Expect Volatility in Bitcoin
Market volatility, whales remain bullish, AND a sneak peek at my portfolio.
Market Analysis
Crypto market sentiment and my take.
STRONG HANDS are buying Bitcoin. The whales are out in full force, continuing to buy up Bitcoin at every possible dip. In the last month, whales with addresses holding between 100 and 10,000 BTC bought 90,000 Bitcoin.
The buying spree started in April, when we first pulled off the all time high, and transaction activity shows no sign of letting up. Whales remain bullish. BUT, one note on whales—the number of “new whales” is shrinking. This could be for a variety of reasons such as higher cost to entry or potential whale newcomers being pulled into alts instead.
ALTCOINS SUFFER during the recent market volatility. They’ve had a wild ride this year right alongside Bitcoin. In last week alone, the price of Ethereum dropped roughly twice as much as BTC in percentage terms.
Other alts such as Uniswap, Stellar, Filecoin, XRP, Dogecoin, and VeChain all saw double digit losses compared to Bitcoin’s roughly 5% drop between 6/13 - 6/20. Some, like Internet Computer, took the drawdown even harder, dropping as much as 30% during the same period. As always—as Bitcoin moves, so does the market. A caveat on top too is that altcoins tend to fall further than BTC.
A ROCKY START TO THE WEEK is developing. On top the above mentioned corrections, crypto markets could fall more Monday on news of added crackdowns out of China. I mentioned a possible $30,000 BTC test a few weeks back.
While we still haven’t quite tested those levels, they remain on the table. $35,000-38,000 support failed over the weekend. Both Chinese and U.S. FED actions are critical to watch this week. Despite the drawdown, expect whales to continue buying. Government crackdowns on crypto are not new.
I’M WATCHING THE JUNE CLOSE. I want to see Bitcoin hit a specific number at the end of June before determining which overall direction the market is heading. I do still contend we’re in a bull market and that we have roughly 40-50% of runway left before we enter a bear market. I broke down the monthly closes since September 2020 in THIS PAID POST.
Some insight from that post—I consider March and April to be outlier months in the current market cycle. They are periods of near or actual all time high price territory. The May downtrend occurred in the immediate aftermath from all time high corrections. We have to go back to February numbers when considering what target prices we need for Bitcoin in June.
Crypto News
What’s happening in crypto.
INVESTMENT BANKS are split on Bitcoin and crypto but that isn’t stopping them from opening up services to customers. Goldman Sachs has begun trading bitcoin futures with Galaxy Digital, a crypto firm founded by Mike Novogratz. This comes on the heels of JPMorgan’s announcement that they’re launching a Bitcoin fund.
JPMorgan CEO Jamie Dimon has had to walk back criticisms of Bitcoin over the years. JPMorgan is even hiring for crypto-specific roles, acknowledging the regulatory space around it as a “serious emerging issue.” With crypto going mainstream, all banks want to plant their flags.
IT’S OFFENSIVE to watch people in positions of power speak with such conviction from uninformed podiums. I’m referring to Sen. Elizabeth Warren’s recent environmental criticisms of Bitcoin. Sen. Warren claims to be a champion for financial equity. Bitcoin, at is core, is an asset for universal financial inclusion.
Her critique even lumped Bitcoin in with Dogecoin. It reveals a lack of understanding on the topic and she appears willing to dismiss Bitcoin entirely. It’s not a partisan issue in the U.S. either.
We’ve also seen former President Trump call Bitcoin a scam. BUT, there is hope. Sen. Cynthia Lummis has been a champion for modernizing government regulation as it relates to tech and crypto. She’s been open-minded toward Bitcoin and continues to be a sensible voice among lawmakers.
I’M AN OPTIMIST when it comes to government… even if it doesn’t always seem like it. In the U.S., the federal government can be slow to act, but they tend to come around to the will of the people. Mining and environmental discussions aside, there’s other topics being tossed around.
Many believe SEC Chair Gary Gensler will usher in the first ever U.S. Bitcoin exchange trade fund. There are already Bitcoin and Ethereum ETFs in Canada. The Winklevoss twins filed the first-ever application for a Bitcoin ETF in the U.S. in 2016. We’re still waiting for it to happen… The SEC just delayed a decision on a VanEck fund. Recent mainstream criticisms and price volatility may make it more difficult for us to see this happen in the near term. BUT, long term is another story—a U.S. Bitcoin ETF feels inevitable.
FIRST COMES EL SALVADOR, next comes… to be determined but Bitcoin nation state adoption has begun. NFL player Russell Okung entered the Bitcoin space this year. He’s of Nigerian ancestry and wrote an open letter to the government of Nigeria, urging them to adopt a Bitcoin standard.
The above commentary from Sen. Warren and other U.S. critics conveniently ignores the “SG” in the “ESG” (environmental, social, governance) movement and how Bitcoin is being used by citizens of Nigeria, Turkey, Ukraine, Lebanon, Venezuela, Argentina, and so many other countries experiencing either government and/or economic instability. We’ve already seen several Latin American politicians show support for Bitcoin following El Salvador’s move to make it legal tender. Argentina, Brazil, Panama, and Paraguay are countries to watch in the “who adopts Bitcoin next” conversation.
IF YOU LISTEN TO ONE PODCAST this week, listen to the Jack Mallers interview with Peter McCormack. Mallers, founder of the Lightning Network payments platform Strike, gives the behind the scenes story of recent developments in El Salvador. It’s a great reminder of why Bitcoin matters. Sometimes, it’s best to ignore the markets, price tracking, and trading and just zoom out. Bitcoin is changing lives for the better. It will continue to be attacked in the public square but those who need it most will champion its progress.
BITCOIN AND CHINA have a complicated relationship and recent weeks have resurfaced some of the the biggest points of contention between Bitcoin and the government in the PRC. The People’s Bank of China just told major banks in the country to stop facilitating cryptocurrency transactions.
This comes on the heels of intensifying crackdowns on Bitcoin mining in several regions of the country. The Chinese people have long supported Bitcoin but the government desires strict controls over money flowing within and out of their borders. It’s also very possible that the PRC views Bitcoin as a direct competitor to its digital yuan. As always in crypto, it’s key to watch what happens in China.
Read More in Crypto:
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