🧠 This will be Bitcoin's toughest battle so far

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GM - Arsen here. ☕

Welcome back to Bitcoin Therapy. The newsletter that keeps you informed AND entertained.

First, happy and relaxing Sunday to 3,332 patients reading today. 👋 

Just got back home after 1 month of traveling. Feels good to be home.

But you know what’s also good? This week’s email 🔥

Alright, here’s what I got for you this week:

  • Leverage traders cause a flash crash - $500 Million wiped out in 1 hour

  • Jim Cramer speaks positively about Bitcoin (R.I.P)

  • Bitcoin ETF is on a final stretch

Estimated read time: 3 minutes and 2 seconds

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LEVERAGE DEGENS CAUSE A BITCOIN FLASH CRASH

Now, you know me: I don’t like talking about the price

It’s the LEAST interesting thing about Bitcoin.

BUT, some of you asked me why we dipped 5% earlier this week.

So, here are 2 reasons why:

1/ Jim Cramer spoke positively about Bitcoin (see story below)

2/ Overleveraged traders got liquidated

No, being “liquidated” doesn’t mean being well hydrated.

It’s when degenerate traders who borrow money to trade lose their trades.

And boy, let me tell you, there’s A LOT of leverage trading happening in Bitcoin.

Just this week, we saw over $500 Million Bitcoin Longs get liquidated.

“But how do liquidations affect the price?”

Let me explain by using an imaginary trader called ‘Dave’:

  1. Dave lives in his mom’s basement. He is watching the Bitcoin chart pamping like no tomorrow. He gets FOMO and decides to go all in and risk it all.

  2. But Dave’s net worth consists of $2.24 in his Chase checking account and a half-eaten hot dog. So, Dave decides to sign up for a trading platform and borrow money to do leverage trading.

  3. Dave read somewhere that big leverage (25-100x) can lead to big profits but also big losses.

  4. So, Dave opens up a 100x leverage-long position. This means he is betting on the price of Bitcoin to go up. And because it’s Dave, the price of Bitcoin drops 5%

  5. Dave gets liquidated and now has to sell his hot dog (and a kidney)

Now, imagine there are 1000’s of Daves getting liquidated at the same time —> this creates a cascading effect causing the price to go even lower —> causing even more Daves to get liquidated —> price goes lower…you get the point.

The result? $500 Million in leverage trades got liquidated in a single hour. Yes, an hour.

These so-called ‘flash crashes’ are not fun, but they’re necessary.

They wash out the overleveraged dumb money and balance out the market.

Anyways.

The best trading advice: don’t

30% OF BITCOIN IS LOST FOREVER

Scary number, I know. Let me ask you a few questions:

  1. Do you think your Bitcoin setup is secure enough?

  2. Do your loved ones know how to access your Bitcoin if something happens to you?

  3. Are you using Bitcoin without being surveilled by third parties?

If you struggle with these questions, you’re not alone. I’ve been there.

I’ve made lots of mistakes when I first discovered Bitcoin in 2017. I’ve sent BTC to the wrong addresses, overpaid in transaction fees, and sometimes didn’t back up my wallet (RIP sats).

This is because there was no one to guide me. But that’s not the case today. Meet The Bitcoin Way - your Bitcoin IT team

These Chads offer personalized, secure, and comprehensive solutions for every aspect of your Bitcoin journey (they’ve thought of everything):

  1. Wallet & node setup

  2. Individuals & Businesses

  3. Inheritance planning

  4. Privacy-focused collaborative custody

  5. Fast and reliable tech support

They’re rated 4.9/5.0 on Apollo. So yeah, they’re legit.

Schedule a free 30-minute call today 👇

THIS WILL BE BITCOIN’S TOUGHEST BATTLE

Bitcoin is dead.

No, I’m not joking.

What happened? A prominent figure from the traditional finance world talked positively about Bitcoin on national TV.

They said Bitcoin is “here to stay” and that it “can’t be killed”

The issue? It was Jim “anti-Midas touch” Cramer.

Now., if you don’t already know, everything Jim touches turns to shit.

In traditional finance, this phenomenon is called “the inverse Cramer”.

Here’s Jim's résumé in a nutshell:

  • 2008: Jim said, “Bear Stearns is fine. No need to withdraw your money”

Narrator: a few days later, Bear Sterns collapsed and caused a global financial crisis.

  • 2012: Predicted that Netflix and Best Buy stocks would crash

Narrator: They both went up over 100% in the following months

  • 2022: Predicted Meta (Facebook) would go up

Narrator: Meta plummeted over 50% in the following year, for which Jim apologized publicly

  • 2023: Defended Silicon Valley Bank and said it was “stable”

Narrator: a month later, SVB imploded, which caused a chain reaction and a few other banks to collapse too

Pack it up, guys. It was a good run.

Bitcoin has withstood many attacks from hackers, competing sh*tcoins, governments, and screeching environmental Karens.

But Jim Cramer speaking positively is the final boss.

BITCOIN ETF ON A FINAL STRETCH

What’s been happening in the last 6 months:

  • I’ve been trying to get in shape

  • The world’s largest asset managers have been trying to launch the Bitcoin ETF

My biggest obstacle? Tasty food

BlackRock’s, VanEck, Fidelitey and co’s biggest obstacle? SEC.

That being said, the latest sources say the SEC’s ETF decision deadline is January 10 (next week). 👀

Everyone and their grandma are bullish and expect the price to soar after the approval (which is likely🤞)

That being said, I DO NOT recommend buying the Bitcoin ETF.

Why? Because you’re essentially buying a Coinbase IOU sold by Wall Street suits.

Basically, you’re buying fugazi Bitcoin.

Don’t buy fugazi bitcoin, ok?

Thank you.

QUICK NEWS⚡

  • Indonesia is cracking down on Bitcoin miners - 10 operations already shut down. 🪦

  • BSV fanatic fakes a BlackRock press release to make it seem like they’re launching a BSV ETF. So desperate, lol.

  • You can now play Farmville but on Bitcoin. It’s called Homegrown.

THIS WEEK IN A MEME 📅

FROM THE ARCHIVE 📁

Be like John.

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See you next Sunday,

Bitcoin Therapy Team

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