Seeing
Daily Ramble
Nothing warms the cockles of me heart like watching a newly hatched Bitcoiner make his or her way in the world. I’ve had the pleasure of experiencing it many times along the way (only during bull markets, unfortunately) but it’s a gratifying thing to watch friends and family get sucked across the event horizon with Bitcoin.
I heard Dan Held, a prominent voice in the Bitcoin space, say it takes about 50 hours of studying Bitcoin to begin to grasp it. That jives with my experience. There’s simply not a lot of folks that are willing to take that time and as a result, when the downturn in prices come, they sell, only to be left holding an empty bag when the price continues to run on without them. It bears repeating: no one has ever lost money in Bitcoin that was able to hold for 3 years. Now, that’s a tough message to hear when you bought the top in December 2017 at $20k only to watch the price depreciate as low as $3,400 before bouncing up to $26k by the end of December 2020.
But I want to talk about the importance of taking the time to “see” Bitcoin. There’s a scene from What the Bleep Do We Know, a 17-year-old movie exploring the realm of human knowledge, that tells this story:
After 17 years, I still think about this scene, but recall nothing else in the movie. Today, I can think of no better example of studying the “ripples in the water to see ships” than bitcoin. Because it is 100% original, it takes either staring at the marks bitcoin is leaving in the world or having someone you absolutely trust explaining it to you ad nauseam before the light bulb goes off. And just like being able to see “the ships”, once you get Bitcoin, it can’t be unseen: a monetary force analogous to gravity.
It’s not if, but when and at what price you get it. The most valuable time you’ll ever spend is the time to “get Bitcoin”. Invest the time and you won’t be disappointed.
Favorite Thing on the Interwebs Today
I laughed when I read the absurd headline.
Reality check: A guy with a memorized password has been confiscated, but his Bitcoin is tucked in, snug as a bug, on the blockchain.
Bitcoin Price Prediction
Yesterday: $36.3k - $42k
Today: $42.8k - $50k
Tomorrow: $42k - $50k
Well, that sure escalated. Yesterday, Elon Musk announced that Tesla had purchased $1.5B of bitcoin and the market reacted as if someone had dumped a mug of gasoline on the fire — boom! It shot straight up from $39.5k to $48.5k, a 22% price increase, in a matter of hours. To say the news is bullish is a criminal understatement. Tesla entering the space — and now there are swirling rumors of Apple entering — have put a tailwind of epic portions behind Bitcoin. It genuinely feels as if corporate FOMO (fear of missing out) is heating up in the same way retail FOMO created 2017’s massive bull run. If that is what’s happening, combined with the lack of supply on exchanges, the price run-up could be of staggering proportions. This is not the place to be selling.
Here and now, the price seems to be catching its breath. I don’t anticipate any serious pullbacks occurring before we move up to $50k. In the meantime, there is a small chance we come back to the $42k region to test it as support.
Bitcoin Ed Bite
Q: What is a Bitcoin market cycle?
A: Every four years the emission rate for minting new Bitcoin, through mining, is cut in half. As a result, a four-year market cycle has developed. About 6 months after the supply is cut in half, the price of Bitcoin clears its prior all-time high and goes on to hit its crescendo, a blow-off top, about 18 months after the halving event. The following 2.5 years are a bear market. From the lowest point to the highest point, the price increases hundreds of percent. But just as remarkably, from the highest point to the lowest point, the price declines by up to 85%. We are experiencing the cycle for a third time right now.
What I’ve described is the pattern that occurred in the last two halvings. History is simply a guide, not a prediction of the future. If the pattern continues, we should experience the blow-off top in December. Unless hyper-bitcoinization occurs, first…
Thanks for reading,
Kent
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