FinTech Newsletter – March 2024

All the information in this letter is not to be considered financial advice; it is the author’s personal views and agreed views of others from their overviews of present markets,

Some of the content will be a summary of articles I have read and believe the author got most or all of it bang on, some will be statistics that have been check for validity, but all will be content I believe is of use or interest to margincall.club members.

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Welcome to the March 2024 edition of the margincall.club FinTech Newsletter.

This month is a little late as I have been travelling and got delayed, I will provide you with an overview of key financial events and market developments from the past month (February) and what effect those events could have in March, as always the goal is to help you stay informed and to make your own well-informed decisions.

I will also visit any of the price predictions given in the February 2024 letter to see what played out and what didn’t and why.

Financial Market Highlights:

1. Stock Market:

The scepticism in markets of reported government figures remains across the board which is continuing to cause some jitters with traditional markets in March but the bullish pendulum seems to be swinging.

There seems to be a “lets prepare for war” vibe in markets at the moment, not good!

February saw a 2 to 3% drop in markets, that played out with all the major stock markets, but all are in new territory for March 2024.

2. Economic Indicators:

As I said last letter beware the hawks of war! The strike’s in the gulf escalated in February and the coalition responded, the result of which is most shipping is avoiding the area and taking the long way round, which if it carries on could be a large loss of revenue for Egypt’s government, it generated $5.61 billion in 2020, so expect Egypt to be pushing for peace quickly.

• Cryptocurrency Update:

At the start of February I was of the mind that Bitcoin would get very close to >$60k< around the end of the month and it exceeded my expectations, Its hard not to remain bullish on Bitcoin, the ETF outcomes will play out as we move through March.

I still believe the supply shock is yet to hit!

I did say in the Feb letter: “the end of January could see a new all-time high for Bitcoin” that was a typo due to uploading a copy that did not have the full corrected paragraph in, and a number of people picked up on it, it should of read April, around halving date, and history tells us that when the halving hits that rodeo starts! 

I now think that will come early, that could form a cup in the long term chart, which could mean a pull back to form the handle.

If it does that it would be a $50k break out to a $120k Bitcoin price in the next move!

4. Commodities and Forex:

I don’t provide updates in this letter on commodities like oil, gold, and Fiat currencies as these are assets that are affected by market trends and all the above.

Investment Insights:

1. Market Analysis:

As last month I stand by what I said before as this is a macro view, keep one eye on El Salvador and Argentina in the approach to giving more credence to Bitcoin in the day to day use in both countries.

Also fiscal digital transfer service in the African sub-continent will be a deal this year, expect any service looking to promote these services will do well till year end.           

2. Investment Strategies & Featured Asset:

Nothing has changed here from last month, my Macro view is you want to have a foot in both traditional and crypto markets and you have to look at data miners and companies like Micro strategy, the miners can switch to data storage and Micro Strategy will most probably capitalise some Bitcoin to cover costs of purchase if BTC goes >4X as that would be prudent.

If you see any ATM company looking to use those machines when idle to mine Bitcoin or a company that is using renewables, solar, water and wind to power miners all would be worth doing Due diligence to see if they are investable.

Plus any deals you hear about between Ai and data storage companies would be worth due diligence time.         

Financial News:

1. Global Financial News:

As started in the January and February letters, we have had other parties joining the war in the red sea, so we are going to see the US and other markets suffer that rely on that supply chain route, and that is showing in the markets.

These actions will only see pressure on interest rates across US, Euro and the UK which could see the stock market rise against the predicted down trend, the longer this goes on that catastrophic share fall will be seismic and that cascade collapse of market positions I talked about last month will be unlike any seen before.  

Covered most of the news that could have impact market movement last month and they remain the same, those facts remain around the events in Ukraine, Gaza and Iran, escalation there could see a chain reaction in events and that moving US markets down and we have seen US personal killed in the last few days which have yet to see a response, that could be a pivotal action to escalate conflict.

1. **Interest Rate Rises Slow Down – But More Still to Come:**

   Expect a dovish presentation from the feed two months before they start to drop interest rates. Watch the numbers on this, the fed state what data they use google it to educate yourselfs.

2. **Food Prices will rise in 2024 more than inflation:**

   – Global food prices are expected to stay elevated in 2024 due to factors like drought, excessive rain, the war in Ukraine, and Gaza plus high energy costs impacting global farm production.

   – The politicians have run out of smoke and the mirrors are broken, western countries that have only experienced single figure inflation are now experiencing inflation in the >20%< range on consumer edible’s, people are seeing those price increases and shrinkflation (the producers art of reducing the amount in a packet and still making look the same!)  the only way to reduce that is less tax on the costs of transport and in the supply chain, which means reduction in tax income which inturn means more cow bell!

I would add to this that companies will exploit “Shrinkflation” in products, less product same price strategies!

2. Regulatory Updates:

News on ETH ETF’s expected in weeks (maybe May as the ruling says “By May 11^th”)

Personal thoughts:

I published this and the chart below last month, it showed a $45k Bitcoin at the halving in April, one of things that has come to mind with the advent of all these ETF’s is private wallet ownership.

ETF investors won’t require their own wallets, before individuals owned wallets and put Bitcoin in them, now the likes of Blackrock and other ETF managers will hold the wallets for multiple clients and that will have an effect on the metrics of the chart in a good way, I will be publishing a more indepth chart in the April letter.   

As you may know I am “the numbers guy”, and I am always looking at the numbers, over the holiday’s I was looking at figures around the halving and wallet adoption to see if there was any correlation, and I found somethings of interest, the main one was that it would seem the multiple increase in Active wallets from halving to price top multiplied by >9< would seem to indicate what top Bitcoin will top out at.

Below is a image of a simple excel document I am working on to test that theory, and the red is a predicted Bitcoin price top based on if active wallet highs in 2025 equal the 2017 all-time active wallet highs.

It is all based on historic figures and movement and requires more work as it has a >7%< discrepancy so additional data would help to prove or disprove, but it does seem to confirm Plan B’s 2025 price prediction which is a little spooky! The red figures are the predicted numbers based on previous bull market numbers.

There is the Having dates, and D is Bitcoin >price< at that date, E is the >high< of that bullrun, F is the high divided by Bitcoin value on halving day, G is the>date< E price was taken from Glassnode, H is the number of days it took to get to it’s high from the halving day, I is the active wallets on halving day, J is number of wallets on approx high date, K is J divided by I to evaluate Metcalfe effect, K appears to correlate to price if a multiple of 9 is applied on all halving’s to date.

I do believe there is more relevant data to add, but that I think will only confirm the trend shown!   

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James,

Margincall.club