Hopium? The Real Reasons To Be Bullish On Bitcoin
Listening to the forums and chat rooms about the next Bull Run on Bitcoin can be a pain. One can smell the invisible vibe of fear that the bubble has burst, fought down by lots of Hopium that just makes no sense. It smells like cold sweat and dirty teenager socks when all these hope-driven discussions climax why Bitcoin shall start a hyper-run to 50k next week. We had the Chinese New Year, the tax season, the Wall Street boni and countless other reasons pulled out of thin air to not lose the faith in Bitcoin. Desperately woven, highly speculative assumptions, followed by one thing again and again: disappointment. And while we don't know when the rocket will take off, we have collected some profound reasons, why we think that we are not lost – but sitting in the loop of a very promising waiting game…
Did we just enter the ice age? Technically, with the break of the support shown in the picture above, we might see some downside in the coming weeks, though fundamental-wise we might stroll through this bear phase with a small smile with what we have ahead. After Bitcoins rocket ride to the mars last year – and its fast return to the ground, we know the price development in crypto moves in time lapse. A loss of almost 3/4 of its value in this time frame is alarming to many conventional analysts and spreads, of course, much fear between the holders. No wonder, people holding cryptos clutch at any straw, to do the Apple + Z tap to undo this mess. Let it be it Wyckoff cycles, let it be Elliot waves – no technical indicator has been left out to become abused by bedroom analysts to “predict” the big fat bounce – and they all have been punched back to reality. Even big names like Bitcoin Evangelist Charlie Shrem, (BitcoinFoundation.org/Crypto.iq) have been proven wrong.
May 2018 will be the last time we ever see #bitcoin under $10,000— Charlie Shrem (@CharlieShrem) May 3, 2018
But should this poison our optimism? Are all these experts wrong, just as no one wants to realize that the bubble we were sitting in popped? We don't think so!
Institutional money in the steam cooker
The asset “Bitcoin” is thriving and cooking hindsight – we just have to glue our eyeballs to where the money is. If we connect some headlines, our odds are pretty nice to assume institutional money is being set aside in preparation for the next big run-up. We all know, smart money never buys the top and so it is delusional to think ballers will enter at a 20k Bitcoin. Seeing the Corn down for so many months hurts, but big companies are moving slow, due to their organizational structure in conjunction with the given legal circumstances of a special thing like an unregulated, autonomous asset.
6 Months ago Goldman Sachs Chairman Lloyd Blankfein warned us all that Bitcoin is a vehicle for fraudsters – now they are telling the New York Times, that they build an expert team for trading Bitcoin for their clients and themselves. He mentioned increasing interest in Bitcoin futures already on the world economic summit in Davos.
At the same time Chicago's CBOE faced an increased demand in their futures to allow betting on the Bitcoin price – and while the Bitcoin future trades around 4000 times a day on average, interestingly there are days since mid of March (and especially April, 24th) where the volume spikes up to the double, a huge indicator for institutional money entering the ring.
The cryptomarket opens to the big boys – after CBOE, the Chicago Mercantile Exchange chimed into the Bitcoin Futures business and meanwhile, the Intercontinental Exchange, owner of the NYSE, works on a trading platform for Bitcoin. Similar plans are in the oven for the Nasdaq – Bitcoin gone Wall Street. In Germany, the Börse Stuttgart is on the move with BISON, a trading crypto trading app.
And then, as cherry on the cake, the Bitcoin ETFs are around the corner, especially with the recent SEC moves they are likely to hit us anytime soon. Watch this space!
Trading Bans Removed, Regulations & Rules instead
After countless news about China, India, South Korea and more countries issuing a ban on Bitcoin, the signs all are reverting. India might see a U-turn soon, after admitting that their “ban” with the RBI might have been politicking. South Korea changed their mind, due to the new FSS chief, Yoon Suk-heun, who wanted to work on a better regulation of crypto (instead of banning exchanges) on day 1 of his ministry. Japan as well announced regulations, though investigates in anonymous cryptos, which shall not be traded anymore, as per their wishful thinking.
The setup seems obvious – big boys coming in, regulations will kick in – more rules for everybody, but likely also more stable markets. It is just logic – a big-time frenzy like cryptocurrencies can't stay in wild west manner AND become mass adopted. The governments will force more and more regulations, which means fewer scams in the future for all of us, but also fewer opportunities for anything dodgy. We might see a more stable price development in Bitcoin and crypto in the near future – less crazy thousand dollar jumps and more slow and steady growth. And while decentralization means autonomy from the banks, we are yet depending on their services to spend the money crypto made us, to pay for our rent or mortgage.
As much pain regulations might mean to us – as important it is for a substantial growth. According to BlackRock, this is the missing link for smart money coming in. Institutional money fears uncertainty, and while they start up building positions slowly, this hinders them to start the big moves.
We don't have any “predictions” for you, our balls are not made of crystal, but we anticipate healthy growth back over 10k in the following months. We don't believe in a quick reversal and everything is good again like in December – but we are more than convinced about the long-term growth of the Corn. The governess is in the house and she does not like the kids to play with dirty shoes on her carpet.