[00:00:00] As salamu alaykum. I hope you are doing well. Today is Tuesday, June 18th. Bitcoin is right around 64, 000. And today we're going to talk about indicators in the crypto markets specifically and what they're telling us, whether or not this crypto bull run is over and done with, or there is perhaps more meat left on the bone.
So without further ado, let's get started. As always, this is not financial advice, so be sure to do your own due diligence before making any investment, any investment decisions. And thank you so much for all the people that are leaving likes on our last two lives. We have met and exceeded our goals.
And so yeah, I just really want to thank you for doing that. [00:01:00] So let's get started. The crypto market cap is at 2. 4 trillion, and you can see that broken down by asset. We, we peaked earlier in the year at, you know, right around 3 trillion. So we've pulled. Pulled back noticeably from that peak.
And you can see that 1. 3 trillion of that is just Bitcoin. Another 400 billion is Ethereum. Stablecoins is 150 billion. And then all of the altcoins are right around 500 billion. Ethereum, by the way that is 400 billion more than what I would pay for it absent a secondary market. And I'm pretty sure no one would pay that for it absent a secondary market.
The only reason it has this valuation is because there is a secondary market where people can. You know, sell their Ethereum for a price, but other than that, absent a secondary market, I don't see any uses for [00:02:00] this cryptocurrency. So this remains a head scratcher for me. Perhaps the market eventually manifest my my evaluation for it.
And perhaps not the market can remain. Irrational as the saying goes, it goes, the market can remain irrational longer than investors can remain solvent. So something to keep in mind, the stable coin market cap remains steady. It's kind of signaling that it's in a neutral territory. The market is sort of neutral, not neither.
Particularly bullish or bearish at this particular point in time. Now the stablecoin market cap, when it is rising following a bull run in altcoins, this could signal that people are getting ready to cash out of altcoins. However, if it's rising following a downtrend [00:03:00] in altcoins this could signal that people are getting ready to jump into altcoins and perhaps good times are ahead for altcoins.
Now with a stable level for stable coins their market cap being stable, that is it suggests the market is pretty neutral. As I said, neither bullish nor bearish. And indeed this is. What we get from the fear and greed index in crypto. So we have a neutral rating on that, which means objectively speaking, this is a better time to be buying than when we were in the greed and extreme greed territory, which we were in earlier this year, the top Altcoin performance has been quite abysmal in the last week.
So you can see basically a sea of red here. And this should remind investors of what I always say [00:04:00] is to take profits, especially when you're dealing with a very volatile asset like altcoins. When you have profits, when you're lucky enough to have profits, book, those profits, they'll never go broke taking profits.
You will go broke, never taking profits, especially in something as volatile as alt coins. So when you do have profits, take some, I'm not saying, you know, necessarily take all your chips off the table, but take some, because that helps you deal with times like today, where in the markets have pulled back.
The Bitcoin ETFs, now this actually, if you look at their flows, outflows and inflows, it tells a pretty interesting story. So you can see in the last. Six days. The the, the outflows have exceeded the inflows for five of the last six days. So those are the bars on the right. And you can see there was a green bar [00:05:00] on Wednesday of last week.
And that is the day that the data for inflation came out. So what I think happened. Is that immediately following the data on the cooling inflation, there was a rush of inflows into the Bitcoin ETFs. But then later in the day when the Fed opened its mouth and appeared to be hawkish the outflows started.
We ended the day with net inflows, but then the following days we had outflows. As I mentioned yesterday and yesterday's live, I really. Don't put much weight on the feds comments and whether they're hawkish or dovish. If you'll recall, the fed thought that inflation was transitory and it was basically, you know, telling investors not to worry at the tail end of the last bull run and people who followed the feds.
Speak [00:06:00] got wrecked. But people that were following the data knew that inflation and the trajectory of it was telling a very different story. And now the opposite is happening. The data is telling us that inflation is cooling. The fed is being hawkish and the market again is following the fed as opposed to following the data, which I think is a mistake, but it is a mistake that is providing investors, I think with a good buying opportunity, I think now is a good buying opportunity because the data, the inflation data specifically is telling us that inflation is going down.
And there will be an easing in monetary policy upcoming. And so, you know, you can make of that what you will. The Bitcoin MVRV Z score on the topic of whether the bull run is over or not, the MVRV [00:07:00] Z score is If you look at the last three bull runs in the last three bull runs, the peak of the bull run came after the MVRV Z score reached six or seven.
By the way, MVRV it so that's market value to realize value and the deviation and the difference between them, this is what this is measuring the market value is where the price is right now. The realized value is how much people paid for the Bitcoin that they hold. And the difference between them gives us an idea of, you know, how much profit investors are sitting on.
So previously in the last three bull runs, we've always reached levels of six or seven for the MVR VZ score. This time around, we have so far not gone above four. So I think that if history repeats, this is [00:08:00] suggesting that the bull run is not yet over. And I have not found a better a better indicator for, you know, whether the bull run is done or not then the MVRVZ score.
If you look at the hash rate for the Bitcoin network we actually pulled back a bit. It's hard to see on this chart. We pulled back a bit since May around 10%. This is important for Bitcoin miners because it means the cost of mining Bitcoin is actually falling. Now this is much needed considering that Bitcoin, you'll recall, we've gone through the halving.
So the amount of Bitcoin being mined has basically halved April. And the price of Bitcoin has not gone up by double since April. So Bitcoin miners are really feeling it right now. And if you look at Bitcoin miners and their [00:09:00] behavior in the last month, they've actually been selling a lot of their Bitcoin holdings.
One can presume that this selling activity is because of financial pressures from the. reduction in Bitcoin rewards that has not been accompanied by a similar and equal in quantity increase in the price of Bitcoin. So the Bitcoin hash rate falling, and this has been associated with the summer months, and we'll talk about this in a second.
The Bitcoin hash rate falling is welcome news for Bitcoin miners. Bitcoin minor revenue has fallen. It peaked in March and it fell in the month of April where we have the, where we had the having and fell again in May too early to call June yet. But the trend is definitely a [00:10:00] tough one for a Bitcoin miners.
Now this is as it relates to the business of mining Bitcoin. However, as we've seen with core scientific and with Iris energy, the market is now adding another wrinkle to its valuation of Bitcoin miners related to the dual use of their compute power for generative AI, in addition to Bitcoin mining. So the Bitcoin miners that Have that dual use optionality will or, and are performing better than miners that haven't made those investments.
Australia. A sign that crypto adoption is expanding globally. Australia has approved a Bitcoin spot, ETFI don't think this is necessarily gonna have that big of an impact on the price of a Bitcoin. I believe this goes live on June [00:11:00] 20th in Australia. So there will be increased access to Bitcoin for Australian investors.
And the Bitcoin hash rate, as I mentioned, has slowed down since May and may continue to slow down in the summer months. And the reason for that is there is increased demand for power. A lot of these Bitcoin miners have agreements with local authorities regarding curtailing of their power usage, depending on demand for the grid.
But also one of the key challenges of Bitcoin miners is keeping their miners cool. And when the The temperatures go up, especially in places like Texas, which a lot of Bitcoin miners are based in. It becomes more difficult to keep those mining machines cool. It [00:12:00] becomes more expensive to do so. And in many cases it becomes.
Less economically sensible to keep as many Bitcoin miners working when the price of mining increases because of these added cooling costs. And what we've seen in 2023 summer and, and the summer of 2022 is that the hash rate actually dipped during those summer months because miners were taken offline when the temperatures rose as much as they did.
So. The Bitcoin hash rate may fall even further which is welcome news for Bitcoin miners. As we mentioned, MicroStrategy has increased its convertible no offering to 700 million and it will use that money to buy Bitcoin. This may have a positive impact on Bitcoin's price in the next week or at least.
Work to counteract some of the bearishness [00:13:00] that some investors are exhibiting with regards to Bitcoin. However, this is not a long term thing. Obviously something like, you know, the Bitcoin ETFs is what investors and the rate of inflows to outflows is sustained and the sustainability of that and consistency of that is what will take us to the next leg here in the Bitcoin cycle.
And Saudi Arabia has joined the Bank of International Settlements and China led central bank digital currency project, which is not what we need in terms of you know, using a uses for crypto. I don't think, you know, China's central bank digital currency is something that. Anyone should be excited about probably be used for snooping on people's activities international purchases and, and, and sales.
And this is [00:14:00] not really what crypto was meant for. Crypto was meant to decrease the amount of central control, whereas CBDCs and. I think the Bank of International Settlements will not do that. I don't think they'll necessarily, I don't think this is necessarily a problem that is being solved here in terms of, you know, making the process of international settlements more smooth.
I don't think that's necessary with all the different technologies that are available. I don't think that this is a problem needing a solution. It's not what we need right now. I think there are. You know, many different ways for international settlements to happen with very minimal fees. We don't need a centralized you know, bank that is overseeing this.
I just don't see any benefit in it. [00:15:00] So Yeah, crypto's adoption is increasing, but the impact is, is mixed in terms of how it is being used. So my takeaways here from the what we've covered is the MVRV Z score suggests it's unlikely. Based on historical precedent that bull market is over. Despite the recent pullback the Bitcoin ETFs will need to recover.
If you noticed the inflows and outflows are correlating quite tightly with the price of Bitcoin, the inflows and out, and the balance between them. It's correlating quite tightly to the price of Bitcoin. So when inflows exceed outflows, price is going up. Doing inflows when outflows exceed inflows, the price is going down.
And since these are being traded like stocks, these ETFs, I really think that the recovery here and their [00:16:00] prices will to a large extent be contingent on the recovery in the overall market sentiment, which is. A function of, at least at this point in the market cycle, it is a function of investors outlook for interest rates and whether they think the Fed is close to cutting or not.
And so when the, when investors. Feel more confident that a cut is around the corner. The market in general will recover as well. Bitcoin ETFs and the price of Bitcoin right now. I mean, you can really think of Bitcoin ETFs as almost a technology stock. And while the indexes, which are basically overrepresenting very few stocks have, you know, not necessarily shown a significant pullback.
That's because they're [00:17:00] overrepresenting a very small number of. Big cap stocks. The breadth of the rally has been very limited in stocks. And so, and most stocks actually have not done well this year. So. Until we get a
signal from the Fed that cuts are, are close and we can see some dovish, dovishness from the Fed. I don't think the breadth of the rally and tech stocks, which In some ways you can consider Bitcoin ETFs, you know, belonging to that category, the breadth of that rally will not really see a significant increase.
Crypto adoption is expanding, albeit with mixed implementations and impacts. And a reminder to take profits to better deal with moments like this. Hamdulillah. We've had a pretty disciplined approach as it [00:18:00] relates to taking profits. We've been taking profits consistently when they become available to us.
Again, that doesn't mean we're exiting our positions entirely, but we take profits. When they. When the opportunity presents itself and because we, we have taken profits we're less nervous about times like this and whether or not the bull market is over now, because we've already booked profits.
Like I showed in a previous life right now, our Iris energy position, one of the Bitcoin miners, it's 1, 000 principal and. 6, 000 profit, right? So that's, so basically we're playing with, as the saying goes, playing with the house's money. It's basically almost entirely profit. So something to always remember in times like this, if you'd like to follow RPF portfolios, link to do that is in the description of this video.
Subscribe and leave a like, if you haven't already, I'll take some questions very [00:19:00] quickly. While I come, Salam Rashad. As an Ethereum holder, every time you comment on it, I hope the price will go up so I can cash out. I do think that inshallah, the price will go up and you'll get an opportunity to cash out.
Inshallah.
Yeah. The Fed, the Fed is, I mean, the entire Rashad is saying that it seems like the Fed exists to this. . Yeah. The, I, I questioned the entire argument for the Fed's existence in the first place. To be completely honest wa I would appreciate if you would reply . Well, there it is. I did reply.
I appreciate your appreciation of my insights Slan brother with Altcoins recover and increase in Shala. I think they will. It may take some patience though. Actually, if you told me, you know, to guess when the recovery will come typically recovery comes for Bitcoin and for crypto broadly around 90 days after the [00:20:00] Bitcoin halving.
Right now we've, we're already 60 days after the Bitcoin halving. So in about a month, I think, you know, mid July, I think we'll see Bitcoin taking off and I think altcoin recovery will soon follow. Eid Mubarak, Lebanon. I see you. We want to buy a Tesla car as we're invested in the stock, but we don't want to use interest loans.
Is there any Islamic institutions here to finance a vehicle purchase? I'm not aware of any Islamic institutions that do vehicle financing. But I do think that Tesla may have some near zero APR offers that you can look into. So if you, I mean, if you have to buy a car and. You know, your options are, you know, six or 7 percent versus something that's near zero.
That's something that you may consider. I'm not saying that any amount of interest is Halal, of course not. [00:21:00] But you know, if you if you have to make a decision between the two, then go with the, the lower near zero interest, if you can find it. That being said, obviously, if you can buy your car with cash, that's better.
So something to consider with that being said, thank you all for tuning in. Really appreciate it. Leave a like, as I mentioned, let's get this video to a hundred likes as as we have been, I really appreciate that. And until next time, take care of yourself. Salaam Alaikum and peace be upon you all.
