Bitcoin is firmly back in the news again, after another ATH not so long ago, and then the recent dip....
Obvs we've sort of been here before and it sort of feels different and yet the same as last time, and as usual it's quite difficult to know what's going on with any level of uncertainty, but I'm of the view we're gonna see higher highs and probably contiuned, but not necessarily more volality along the way!
What's Driving the Spike?
We've got an improving 'macro backdrop' especially in the US...
Among the principal drivers of the recent rally is what Republican legislators in the US are calling "Crypto Week." Three landmark cryptocurrency bills are set to be voted on soon. The bills promise to reshape the regulatory landscape and render the rules governing institutional and corporate entry into crypto markets clearer.
And we can see clarity generating confidence as traditional finance ncreasingly positions itself on Bitcoin. Exchange-traded funds (ETFs) are also propelling demand — within one at the end of July, $2.7 billion went into Bitcoin ETFs. BlackRock's iShares Bitcoin Trust has about $90 billion in assets. Sovereign wealth funds, corporate treasuries, and financial advisors are also investing in Bitcoin at record pace, with some companies even using it as a "strategic reserve."
Just another Bubble...?
I'm not so sure...
The current increasing investment coming into crypto doesn't seem to be FOMO driven, it's not a piling-in all of a sudden so much as investors gradually adding more to their ever expanding crypto portfolios.
I can't see where any significant sell-pressure would come from, I'm sure most of the selling, like me, is earlier Vestors gradually offloading, and, like me, many of them are happy to sell of relatively small amounts around the $120Ks, but hodl the rest for larger moves up.
Bitcoin does not seem to conform to the standard bubble model. Bubbles have a tendency to pop and never revisit previous highs, but Bitcoin has a history of rebounding after every crash to a new high. If there is any such thing as a Bitcoin bubble then we are witnessing the biggest, most elongated, most unusual bubble in history.
Final thoughts...
I'm still sticking with what I've always said about BTC.. there's just too much uncertainty to predict where it's going...
Oh and in terms of the Bubble theory one other problem is that the term bubble is a price "unmoored from fundamentals," but crypto's fundamentals are notoriously hard to measure.