Last Week in Bitcoin is a new segment that covers the week in Bitcoin, with all the important elements and some analysis.
Regardless of what the charts say and the current price, the past week has been a bullish week in Bitcoin. Billionaire Ray Dalio confirmed he holds Bitcoin, activist investor and former Bitcoin doom prophet Carl Icahn has expressed an interest in prosecuting crypto “on a grand scale,” and Texas has enforced a law that provides a legal framework for Bitcoin in the state creates and paves the way for Texas to become a crypto hub. China and Iran took action against Bitcoin mining for the umpteenth time, and prominent investors Elon Musk and Michael Saylor announced the formation of their Bitcoin Mining Council.
A table to consider
The graph above, courtesy of Bloomberg’s Global Macro Investor platform, compares Bitcoin’s performance between 2010 and 2013 with that between 2016 and now. As you can clearly see, we are still overdue for a decent bull run that could likely peak at $ 400,000.
Of course, there’s a lot more eyes on Bitcoin this time around than there was a decade ago. Fear, uncertainty and doubt have increased as the media, billionaires and many others rely on anti-crypto sentiment. As we’ve seen over the years, Bitcoin is a global community and its only focus is on a decentralized financial system where power is in the hands of the people. Some may say that even negative news is good news as it introduces new people to the idea of Bitcoin and, as they research, they very likely decide to invest themselves.
Bullish: In the short term
Prominent investors are now piling up in Bitcoin almost weekly. Last week’s news that Ray Dalio holds Bitcoin and Carl Icahn is also interested only confirms that no one can ignore Bitcoin as a logical investment anymore. As prominent investors come on board, Bitcoin is perceived as even more legitimate by former skeptics, which often has a positive effect on the overall price and further fuels the bull runs. This current run could likely be anywhere in the $ 400,000 range for the next year, as shown in the graph above and discussed in my previous article, which compared Bitcoin’s performance after each halving. The last halving took place last year and ushered in the current bull market.
Bearish: Long term
In an almost ironic twist, my reasons for being bearish in the long term are almost the same as why I’m bearish in the short term. Billionaire investors and public corporations joining the Bitcoin train are both good and bad for price promotions. When bitcoin eventually hits close to $ 400,000, the billionaires will likely liquidate their positions with a fat short-term profit. Similarly, publicly traded companies that have achieved tremendous ROI are likely to see activist investors pushing to sell their holdings and distribute dividends to investors. Microstrategy should be safe as Michael Saylor controls most of the voting rights, but what about the rest of the publicly traded companies?
I have little doubt that the current dip-intensive market we are seeing is bitcoin finding its new low and stabilizing before the next boom. Yes, there will likely be several 20-30% drops before Bitcoin hits its next peak, as seen during the 2017 bull run. However, as more people and companies view Bitcoin as the future of the financial system, the price should reflect the same.
It’s important to keep an eye on Texas and its lawmakers. As the state opens up to a more favorable legal framework, it will likely invite investors and businesses alike to move to Texas. This should serve as an inspiration for more states, maybe even some countries, to follow suit and embrace Bitcoin. Think of Texas as a test run for now, but it’s likely the start of big things to come.
The efforts of some countries to ban or curb bitcoin mining are another cause for concern, especially considering how much of the bitcoin hashrate comes from China. Yes, on the positive side, this should be spreading our mining operations around the world, which will have a positive impact on creating a more decentralized hashrate. On the other hand, the formation of the Bitcoin Mining Council is also a cause for concern as it pushes some form of centralization into Bitcoin mining. Should more miners move their activities to the US and join this council, there is a possibility of a new form of centralization of power looming in the mining community.
What I didn’t mention above is one important piece of information that came to light this week – Apple’s interest in hiring an executive with crypto experience. Some may speculate that Apple could prepare its own currency, but this is unlikely. The more likely scenario is that they will open up to bring Bitcoin and other crypto payments to their Apple Pay platform and likely allow crypto for app payments and device purchases. That would be very bullish. However, it is unlikely that Apple will use any of its nearly $ 200 billion cash holdings to invest in Bitcoin.
Overall, I think this is the ideal time to stack up some sats and build your stocks. The market is stabilizing and even if there are a few more drops in the next week, a bull run is imminent.
This is a guest post by Dion Guillaume. The opinions expressed are solely their own and do not necessarily reflect those of BTC Inc. Bitcoin Magazine.