*Note: I will be traveling for the next two weeks and will be unable to make posts on a regular basis until I return.
Downward pressure on the entire space obviously continues. There has been a series of H&S patterns as well as bearish flags that have all worked to take prices lower. There is one pattern that is still targeting the $8,400 range, that target has not been reached and is still valid. Here’s the Big Picture Daily chart:
Here’s a 30 minute chart, I can’t remember seeing a chart that had so many well developed H&S patterns in such close proximity:
There is a definite psychology to Head & Shoulder patterns, these are classic patterns and actually do not look contrived or manipulated to me. If you want to see contrived, just look at a chart of the DJIA, S&P500, or NASDAQ. There you will find manipulation, historic overvaluation, and a classic bubble.
So the question then is: Are the banks manipulating the price of Bitcoin (and by extension other coins as well)?
There certainly are a lot who think so – and it doesn’t help that the top was put in the day Bitcoin futures began trading! The fear of Bitcoin manipulation looks like this:
At about $5,000 BTC the banks start buying actual BTC like crazy rapidly running the price up. Jamie Dimon, CEO of JPM, calls BTC a “fraud” in order to intentionally drive the price down. Meanwhile JPM and other banks are buying with both fists (they can simply materialize Dollars after all). They buy hard running up to the opening day of the futures market.
On opening day they short BTC like crazy via the new futures market and begin selling their actual Bitcoins, thus driving the price back down in order to profit on their futures bets… Once they run out of BTC to sell, they will flip that trade, begin buying, rinse, repeat, rinse, repeat.
That’s the thinking, but is that reality?
First of all, there is no doubt that it should be understood that banks and bankers are NOT your friend. Nor are they the friend of humanity – period. So none of that is beneath them, for sure.
This seems “foggy” to most people, so let’s examine the mechanics involved in both Futures and ETFs:
Futures are EXACTLY like gambling – they are, in fact, legalized gambling. They are a bet on the future price of an underlying asset – be it gold, silver, oil, Bitcoin, or whatever.
The CME Group is the exchange that handles trades of Bitcoin futures. An important aspect of their futures contracts is that all settlements are in CASH, NOT BITCOIN. This means that they do NOT need to own any Bitcoin in order to settle payment.
There are rumors going around that the banks have made deals with the exchanges in order to use Bitcoin held by the exchanges as backing for those futures contracts. This is not necessary since the banks can and do settle all BTC futures contracts in Dollars – remember, banks can simply turn on their printer to make more Dollars, they don’t have to own BTC. They are running a betting parlor, a gambling side show that has ZERO function on behalf of a proper society.
This is not to say that there aren’t legitimate uses for some futures, there are – like airlines and other businesses who use them to hedge the price of oil. But a need to hedge the price of BTC? Not yet (but big players who accept BTC as payment may want to hedge in the future).
So if the regulators think its okay to trade BTC futures, why would they turn down every application to date to create an ETF?
Oh yes, we’ve heard their excuses – you know, they are trying to “protect us.” LOL
No, they don’t give a rats behind about you or me losing our money! They steal it every chance they get, it’s a laughable proposition that some banker or regulator is “protecting” the public.
There are two types of Exchange Traded Funds (ETFs). One type is just a piece of paper where the scammers who organize it claim to follow the price of the underlying asset – gold, silver, real estate, bonds, whatever. They take exorbitant fees all along the way, and thus these paper tigers rarely, if ever, maintain the value anywhere near equal to the actual underlying. Why would you own them over the underlying? Only for short term trades so that you don’t have the hassle of taking possession – that’s it. Oh, and you can leverage these (the slippage is even more pronounced over non-levered ETFs).
The other type of ETF is one whose charter documents require the company to actually own the underlying asset in an amount (close to) equal with the amount of funds deposited into the ETF. This is like GLD and SLV – they are required to actually buy physical gold or silver.
And this is EXACTLY what the banks and regulators DO NOT WANT! Why?
Because, unlike any other asset on the planet, and especially unlike any financial asset on the planet, Bitcoin is strictly limited in quantity! That means that if money goes into an ETF that is required to buy it, then the price will rise, it will draw more interest, and that interest will weaken their power and control. That’s the real reason.
This is a very important point – When you invest in any paper financial asset, you are buying something from them… and then they simply make another, and another, and then 10 trillion more!
But Bitcoin, nuh, uh! No sir. You buy a bitcoin and there is no making a new one – no replacing it, no forging it, no hacking it. The decentralized trusted ledger makes this possible – and it is a revolution for humanity. So imagine a BTC ETF that requires the fund to own actual BTC… There are only 16 million BTC, what do you think pumping millions and billions more into BTC via ETFs will do?
I highly doubt they will allow it anytime soon – maybe a pure paper ETF, that would take money that otherwise may have found its way into the actual underlying. And that is why paper dollar settled futures and ETFs only – they are a-okay in diluting Bitcoin as it brings them wealth, power, and control. But they will strictly attack anything that promotes the underlying BTC – watch for this, it will become clear.
What they really care about is that they know Bitcoin and the coins that aren’t issued or controlled by them erode their power base. They are losing control, and they know it. It’s very small right now, and they intend to keep it that way if they can.
I can assure you and them that they have lost already – it’s only a matter of time.
PLEASE – For the sake of humanity – do not put a single dollar into any paper BTC product!! Those who do are as complicit as those who make them – karma will take care of them in the end.
REAL PEOPLE OWN REAL BITCOIN – and they take the actual coin off the exchange and put it in their own electronic wallet – that way the exchanges cannot “FRACTIONALIZE” BTC which I can tell you they all do.
REAL PEOPLE POSSESS REAL BITCOIN!
Be Real – I’ll return in a couple of weeks for more.