Pizza, Bitcoin, and Wall Street: A Recipe for Market Mayhem

Yes, this is a crypto update. But unlike some other bitcoin and crypto people, I'm not going to rabbit on and show a lot of charts and technical analysis.

I'm just going to share a story about pizza. So many years ago, I was living on the Sunshine coast and just across the road from my house there was a Pizza Hut.

About four doors down from that was a Pizza Capers across the road and down a bit further was a Cafe Italiano. And there was another place that I can't remember the name of right now because it was about 20 years ago.

There was four pizza places within about a one block walk of my house, which was great. And they all had their own different thing. Pizza Hut had their dine in. They had the buffet salad bar and the all you can eat pizza nights.

And they did have a very good quality product. Pizza Capers had some differentiation.

They had barbecue chicken and avocado and paprika and all sorts of weird and wonderful ingredients that you didn't get on normal pizzas. And the Cafe Italiano made these massive. They were like 15, 16 inches across and they were really good.

They made their own dough and that sort of stuff. It was very, very authentic. A bit more expensive, but a much higher quality ingredient.

And then what occurred is a little further down the road, about two blocks down the road, they opened up a Domino's Pizza.

Now, while Pizza Hut was selling pizzas for about 13 pizza capers was between 15 and 20, and Cafe Italiano was selling these giant big pizzas for $30, Domino's opened up down the road and started selling their pizzas for $5. And a lot of people were like, oh my God, how can they make money doing that? Surely they must be losing money, but let's try it out.

And Domino's, it was a cheaper product, it was an inferior product. But at that time I had a couple of teenagers living at home and it was significantly cheaper for us to get the Domino's pizza.

And Domino's is obviously part of a big franchise.

They had very deep pockets and their business model was to go into the marketplace and basically sell pizzas at cost or even below cost for long enough to drive the other guys out of business. And so what happened?

It took about 12 or 18 months, but one by one, these other competitors actually started to close their doors and shut down until Domino's was the only game in town. Domino's was the only pizza person there.

And once they've driven the other competitors out of business, you could no longer get the $5 pizzas, they started to jack them up to $8 and $10 and things like that. So what we're seeing now in the crypto market is basically in the last 12 or 18 months, we've seen a lot of institutional adoption.

A lot of Wall street billionaires, hedge fund managers, and these sort of guys have started buying into bitcoin, which has been great. It's broadened out the space, brought in a lot of institutional adoption, but it's also brought in the institutional behavior.

And let's face it, there are Wall street raiders, there are professional hedge fund managers who actually make bets against the market, and they make a lot of money when the market goes down.

So what we've been seeing in the last couple of weeks is people deliberately buying lots and lots of bitcoin, borrowing money to buy bitcoin, then dumping it on the market for less than what they paid for it, trying to drive the price down. So we've seen what the raiders did to Luna last month by borrowing a lot of money and then dumping and tanking the UST onto the market.

We've seen some signs of stress around Three Arrows Capital, a billion dollar hedge fund, crypto hedge fund out of Singapore. And what we're seeing at the moment is like, the question is, how low can bitcoin go? Really?

It's dropped from 68,000, 68,000 down below 20,000, a level that most people said it can never go below 20,000 because that was the size of the highest peak, judging from the charts and things like that. But what you need to understand is the miners, their cost of production is around about 17,400. That's how much it costs a miner to produce a bitcoin.

So once that 20,000 level was reached, there's bad operators out there who are saying, hey, I wonder if we can push the price even further down to the point where the miners are actually going to start losing money.

And then if we push it down to the point where the miners are going to start losing money, the miners are obviously going to dump their bitcoin onto the market, which forces the price down even further, because bitcoin and crypto are quasi anonymous. I mean, I don't know your wallet address. You don't know my wallet address. But we can actually see the big players in the market.

We can see the wallet address that have been buying billions and billions of dollars worth of bitcoin. And you can see when they bought it, you can figure out what they paid for it.

So if you're in this place, and you're a hedge fund manager and you've got billions of dollars at your disposal, you can literally underprice them and drive them out of business, just as Domino's did with those other four competitors, the pizza competitors on the Sunshine Coast. That's where the pizza comes in. Bitcoin pizza. Good flashback.

So the price can go down at 17, 400 level, then literally, these miners will have to start selling their bitcoin. They'll literally go out of business. And then it's on public record that Celsius has a liquidation plot price of around about 15,000.

Michael Saylor, for those who know Michael Saylor, I'll talk like this. Michael Saylor has a liquidation price of about 13,000. That's the level that he's going to have to start selling whether he wants to or not.

So will these competitors be able to drive the price down? It just depends on how deep their pockets are and how big their motivation is.

Obviously, by opening up in competition with these other four places, Domino's lost a lot of money, but they could, if they could afford to lose money for 12 or 18 months and drive the price down until they actually captured all the market share.

So there may be some bad operators out there who are going to deliberately be selling bitcoin for less than what they paid for it, driving the price down, trying to get rid of their competitors. Then, when the price is low enough and the competitors have gone, they're going to jump in and buy up all the bitcoin.

So will Bitcoin break the 17, 400? Will it break 15? Will it break 13? Nobody knows. All of the guys commentating with their charts and all that sort of stuff, nobody knows for sure.

We're in unprecedented territory because bitcoin has broken its previous pattern of never dropping below the previous high. It's broken its pattern that it's held for 13 years.

Bitcoin has never existed in an environment where there's high inflation and increasing interest rates, because we haven't had that for the previous 20 years. So we're in uncharted territory. Nobody really knows. But happily, there is a bit of a groundswell.

Some people may remember when there was big hedge funds who were shorting Gamestop and pushing the price down, pushing the price down. And then a community on Reddit called Wall Street Bets started buying up the Gamestop.

And basically it was just a bunch of nerds sitting behind their laptops, buying this stock so that they could bankrupt the guys on Wal street who are actually shorting this stock. So what's happened in the last few days?

There's a lot of people who are coordinating their efforts to buy more bitcoin and drive the price up, or at least keep it above that 17,400 level so that the miners don't shut down and they don't have to actually turn off their equipment or maybe sell out their businesses.

There's also people out there who are resisting the attack on Celsius, and they're buying the Celsius token and just pulling it off the exchange and holding onto it. So Celsius token was around about $7. It dropped down to like 25, 30 cents. It was sitting at 70 cents last time I checked.

And then this morning, it rapidly went up to a dollar.

And there's people who I'm in communication with who are actually buying lots of Celsius coin, taking it off the exchange and then saying, I'll sell it when it gets to a hundred dollars.

Now, it's never been anywhere near a hundred dollars, but by removing all those coins off the exchange, they're stopping the guys who are trying to short this and trying to sell it down. So it's very, very interesting what's playing out.

As for how low bitcoin will go, we don't know, because no one knows the motivation or the extent of how far these Wall street guys are going to go.

Are they happy to lose 2, 3, 5, or $10 billion in order to drive the price down to $10,000, and then they can just come into the marketplace and buy up all of bitcoin after they've bankrupted their competitors? That is definitely a possibility. It's not a happy possibility, but it is a possibility.

If we can hold above the 17,000 for the next 612 months, possibly we can actually drive these short sellers out of the market and basically bankrupt the guys who are trying to bankrupt everybody else. A lot of people got affected by Luna. There were no bailouts.

Millions of people lost billions of dollars in that because of some nasty operators who decided to basically game the system for their own financial gain. And this is what happens. You get institutional money into the crypto space. You get institutional behavior.

There is no laws and regulations in crypto at the moment. So you're going to find that possibly for the next six to 12 months, it's going to be very scary area.

Fortune favors the brave, of course, as Matt Damon said. So those who jump in now may find, yeah, you're buying Bitcoin for 17 or 20,000, it's significantly cheaper.

Than what it was this time last year, but it's actually more expensive than it was two years ago.

So you have to zoom out on the charts and say, okay, yes, it's gone down 50% in the last 12 months, but if I've been holding for two years, I've still more than doubled my money. So recognize this is an opportunity to jump in and buy crypto at very, very cheap prices.

Yes, it is risky because you've got some major players out there who are trying to send people broke. But if we can hold these levels, then obviously it's going to work out well over the long term.

And the suggestion may be to dollar cost averaging at the moment.

If you see it drop below 17, don't put all your money in there because the short sellers may get excited and try and push it down to 15 or 13,000 to drive the other players out of the market. So always keep some dry powder, always keep some money in backup and reserve just in case it dips a little bit lower.

I can't see bitcoin going down to 10,000 because there's no real gain for anybody to do that. Once it go goes below the 17, once it goes below the 15, once it goes below the 13, they've effectively blocked out.

And Michael Saylor is the single biggest holder of bitcoin in the world. He's got twice as much bitcoin as what Tesla has.

So if the price goes below 13,000 and Michael Saylor is forced to sell, that's pretty well game over for the big institutional players in crypto. These guys play some very nasty games. So put your armor on, do your due diligence, dollar cost average and remain alert.

This is probably the most exciting time we've seen in crypto, certainly since I've been in seven years and probably in the last 15 years. And I'm sure there'll be some records in the history book set when this thing finally bounces back. Stay safe. I'll talk to you soon.