A Major Bitcoin Analyst Is Selling. Should You?

0:00One of the most respected macro analysts in the Bitcoin space just announced that he sold his Bitcoin. And I'm not talking about somebody who's a hater or a random trader. This is somebody who's been around for years. He's definitely not ignorant about macro or markets or Bitcoin. So the question many Bitcoiners are asking is, should you do the same thing? Is sentiment too bearish? Is price heading further down? And should you sell your Bitcoin? Well, this video is not about price predictions. It's about mindsets. And by the end of it, I think you'll understand why even smart analysts sometimes sell Bitcoin, but why copying them is still a mistake. We're going to get into it in one second. Real quick, you're watching the sat stacker show, a Bitcoin show for people who think deeper about money. I'm your host. My name is John AKA the sat stacker. This channel is for people who want to learn to stack smarter and better understand and grow their conviction in Bitcoin. So hit the subscribe button and let's find out why curiosity killed the sat. So Luke Groman sold his Bitcoin. This guy

1:00is a veteran macro analyst, very well respected from everything I can see. He's got 25 plus years in experience in equity research macro strategy. And he's been in Bitcoin for a while. He's almost on the level of somebody like a Lynn Alden in terms of macro analysts who also study Bitcoin and are generally bullish on Bitcoin. Or so I thought. And he just announced that he sold down his Bitcoin position. Here was his reasoning. You can listen to him in his own words. He starts off by talking about quantum computing. Very serious people raising the potential that it could be an issue within two to nine years. The quantum stuff is way over my head. I am not in a position to sit here and have any debate with someone is quantum. Yet is it a risk? Is it not? What I am in a position to discuss is I've been in markets 30 years and I'm watching the way Bitcoin is not making a new high against gold. I'm watching what Heather's doing. I'm watching what these people I respect in the space are saying. And I'm saying markets are telling me that serious. And oh, by the way, the OG whales most selling in a cycle ever. Maybe it's nothing intuitively. If I was worth 50 hundred,

2:06200, 300 billion, you know, million dollars, billion dollars in Bitcoin is probably mostly in Bitcoin. I've held it for 15 years. I would probably be very tight in in that one. I would start to take some off the table if I thought quantum was a risk I wanted to at least hedge somewhat. And so when I see this whale selling, I can't help but think, you know, maybe there's something there. Given the price action I'm seeing when you're looking at gold versus Bitcoin not breaking sitting a massive a new high against gold for the first time in its life. When I see it breaking down on a momentum base, various momentum bases relative to the dollar on long term charts. I don't really look at the chart. Like for me, I just want to see the long term technicals and the long term technicals were really breaking down about three, four weeks ago, six weeks ago. And so that's really where I just say, you know what? I might fully concede I might be being too cute. And for these technicals when they broke, each of the last three times as emphatically as they just broke about three weeks ago, four weeks ago, the median decline in Bitcoin was 65, 70% each time. I've only been three triggers

3:07and 14 years. And there have been no false triggers. So for me, it's, you know what, especially given the size that it had grown to in my portfolio, you know, as a champagne problem, it just to me, it's spoke to a need to write size it and substantially reduce positions because I just think it's going a lot lower. And I guess lastly, a tieback, why is it functioning? I've called it the last functioning smoke alarm for five, six, seven years. Look, it's telling us the first half next year. It's going to be ugly. If it isn't just a Bitcoin specific quantum computing self, and I don't think it is, then what Bitcoin's telling us is basically everything but gold and the dollar are likely to get way later. For at least the next several months, it's negative. If it crashed tomorrow to a level where it's okay and revulsion, I could revisit that. All right. Look, this video is definitely not meant to be a hit piece on Luke Grohmann. I like Luke Grohmann. He's very, very smart. He's much smarter than me. He's way more experienced in markets. I may even actually agree with some parts of his reasoning, which we'll get you later. But of course, I do think his decision to sell down his Bitcoin position exposes the single biggest mistakes that people tend to make with Bitcoin.

4:11Let's start with the quantum stuff. My general thesis is that the quantum computing threat is far enough off that there's plenty of time for Bitcoin to upgrade to quantum resistance. If quantum truly is a risk in the very near term, then of course, the entire economy and the internet is all at risk as well. And probably whatever you're going to move into after you sell all your Bitcoin is probably at risk as well, unless it's putting everything you own into physical goal or barrels of oil in your backyard. But right now, to me, it feels like the quantum food is mostly a nothing burger. The Bitcoin development community is on top of it to a large degree. Most news headlines about quantum are way overblown. And anything resembling quantum computing that could reverse engineer Bitcoin private keys is pretty far off. What I do think is interesting is seeing the amount of quantum food popping up recently, all organically at the exact same time. Whenever I see something like that, my spidey senses start tingling. I get that little twinge in my

5:11nether region that lets me know if something might not be on the up and up. Because in the crypto world, you got to have your head on a swivel at all times. Remember, the ethos is don't trust. Verify. Like the last couple months, when all of a sudden out of nowhere, there was a massive, totally normal, totally organic discussion about privacy coins. Lots of food about Bitcoin not being private enough. And all of a sudden out of nowhere, an eight year old failed shit corn with a 20% founders tax was suddenly being shilled all across Twitter, seemingly by even reputable sources. You can watch my video on the Zcash pump it up here, if you haven't seen it already. But suffice to say, when you see those narratives start to gain a lot of traction, all at once, seemingly out of nowhere, I usually suspect someone is grifting. In other words, it is absolutely possible that someone wants to shake you out of the hardest money that's ever existed and scoop up your Bitcoin on the cheap and spreading the quantum fud far and wide is a very effective way to do that.

6:13Maybe Luke Grohm and Felverett. Maybe he didn't. I have no idea. I'm obviously speculating. But I will give him one thing that I do agree with on the quantum fears. They could be a headwind for Bitcoin in the near to medium term and lead to slower adoption or continue to affect price, whether or not the quantum risk is actually real at all. Because until the quantum issue is totally settled and Bitcoin is upgraded to quantum resistance, the perception of it as a risk could dampen price action, markets trade based on perception. And if a lot of people think the quantum risk is real, that might lead to more selling or less buying until it's totally resolved. So if you're a trader, maybe you want to try to trade that somehow, I don't know. Me personally, I don't really want to risk ending up with less Bitcoin because I got shaken out by Bitcoin's version of Y2K. If you're too young to know what that is, just google it. Now Luke also mentioned large Bitcoin OGs are selling off more this cycle than ever before. Maybe there's some signal in there or maybe this is just the first time when Bitcoin has ever

7:18topped $100,000 and there's more liquidity than ever before with micro strategy, the launch of Bitcoin ETFs, Bitcoin treasury companies, all gobbling up billions and billions and billions of dollars worth of Bitcoin. So if you're an OG sitting on like tens of thousands of Bitcoin that you been holding for more than a decade, sure, I can see wanting to buy a super yacht or had just small percentage against the quantum risk stuff or do some kind of estate planning or something. I don't know, but I don't really see any of those things as reasons why I would want to sell my Bitcoin because I am a tiny little middle. I am a plankton compared to them. I'm in a different phase of life, phase of wealth accumulation compared to them. Diversification is for wealth preservation when you've already reached the mountaintop. If you have a billion dollars, you might diversify to protect against different long tail risks or make certain lifestyle upgrades, but if you're trying to build wealth, concentration is actually the name of the game. You're trying

8:19to capture as much asymmetric upside as you can, not dilute it. So if you have deep conviction in the right asset, going all in is how you really build wealth faster. Diversifying all of that asset, especially if it actually has been the best performing asset in the world for 16 years is a kin to selling the winner to buy the losers. Heaging is what you do once you've already made it, and that's just not the phase of life that I personally am in, whether or not it's right for you is up to you and your financial advisor. Unless he's a tradified dork who doesn't get Bitcoin, then you fire his ass and you put the 1% fee into more Bitcoin. But back to Luke specifically, he doesn't seem in that clip that he showed to concerned with the possibility or the risk of ending up with less Bitcoin. Maybe he's already reached the mountaintop. Maybe he has large positions in other assets and he's hedged across a lot of other different things. I don't really know. It doesn't really matter. I just know that it's not really the same mindset as many Bitcoiners,

9:20or that's my mindset. Once you understand Bitcoin, it doesn't really seem logical, in my opinion, to diversify into the S&P and gold and all these other things, which in the end are just inferior to Bitcoin. If the market ends up saying that that statement is wrong and these other things outperform Bitcoin, then so be it. But most hardcore Bitcoiners are pushing the chips into the center of the table because they can see that they're holding a royal flesh. It's pretty unlikely that in the long term, another guy at the table is holding a better royal flesh. In the short term, who the hell knows? And maybe that is another key difference between me and somebody like Luke Grohmann because he's a macro analyst after all. Definitely pays more attention to this stuff than me. He's definitely more knowledgeable about it. But maybe there's also an activity bias there because I can just imagine if you send an email to your clients every few weeks that says, just keep hodling. Eventually, they're going to say, what the hell am I paying this guy for? Maybe that's part of it. Maybe it's not. I don't know. Or maybe it's just that he

10:23stares at this stuff all day long and he's deep, deep, deep in the weeds. In fact, I'll show you, he did tweet out that he successfully did this in 2021, sold some of his Bitcoin. He watched it dump further and then he bought back in at lower prices and ended up with more Bitcoin. So maybe he is one of the probably one percent of traders who can successfully time the market, both the exit and the reentry. Though to be fair, this time he did sell at I think he said 90 or 95K. So he didn't time the top anywhere close to perfectly. He missed the top by about 25%. And my problem is that I'm not going to spend all day looking at the charts and the macro signals. It's not my job. I do look at Twitter, but there's way too much noise there to decipher the real signal on a day to day basis. So I'm very happy to admit that I'm sure as hell not going to successfully time the top or the bottom. But what that mindset does for me is it lets me turn the volatility into my friend. Instead of selling my Bitcoin 25% off the all time high and waiting

11:28for it to dump further and trying to lump some back in at some hypothetical bottom so that I theoretically end up with more Bitcoin, which of course contains a high degree of risk that you end up with less Bitcoin. Instead, I have a highly strategic fine-tuned proprietary strategy for ending up with more Bitcoin. If Bitcoin's price does dump more than it already has, I will buy all the dips and all the local bottoms in between that dump and the next new all time high and I'll turn the volatility into a weapon and the dollar cost average into my superpower. And I will sleep like a baby knowing I am vacuuming up cheap sats. Maybe Luke or some other traders will successfully time the bottom and end up with more Bitcoin. But maybe they'll miss the bottom by 25% just like they miss the top by 25%. So how much are you really gaining at that point if you miss the top by 25% and then you miss the bottom by 25% and then if you were up on the position that you sold out of then you owe capital gains taxes on those gains and then you buy back

12:30in at a lower cost basis so you'll owe more capital gains taxes the next time you execute the strategy and in my opinion by the way for 99% of people it's definitely not a good idea to get in the habit of thinking you can successfully time the market even if you get it right once. So like I said Luke apparently successfully did it once before but what if doing it successfully once is actually worse than failing at it because it leads you to think you can do it again. So what if you keep doing it again and again and again aren't you at that point just playing with fire and increasing the chances that one of these times you get burned. I'm not saying that that's right for everybody but I'm saying this is the mindset that helps me but one thing that's super important that you never want to forget about Bitcoin is that the vast majority of the time this is standard. It trades sideways or down most days of the year and historically if you haven't seen this chart before I want you to remember it the vast majority of the gains come in about 10 trading days of the year.

13:3610 so if you look at these charts I got two of them to show historically what that looks like look at the difference between catching the run-ups on those 10 days and missing them it essentially takes the best performing asset of all time and turns it into a loser. If you sell the top or 25% off the top and then you oopsie miss time the bottom then you're sitting on the sidelines waiting for your reentry and you miss one of these rallies then you could very well end up absolutely shooting yourself in the foot and maybe buying back higher than where you sold maybe you end up missing out when we finally hit that fabled god candle the omega candle recently we saw about a 10k red candle in a single day well what if we end up seeing a 10k green candle in a single day what if we see it in an hour what if we see two of them in a row in the middle of the night and you miss it oh I had limited orders but they didn't trigger oh I had alerts set but my phone didn't go off who the hell knows this asset has been known to melt faces and I for one would be far more

14:39psychologically and emotionally bummed by missing out on the omega rally than I would by holding on through a 40% bear market a 40% drop you can just remind yourself that you're stacking cheap sats what are you going to tell yourself if you miss a 50% run-up in a week and you're left with far less Bitcoin than you had originally maybe that mindset makes me a sucker to the 1% of traders who are making a killing scalping 1 or 2% a day or timing the tops and bottoms who cares I'm still flat out not interested I don't think quantum is a risk I don't think bear markets are a risk I think selling your Bitcoin to try and end up with more Bitcoin is a risk you'll just never convince me that most people who sell their Bitcoin end up with more Bitcoin it's very possible that Luke is the exception but I am very happy believing that I am not what about you are you going to sell your Bitcoin so you can end up with more Bitcoin me I'm going to buy more Bitcoin to

15:41end up with more Bitcoin that makes more sense in my opinion because the other thing that I believe is always true in Bitcoin is that if you read all the news and watch all the commentary and follow all the narratives I'm sure there is always some reason or some expert telling you to sell your Bitcoin there's always some risk factor or some macro event that you can convince yourself is the signal the time to sell or more likely there's always someone out there with more money and a bigger megaphone who's trying to convince you to part with your Bitcoin because they want it for themselves that's actually always been one of the most important lessons in crypto everyone wants your Bitcoin even the shit corners are just trying to get your Bitcoin so I'd rather treat all of it like noise stay humble and stack sats because like I said that way even the worst case scenario I'm still ending up with more Bitcoin it was famous Bitcoin hater Warren Buffett who

16:43said the stock market is a device for transferring money from the impatient to the patient well he might hate Bitcoin but I think that statement is even more true of Bitcoin than it is of the stock market Bitcoin amplifies that effect more than almost any other asset Bitcoin is about lowering your time preference understanding money and its relationship to time and energy and punishing high time preference behavior Bitcoin is not a get rich quick scheme it's a don't get poor slowly scheme and it's also probably a get rich slowly but faster than you would if you bought an index fund scheme a finite supply money with a terminal half life of infinity is not promising to make you rich overnight but it is designed to capture a larger and larger share of all the world's value over time and never dilute it I don't really think it matters why you panic sell whether it's because of the fun of the day or you outsmart yourself and sell because you're gonna buy back in later I will always believe that the vast majority of people trying that will

17:43end up eventually with very little Bitcoin especially if they get it right once because then they'll think they're a genius right up until the moment when they get caught with their pants down for people who are new to Bitcoin the hardest part is often the volatility but for some people who've been around for a long time the hardest part is actually resisting the temptation to think you've got it all figured out you understand the cycles you understand the signals you're not gambling you've seen this before and you understand all the indicators until you don't personally I'd rather ensure that I continue to own Bitcoin rather than gamble on my ability to outsmart it at the end of the day smart people might sell Bitcoin for rational reasons but that doesn't mean it's rational for you or me to follow them ownership beats timing and owning the hardest money that's ever existed is its own reward patience is the real alpha because in the long run Bitcoin punishes activity bias and rewards conviction those are the principles that I choose to live by you go out and

18:50make your own decisions but I hope for your sake that you don't end up with less Bitcoin because that's gonna be a tough field as well I don't know who first said it but you either take the orange pill now or you take the orange depository later who in the right mind wants to take the orange pill now and then still end up taking the orange depository later by accident so if you want to keep learning to stack smarter and better understand and grow your conviction in Bitcoin you watch this video right here you subscribe to the channel I got a great interview with Natalie Brunel coming out next week so stay tuned for that and never forget quit slacking and start stacking