Years hence, when truly life-changing wealth is realized by the patient, steadfast, and honest holders of bitcoin, they will say "you didn't earn it". They will say "you did nothing for it", that you somehow "got lucky" or worse, they'll imply through veiled innuendo that, because you're "lazy and good for nothing", that you "don't deserve it". Little will they know the emotional roller coaster of fear, uncertainty, doubt, and exuberance that this market subjects all those who dare tread here.
"I have toiled and slaved my entire life for a paycheck," they will say. "I've faithfully paid my taxes, endured inflation, sat idly and without protest while the banking and political elite eroded what remains of my savings, retirement, 401k, pension, and my rights bestowed by the Constitution -- thus only I am worthy of [etcetera, etcetera]."
Adding to their insults, these same accusers - many of whom will have no doubt "dabbled" in crypto, probably in the form of Dogecoin gambling or some other shitcoin speculation from which they got burned - will, of course, be the most vocal proponents of crypto regulation. "Tax the bitcoiners!" they will cry. "It's only used for criminal activity, money laundering, and tax evasion anyway. Tax them! Take their rights away! Confiscate their digital property, they don't deserve it!" So loud will be their clamor that they won't care if such digital confiscation opens the legal door to the confiscation of physical property like real estate.
Such appeals, however, (so contrary to the American spirit) will fall largely on deaf ears in the years to come, not with the likes of U.S senators and representatives, state governors and city mayors, as well as the biggest companies and payment providers in the world who are working to bring about a Bitcoin-friendly future, their collective efforts which will, of course, further fuel Bitcoin adoption. With so many pro-Bitcoin congressmen currently in session and so many large companies who have added bitcoin to their treasuries, the likelihood of an outright "bitcoin ban" in the US is increasingly unlikely, as is overly-burdensome regulation for crypto start-ups. More regulation will come but only to a point. Arguably, Big Tech is more powerful than Big Government. The Trump Administration, as "tough" as it purported to be, took a backseat to Big Tech when it bowed to the existing legal interpretation of the Section 230 law which provides the legal framework for internet companies' terms and service agreements. No change was made to the "law" and thus Big Tech could continue as they always had which, in Trump's protest, displayed an unsavory penchant for censoring "right-wing" perspectives. This failure to act came back to bite the former president when he himself was censored from Twitter - his most active SM platform and the de facto pulpit of his entire administration - in early January of this year. If Big Tech wants something to happen or not happen, their enormous pockets and lobbying efforts can make it so. They will not sit idle while certain backward-looking political figures attempt to keep our current financial system stuck within a 20th-century infrastructure. Indeed, retail banks, branch offices, SWIFT, paper checks, paper money - slow, ineffectual, and antiquated as they are - will not survive the digital economic revolution, the same as traditional information hubs did not survive (or barely) the disruptive effects of the world wide web.
In noteworthy news, Amazon is currently hiring a "digital currency and blockchain expert" to forerun what is presumed to be their "big move" into the crypto payments game. Rumors - which have now been denied by company leadership (causing the price to quickly retreat from $40k) - are swirling that the e-commerce company will soon be accepting bitcoin as payment for goods and services provided through their site. It has also been rumored they are planning to create their own cryptocurrency coin. The purpose and legality of this coin is debatable, but the main takeaway is that Amazon will soon be "a bitcoin builder", never mind the typical cat-and-mouse PR stunts pulled by mega-corporations. I think Apple will follow suit before the end of the year which will open the floodgates for other forward-looking companies to enter the crypto space. While the rumors help pump the price in the short term, this is yet one more long-term step toward legitimizing bitcoin in the eyes of the public and congress, making the threat of outright prohibition and other dumb-dumb government actions more and more unlikely.
On the price front, Bitcoin seems to have finally broken free from the doldrums that had hindered it since we reached $64k in April. Bitcoin pumped to nearly $40k last night, witnessing a $2000 increase in a matter of 15 minutes, a move that liquidated nearly 1 billion dollars of short positions, effectually removing the main overhead resistance that was keeping Bitcoin suppressed for the past few months. The chart I am looking at now is "Bitcoin Dominance" which calculates how much of the overall crypto market cap is composed of Bitcoin. Today it stands at 48%. In addition to the necessary hash rate recovery from China's miner crackdown (we're still down 45% from the peak), Bitcoin will have to retake +50% of the overall market dominance before a sustained advance can occur. Another big reason that I don't believe we're in a bear market is that there has not been an altcoin capitulation into bitcoin which occurs during every sustained downturn. No, altcoins are still relatively strong and many investors are accumulating their favorite shiny "toys".
Bitcoin, however, is the market. Retail and institutional investors start there and, when they've seen substantial returns from Bitcoin, they tend to "diversify" into shitcoins toward the end of a cycle. Bitcoin must outperform the entire market in a powerful way for a sustained period for us to eventually reach my ~$250k price target, which at this point seems a little low. I now believe the bigger surprise will be to the upside and that we'll hit $300k this cycle. The market is designed to shock investor expectations. Recently, traders and "crypto experts" were calling for a low of $20k - unprecedented in a bull run. With Bitcoin's apparent reversal - which could be a fake-out - it looks like we may never see the $20k range ever again. I could be wrong of course, but at this point, what does it really matter?
If you're a reader of this newsletter and you've held through the downturn - especially as a new investor - going to $20k should not shake you from your position. If this is you, congratulations. I believe those who have been patient, not only over the last three months but the past three years, will soon reap their just rewards. Moves like the one we saw last night will probably be the norm. Bitcoin has a way of punishing weak and indecisive hands. If you think you'll have time to re-enter a position at a certain depressed point over the next 6 months, you might be disappointed. I believe a return to the $50k level will be rapid. This is not to say that one should FOMO back in if they've sold, but it should be a lesson for all future bitcoin investments. "Time in the market is far more important than timing the market." Timing Bitcoin is notoriously difficult if not impossible. Dollar-cost average. Again, for those who have been patient, congratulations. I do not necessarily think it'll be straight up from here - there will be numerous corrections along the way - but I am beginning to believe the worst of this cycle might be behind us.
Good luck to one and all.
NSV