Bitcoin Price to Rebound as Trump Hides 'Atomic Bomb' in Crypto Reserve Order

This article is a reprint of a comment made by a subscriber, TechNova, in the March 6 Daily Diary community. The team felt that TechNova's opinion was worth sharing because of the conversation that his posts fostered.

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Bitcoin: Some further thoughts.

Remember that Crypto Mood after the last few Rug Pulls has been MORBID.

I have mentioned many times the total Retail Crypto Capitulation.

Those same folks are now pissed and calling this yet another Rug Pull. I get it. And I warned y'all here about the first impressions and the HIGH VOL around the announcement.

Crypto Twitter was not happy with the announcement.

Now it is time for some deeper thinking. 

This, to me, is no different than an FOMC meeting release and the stock market trying to figure it out.

So let's dissect a bit.

THE BAD:

1) The US Gov is not going to be buying ANY crypto.

This means they are not going to buy your Coins. All those whose bags were nuked, and were preying for a Bailout did NOT get what they wanted.

2) This means the Trump does not intend to go through Congress at all.

Many were hoping for meaningful reforms that would require congressional approval. That is clearly not going to happen.

3) Those that were hoping for an actual Reserve with Non BTC, just got hosed.

So no XRP, ADA, SOL in the Reserve even though Trump tweeted that it would be the case.

So rightfully, many are now saying 3 Rug Pulls and you are OUT.

Crypto has TOPPED and we are done.

THE MAYBE GOOD:

1) For the first time in World History, a Cryptographic Digital Asset has been labeled a Strategic Reserve Asset category.

The US will "never" sell its 200,000 coins. Labeling them a Digital Fort Knox.

BTC went from $100 to $100,000 by being labeled "Rat Poison", now that it is labeled "Digital Gold" it is going to Zero? Really?

Please go and re-read my missive of RISK ASSET allocation. Read what I wrote about allocation based on RISK. RISK being defined as an extinction event. What do you think just happened to BTC from a RISK perspective? Did it just go up or down? I had it at 35% RISK. If I adjust it lower, what does that mean the price should do?

2) The US owns both BTC and ETH acquired through seizures.

This to me means that the ETH will not be sold either. By inference that means that the US is now going to hold a Layer 2 Coin ecosystem.

This is from a previous history of calling all ETH coins Securities. To know calling them Digital Assets.

3) The EO also calls for a Digital Stockpile.

These are assets that the US is now going to collect that it secured without payment.

How would that work?

Simple. Ripple settles its lawsuit for $100M in XRP.

BOOM the US now owns $100M in XRP. And you if think that is not a huge win for XRP to pay that fine you are not playing the game correctly. ;)

4) The US can use ANY NEUTRAL strategies available to the Commerce and Treasury Secretary to add to the Bitcoin Reserve.

This is the atomic bomb hidden in the release.

I was talking to a friend today that has been tracking Mar-a-Lago visits to get a sense of who is paying Donnie and who has not yet paid any dues to the King, and he said something that caught my attention. Not a single person from the Gold Mining complex has come by yet, and transferred any Coins to Donnie. Not one.

Now I don't want to start any panic amongst our Gold holding friends. But would it not be a NEUTRAL strategy, now that we have established BTC as Digital Gold, to make some transfer from Fort Knox to "Digital Fort Knox"?

From what I gather, there are certain emergency provisions by which the Treasury Sec can make this transfer unilaterally, without the approval of Congress. Again, not saying this will happen, but I am not saying it cannot happen either.

5) This was done without Congress.

Anyone expecting an announcement that required Congress was disappointed. I happen to think this is more bullish than announcements that require congress.

If we needed congress, this means a stalemate. Getting everything you possibly can that does not require Congressional approval in my book is literally the definition of getting everything you can.

My early conclusions.

I understand that a beaten down Crypto Retailer is pissed. This is not what was promised. Their hopes and dreams are shattered. But keep in mind, it is my view that Retail has already capitulated. They have nothing left to sell.

This big drop in BTC was from speculators that stepped in this week to buy this event. It was not from long term investors.

But if you are an institutional buyer, or a large holder of BTC such as myself, I see this as a rather meaningful move. My bags just got secured by the US GOV.

I don't need BTC to run to $150K tomorrow, I simply want to know that BTC is never going back to $30K, and this to me was just guaranteed. If my RISK assignment now goes from 35% to 10%, that means that if BTC does not go up to make up that difference, it is no longer priced correctly as it relates to RISK.

I think we are going to see wild moves tonight (March 6th), and all day tomorrow, and all through the weekend. I think a bunch of people have given up on Donnie, and now will walk away from Crypto, while I think a bunch of large money investors will be looking longer term at what this means.

The reason I started posting about BTC years ago to get people to jump on this journey is because it is very rare for an opportunity like this to be available to the average joe. If you wanted to be an early investor in FACEBOOK, TWITTER, etc... you needed to be an accredited investor. In other words, already rich.

In America if you are poor, you are not allowed to take risks with your capital even though you have so little to lose. Crypto was the Trojan horse to that system. People with little, could see their funds go up 1000X.

An early missive I wrote spoke about how few early AAPL, GOOG, MSFT millionaires we still have. Folks who, if they had just held, would be multi-millionaires today just through Options and Stock grants. Poor people get these and cash them immediately. Partly because they need the money, but also partly because they lack financial education.

In that missive I wrote that my biggest fear for Crypto was that it was going to shift from making the average Joe rich to making, the large Old Wall cats rich. This is why even though Dougie rags on it, HODL'ing is so important. You need to stick around for when Sovereign Funds start buying BTC at $500K per Coin. Yet, seeing the absolute despair online by Crypto Retail, makes me sad. It shows me that they have been taken out of the wealth creation system already, and have now ceded the space to those already wealthy seeking to add more to their wealth.

Recent Retail Surveys showed that most Retail sold their BTC to move into ALTs ahead of ALT season.

Now their ALT bags have nuked 90%.

So they waited patiently, accumulated huge BTC profits, only to lose them all in ALTs.

Those people will not buy back as BTC is too expensive now to get back in.

It is too early to draw any more conclusion than these.

That being said, I gave 2 possible price targets. 1 was for a good announcement, the other was for a bad announcement.

But I guess I should have quantified for which crowd. This was a terrible announcement for Retail, and a great announcement for the institutional holders.

So what does that mean for price?

I think we will see a lot of chop. But my instinct is that there is enough here to prevent what all the Bears I see posting now are posting : "BTC has topped. Heading to $60K".

If that were true, what institution or rich person would not be backing up the truck to load up on BTC now that it is officially designated as Digital Gold? I think, everyone will. Which is why my buddy MAX PAIN would say then why should that be the outcome?

The most expected outcome should be sideways chop and digestion around these levels.

$82K to $92K... until we hear more.

That to me, is a loss for the Bears and a win for the Bulls.

Now tomorrow is going to be a long day, who knows what crazy sh$t they can add to this.

If Sacks or Lutnick even mention their ability to transfer Gold then GTF out of the way of the BTC steamroller. We could be at $125K by Sunday night.

TechNova is long Bitcoin and other crypto assets.