$180 Billion Just Got Lost

This article also appears on The Duran

Steve Brown

In January this year I wrote on twitter that Bitcoin would be targeted by the monetary cartel when it reached  $1 trillion in US fiat market cap, and that’s precisely what happened. Within just four days from 21 February — when bitcoin reached its peak of $58K per BTC — to the 26th, bitcoin lost $10K in fiat dollar terms. Overall that loss represents $180 billion dollars US. Where do those ‘lost’ speculative dollars go? Into the share markets? No. Into notes, bills or bonds?  More no.  Into the gold or silver markets? No, noting that the forever manipulation of gold and silver was a founding principle for Satoshi’s adherents.

Bitcoin is a global phenomenon and derivative (of fiat currency) mostly represented by US dollars.  While $180B is seemingly a small figure in relation to the trillions of dollars the US must bandy about, if any dollars can be found where they don’t belong the Fed/Treasury is more than happy to vaporize them at will – especially if such dollar liquidation impacts China. Since a large proportion of bitcoin activity does take place in China, and the computers to calculate bitcoin are made there, China’s capital flight and FINTECH closely align to US dollars.  Bitminer sales represent significant exports for China, and  according to the University of Cambridge China’s exposure to bitcoin may be 65% of the bitcoin market cap, where that market cap is just under $1T in USd fiat.

Bitcoin is not a real currency and is not accepted as such beyond fringe transactions. That’s because bitcoin can only transact seven times per second, resulting in high fees through arbitrage and delayed settlement times. The Lightning network aims to resolve such transactional problems, but there are significant roadblocks where “segregated witness” is one. Segregated witness will require a major change to distributed blockchain ledger accounting to work.

So, since bitcoin is not a currency… what is bitcoin? Bitcoin is a speculative asset which resembles a pyramid scheme dependent upon layered components which allows it to trade. One of those layers is tether which was recently enjoined by the state of New York from carrying out its illegal operations in the state, along with a related exchange called Bitfinex. Even so, attempts have been made to gentrify bitcoin by the billionaire Winkelvoss twins, ex Goldman trader Raoul Pal, Elon Musk, and by touts from America’s largest criminal bank, JP Morgan, with some success noting bitcoin’s meteoric rise per the last few months.    

The bitcoin tumble predicted in January by an unidentified lazy crypto blog journalist at $1TN USd bitcoin market cap, represents the disappearance of about $180BN in (mostly) US dollar fiat, which is quite convenient for the Fed, and for the US regime’s China policy too. But where did that lost bitcoin fiat go?  This time, small or “retail” speculators liquidated all or a portion of their bitcoin holdings — mostly in dollars and apparently sidelined, according to one source. Beside the China capital flight out of BTC into domestic distribution of its own CBDC, some major bitcoin holders or “whales” have held bitcoin while smaller retail investors sold. That could spell trouble for Musk, who probably acted illegally* when he touted for bitcoin.

That retail holders of bitcoin have sold while large commercial holders have held, spells trouble not only for bitcoin, but for those large holders.  It means that bitcoin’s rebound will be slow, especially while bitcoin is plagued by legal matters and even impostors who claim to be the fabled Satoshi Nakamoto. Also, the foundation for crypto – where one punter hopes to sell it to another at a higher price — is endangered, when the marks drift away.

But again… where can that $180B US in lost bitcoin** go? Traders will not hold cash, which is constantly debased. Hedge funds have limited options in a market where short-selling is not allowed, and hedge funds cannot absorb massive liquidated $$ share amounts instantly or easily. To focus on other sectors such as debt instruments and commodities? Certainly not commodities, but the US Treasury and sovereigns would like to see a flight to state debt…. well, maybe not. Unfortunately in a world of negative or near negative nominal fund rates a flight to state debt instruments does not work.

That’s because western governments have huge balance sheets stocked with bonds and government-issued debt instruments that those governments would dearly love to unload to real buyers — if only they could. But the western monetary system can’t handle hundreds of liquidated billions at very short notice into those debt instruments (Treasury’s, T-bills, notes bonds, MBS, TIPS, sovereign gilts etc) when nominal and real government fund rates are negative… as they all are. (NB: real government fund rates in the US have been negative for years, even though the nominal gov fund rate is positive .005 percent.) The foregoing is not meant to detract from the fact however, that western monetary markets are and were designed and created to warehouse trillions in derivative, governmental, and public and private debt. Even so, there are limitations regarding how much government-induced debt the western monetary system can handle. So far… that limitation has not been met.

That crypto and Wall Street traders cannot flee to cash is one thing, but consider that many bitcoin mom & pop punters have fled to cash for now. However, it is the whales like Bukele, Justin Sun, Raoul Pal, Mike Saylor and a few others (including the ESF BTC dark pool***) whom are most exposed to an extended trade sideways.

We may see Formula 1 promoting crypto.com and CNBC and the other big media outlets bribed to push the crypto scam. After all, the crooks who own and operate western markets have never seen a scam they didn’t like. But… the astro-turfers for bitcoin and crypto have a general problem…

Suppose PTB’s gave a scam and nobody came?

*bitcoin has not been declared a security by the SEC at this time

**or for that matter hundreds of billions in Wall Street and world market shares

*** See: The CIA’s Bitcoin Heist https://strategika51.org/2021/09/05/cias-bitcoin-heist/

Twitter: @newsypaperz

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