclerc. Then if we start to take a look at the Bitcoin market, what we can see is that hash ribbons, which ultimately will visualize the minor collapse. As the price of Bitcoin goes down, miners who can't keep a very low cost of operations, they eventually give up. They could shut off their operations and they actually start to sell the coins that they previously mined.

• 6:22Anthony Pompliano?

  Bottoms in the Bitcoin market and these bear markets normally coincide with minor capitulation. The weak miners are bankrupted, adding to Cell pressure in a cascade, then the ribbon recovers. And that's where you ultimately will see those green circles in this chart from Willy Woo, equaling the bottom. It looks like there is deleveraging right now, as he stated, but we are not quite there to the bottom yet. Then lastly, we can go and we can check out Checkmate, which says all three Bitcoin MVRV cohort ratios are underwater. The aggregate market underwater on a cost basis standpoint, long-term holders underwater, and short-term holders are underwater as well. It's exactly what you would expect to see near a market bottom.

• 7:07Anthony Pompliano?

  And then, of course, David Puel pointing out that the MVRV crosses between long-term holders and short-term holders. Well, we're there getting close again. And what this means is that the short-term holder cost basis is actually below the long-term holder cost basis. What that usually signals is that the short-term holders, they're in trouble. Eventually, they give up and usually they just walk away. Now, of course, all of these metrics, they're great data points and you should pay attention to each one of them. But they ultimately can't be relied on unilaterally. You have to look at the summary of all of the data. You've got to put it all together and you've got to say to yourself, I am only playing a probability game.

• 7:48Anthony Pompliano?

  If I think that I'm a day trader, which 95% of you are not and shouldn't try to be, do I actually want to try to time the bottom? Or do I simply want to understand if the structural elements of Bitcoin are actually still intact? And if I can look at the fundamentals, the underlying metrics that aren't involving price, and I see that Bitcoin is still healthy, it's still decentralized, it's still executing the code as it was designed, and it's still providing the same value and utility to end users, but the price has simply decoupled from those fundamentals? Then usually in past bear markets, simply dollar cost averaging has served really well for those people. Now, history isn't necessarily a guide in terms of telling us what's going to happen in the future,

• 8:33Anthony Pompliano?

  but it does serve as a great way to understand how it's played out in the past. Now, this is financial advice, but if you do your own research and you take a look at all the data, something tells me that a lot of you guys will see what I'm seeing, which is that the underlying fundamentals appear to be very healthy. And it looks like that price decoupling from fundamentals could just simply be presenting an opportunity to the market. Hope you guys enjoy these updates and I'll see you guys next weekend. Thanks so much for listening to today's episode. I really hope you guys enjoyed this one. Make sure you subscribe on Apple, Spotify, or your favorite podcast player. And if you're looking to try to transition to get a new job in the Bitcoin or crypto industry, we've got you covered. Head over to pompscryptocourse.com. We've developed

• 9:16Anthony Pompliano?

  a curriculum with the top teams across the industry. It's a three-week intensive training program with over 50 events packed into that three-week time period. Go to pompscryptocourse.com to learn more, and I'll meet you guys for the next episode.