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Hey Guys,
Tough day on the markets for sure.
I'm not too fazed. This is mainly because I have a fairly good idea of why they are looking the way they are.
Thought I would share them with you...
1️⃣ Those weekend futures liquidations. I shared the post above over the weekend that explained the impact of excess leverage and cascading liquidations. That is what drove us below 60k.
2️⃣ JP Morgan FUD. They released a report that claimed the liquidations had an impact on the liquidity in the Bitcoin markets. Not really correct but the FUD did come at a time when traders were already skittish
3️⃣ Impacts of that Turkish Exchange Rugpull. It has been reported that the founder rug pulled and managed to bag over $2bn in BTC. Turkey had some of the largest per capita Bitcoin adoption stats in the world. They were already dealing with the impacts of the Central Bank ban last week and the Exchange rugpull adds insult to injury. There are also fears that those $2bn funds could seen make there way onto the market in some way and potentially impact on the price.
4️⃣ Biden's Cap Gains Proposal. It was announced that Biden is looking to increase capital gains tax to as high as 43.% for high income earners. This is almost double the rate that they have to pay now. Of course, this spooked all markets. All of those wealthy investors who own assets would be in the firing line.
None of these have fundamentally altered my investment thesis in Bitcoin. The last one is particularly nonsensical to me. Firstly, it only applies to High Net Worth US citizens. And, even then, do you logically think that Bitcoin whales would sell now to avoid tax in the future?
"Let's sell Bitcoin now to avoid the tax we have to pay on all those massive future gains".
That sentence is silly which is why I don't think they will really sell.
Moreover, this whole "tax" FUD is mute. That is because it's merely a proposal which is pretty unlikely to pass the Senate. We should not forget that the Dems only hold a razor thin majority and there are a lot of moderate D's who would not support this.
So, it's all noise. I will be enjoying my weekend as its amazingly sunny in London. I won't be stressing about the markets. They will be there when I return.
Keep Calm & HODL On 💎🙌