Bitcoin Observations
This is NOT investment advice.
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DeepSeek Bitcoin AI
What is Bitcoin? I think that is the question to ask if one is concerned about China's AI initiatives and a race to the bottom in the AI space. I've always found this to be helpful:
BTC = TCP/IP
Lightning Network = email
If AI were the internet, should we not expect multiple different versions or brands to emerge (AOL, Yahoo, AskJeeves, Google, etc.)? The bigger point, in my humble view, is the inevitable need for AI tools/agents/machines/businesses/things/stuff to pay each other. This brings us back to what Bitcoin actually is, something that is regularly overlooked.
Among other things, Bitcoin enables one to assign and transfer value from Point A to Point B without the need for a 3rd party intermediary. If AI takes off, one can imagine how many payments for services, invoices, etc. would be flying around the ecosystem. Machines/agents don't want or need 3rd party intermediaries. AI will use the Lightning Network (and already does).
Bullish for BTC on an extended timeline.
The DeepSeek issue however does highlight one reason why I am skeptical/lost as a potential investor. "Buy the tools!!!!" Duh, NVDA has already set record after record for multiples for a firm of that size. I think the market got the message. But is the hardware even safe? Why is this AI Agent better than that AI Agent? Was Yahoo better than AOL or was AOL better than Yahoo? What locks in customers? Is it proprietary or just the "best stuff" and "best service"? AI is and will be huge, but being long BTC already gives you exposure if that type of thing stresses you out.
I would NOT rule out nefarious intent here either with China trying to embed this stuff inside all sorts of other things. Also - who in their right mind would blindly assume China has the best and correct answers and a product/service that is of the quality needed to serve in the manner proposed?
Global Liquidity and BTC
Yes, of course there is a level of correlation. Bear in mind though, this "M2 Index" or "chart showing global liquidity" . . . . . . . . think aircraft carrier not a small vehicle that can alter course on a dime. Think monthly and yearly charts, not a 15 minute chart with your 100x levered Solana trade. Sure, it ebbs and flows, but what is the big picture?
ECB just cut rates again. Bank of Canada just ended QT.
From BitcoinMagazinePro.com:
Long In The Tooth?
Back to Glassnode again for more great tools and data. First, my take on cycles. I use the information and analyze it. I don't force myself into a position based off of some presumption or demanded entitlement that a cycle moves a particular way at a given date or week before or after a halving or any other event. I like patterns and trends but don't adhere myself to a predetermined outcome based off of a past chart pattern. For example - many are using the 2020-2023ish period as a "cycle" or "bull market". Just my two cents, but I see that period as a coiled spring constantly swatted down by things like FTX and political hatchet jobs - a bad environment.
But first, Realized Cap:
Here is where we are today:
As depicted, the current run we are on (they pin the start to the 15kish low post FTX) has not been nearly as lucrative as other runs in the past. This does not mean it will be either.
Here is how I use this information. It provides an excellent context for relative comparisons for queries related to curiosity about "how much more is left" or "haven't we gone so far a crash is due" and things like that. We have seen very low retail participation thus far. The floodgates have opened from a regulatory and political standpoint (has THAT ever happened in ANY of these prior "cycles"?). Do you think we are approaching the end of this ride or just getting warmed up? Your call.
This Realized Cap data is more likely to have me thinking we are in the 3rd inning rather than in the 7th inning. Does that make sense?
Powell Dovish Hawk
No meeting until March. New administration. Kind of a nothing burger meeting? Again the Fed says it sees more inflation ahead above its so called target rate, but it doesn't come out and say it will use its hammer of raising rates to knock down the inflation. Powell mentioned nothing stopping banks from his side on working with Bitcoin.
Friendly Reminder - It's Global
The people of Argentina witnessed their government default on its own debt multiple times in the last few decades. Yes, there have been significant recent changes. Nonetheless - this is how someone forced to use the Argentine Peso sees Bitcoin:
Many more examples just like that. Bitcoin is global.
Forward Hash
Via entity ended up adding more hash from March 10 - April 30. Those were not my top choices but only so much available. I would have preferred more weight on April/May. So what does this mean?
My entity secured a certain amount of Petahash for the given time period. It will drip into my pool account daily during that period of time. No machines (for this output). If the fiat exchange rate were to fall below where it is now and remain there during this time period, then my results from this move would be undesirable (unless oddly transaction fees and hash price moved opposite). If the fiat exchange rate were to rise then I would be collecting whatever BTC is generated during this time by the amount of Petahash secured with the opportunity to convert it to fiat at a higher exchange rate than when acquired.
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