Dear Reader,
Hello and Welcome. This is the second issue of the Bitcoin Investing Quarterly Newsletter & Report.
This issue looks at Q1 2022 (January, February and March).
Introduction
The focus for this newsletter is long term investing, so our view looks on a monthly and yearly basis. “Buy Bitcoin, you’ll thank yourself in the future”.
In this newsletter the main fiat currency used will be the British Pound Sterling (GBP). In the previous issue I also focused on US dollar (USD), however as I am based in the UK and only focus on GBP I’ll focus on that for the time being. It’s possible in subsequent newsletters I’ll go back to US dollar (USD) and possibly include the Euro (EUR) and or Japanese Yen (JPY). I’m still working on creating a metric for measuring Bitcoin in price of Gold per kilo, will let you know when/if this is in a publishable state.
This newsletter is a compilation of notes, research and analysis that I use for my own Bitcoin investing. Rather than keeping this closed and only for me, my thought has been to open this up for subscribers. For the time taken for the research that is where the subscription fee comes in. Hopefully you’ll find this newsletter useful and or valuable and will subscribe as a paying member.
This newsletter is for simple decision making, based on your own strategy and goals that you define for holding or selling Bitcoin. This newsletter is not about exotic investing such as margin trading, shorting, futures, options or other derivatives. Just simple spot buying and selling of Bitcoin, nothing fancy. An alternative name for the newsletter could be: “The HODL report with a bit of Buying and Selling of Bitcoin”.
Q1 2022 Summary
Q1 2022 (January, February and March):
- A lot can happen in 3 months or 12 weeks. We’ve now entered a hot war between Ukraine and Russia.
- Some commentators have said this is the start of World War 3.
- As of today (1st April 2022), Putin has said he will shut off gas to some countries.
- Cost of living crisis is spiralling in the UK and elsewhere.
- Governments seem to be asleep at the wheel while we all watch a slow motion train crash of inflation and living cost pressures.
- With all of the above, there seems to be more and more prescience from Satoshi Nakamoto and the Bitcoin believers. Almost to the point of foreseeing the future. Was all this inevitable?
- Will there have to be a war which will then lead to a financial reset?
- Jack Dorsey said months ago we are entering a period of hyperinflation.
- I’m not sure it will be a sustained period of hyperinflation, but there will be a shock of inflation. Will this lead to a recession World Wide? It may depend on government responses. For example, it’s worth looking at the Bradbury Pounds in the UK from 1914 (First World War) and see how a similar system could be put in place.
All the above factors play into the narrative of geopolitical, economic and financial uncertainty in the World.
This is an environment that Bitcoin was either created for, or has naturally come to embrace. Bitcoin embodies its role as the financial and monetary release valve or black hole of monetary gravity.
This enables Bitcoin to be harnessed by ordinary people to protect their money, capital and wealth.
Q1 2022 Bitcoin Results for GBP
How did Bitcoin fair in Q1 2022 within the above macro environment?
Bitcoin reached a high of:
£36,825.74
Bitcoin reached a low of:
£24,450.00
Based on the results from Q1 2022, I will be looking to use the best day to buy and sell for Q2 2022.
The best day to buy (lowest price) is likely to be:
- Week 1 of month on Monday, Friday or Sunday at 13:00 UTC
The best day to sell (highest price) is likely to be:
- Week 5 (or last week) of month on Thursday at 21:00 UTC
Source: Data for above USD and GBP compiled from Coinbase via TradingView. Please note the figures above are accurate compared to the visual graph figures which are approximate.
Graph Visualisations for Investing In & Out:
Note: The following graphs were compiled by BBCD Satoshi using data from Coinbase via TradingView. Please note the figures shown on the graphs are approximate, whereas the figures in tables are accurate.
British Pound (GBP)
Logarithmic View of GBP: All time
Logarithmic View of GBP: 2022
Logarithmic View of GBP: 2022 Daily
Logarithmic View of GBP: 2022 MACD and RSI
Experiment for Best Day, Week Number and Time to Buy/Sell Bitcoin
This is based on looking at each month in the year to see pattern(s). There can be many factors that cause these patterns.
- One hypothesis could be the salary effect, whereby people paid in Bitcoin are sent their Bitcoin and then cash out into their local currency within a day or two of receiving their salary/wages.
- Another hypothesis can be looking at Dollar Cost Averaging (DCA) into and out of Bitcoin. Algo Trading, Bots and also humans setting a specific day of the week, week number in the month and time in UTC to either buy or sell Bitcoin. As institutions and corporations invest in Bitcoin, the other aspect to consider will be quarters in the year when portfolios are rebalanced.
- I personally think both of these hypotheses will have a bigger impact going forward. Maybe we’ll see the DCA effect clearer
GBP
- I’ve limited this experiment to only GBP.
- This is an experiment currently, but so far has indeed been useful for buying and selling.
- On a rolling basis:
- The best day to buy (lowest price) is likely to be: Week 1 of month on Monday, Friday or Sunday at 13:00 UTC
- The best day to sell (highest price) is likely to be: Week 5 (or last week) of month on Thursday at 21:00 UTC
Data download:
For subscribers please click on the download area for formatted data files. These should be in CSV and Excel format.
Further project for AI and Machine Learning
Over the coming year I’m hoping to make use of machine learning and or artificial intelligence to start making predictions based on previous data. This will enable Bitcoin investors to focus on specific days of the week, week number in a month and quarter for planning ahead to optimise entry and exit for Bitcoin investments. Watch this space.
Publically Available Graphs, Statistics & Metrics for Bitcoin:
These very useful and excellent charts have been created by third parties. Please take your time to become familiar with them if you are not already. I highly recommend subscribing to the authors websites and social media posts.
- Puell Multiple
- Stock-to-Flow (S2F)
- Bitcoin Logarithmic Growth Curves/Power Law
Puell Multiple:
Source: https://www.lookintobitcoin.com/charts/puell-multiple/
See also:
https://studio.glassnode.com/metrics?a=BTC&category=&m=indicators.PuellMultiple
https://medium.com/unconfiscatable/the-puell-multiple-bed755cfe358
https://twitter.com/cryptopoiesis
Stock-to-Flow:
Source: https://studio.glassnode.com/metrics?a=BTC&category=&m=indicators.StockToFlowRatio
See also:
https://www.lookintobitcoin.com/charts/stock-to-flow-model/
https://medium.com/@100trillionUSD/modeling-bitcoins-value-with-scarcity-91fa0fc03e25
https://twitter.com/100trillionUSD
Bitcoin Logarithmic Growth Curves:
Source: https://www.lookintobitcoin.com/charts/bitcoin-logarithmic-growth-curve/
See also:
https://twitter.com/hcburger1
https://t.co/Qi94ZDV14p
https://medium.com/quantodian-publications/bitcoins-natural-long-term-power-law-corridor-of-growth-649d0e9b3c94
Selected Products and Services:
Kraken OTC (https://www.kraken.com/features/otc-exchange/)
If you are considering making considerable purchases of Bitcoin, I would consider using the OTC (Over The Counter) desk at Kraken.
This would be for purchases over $100,000
I recommend looking at and considering Kraken OTC:
From their website marketing:
“Over-the-counter (OTC) trading takes place off the open Kraken exchange. We offer deeper liquidity and a private, more personalized service to institutions and high net-worth individuals needing to fill large orders that might be too disruptive if placed on open markets at the exchanges. Whether you are trading blocks of $100,000, €10,000,000 or 2,000 Bitcoin, the OTC desk will provide you with execution and settlement services that are discreet, secure and ultra-competitive.”
https://www.kraken.com/features/otc-exchange/
Casa (https://keys.casa)
Something to seriously consider with Bitcoin is what would happen to your Bitcoin in the event of your death.
Alternatively, how can you securely plan your inheritance with respect to your Bitcoin holdings?
I recommend looking at and considering Casa.
From their website marketing:
“Casa Inheritance keeps your bitcoin safe, even after you pass away. Included with every Casa Diamond membership.”
https://keys.casa
Google Trends:
Searches for the word “Bitcoin”
Past Year
Last 5 Years
Halving Countdown:
The next Bitcoin halving where the supply is cut in half is likely to be in 2024.
Please see this dashboard for further details (scroll right and left for the full dashboard)
https://bitcoin.clarkmoody.com/dashboard/
Selected Important News from Q1 2022:
- What’s up with the S2F? A look at the popular Bitcoin model. The model that attempts to predict the price of bitcoin has come under much scrutiny — is the criticism valid?
Source: https://bitcoinmagazine.com/markets/whats-up-with-bitcoin-stock-to-flow
2. El Salvador Postpones Bitcoin Bond: Report The country's finance minister said the offering may come as late as September, according to Reuters.
Source: https://www.coindesk.com/business/2022/03/22/el-salvador-postpones-planned-bitcoin-bond-report/
3. Crypto vs gold: the search for an investment bolt hole
Source: https://www.ft.com/content/d497772f-7422-4372-b72d-f74f96884466
4. MicroStrategy Takes Out $205M Bitcoin-Backed Loan to Buy More Bitcoin. A subsidiary of Michael Saylor’s MicroStrategy is leveraging its Bitcoin to buy more Bitcoin with a $205 million loan from Silvergate Bank
Source: https://decrypt.co/96313/microstrategy-takes-out-205m-bitcoin-backed-loan-buy-more-bitcoin
Q1 2022 Conclusion
For Q1 2022, GBP Bitcoin reached a high of £36,826 and a low of £24,450. The median Bitcoin price was £30,638.
There has been talk of a crypto winter and also rises in the value of Bitcoin, so it’s hard to gauge which way the market will go. People in the Bitcoin space are literally hedging their bets with the geo political, economic, and financial uncertainty.
The weekly RSI went above 50 and also the MACD flipped a green bar which historically is a good sign.
Q1 2022 saw increases in the value of Bitcoin when measured against fiat currency.
In terms of safety and a place to keep capital, this is a 50/50 based on a risk management perspective. If you need access to a portable, secure, non confiscatable asset then Bitcoin is the choice.
A Lot can happen in the world of Bitcoin in 3 x months (1 x quarter), so let's see how Q2 of 2022 does in the next issue.
Thank you for reading.
Any comments or suggestions are welcome at Twitter/bbcdsatoshi
“Buy Bitcoin, you’ll thank yourself in the future”.
