Transcription
Welcome to Plan B on YouTube. Today we discuss six charts and, of course, the big question is: are we still in a bull market, or did we enter a bear market? Now, Bitcoin dropped from 84,000 at the end of February to 82,000 at the end of March, and that is not the V-shaped recovery that we hoped for. However, the black line here, the 200E moving average, is still going up, from 44 in February to 46 in March. And that's that's a bullish sign.
Also interesting, if we look at the geometric mean, which is also a moving average but calculated slightly differently, uh, differently because, yeah, it fits better the uh logarithmic scales and the compounding effects of uh of financial markets. But if we look at the two lines, the normal moving average and the geometric mean, they are very close together. And that means volatility is getting lower. Volatility was very high in the beginning of Bitcoin, and we see the lines um separated from each other, and it gets smaller and smaller, and now they're almost similar. Um, so yeah, what what does that mean? Does that mean there will be no more bull markets uh and also no more crashes and bear markets, and that we have a steady but uh yeah upward going uh growth? Um, which isn't too bad by the way, because well, we have been growing from two from from 20,000 to 40,000 and 40,000 to 80,000. So if that trend continues to 160 and 320, not not that bad.
However, uh we don't know that. It might be uh that the bull market is still forming and that the moving average will separate again, will diverge again from the geometric mean. Um, one more thing on those two lines: Notice that you can't have a bear market, a big crash, when the 200E moving average and the geometric mean are together. Um, the big crashes here are happening when there's a diversion between the two lines. Also here in 2018, there was a big gap between the two moving averages. Same here in 2014 and 15. In fact, if we look at historical uh situations where the lines are together, that would be here at the uh end of 2020. That's when the bull market began, the end of the bull market, the FOMO phase. Same in the beginning of 2017 when the lines were together. So, moving average and geometric mean together could mean the bull market is about to start.
Now, next chart. The reason for the recent drop in Bitcoin price has nothing to do with Bitcoin at all. It has to do with the general economy and Trump and the tariffs and all the volatility and uncertainty that causes in the markets. So let's look at the stock market and and let's look at the big picture, right, the general lines, and I'm looking at 10 years of data here. The S&P 500, the stock market, is on the x-axis, and Bitcoin is on the y-axis. It's both on logarithmic scales, of course, uh because we're looking over long periods and upward trending lines. Now, S&P started in 2015, or it ended actually in 2015 at around 2000, and then 10 years later it ended in 2024 at 6,000. At the time, Bitcoin in in 2015 was 400 and it ended in 2024 at about 100,000. So the S&P, general picture of the last 10 years, did a 3x from 2000 to 6,000. Bitcoin did a 250x from 400 to 100K. And there's a real clear positive correlation with a very high R squared. So the line that can be fitted is very um the points are very close to that to that line. This is a very nice fit. Um, and there is this positive correlation. So when the S&P goes up, the stock market goes up, Bitcoin goes up. Is that a bad thing or is that a good thing? Well, it just is. And um what we're seeing today or or in 2024, 25, sorry, that's the uh the pink dot. Uh, we're seeing, of course, the S&P going down from 6,000 to 5,000 and Bitcoin also going down from the 100K to about 80K. Uh, so that's that positive correlation. Again, both go down, both go up. Um, in my opinion, when S&P will bounce back, when the markets have adapted to Trump's tariff policies, when it bounces back to 6,000, Bitcoin will probably be above 100K again. And in fact, if it's a question uh of when rather than if, the S&P grows to 7,000, that that would fit a Bitcoin price of 300,000.
Now, if we look at gold on the right chart, it has gold on the x-axis. Same chart but with gold on the x-axis, also on a logarithmic scale. It's also 10 years of data. So gold was $1,000 in 2015 and it's $3,000 right now, 10 years later. So it's that same 3x that the uh the S&P did. Uh, and Bitcoin, of course, going from 400 to 100,000, 250x in the same period. Nice positive correlation with a high R squared, just like uh stocks. Um, so gold, yeah, what what it does normally is if gold goes up, bitcoin goes up, and of course um behind all this is also the dollar and the money printing. So the dollar loses value. It's called inflation, and everything that cannot be printed by governments, like gold, like the S&P, and like Bitcoin, goes up. Um, now recently we saw gold pumped to 3,000, Uh, but Bitcoin fall to 80K. So that that that's a question mark. Is that a break of this 10-year-old positive correlation? Is is Bitcoin going its own course, or is that just an outlier, a gold outlier uh that will probably bounce back to that line? Uh, I think the latter. Uh, I don't think this this 10-year-old uh correlation will break. And uh by the way, note that a 3k gold would fit, if we go up to that line, a 300k bitcoin. So we have a lot of pointers towards that 300k bitcoin. From gold uh at 3k would point to a 300k bitcoin, but also equities uh S&P at 7k would match that 300k bitcoin. So there's no guarantees. Of course, this happens. It looks like a sweet spot. It's also not investment advice. It's just me looking at the data, my interpretation. And please do your own research and make your own conclusions on that.
Now, if we go if we talk about 300k Bitcoin and we look at the stock-to-flow model, that that would perfectly fit the levels that stock-to-flow model is is predicting, right? The stock-to-flow model predicts 500k for the uh 2024 2028 halving period. It's an average level, and uh just like last halving period where it predicted 50k and it turned out to be 34k, which is pretty close, uh there is a range of uh uncertainty um uh and standard deviation range around that point estimate of 500k, and and that range is roughly 500k divided by 2, which is 250k and times 2, which is 1 million. So 250K to 1 million range for the stock-to-flow model. 300K would fit right in there. And of course, stock-to-flow thesis that scarcity drives value is still very true, and I think it's first principle, right? It's uh scarce things are more valuable than than non-scarce things.
And um in this chart, if you don't know this chart, you see Bitcoin over time and you see the other assets, silver, gold, and real estate. And in fact, you could you could say this is Bitcoin over time, time, but in fact you could also see it as Bitcoin phases. So this is the first phase. This is the 2012 halving, the first halving. And until that time, Bitcoin was well an IT proof of concept uh basically with less value than 100 million dollars. So then in the next after the 2012 halving, in in 2013 and 14, uh miners came in, uh ASIC uh chips came in, and and more exchanges uh entered the market. So it the market grew. Bitcoin adapted, and the market grew to a $10 billion market cap. It's a totally different animal with the miners and the exchanges. And then in the next cycle in 2016 till 2020, the market grew even further with more legal clarity and clarity about forks. So if if if somebody decides to copy Bitcoin, it can copy maybe this this proof of concept phase, but it cannot copy all the miners uh investment of all the miners and also not all the exchanges. So very important for Bitcoin this phase, and with all that clarity, then the last phase, 20 to 24, well, retail investors really really jumped in and and brought this Bitcoin asset to over $1 trillion market cap, and and that's where we are right now, and that that brings Bitcoin on the radar of institutional investors. So they don't look at everything le anything less any asset less than a trillion dollar, it's it's nothing. Even even Bitcoin right now it's it's really small compared to for example gold, which is more than 10 10 trillion, it's probably 20 trillion at the moment with the current prices, and real estate which is a 100 trillion plus market. Now the interesting thing is that Bitcoin scarcity right now is twice gold's scarcity. Gold is a stock-to-flow ratio of 60, and Bitcoin has a stock-to-flow ratio of 120. It's even higher than the stock-to-flow ratio of real estate, which is around 100. But the value is much less than gold and real estate. So in my opinion, Bitcoin is very much undervalued, and uh in the future when uh and and and that's that's logical, right? Um, silver, gold, real estate are really old investments uh uh asset classes that people know have known for thousands of years, and Bitcoin is new. People don't understand it. There's a lot of people that still think Bitcoin is a Ponzi scheme or that Bitcoin is for criminals or that Bitcoin is bad for the environment. Uh, it is not. So over time, when people learn to know what Bitcoin is and get familiar with the asset, uh I think the only um um yeah thing that can happen with with value and with price is going towards that line uh and towards the other assets. And right now it's it's it's very undervalued.
Next chart. If we stay on-chain, like stock-to-flow, we look at realized price. Right now the realized price, the total market realized price, is um is it's 45K, is 44, sorry, 44K, and that's up a little bit from 43. Um, if we look at the five-month realized price, that's only the last five-month buyers that bought last last 5 months, uh the cost price would be 91k. That is, of course, those buyers are on average in in a loss uh because Bitcoin is lower than at 91, it's at 82. Now, if you look at the medium-term, 2-year realized price, I like the two-year realized price. I think it's the most usual usable because the total realized price has all the Satoshi coins, the 1 million Satoshi coins from the beginning valued at zero, and it has all the lost coins, that's also millions of lost coins in from the old days, all all against low prices. So it drags that that realized price down, and the uh very short-term realized price is um very influenced by well short-term movements. So I like the two-year two-year realized price is at 75,000 right now, up from 74 end of uh February. Um, yeah, uh in profit. So on average, people that bought last two years are in profit because they bought at 75 and Bitcoin is now 82. Uh, so really I do not see much pain in the market. Most people are in profit, and that's quite healthy, quite bullish in my opinion. Um, note that I would be less optimistic if that yellow line, that yellow line, the five-month realized price would be would cross the 2-year realized price, would be below the 2-year realized price, because that usually is an indication that the bear market has started, and we're not there yet. Um, this here you see it as well in 2018, yellow crosses blue, or here in 2014, yellow crosses blue. It's not the case at the moment. Yellow is at 91, blue is at 75.
So now the most important chart. I made this chart in 2022, just after Bitcoin missed the 100K mark, and I failed to see that as well. Um, and to not be as late uh to recognize it, I made this model. It's built on on-chain uh indicators. It's proprietary, so you don't know exactly what it is, but the outcome is interesting. Uh, it shows red. So we're still in a bull market um and not in a red uh uh distribution phase. It's there. There's no yellow dot yet. And yes, it's a very weird bull market so far. It's flat. It's much flatter than historically, and it's long, more than a year old. I think that has everything to do with that that that premature all-time high here when the ETFs were introduced in at the start of 2024. Since then we're in this this this red bull phase. It's weird, but it's not yellow. And by the way, even if there would be a yellow dot, it's not that clear as all the other dots, right? If if if yellow flips to green, it stays green. And that that's the bottoming out of the market. And then if if if green flips to blue, the accumulation phase, that stays blue, it doesn't flip back. But but if red bull market flips to yellow distribution, it's it could be a bit noisy. Uh, like in 2013, it flipped to yellow and then a couple months later back to red and raging bull market again. Same in 2021. And that that was so confusing in 21. So it the bear markets seemed to to have started after China banned the miners. Um, and then it the bull market seemed to have started again and and and red dots came back just to be followed by more yellow dots and then the real distribution phase and later the bear market started. So right now, no yellow dots, still red dots and ready to go. See you next time. And uh beware that all models are simplifications of reality. Some models are useful.