2021.08 - Irrelevant
TLDR:
Companies and leaders will keep finding it harder and harder to avoid Bitcoin as it becomes obvious that “staying out of it” increases their risk of becoming irrelevant.
THE STANCE
My personal opinion on where the ball might be heading.
This news would have been huge a year ago:
As the list of luminaries signaling support for Bitcoin keeps growing —and the names on that list are already impressive— the new names will land with less of a punch.
The thing to keep in mind is that as Bitcoin’s price rises it becomes MORE attractive to certain buyers. Some institutions can’t even look at it if the market cap is less than 1 Trillion.
This dip has been your opportunity to stack hard before the next big push up. Put in the work, build your conviction and stack now.
Despite going from under $6k to over $40k in less than a year, I still see lame criticisms like “Bitcoin is not scarce because it’s divisible”. Bitcoin is not for people who can’t do basic math.
What happens if Bitcoin keeps outperforming most funds and stocks? They’ll become irrelevant.
LONG BITCOIN
Recent news that keeps me bullish on Bitcoin —"long / bullish" means you have the expectation something will rise in value.
Banks Keep Bending The Knee
Slowly but surely, legacy financial institutions keep jockeying for position in terms of a Bitcoin strategy. And I’m not talking about just the young-and-scrappy fintechs
This week, JPMorgan (who has famously been critical in the past) seems to be slowly backpedaling out of its position. Now they are suggesting investors allocate 1% of their portfolios to Bitcoin:
Corporations Stack Different
Square doubled down on it’s initial $50M purchase of Bitcoin, this time buying $170M (about 5% of its cash)
Microstrategy quadrupled(?) down (losing count here) and raised a cool $1.026B (at zero % interest, no less) to stack additional Bitcoin. They added 19,452 BTC at an average price of $52,765 per coin.
They now hold 90,531 BTC with an average purchase price of $23,985
Coinbase Prepares for Pricey IPO
Eyes are on Coinbase as they prepare for their IPO. At it’s current valuation north of $100 billion, Coinbase is neck to neck with Goldman Sachs who not too long ago called Bitcoin, "not an asset class". It’s worth noting that toe companies valuation sat around $54B at the end of January
One was the interesting revelations that came from the filing was that only Coinbase holds $130M in Bitcoin. While that may seem like a lot to you and me, it was noted by sharp-penciled Bitcoiners on Twitter that this is equivalent to “less than $100 in daily revenue DCA since their inception.”
Given that Bitcoin was around $13 when Coinbase started and that they’ve generated around $3.4B during that time, it’s somewhat pathetic that they have such a small stack.
Still, their volume numbers were interesting:
Not everyone is excited though
Billionaire entrepreneur Chamath sounded a warning about the IPO though (which will be a direct listing). Mainly that Conbase’s valuation had risen too sharply in the last month which could lead to insiders dumping on retail.
CRYPTO WARS
crypto- |ˈkrip,tÔ | concealed; secret.
The monopoly over fiat money will not be given up without a fight.
Ignore NFTs
I’ve been seeing a lot of noise around NFTs (non-fungible-tokens) lately and I thought I’d chime in: Stay away from them. Or have fun with them, just don’t fall for the line that they’ll be a good investment.
SHORT FIAT
Recent news that makes me bearish on the legacy financial system —"short / bearish" means betting it will go down in value.
Fedwire Down
The Federal Reserve Payment system —which is used to settle around USD$3 Trillion per day— was down for several hours last week, leaving banks unable to send or receive wires.
How embarrassing. Especially in light of Janet Yellen’s recent criticisms of Bitcoin
Affected services included the Central Bank, FedACH, FedCash, FedLine Advantage, FedLine Command, FedLine Direct, FedLine Web, Fedwire Funds, Fedwire Securities and National Settlement.
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.
Big Dip / Small Dip?
Last week we saw the “board” on our Bitcoin Surfing chart was at $44,183 this means we expected Bitcoin to find some support at that level that would allow it to regain its footing.
As it turns out, the week closed at $45,241 with a wick that reached a low of $43,021
As I said last week, any price between the board (currently at $42,670) and the beginning of the stratosphere (currently around $80k) is just Bitcoin doing its thing.
Each candle in the chart represents one week
I don’t know how long it will take Bitcoin to gather its strength before the next jump. But my read is, probably not long.
Bitcoin stopped short of $60k on the last push up. Then it took a breather, giving you a chance to buy cheaper. If you bought at the top, don’t despair. It happens to all of us. A little patience and you’ll be doing just fine.
How to interpret the Bitcoin Surfing chart:
Think of Bitcoin's price-action as a kite-surfer:
Bitcoin uses its board to stay above water and wants to catch some air.
When it catches air, it tends to keep rising but if it rises too fast (it's feet no longer touch the board) it can stumble.
If it falls off the board, it tends to keep falling until it regains its footing (may need to touch water or sand for that).
Water and sand arrest the fall and help it push itself back up.
If it goes up so much that it gets close to (or into) the Stratosphere, it will probably crash down all the way into the sand and may need to tap the bedrock level before pushing up again.
