#961 Why Did Bitcoin Crash Down To $25K This Week?

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 various Bitcoin metrics to help you understand why Bitcoin crashed this week and what you should do during a crash. 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 http://coinbase.com/wallet to learn more. ======================= If you’re a regular listener of the podcast, I would bet that two things are true: First: You’re passionate about Web3 and protecting your personal data And two: that you’re a human. If I’m right, then congratulations! You’re entitled to all the benefits of the decentralized web. But there’s a catch: As Web3-enabled tech — like NFTs, smart contracts, and DAOs — drive more elements of our “real world” lives online, proving that you’re a person – without surrendering personal data – becomes exponentially more valuable. And exponentially more difficult. This is why Unstoppable Domains launched Humanity Check. Humanity Check proves that you’re, well, you – without revealing personal data. No matter where you go on the web, you’ll have total control over which apps you want to share data with…and which ones you don’t. Prefer to be completely clouded in mystique? No worries - Humanity Check is 100% opt in. If you want to feel alive, or at least prove you are, head to http://UnstoppableDomains.com and get your NFT domain with Humanity Check. ======================= 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. 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, you can do so much more. Collect

• 0:47Anthony Pompliano?

  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. If you're a regular listener of this podcast, I'd bet that the two things are true. First, you're passionate about Web 3 and protecting your personal data, and two, you're a human being. If I'm

• 1:30Anthony Pompliano?

  right, then congratulations, you're entitled to all the benefits of the decentralized web. But here's the catch. As Web 3-enabled technology like NFTs, smart contracts, and DAOs dive more elements of our real-world lives online, proving that you're a person without surrendering your personal data becomes exponentially more valuable and exponentially more difficult at the same time. This is why Unstoppable Domains launched Humanity Check. Humanity Check proves that you're, well, you, without revealing any of your personal data. No matter where you go on the web, you'll have total control over which apps you want to share your data with and which ones you don't. Prefer to be completely clouded and mystique? No worries, Humanity Check is one of the best.

• 2:10Anthony Pompliano?

  100% opt in. If you want to feel alive, or at least prove you are, head to unstoppabledomains.com today and get your NFT domain with humanity check. Again, head on over to unstoppabledomains.com and get your NFT domain with humanity check today. 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. 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,

• 2:53Anthony Pompliano?

  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, 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.

• 3:36Speaker 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.

• 4:00Anthony Pompliano?

  All right. So obviously this week was absolutely insane, but Bitcoin recovering nicely, sitting right around $30,000. You can see that it's trading right in tandem with many other assets. If we then go and we look at the Bitcoin statistics themselves, Bitcoin market cap sitting just under $600 billion. Still, about 1.77% inflation rate, and of course, over 90% Percent of the 21 million Bitcoin have actually been issued. The real exchange volume coming down drastically, under $4 billion now. But miners, they continue to get paid to secure the decentralized, secure computing network of Bitcoin. But now they're only being paid $27 million every 24 hours. Bitcoin is traded down 56% from its all time high, but it's up about 15% from the recent low.

• 4:44Anthony Pompliano?

  If we then go and we take a look at Bitcoin versus gold in the S and P 500. We can see that over a one year period Bitcoin down significantly 40%. Gold down one and S and P 500 down two. But if you zoom out and look over a two to 10 year period Bitcoin has drastically outperformed gold and S and P on almost any other timeline. And then of course, paying attention to Bitcoin's closing price history. We can see that Bitcoin trading right around $30,000. Means that there's only been about 487 days in its history where it's traded higher than this. And so if you bought Bitcoin and held on 90% of days until today, you would be in the money. But still 9.98% of the time, it was actually trading higher than it has been today. If we then go and take a look, we can see that the compound annual growth rate of Bitcoins 138%.

• 5:29Anthony Pompliano?

  Still drastically outperforming gold, S and P 500, NASDAQ and TLT. And then that five year sharp ratio coming in at 1.26. Still making an attractive way to add to your portfolio and have a positive impact. Let's jump now and go take a look at Will Clemente and the Blockware team. They've got an excellent newsletter that they put out every Friday. And in this week, they've got some great charts. First, we have the net realized profit and loss. We can see that about $2.5 billion in net realized losses on two separate days just this past week. Now, if we jump and we look at what's causing all of these problems. Everyone knows that Luna and Terra ecosystem has had major, major issues, including their altcoin going literally to zero. And the U S T, stablecoin losing its peg.

• 6:13Anthony Pompliano?

  You can see that this Luna Foundation Guard balance of Bitcoin was growing nicely and was holding price up. All of a sudden it's dropped and basically they have no Bitcoin left. Now that's resulted in some of the largest days of net Bitcoin inflows to exchanges in nearly five years, which Lockware and Will have identified nicely. You can see it here in green on the far right of this chart. Then we can go take a look at whale balances and we see that whale balances continue to decline, which is a theme that is going to be important to watch as we move forward. Then, of course, the short-term holder cost basis we're trading underneath it. We've gotten rejected off of that a couple of times and it continues to go deeper and deeper. That means that, of course, the short-term holders, they're in trouble.

• 6:55Anthony Pompliano?

  Then if we go ahead and we take a look at realized price, we can look at something like a top or bottom model. And we can see that those realized price were getting close, but the aggregated cost basis of all investors on-chain currently sits around $24,000. And so any price below the realized price should be seen as extreme value. Now, let's jump to the MVRVZ score, and that compares Bitcoin's market value to the realized value. And in that, we can see in this green zone, we're getting close to a generation buying opportunity. And so then if we jump to something like the entity-adjusted dormancy flow, we see here, we're in the green, it's flashing a buy signal. Then, jump to the reserve risk. Again, this is measures Hodler confidence in comparison to price,

• 7:39Anthony Pompliano?

  and we're flashing a buy signal there as well. If we go look at something like the Mayor multiple, which has been around for quite a while, that's the comparison of the price relative to 200-day moving average. Again, one of the lowest points in Bitcoin history, and flashing a buy signal. And then, of course, Bitcoin approaching that 200-week moving average, currently sitting at $22,000. As we get closer and closer to that, it only means that more and more people are going to say, Bitcoin may be valued at a point that is quite attractive. And so ultimately, if you're able to get the courage, conviction, and have the dry powder, you buy around these points. There's no guarantee of future performance, but it sure has in the past worked out pretty well. Next, I want to jump over and look at Dylan Leclerc.

• 8:21Anthony Pompliano?

  He had a great tweet where he pointed out the reserve risk is quantifying that Hodler conviction relative to price. We can see that deep buy signal flashing there as well. And then lastly, Dylan had a great tweet where he basically summarized what's happening right now. Everyone wants to buy blood until it actually comes. This is part of what makes this current market It's so unique is that everybody prays for a lower Bitcoin price if they're trying to accumulate more and more. But now that it's here, there's tons of fear, uncertainty and chaos in the market. You need to do your own research, need to be aware of the risk. But as we've seen in chart after chart after chart and metric after metric, there are buy signals flashing all over the place. I hope that you guys enjoy these overviews and we'll be back next week in studio.

• 9:05Anthony Pompliano?

  So until then, I'll see you guys on the internet. 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 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.