#848 Can Bitcoin Stay Above $40k? - 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 to help you understand why Bitcoin pumped this week and how the Russia/Ukraine crises is affecting the macro enviorment. To see the video with the corresponding charts referenced throughout the interview, go to the Anthony Pompliano YouTube Channel. ======================= Today’s episode is brought to you by Coinbase Wallet, your key to the world of crypto. Crypto wasn’t made to just buy, sell, and hodl. With Coinbase Wallet, you can do so much more: Collect more NFTs, earn more with DeFi, and trade more than 4,000 tokens. Whether you’re looking to play, stake, spend, or just explore a trending new protocol — Coinbase Wallet is your key to more. Long-time HODLers already know that wallets are a must-have if you want complete control of your crypto. That’s why Coinbase Wallet makes self-custody simple, while providing the safety and security of the most trusted name in crypto. Visit coinbase.com/wallet to learn more. ======================= Unstoppable Domains is THE #1 provider of NFT domains. These aren’t traditional domains, these are domains with superpowers. With your unique NFT domain such as pomp dot crypto or pomp dot nft, you can replace your long complex wallet addresses, verify ownership of your NFTs and join the 10’s of thousands of people who are now using their NFT domain as their Twitter and Discord usernames. Go to unstoppabledomains.com and get YourName dot crypto, dot x, dot nft or a range of other endings for as low as $5 and never worry about gas or renewal fees because with Unstoppable Domains you pay once and own forever! ======================= Cryptocurrencies offer boundless potential, but how will you protect your crypto? Arculus is the next generation crypto cold storage wallet that combines the world’s strongest security protocols on the Arculus Key Card with an easy-to-use Arculus Wallet App. With over 20 years of experience developing leading-edge secure payment technologies, CompoSecure created Arculus to give you the power to protect your financial future. You can buy, store, swap, send and receive your crypto with a simple tap of your Arculus Key Card to your mobile device. Your private keys are encrypted on the Arculus Key Card and they never leave it. Stay safe from hackers with no cords; no charging; no Bluetooth. The only person accessing your crypto... is you. Buy Arculus on Amazon 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. We try our best to go through the on-chain metrics and explain what the hell is happening with Bitcoin, and why has the price been falling. 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 brought to you by Coinbase Wallet, your key to the world of crypto. Crypto wasn't made to just buy, sell, and hold. With Coinbase Wallet,

• 0:45Anthony Pompliano?

  you can do so much more. Collect more NFTs, earn more with DeFi, and trade more than 4,000 tokens. Whether you're looking to play, stake, spend, or just explore a trending new protocol, Coinbase Wallet is your key to more. Longtime holders already know that wallets are a must-have if you want complete control of your crypto. That's why Coinbase Wallet makes self-custody simple, while providing the safety and security of the most trusted name in crypto. Visit Coinbase.com/wallet to learn more. Again, that's Coinbase.com/wallet and learn more today. Today's episode is brought to you by Unstoppable Domains. Unstoppable Domains is the number one provider of NFT domains. These aren't traditional domains,

• 1:26Anthony Pompliano?

  these are domains with superpowers. With your unique NFT domains, such as Pomp.Crypto or Pomp.NFT, you can replace your long, complex wallet addresses, verify ownership of your NFTs, enjoy the tens of thousands of people who are now using their NFT domain as their Twitter and Discord usernames. Go to UnstoppableDomains.com and get your name dot crypto, dot X, dot NFT, or a range of other endings for as low as $5. And never worry about gas or renewal fees, because with Unstoppable Domains, you pay once and you own it forever. Head on over to UnstoppableDomains.com today to check out more about what they've got. Again, go there and you can get any domain with any ending for as low as $5. Unstoppable Domains.com.

• 2:10Anthony Pompliano?

  Episode is brought to you by Arculus. Cryptocurrencies offer boundless potential, but how will you protect your crypto? Arculus is the next generation crypto cold storage wallet that combines the world's strongest security protocols on the Arculus key card with an easy to use Arculus wallet app. With over 20 years of experience developing leading edge secure payment technologies, CompoServe created Arculus to give you the power to protect your financial future. You can buy, store, swap, send and receive your crypto with a simple tap of your Arculus key card to your mobile device. Your private keys are encrypted on the Arculus key card and they never leave it. Stay safe from hackers with no cords, no charging, no Bluetooth. The only person accessing your crypto is you. Buy yours today at getarculus.com.

• 2:55Anthony Pompliano?

  All right, let's get into this episode. I hope you guys enjoy this one.

• 2:57Speaker 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.

• 3:21Anthony Pompliano?

  What's up guys? Bang, bang. I'm on the road this week, but you didn't think I was going to miss out on our Bitcoin weekly update. That's right, there's lots of geopolitical conflict going on, lots of uncertainty in the market. Many people asking what the hell's going on with Bitcoin? Should it be going up? Should it be going down? Is it going to be used to evade sanctions? Is it going to be used to do good in the world for people who are fleeing Ukraine or elsewhere? Well, let's dive into some of the metrics and see exactly what's going on using on-chain metrics and macro data. Here we go. So first, if we get started, we got to look at price and Bitcoin's been trading somewhere between 40,000 and 44,000 for a couple of days now. That's up about 20 to 25% since the invasion of Ukraine started. There's a lot of people who've been talking about Bitcoin.

• 4:02Anthony Pompliano?

  Is it a safe haven asset or is it not? And it looks like many people around the world, the market in general, is going ahead and placing a premium on the asset. We also know that Bitcoin has been trading at an all time high when measured in rubles. But if we look at the underlying network itself, those statistics is that Bitcoin is Trading somewhere around 750 to 800 billion dollars in market cap. We know that about 90% of the supply has already been issued. And of course, there are about a million active addresses every single day. Miners are being paid between 35 and 45 million dollars per day, sitting right around 40 million dollars today. And then ultimately, if we go and we look, Bitcoin is actually down almost 20% over the last 12 months.

• 4:46Anthony Pompliano?

  But it's up 350% over the last two years. That's because of the base effect. Last year Bitcoin went from 30,000 dollars in January, all the way up to 64,000 dollars in about March timeframe. And so ultimately, that base effect is affecting that one year return. But Bitcoin still only has spent about 300 days above the current position. So about 94% of all of Bitcoin's life has been at a lower price point. If you bought then and held till now, you are in profit. Ultimately, if we go ahead and we take a look at the compound annual growth rate, what we see is that Bitcoin is still compounding annually at 145% over the last 10 years.

• 5:26Anthony Pompliano?

  And that five-year sharp ratio sitting above 1.5, making it an incredibly attractive portfolio diversification tool and also a great risk reward. If we then come in and we take a look at a number of different metrics that show us the behavior of those holding Bitcoin or various activity on the Bitcoin network. We can see in this week's Blockware Intelligence Newsletter, written by Will Clemente and the team over at Blockware. It's showing that there's three separate metrics that are all telling us that we're near a bottom. Doesn't guarantee that we're actually at the bottom, but definitely that we're nearing one. We can look at a Bitcoin entity adjusted dormancy flow, again, very, very low compared to historical numbers.

• 6:05Anthony Pompliano?

  If we then go and look at the entity adjusted MVRV, comparing Bitcoin's valuation relative to the value stored in the network. Again, relative basis, very low. And then ultimately, if we look at the mayor multiple, one of the classic metrics to measure Bitcoin compared to the past price movements. We see that the mayor multiple is quite low as well. And so ultimately, these metrics don't tell us, hey, you should buy or hey, you should sell. But what it does show us is on a relative basis Bitcoin is drastically undervalued to where it's been in the past according to a number of these network metrics. Now, many of you are probably wondering to yourself, why is it that Bitcoin is being bid up during a time of international conflict, of uncertainty and chaos? Well, Lynn Alden had a great tweet over this week where she said that the world collectively

• 6:49Anthony Pompliano?

  has about $15 trillion in official sovereign international reserves. Less than 2.5 trillion of that is gold, the rest is fiat, and the fiat portion can be frozen for that country by other countries. Even a sizable percentage of the gold portion is international custodial, meaning that many countries let other countries hold it for them. The vast majority of sovereign reserves are permissioned assets and thus aren't really sovereign. Of course, if you have an asset like Bitcoin that is digital, that's decentralized, that it is resistant to both censorship and seizure, there's a lot of people in the world that are waking up to why that may be important moving forward into the future. And so ultimately, this is why we're seeing Bitcoin get bid up. There's many people saying, maybe, in the words of Satoshi, I should get some in case

• 7:33Anthony Pompliano?

  it catches on. But one of the things to be really careful about is that the narrative of Russians or Ukrainians buying Bitcoin, they were not seeing that in the data yet. This tweet from Willie Wu on March 2nd shows that local Bitcoins, the peer-to-peer Bitcoin trading volume in both Ukraine and Russia are not showing any significant uptick. And so what's more likely is that people elsewhere outside of Russia and Ukraine are realizing the value of Bitcoin, they may even be speculating that Russians and Ukrainians could go buy Bitcoin and therefore they're all going and buying it, even though they're not in the conflict zone. And so ultimately Bitcoin being up materially since the beginning of this geopolitical conflict and invasion is something to keep your eye on. But remember, there's a whole macro world out there.

• 8:17Anthony Pompliano?

  We're watching everything from energy prices increase, we're watching movements in the yield curves. Every single piece of the global economy is under duress or is under movement right now. And so you've got to be able to look at Bitcoin through the global macro lens. It's really hard to do. And so ultimately, if you simply are like me, dollar cost averaging and saying, it doesn't matter what happens in the world, I want my Bitcoin and I'm going to keep holding them, then you're probably going to have a lot less stressful life right now. I hope this is helpful and we'll be back to normal programming next week. Hope you guys have a great rest of your weekend and talk next week. 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.

• 9:00Anthony Pompliano?

  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 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.