Well, Bitcoin (BTC) decided to take the bearish path, or maybe larger players that shape the market made the choice for it. The ascension from the narrowing pennant proved to be a fakeout and a tweezer top at $10,278 was followed by a sharp reversal all the way to the bottom of the larger bull pennant that Bitcoin has traded in since topping out at $13,800 on June 26th.
The majority of popular crypto-Twitter traders fell mysteriously mute as the carnage unfolded on August 28. As mentioned previously, the danger of issuing price action absolutes rooted in hubris is that the unpredictably cruel hands of fate often bring down the self-assured faster than Icarus fell in his ill-planned mission to escape Crete.
As the day progressed, however, analysts began to piece together a narrative that explained how the bear break could have occured and some interesting theories surfaced.
A market maker makes a whale-sized trade
A $120 million buy wall on BitMEX stands out as an anomaly, (if those exist in the crypto market) that could have impacted today’s pullback but that is yet to be determined. One trader who goes by the moniker CryptoMonk suspects that the buy wall was “someone trying to unload some corn.” Or, in simpler terms, a large seller threw up a buy wall to maintain Bitcoin price while unloading from their own stack.
“Build the wall!” he chanted. And they laughed.
Until he actually started building the wall.
“Cut corporate taxes!” he campaigned. And they laughed.
Until the Tax Cuts and Jobs Act of 2017.
“Buy Greenland!” he tweeted. And they laughed.
Until . . .
The Original Green New Deal
Greenland doesn’t seem to have a lot going for it. There’s almost zero infrastructure, no land for crops, and it runs a consistent deficit. Most of its money comes from fish.
The country’s national anthem roughly translates to “Our country is really old.” The backup national anthem translates to “Our country is really long.”
Financially, Greenland is a mess. Denmark subsidizes Greenland to the tune of about half a billion dollars a year. That’s two-thirds of the annual budget. Without that help, Greenland would face complete collapse within years.
So at face value, Greenland looks like a horrible proposition.
But this isn’t even the U.S.’s first, or second, or even third attempt to pick up the Arctic country.
One of those attempts was right after World War II. The U.S. offered Denmark $100 million (~$1.4 billion today) in gold to buy Greenland.
It was December 2017. We were wrapping up a banner year at my flagship cryptocurrency newsletter, Palm Beach Confidential.
Now, back in January 2016, I’d realized cryptos were the next big investing megatrend. I knew we were at the beginning stages of the biggest story of my investing career.
My publishers at PBRG were skeptical at first. But I eventually convinced them to let me share my crypto ideas with hundreds of thousands of subscribers who rely on us for income-producing and money-making ideas.
The rest is history…
Bitcoin rocketed from about $450 per coin when I first recommended it in March 2016 to nearly $20,000 in December 2017. Ethereum did even better—and has been up as much as 15,821% since then.
My top recommendation rose as much as 151,323%. Even after the 2018 crypto pullback, it’s still up a staggering 7,477% today.
As you can imagine, many of my readers made buckets of money. Some became “overnight millionaires.” And others built on their already sizable nest eggs.
"How are things, Jeff?" I asked my friend recently. "I bet business is good with these low interest rates..."
I've known Jeff for many years. He also happens to be a local mortgage banker. We were both eating dinner at the same restaurant earlier this month.
"Business is great," he answered. "I just locked in a 30-year mortgage today for a client – at a rate of 3.375%."
"3.375%!" I said. "Lucky client..."
To see just how crazy this is, you need to understand one thing. That number is about the all-time record low for a mortgage rate – in U.S. history. Seriously...
Looking back at the last century, the best mortgage rate you could have gotten for a house was just under 5% – back in the late 1940s.
In this century, mortgage rates bottomed out in 2012 and 2016 at around the same 3.375% level Jeff just locked in for his client.
In short, mortgage rates today are as good as they get. And that means the time to act is now.
Dear Rich Lifer,
Over the weekend, I shared some of the pros and cons of buying a vacation home.
Not only do you need to be able to cover the upfront costs of buying a second home, you also have ongoing yearly expenses to cover as well.
And unless you intend on renting out the property for a good chunk of the year, forget about seeing a significant return on your investment.
But, a few readers asked if buying a second home with friends is a better idea.
Today I’ll dissect this question a bit.
Should You Buy a Vacation Home with Friends?
Buying beachfront property or a cabin in the mountains might seem like a pipe dream on your own dollar. That’s why more and more buyers these days are teaming up with friends to share the cost.
Dividing the mortgage sounds great on paper, but buying a second home with friends comes with its own set of challenges.
Chris’ note: Chris here, managing editor of the Dispatch. With gold on the move – up 18% over the past three months – I tracked down my good friend and go-to person when it comes to all things commodities, David Forest.
I wanted to get Dave’s thoughts on what the big picture looks like… and whether this rally can continue.
As you’ll see, not only is gold just starting to heat up… but the entire commodities sector is on the verge of a huge boom.
And Dave says there’s one type of commodity – besides gold – that needs to be on your radar today if you want to benefit from this trend.
He tells me all the details below…
Chris Reilly, managing editor, Casey Daily Dispatch: Dave, as regular readers know, you’re always on the road, uncovering the biggest opportunities in the resource space. One of your stops earlier this month was the Sprott Natural Resource Symposium in Vancouver. What was the vibe like there?
Dave Forest, editor, International Speculator: Well, Chris, during one of the days at the conference, I was part of a breakfast Q&A with Doug Casey and Nick Giambruno.
Last time was during the Financial Crisis. Now it’s happening in a kinder and gentler way, but there is no crisis.
The evidence thickens: In July, the median price of new single-family houses fell 4.5% from July 2018, to $312,800, and was down 3.1% from July 2017, according to the Commerce Department this morning.
These price changes do not include the incentives – the free upgrades of finishes, counter tops, and the like – that homebuilders dangle in front of potential buyers to make deals. With incentives, buyers get a little more for the same price. The price declines in the chart are on top of that.
The trend via the three-month moving average.
As you can see from the chart above, this data – produced jointly by the Census Bureau and the Department of Housing and Urban Development – is, let’s say, a little “volatile” on a month-to-month basis. It also gets revised (up or down) in the following months. The three-month moving average smoothens out some of those effects and allows for longer-term trends to