Trump is Satoshi
Friday October 18th, 2024 - Issue # 85
(Any views expressed below are the personal views of the author and should not form the basis for making investment decisions, nor be construed as a recommendation or advice to engage in investment transactions.)
I’m kidding, of course! Just having a little fun with those who’ve said I’ve been too political lately, especially with such an important election coming up that clearly has real-world implications. But hey, I write about macro and crypto/finance—it’s kind of hard to avoid. Also a play on the new “Satoshi Hunter” HBO documentary, Money Electric: The Bitcoin Mystery (😖) which was completely underwhelming in my opinion, in case you were wondering.
Back to business. It’s no secret there’s a lot of anxiety around this election, and rightly so. We’re in the home stretch, and once the dust settles and we get a winner (hopefully quickly), the markets will finally get some clarity. Here’s how I see it playing out:
If Trump wins, I think we absolutely rip. In fact, I wouldn’t be surprised if the real bull market kicks off the moment those election results are confirmed. On the other hand, if Kamala takes it, there’s likely going to be an immediate sell-off from those of us who’ve been confidently front-running a Trump victory. I will not be selling but I will be looking through my couch for spare change to buy the dip. But here’s the thing—while there might be short-term panic, I don’t believe the bull market is off the table with Kamala. After the initial shock, the market will digest the situation, and I expect we’ll see a return to upward momentum.
I’ll give some credit where credit is due: a Harris administration would probably bring less volatility, and the markets tend to appreciate stability. And let’s be real—it’s not like things are terrible now. I mean, I wouldn’t want to be in anything other than BTC in that environment but there’s still a ton of upside. With institutional infrastructure already in place (think BlackRock ETFs, Fidelity, etc.), Bitcoin can easily continue to dominate and grow by trillions, especially as governments keep pushing deficits skyward.
I was listening to a podcast this week, and this legendary political journalist named Mark Halperin (who claims to be objective) said that if Trump wins, there will be a mental health crisis 'like nothing you've ever seen!' He painted a horrific picture of divisiveness, even at the nuclear family level. Pretty crazy/scary. However, the markets would love it—crypto in particular. I mean, Trump was shilling his sh*tcoin the other day like he’s not in the top of the 8th with the World Series on the line (yes, I’m a sucker for October baseball). If Harris wins, on the other hand, trust in institutions will continue to erode, and while that’s deeply unsettling, it’s also exactly the kind of backdrop where Bitcoin thrives ('schmuck insurance'). So, in a way, BTC wins no matter what—it’s the same same, but different.
To be clear, I’m not just confident Trump will win—I think it’ll be big and definitive. So, I’ve added SOL, SUI, and a few memes to my portfolio, which is still quite overweight Bitcoin (NFA, of course).
I recently met with a tradfi fund manager, someone who’s never touched crypto but has started looking seriously at Bitcoin. While he admitted he's not your classic “crypto guy,” he now sees Bitcoin as a legitimate financial product and likened it to gold in terms of its investment thesis. But what really piqued my interest was his take on Bitcoin’s technical setup (I’m not a chart guy). He highlighted that Bitcoin is forming a massive bull flag on the chart, similar to the pattern we saw with gold recently. This consolidation looks primed to break out, especially with Bitcoin's history of outperforming in Q4—something I’ve been talking about for a while, but it’s great to hear it echoed by a tradfi veteran.
As I wrapped up my conversation with this seasoned fund manager, one thing stood out: Bitcoin is no longer just an asset for the early adopters—it’s establishing itself as a (the?) critical macro asset in a world that’s politically and economically fragile. With the U.S. election looming, his take was that Bitcoin’s short-term price action could act as a proxy for Trump’s odds of winning, but the real story lies beyond Election Day. Whether it’s Trump or Kamala, deficits are ballooning, and dollar debasement is practically guaranteed. In that environment, Bitcoin doesn’t just survive—it thrives.
We also touched on what might come next with monetary policy. The possibility of QE5 isn’t off the table, and if history is any indicator, it could make QE4 look like a warm-up. Think back to March 2020—Bitcoin shot from $5,000 to $60,000 in just a year. The potential for a similar rally is real if the Fed pulls out all the stops. Right now, the charts are painting a bullish picture, and seasonally, we’re in Bitcoin’s best-performing months. So while the political circus grabs headlines, Bitcoin is quietly building strength, waiting for the inevitable flood of liquidity. Personally, I’d say we’re poised for liftoff.
Speaking of gold…
Kind of random thought but might as well share on this cold, dark, Friday morning. I was at Costco the other day and saw the new famous tiny gold bars for sale. It hit me—people are dropping the equivalent of two months’ rent in Toronto on tiny gold bars, desperate to protect their wealth from inflation. That says a lot about the fear driving today’s market. Stay tuned for another big rate cut by the BOC next week and further weakening of our little peso.
Gold God I love this chart.
If you want to catch my team and me breaking down all of the above and more as we wrap up what’s been a pivotal year, join us for our first Q4 Market Outlook webinar on Wednesday, October 30th at 4 PM EST. Can’t make it live? No worries—register anyway, and we’ll send you the recording.