Bitcoin is Eerily Quiet.. Are We in the Calm Before the Storm?

[00:00:00]There's a version of quiet that means everything's fine. And then there's a version that makes the hair on the back of your neck stand up. Bitcoin has now traded inside the same range for 47 straight days. Meanwhile, the Iran conflict continues to yo-yo between threat of World War II and peace talks with oil ripping and dumping on every headline. American oil supply just hit the lowest level since 1984. The AI stocks holding this whole market up looks to be rolling into a bare market or perhaps worse. And the biggest Bitcoin buyer on the planet stopped buying and turned net seller. Any one of these should have moved the price, but all's quiet on the sound money front.

[00:00:33]So, which quiet is this? The calm before Bitcoin breaks down again, or the calm before the storm it was actually built for? This is Truth Block. I'm Hurley.

[00:00:41]Let's mine truth.

[00:00:49]James Czech titled his latest newsletter on Friday, Dead Quiet. And that about covers it. Bitcoin trading activity has fallen to new cycle lows. Volatility is down at around 35%. And every time V has been this compressed the past year, last October, in February, and again in late May, a violent expansion followed. And all three times the price went down. But compression like this only tells you a move is coming. It doesn't tell you the direction. This is a coiled spring, and springs go both ways. And here's the piece not many are talking about. Wall Street figured out how to sell Bitcoin's volatility as a product.

[00:01:26]Black Rockck launched the first yield paying Bitcoin ETF last month, and it makes that yield by writing covered calls against a quarter to a third of its Bitcoin every month. Goldman and Binance are running similar versions. In short, the market found a way to get paid on the movement without ever buying the asset. And then there's Michael Sailor. Strategy has gone 28 days now without buying a single Bitcoin. What they have been buying is dollars.

[00:01:50]Strategy's cash reserves have climbed from 1.4 billion to 3.2 2 billion following the latest buy announcement this morning. So, the most relentless Bitcoin buyer in human history bought $2 billion worth of Bitcoin above $80,000 has now stacked $2.1 billion in cash with Bitcoin below 65K. Buy high, sell low. Somewhere out there, your average retail is feeling seen. But everybody told us that strategy was the bid and that Bitcoin falls apart without him.

[00:02:17]Well, we just ran that experiment for four straight weeks and Bitcoin is sitting higher today than the day he announced his last buy. So, who's holding the floor? Long-term holder supply just printed an all-time record.

[00:02:28]About 83% of every Bitcoin in existence is now sitting in wallets that don't sell. The tourists are gone. What's left is people who bought this because they know what they own. Which brings me to a guy I want you to meet. David Hunter has been in markets since 1973 and runs Contrarian Macro Advisors. His call is that we will get one final blowoff top in stocks this year before the whole thing comes crashing down. Here's a short clip from his conversation with Natalie Brunell. You >> I'm predicting whether it'll happen or not, something like a 70 or 80% bare market in the global bust. If you get the combination of that and say a 30 to 40% hit to housing prices, you know, the whole wealth effect is huge and you don't come back out of that quickly.

[00:03:13]What's interesting is the same man forecasting the biggest economic crash since 1929 is also the most bullish short-term forecaster on Wall Street right now. Hunter has published targets of $10,000 for the S&P and 70,000 on the Dow, which he raised again in his July letter. This is the classic boom and then bust prediction. There's a whole cohort that's been calling for the big one for years now. Lawrence Leard wrote an entire book about it called The Big Print. And to his credit, he's honest about the part most of them won't touch.

[00:03:42]Larry admits he could be early and he's been saying so for a long time and I'm right there with him. I have no idea when this unwind arrives. This year, next year, 5 years out. How much longer can they keep kicking this can? Nobody watching knows, and neither do I. What I'm confident about is that the bill eventually comes due for the sins of the fiat system. That isn't a trade with a date on it. That's the whole long-term thesis. And when you can't time something, you position for it instead of predicting it. Which is exactly why this show is brought to you by Leedin.

[00:04:13]When life sends you a bill in dollars, you shouldn't have to hand over your Bitcoin to pay it. Leedin lets you borrow dollars against your stack instead of selling, so you keep every SAT. With Ledend, your collateral stays custodied and never gets loaned out, and the rates are posted up front with no surprises. Ledend has over $10 billion in loans across 8 years with zero customer Bitcoin lost. So to learn more and check out your rate, visit learn.let.io/simply.

[00:04:39]Okay, let's talk about the chart everybody's been posting this week.

[00:04:42]Borrowed money in the stock market is going vertical. Every red arrow shows every major top of the last 60 years, and you can see why so many are calling doom. Well, James Lavish did something I really respect in his latest informationist newsletter. He went and checked the numbers. That chart measures borrowed money against the size of the whole economy. But you can't walk into your broker and pledge the American economy as collateral. You pledge your stocks. So Lavish ran it against what the loan is actually secured by and measured that way the borrowing is completely ordinary. But he kept digging and found the number next to it that genuinely is at a record. For almost the entire history of this data, investors held more cash in their accounts than they held in borrowed money. That's a cushion. The market drops, the calls go out, you wire in cash and keep your shares. Well, that cushion is gone.

[00:05:31]Investors are holding the least cash against their borrowing ever recorded. a shortfall north of $990 billion. So, the borrowing was never going to be the spark for the big crash, but it is the dynamite. It doesn't tell you when anything blows. It tells you how much comes down when something else lights it. So, if the charges are set, what happens after the blow up? Here's David Hunter again. because of the response to the bust. Again, the Fed's going to be slow to respond, but it's inevitable that in a bust, the only thing that can turn it, and this is global, um the only thing will be able to turn it is money because fiscal policy just doesn't move fast enough, even if they can agree on something. Um so, you know, money will be coming in uh big. I'm talking about the Fed maybe going to 20 trillion in new money. uh you know they obviously did 5 trillion in 2020 uh 2020 2021 um but I think this time because of the leverage and because of what I think will will come as a result of that it may take 20 trillion out of the Fed and who knows maybe 50 trillion globally out of the central banks to turn things. Um, and that will with a lag, Kevin Worsh is right, with a lag, you will see inflation and inflation like we haven't seen in this country even back in the early 80s. You know, I think you could see by by the end of or probably by the early 2030s sometime, meaning 2032 or three, you could see 25% inflation. Um, and you know, obviously interest rates follow inflation. So, you know, rates would be certainly high, double digit.

[00:07:17]Mortgage rates would be in that place, too. Uh, and there's just no way you can afford housing at those kind of rates.

[00:07:25]>> The Fed will be slow. The Fed will be reluctant. And then the Fed prints anyway. And when the printer runs like that, the only thing that protects you is money nobody can print more of, held by you, not a paper claim sitting in somebody else's vault. Which is why this episode is brought to you by BitKey.

[00:07:41]Most Bitcoin wallets assume nothing will ever go wrong, but that's not real life.

[00:07:46]Bitkey is built differently. With BitKey, there's no seed phrase to lose, and on the new device, there's a screen so you can actually see what you're approving before you approve it. And with BitKey, recovery, and inheritance are built right in. So, there's no subscription and no extra service to sign up for. BitKey is where ease of use, peace of mind, and security meet.

[00:08:05]So, head to bitkkey.orld/truth world/truth and use the promo code truth for 10% off the new Bit Key. So, David Hunter is describing the crash, but Mel Mat put a clock on it. Mat built three broker dealers and walked every one of them through the regulatory process, so he knows where the pipes run. Here's the angle he took on the TFTC podcast this weekend.

[00:08:27]>> Almost all the expense of health care for an individual comes in the last 24 to 36 months of life. And we are just now getting into what I would call an accelerated death range for baby boomers where if you look at you know when was World War II over 1945 okay so the first boomers let's say born in 46 we're now exactly 80 years right so the oldest baby boomers are now 80 I don't know about you but most of the people I know they do pretty good in their 70s. I mean, there's always exceptions. Look at Lindsey Graham. But really, where the health problems start cropping up for most of the older adults that I know is in their 80s. And boomers, this is the first year, the oldest boomers are just hitting 80. And if you look at fiscal projections for Medicare and health spending, it's going to blow up. And so, we're getting interest expense blowing up. At the same time, we're going to have health care spending blow up because boomers are hitting what I would call peak medical uh care years. And that's not going to end anytime soon.

[00:09:47]And it's just going to get worse. Um and so like if you look at the we're going to hit $40 trillion in in US debt in the coming months. um we're going to hit over a trillion dollars uh in interest expense year to date in a couple months.

[00:10:04]um how you can look at the US dollar and not say I want to own gold, I want to own Bitcoin, I want to own silver in the same way that people thought was so smart 12 months ago and the debasement, you know, guys from Morgan Stanley coming on Bloomberg debasement trade and now it's like, oh, look, AI stole a little bit of thunder from this.

[00:10:32]I mean, look, there's no question about it. Like, stuff's going up four or five times, but people are starting to see the the easy money days are over.

[00:10:41]>> And MAT's numbers hold up. The CBO had federal interest costs hitting $1 trillion this fiscal year, the highest ever. And now the second largest line in the federal budget behind Social Security. The fastest growing expense in the United States government buys nothing. No roads, no medicine, no defense. It's rent on decisions that were already made. So then Natalie asks Hunter the question we've all been waiting for. What about Bitcoin?

[00:11:05]>> Um, a lot of I think the weakness in Bitcoin I did dip my toe in and with with Well, no, no, you won't like this.

[00:11:15]I don't with an opinion on Bitcoin. Um, at over a 100,000.

[00:11:22]>> Okay.

[00:11:23]>> But it was strictly technical. I I I put a pretty disclosure out there and I'm saying, >> okay, >> you know, what I read in the charts, this thing could go to 75,000 >> and then I've since said next step maybe 50,000. So, so I'm bearish Bitcoin, but I'm the first one to tell you I don't follow it. So, people should take that with a grain of salt. Strictly a technical read. Um, but I do think what I see uh in other markets is probably true there too, which is momentum begets momentum. that a lot of the reaction in Bitcoin is more to do with the um the negative tape than it is fundamentals.

[00:12:05]um that it's just that just like silver, there was so many people, you know, you you probably know this better than anybody that jumped in between 100 and 120 because it was going up and they were they saw a sure thing and they're the ones that are underwater and and bailing out and and then you have the leverage players like Sailor and etc that are going to get stuck because of that. So I always said I want to see it get through the bust. I want to see how it holds up in the bust. After that, I'll, you know, I'll be able to know whether it's something that's as real as everybody says it is or not.

[00:12:43]>> You got to give the man his due. That's an honest answer. And he's right about one thing. Bitcoin has never lived through a genuine global bust. It's 17 years old, and every draw down it survived happened inside a system that was still working. But there is a bit of irony here. He's picturing the crash, but he should be picturing what comes 6 months after it. We ran a small version of this in March 2020. Liquidity disappeared. Everything got sold at the same time and Bitcoin fell almost 50% in a single day. At the time, that looked like a failure. Then the printer came on and over the next 18 months, Bitcoin went up more than 10 times. That's the shape of the test he's asking for. The bus takes everything down together, Bitcoin included. And then the answer to the bust is the money printer. And the money printer is the entire reason Bitcoin was written. Bitcoin was born out of the great financial crisis in 2008. The headline about the chancellor on the second bank bailout is written into the very first block. Satoshi put it there so nobody could ever be confused about what this thing was answering. So Hunter is waiting on the big crash to tell him whether Bitcoin is real. But that bust is the thing Bitcoin was built to fix. The truth is Bitcoin is one global economic collapse away from being widely understood.

[00:13:54]Unfortunately, the vast majority of people don't reach for the fix until the pain shows up. My prayer is that we get more people onto the lifeboat before we hit the iceberg. So, if all of this has you thinking about holding your own keys properly, the Bitcoin way will walk you through it. At the Bitcoin Way, their experts teach self-custody, real security practices, and how to verify your own Bitcoin with your own node, step by step, at your own pace. They'll sit down with you one-on-one and meet you wherever you are on your Bitcoin journey. So, visit the bitcoinway.com/hurly for a free 30inut consultation today.

[00:14:26]So, in closing, every other market we've walked through today has a buyer of last resort. Treasuries have the Fed. The index has trillions in passive money buying every payday, no matter the price. Housing has 30 years of policy built around keeping the number going up. Every one of them looks calm because someone is obligated to catch it when it falls. Bitcoin, in comparison, has no buyer of last resort, and it never has.

[00:14:49]No central bank with a mandate to defend it, no policy to prop it up, and no committee anywhere on Earth that can vote to make more of it. Which means that number on your screen right now, 65,000 in 47 days of nothing, is the only honest price on any screen in the world. Every other price has a rescue baked into it. So, which quiet is this?

[00:15:09]I'm not sure. It could break either way, but the quiet was never the story. The story is what's holding the floor while it's quiet. The biggest buyer stopped buying and the price held. The leverage is now gone. The tourists are gone. 83% of the supply is sitting with people who won't be selling at these levels. We all know what happens next. It's just a matter of when. So, do you think Hunter gets his meltup first, or is the top already in? And when this quiet finally breaks, which way does it go? Let me know your thoughts in the comments. And if you got value out of this one, don't forget to give it a like and share it with your nearest doomer. and subscribe to Simply Bitcoin if you haven't already, so you get the truth buried in all the noise on your feed. That's it for today. Thanks for hanging with me, and I'll see you on Thursday.