First thing to understand, retail traders are the only external effect on price. The primary, short term control on price is OTC (Over The Counter) buying by institutions, they literally phone up and say I’d like to buy 1,000 BTC, what discount can you give me?

So primary, short term factor, is its price manipulation by the exchanges, who are controlling the OTC price. They want to shake off people like you and I. This is very effective while there is stock on the exchanges but as the stock runs out, they can no longer control it. That’s why you hear the discussion about “Stock to Flow” ratio discussed so much.

The other major factor in the stock to flow model is long term Bitcoiners selling out to add to the 450 BTC being added daily by miners. A couple of weeks ago an unidentified whale sold 80,000 coins and cashed out $8.9 Bn. A few smaller whales have followed and done the same.

Thirdly, the Nasdaq has just blocked $MSTR from joining the Fortune 500, despite its qualifying, by creating new rules that prevent BSR (Bitcoin Strategic Reserve) companies from joining the Nasdaq. This crashed $MSTR shares by 3% reducing their mNAV (Market Net Asset Value) to 1.6, meaning the value of the company now trades at 1.6 times the value of its Bitcoin holding. The stock market per say is not against BSR companies, but the latest wave of BSR companies following Strategy’s Strategy is causing alarm, especially as many of these companies are trading at 3 – 5 mNAV.

Fourth the U.S., despite Donald Trumps campaign promise to build a U.S. Bitcoin Strategic Reserve, has turned out to be a trojan horse and Trump has proven to be a shitcoiner. Firstly with his meme coin $TRUMP, but also with his support of other coins, who are built by companies with lobbying budgets like Solana.

Now his firm Trump Media through its crypto firm World Liberty Financial, has launched its own coin $WFLI which is proposing to become a global reserve currency to compete with the dollar and BRICS attempt at a global reserve currency the Digital Yuan.

Lastly, in order to reverse the affect of the Triffin paradox, the U.S. has taken the decision to deliberately weaken the USD.

N.B. The Tiffin paradox is an effect which forces the issuer of a global reserve currency to become a net importer of goods as a result of foreign countries needing to hold this reserve currency by selling their goods and services to the issuer. This gradually weakens the reserve currency issuers own industry and manufacturing base.

This has previously been compensated for by the U.S. tech industry, who has been able to create an enormous service based industry reducing the full effect of the Triffin paradox.

However, the recent weakening of this industry has forced Trump to take the decision to deliberately weaken the USD as a global reserve currency by removing the cap on the U.S. debt figure, bringing about an over supply for bonds, which the current market has little appetite for.

This last happened in 1985 under the Reagan administration and is referred to as the Plaza Accord.

The debt ceiling has temporarily been raised from $37T to $40T, with a bill going through congress to completely remove any cap. This was the cause of the falling out between Trump and Elon Musk, as it negates DOGE’s effort to reduce government spending.

This removing of the limit is going to cause not only the USD money printer, but all corresponding secondary source money printers to be turned on (EUR, JPY, GBP etc…), and will now cause BTC price to start escalating as the BTC price follows the M2 money supply pretty closely.

N.B. The introduction of trade tariffs was the first attempt at stemming the decline of U.S. industry, but the enormous backlash from the rest of the world, especially the incredibly powerful China has reduced the effectiveness of this approach forcing a more dramatic solution.

One last note, some are anticipating a Crypto crash, similar to the dot com crash of the early 2000’s. The overhyping of BSR companies and the over expectation of the US government Bitcoin strategic reserve, could cause the normal 4 year Bitcoin cycle to break. We are still within bull cycle parameters currently, but as we’ve just passed day 500 day of the Bitcoin halving (the halving happened on April 19 2024, 500 days later is September 2nd). We should now  be in the heart of the bull run and close to peak. It has been late before, notably the last pandemic halving, so it is still early to call, but this is a real possibility.

This would have both good and bad consequences. On the good side, it would shake out the 3 million available altcoins currently in existence and reduce this to the 50 or so altcoins that have some utility, but that would come at the price of short term price and value, breaking this current bull run.

In the 2000’s the Internet didn’t fail, it was simply over hyped, its linear growth was projected to be exponential, and so when reality did not live up to hype, many dot com companies failed. mNAV is an indicated of overhype. $MSTR should not trade at a value above 1 and secondary BSR companies definitely shouldn’t trade at an mNAV of 3 – 5. This could be the strongest indication of a crash yet.

Like the Internet dot com, a crash would kill off the weak and subdue the price of Bitcoin in the short term. But ultimately, this culling would only strengthen Bitcoin in the long term, in the same way companies like Amazon and Google eventually dominated the Internet we have today.