Bitcoin’s 40% Discount and the Triple Put: A Backstop for the Bulls?

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sentiment is “in the pits.” The American Association of Individual Investors’ bull-bear spread is so bleak, it’s practically doing a zombie shuffle. Bearish enough to rival the disaster of 2009, and worse than the pandemic crash of 2020—yet, Bitcoin and the S&P 500 have barely slipped 15% from their recent peaks. How’s that for perspective? 📉

The CNN Fear & Greed Index is registering its most pessimistic reading in years, while Capriole’s Active Manager Sentiment gauge shows equity managers hiding like mice, underexposed and ready to jump at any sudden movement. Investors, Edwards argues, are “panicking.” But wait, panic often signals the bottom, right? Remember the Rothschild saying: “Buy when there’s blood on the streets—even if the blood is your own.” Classic, really. 🩸

And then—just as the market seemed on the brink of a nervous breakdown—Bitcoin pulls a Houdini and stages a sharp reversal. A breakout candle to $94,000 reclaims the $91,000–$100,000 range that had kept the market shackled since February. “A significant range reclaim,” says Edwards, clearly thrilled by the dramatic flair of it all. He adds that, for Bitcoin, such moves rarely look back. So what now, a rocket ride to the moon? 🚀

Edwards also points to his firm’s machine-learning Bitcoin Macro Index, which has gone from neutral to bullish after months of slumber. This, according to him, is “a very promising fundamental data reading.” It’s almost as if the stars are aligning, or at least showing a slight inclination toward alignment. The numbers are speaking, but do we listen? 🎧

The Triple Put: When a Safety Net Becomes a Hammock

Now, for the pièce de résistance—policy. On April 2, the U.S. rolled out a massive global tariff plan, then promptly halved it when markets responded with a hissy fit: equities plummeted by 15%, the VIX soared above 30, and credit spreads widened like a bad habit. The markets screamed, and suddenly the government decided to step in with a soothing hand. Edwards dubs this move the “Trump Put,” arguing that if markets start free-falling, there will always be a swift intervention. “Don’t worry, folks—uncle Trump has got your back.” 🛡️

But the Fed wasn’t about to be left out of the party. On April 1, it slashed the pace of quantitative tightening by a whopping 95% (a.k.a., the “Fed Put”). It’s as though someone forgot to tell them that tightening the purse strings might not be the best idea when the market is in a meltdown. So now, the CME FedWatch tool predicts three rate cuts before the year ends. Don’t you just love surprises? 🎉

And, just when you thought the plot couldn’t thicken any further, Treasury Secretary Scott Bessent steps in, reassuring everyone that the decline in Treasuries was due to deleveraging, not foreign selling. “Don’t worry, we’ve got this,” he assures the masses, invoking the “Treasury Put.” In short, three major financial entities—President, Fed, and Treasury—have their backsides firmly planted in place to cushion any catastrophic falls. It’s a “Triple Put,” a safety net so padded you might just fall asleep on it. 😴

Bitcoin: The Great Undervaluation

Now, let’s talk value. Capriole’s “Chart of the Week” shows Bitcoin’s Energy Value, which prices the network based on aggregate miner electricity consumption, shooting past $130,000. Meanwhile, the spot market languishes around $94,000—nearly 40% below this “fair value.” It’s the kind of undervaluation Edwards calls “quite rare” in the early post-halving years, and quite the opportunity for those with a taste for risk. Can you say “buy the dip”? 📈

Now, don’t get too giddy—Edwards is not one to get carried away. There are still risks. “Political and volatility risks remain,” he warns. And he’s watching to see if Bitcoin can hold $91,000 on a weekly close, as well as whether the Macro Index continues its upward trajectory. But for now, he sounds cautiously optimistic. With technicals, sentiment, and fundamentals all aligning (in a completely uncoordinated, accidental way), Edwards suggests Bitcoin could be on the verge of new all-time highs. What a delightful thought. 🤞

At press time, Bitcoin is trading at $93,723. Could this be the beginning of a beautiful rise? Time, and perhaps a little bit of luck, will tell.

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2025-04-25 18:42