2021.07 - Destroyed
TLDR:
Sure, Bitcoin breaking 1 Trillion in market cap was cool, but did you see the Laser Eyes?
THE STANCE
My personal opinion on where the ball might be heading.
This was one of the most fun weeks I can recall in my time in Bitcoin.
And yes, smashing through $50,000 and the one trillion market cap was obviously the underlying cause of the celebration. But the Laser Eyes stole the show.
The hard working memelords at Bitcoin Arsenal came up with and kicked-off the #LaserRayTil100k campaign
It spread like wildfire (the sampling below is very incomplete), you had authors, billionaires, corporate CEOs, economists, journalists, media personalities, taco-eating plebs, Bitcoin educators, fitness experts and at least two sitting US senators sporting Laser Eyes.
If you wanted Laser Eyes, you just had to ask. Someone made them for you, quickly and free, for lulz and glory. It was a joyous celebration for almost all Bitcoiners
Beyond the fut, Laser Eyes also underscored several important points:
The power of network effects —the speed at which this meme spread through the leaderless community was simply incredible
The penetration and reach of Bitcoin —the number and combined influence of the Laser Eyed is impressive
Bitcoiner Hive Strong —More than 700 profiles were changed to Laser Eyes. That’s a lot of work. And there was even quality control —senator Lummis’ first lasers were lackluster and they were soon spotted and replaced. For a community that disagrees on a lot of things and has no centralized leadership, they sure can get shit done fast.
LONG BITCOIN
Recent news that keeps me bullish on Bitcoin —"long / bullish" means you have the expectation something will rise in value.
One Trillion
On February 19, 2021 as Bitcoin’s price climbed above $53,000, its Market Cap —the hypothetical total market value of all Bitcoin— hit 1 Trillion dollars for the first time ever.
The ETF Race
Last week, I mentioned the first Bitcoin ETF in North America had launched in Canada. It seems it’s doing rather well:
The race for a US-based Bitcoin ETF has kicked into high gear:
An ETF will be a big deal because there are a number of institutions that simply can’t buy Bitcoin unless it’s wrapped inside a traditional investment vehicle —like an ETF. Currently most of that demand has been absorbed by Grayscale and Microstrategy, neither of which is an actual ETF.
Another One
Microstrategy just raise a second round of unsecured debt to buy Bitcoin. This time it was $1.05 Billion dollars at —wait for it— 0% interest. This will be studied in Business schools everywhere for decades to come.
“Dabbling”
With over 7 Trillion in AUM (Assets under Management) Blackrock’s definition of “dabbling” may be different to mine or yours.
Who’s Next?
As you know, Tesla invested $1.5 Billion in BTC on February 8th. It’s going well for them.
CRYPTO WARS
crypto- | ˈˌkrɪpˌtoʊ | concealed; secret.
The monopoly over fiat money will not be given up without a fight.
Last Laughs
Back in 2019, CNBC’s Joe Kernen became a Bitcoiner. He may not have plumbed the depths of the Bitcoin rabbit hole, but he understood enough to become a believer.
It was not an easy or comfortable position for him as a part of a mainstream news channel. But I remember how every time the subject came up, Joe would push back against detractors and us Bitcoiners would cheer him on.
At one point he made a bold prediction and was pretty much laughed at by his coworkers. The wait was long, but he was finally proven right.
Here’s to you Joe. I hope they apologize on-air and give you a round of applause. You called it.
PRICE DISCOVERY
This is the section where I talk about price with an updated weekly price chart. If this is your first time here, there’s a “how to interpret” guide below the chart.
Smash
Bitcoin smashed through $50k with decisiveness and is now gunning for $60k.
Normally, BTC “jumping off the board” like this would suggest a correction is due. I hate to say it, but I’m not sure these are normal times though.
Each candle represents 1 week. You’ll find an interpretation guide to this chart below.
All my models are destroyed
Bitcoin has had a fairly cyclical behavior in the past. This was beautifully codified by @planB in a March 2019 chart when he originally published his controversial “Stock-to-Flow” model, which modeled BTC’s price as a function of it’s relative scarcity (I won’t go into the details here).
The model has been widely criticized by many for different reasons. But the fit between the model and reality to date has been uncanny.
Economist and author of the popular and recommended book “The Bitcoin Standard”, Saifedean Ammous has been among of the defenders of the model based on the close fit it has demonstrated with price discovery for more than a year.
Saifedean recently sat down with Michael Saylor for an epic podcast and —among many other things— they discussed this model and the historical cyclical behavior of Bitcoin.
Only listen to it if you are prepared to have all your models destroyed.
