Transcription
This is Matthew Crowder's Bitcoin University. Today I want to answer the question, has the Bitcoin bare market already begun? And this question is from my own paid website. This is from the Bitcoin forum over there. And someone asked, what do you think about gold and silver surging while stocks are at all-time highs and Bitcoin isn't moving much. I've noticed that gold and silver prices have been climbing aggressively, possibly as people move toward them as safe havens. At the same time, the US stock market is at record highs, which usually doesn't happen together. What's interesting is that Bitcoin isn't showing the same kind of price movement right now. I'm just curious what everyone here thinks about this.
Now, this is certainly true. We've been watching gold hit one new all-time high after another, certainly this year. Same with silver, which I believe hit a new all-time high. And then we have Bitcoin here which has really been at least against the dollar has been trading sideways since early spring say since May or so and is behaving not really the sort of meltup you would expect at the end of the cycle. So when I saw Nick Zabo's comment here I thought it was quite good and I wanted to cover it. He writes Bitcoin is in a bare cycle masked by the debasement trade. So I want to talk about what that means.
Monetary debasement is number one. The original definition was just reducing the amount of gold or silver in a coin. The sort of late late empire sort of stuff and thus by extension the modern meaning of it which is the loss of purchasing power of the money. The same amount of money buys you less goods or fewer goods and services. The culprit for this in the age of fiat it's obviously money printing by the Fed and other central banks. Monetary debasement is just the other side of the coin of inflation. Whereas inflation is the price of goods and services going up. Monetary debasement is another way of saying the same thing. It's another way of saying just that your money buys you less or that the money supply is increasing and diluting your purchasing power.
Now CPI inflation, consumer price index inflation in the US deliberately understates the true rate of inflation. What happens is the government bleeds you dry. Then it lies about how quickly you're being bled dry in the official government statistics. So I'm using I'm going to use here another measure of monetary debasement that isn't quite as manipulated as the CPI. And this is Parker Lewis's ribeye index. As he writes here, your favorite all-in-one inflation index has a price update. Same ribeye at the same store is up 6.2% since June. And this was posted uh October 9th of this year. So it's up 6% 6.2% since June. Now $349 a pound. That's 19% annualized since the prior update in 2024. Compound annual inflation is 12.6%. Cumulative 72.5% increase since 2020. So we're talking about quite a bit of inflation at least as measured by that particular very narrow index. But it does show that the US dollar is certainly failing against Texas Ribey.
Now Zabo's hypothesis is this that Bitcoin would be falling a lot more if the US dollar ice cube wasn't melting so quickly certainly against other assets at the same time. If you're enjoying this video so far, just pause really briefly here to ask you to help to support this channel's educational mission. Hit the subscribe button. That does really help. Leave a like, leave a comment, question, suggestion for a future video. And share this video with a friend or family member.
Now, one way of measuring this US dollar ice cube melting might be to look at how various assets are behaving relative to gold. So, for example, if gold is rallying in Bitcoin and S&P 500 and NASDAQ 100 QQQ terms, that could be a way of triangulating fundamental US dollar weakness, just as we've seen fundamental US dollar weakness against ribe eyes. And you've probably seen the dollar being weak against everything in your life. If we take a look at the price of Bitcoin or the price of gold actually denominated in Bitcoin, it's been going sideways for the past two years. Really rangebound. Uh gold unable to break out against it and Bitcoin unable to break out. Uh but we have seen that certainly gold has been strengthening for all of 2025. It's been strengthening against Bitcoin. So when this chart moves up, that's gold going up against Bitcoin. Something similar has been happening to even more dramatic extent with the S&P 500. Here is gold really for all of 2025 massively outperforming the S&P 500 and also outperforming the NASDAQ 100 in the form of the QQQ. So these charts look fairly similar, but certainly the uh it's certainly Bitcoin that gold is having more trouble rallying against, but gold is appreciating in terms of all three of these assets, Bitcoin, S&P 500, and NASDAQ.
Now, why might Bitcoin be showing weakness? Now, I can think of a few reasons. One of them we've been covering adnauseium on this channel. Number one, the reference implementation, namely Bitcoin Core, which makes the main implementation for the node software. This reference implementation has gone rogue this year and the community is dealing with a fallout. Perhaps the market also fears a nasty large oper could be mined at any time now which is definitely a possibility now that core 30 has removed the filters. Also the market wants BTC governance I believe governance issues to be sorted out before the next leg higher. Number two increased probability of a Bitcoin soft fork in an effort to fix the problems caused by Bitcoin core 30. This could all be causing Bitcoin weakness or an early Bitcoin bare market. Number three, widespread collapse of Bitcoin treasury companies. This is something that I've been too busy to cover. We've been covering the more important things that have to do with Bitcoin Core. But this has been a complete disaster certainly for many people and especially influencers in the space who've been pushing these companies. Bitcoin's price may be beginning to price in the fact that these BTC, these Bitcoin Treasury companies may not be as large of a source of future demand for Bitcoin as people originally thought. This was something I talked about back in July, warning people about Bitcoin Treasury companies. The one I'm least worried about is Micro Strategy because I can see that there's definitely room for one of these large companies in the space and Micro Strategy perhaps has the moat that uh it needs at this point. But even Micro Strategy against the dollar peaked shortly after the election in November of 2024 has been in sort of a sideways to bare markets since then. Micro Strategy measured in Bitcoin terms looks the same where Bitcoin's been outperforming Micro Strategy really since that same point in November November 20th of 2024. As I said, I'm much less worried about Micro Strategy than I am about all the copycats. Some of the big implosions have been Metaplanet, which has been falling really since the early spring. Nakamoto's been a complete disaster. Kinley uh basically has done a complete round trip and then Strive has been crashing as well. I could go through there probably 10 or 12 of these companies similar. So that may be one factor, the market pricing in less future demand from Bitcoin treasury companies. Maybe every city, every state, every town, every village doesn't need its own Bitcoin treasury company.
Another factor I can think of that may be bringing in the bare market may be the market just front running the expected bare market that normally occurs at this point in the cycle. We've spoken before about the three green one red annual candlestick pattern. So candlestick is green if the close is higher than the open and it's red if the close is lower than the open. So these are annual candlesticks and we can see this three green one red pattern. So Janu uh so 2019 was an up year as measured from open to close. So January 1st the question is did December 31st close higher than January 1st and the answer is yes if it's a green candlestick. So this was an up year uh 2019 2020 2021 and then we had the big bare market in 2022 as BlockFi and Voyager and FTX and Celsius all imploded. So it's three greens one red and now we've had three green candlesticks. So we would expect 2020 uh 2026 not necessarily that uh it's the absolute change from the current close is lower but we would expect wherever it opens it would it would close much lower uh that year. Now this pattern if you go back far enough it really only works for the last two cycles it worked 2015 2016 then we had a down year. If you look at data before that it's a little less conclusive. Of course, Bitcoin was less liquid and less followed. But in that case, for 2011, you have a red candle. 2012, a green candle. 2013, a green candle, and then 2014, uh, a red candle. And as I understand it, 2014, really 2013 to 2015 was a pretty brutal time for hodlers as a lot of people gave up on Bitcoin. But if this pattern holds, we would expect uh a bare market perhaps starting now and certainly next uh next year.
Now, the conclusion, of course, no one knows the future. I rarely make these sort of chart videos anymore because of this. And also because I think it's a really bad idea to try to time the Bitcoin bull their cycles. We don't even know if they're always going to be multi-year or four-year. We they could become totally different going forward. And I think it's a bad idea to try to time them to jump in and out of Bitcoin due to a number of reasons. One, the capital gains tax problem. Because after you pay capital gains taxes on your profits when you exit, you're left with much less money to reinvest. And so if you're paying 20 25% in capital gains, the market would need to fall by that much for you to have a good a good entry price that would make sense after paying those taxes. And then there's also just the inherent problem of timing any market cycles because everything I've said in this video is obviously highly speculative. So my plan really is just to hodddle. Market cycles are not required to repeat. No one knows the future. There's no expert that knows the future and the path that Bitcoin's going to take. So, I'm just going to continue to huddle. That's how I keep it really simple. I think I'm going to have to be white knuckling it if things get a little more scary than they are now. Um, but I'm going to continue to huddle. I think Bitcoin governance will eventually get sorted out. Though, the road is definitely going to be rough and rocky. But, Bitcoin is certainly going to survive. I do believe this and I think it's headed to a million dollars and beyond. We just don't know the path it takes to get there. But we do know that Bitcoin has no top because fiat fiat money has no bottom and fiat money has no bottom because of monetary debasement.
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