Over the past several days, prominent analysts have argued that more early investors are choosing to hodl bitcoin (BTC) at the moment, and that BTC is a measure of wealth, and while some say that it is a hedge against inflation, others call that narrative a myth.
According to Bitcoin analyst Willy Woo, early investors, who usually like to profit from their coins that carry more dormancy, now hodl – following Tesla‘s USD 1.5bn-heavy BTC purchase.
Early investors like to take profit by selling their coins (which carry more dormancy) into every rally, then this guy called @elonmusk comes along and decides to buy, now they HODL like the rest of us. pic.twitter.com/npv2bIg7ql
— Willy Woo (@woonomic) March 27, 2021
Average dormancy describes “the average number of days each coin transacted remained dormant, unmoved. The higher the dormancy, the older the coins transacted that day are on average, and the more old hands are releasing their bitcoins into circulation.”
Woo’s tweet includes an on-chain analysis firm Glassnode‘s chart of average bitcoin dormancy, 7-day average, showing the moment Tesla purchased BTC. There can be seen an abrupt drop in dormancy just before the purchase, down to November 2020 level. It’s still moving between the November and December levels.
As reported, there is quite a lot of debate in the crypto space and outside of it about possible effects Tesla’s BTC purchase and its head’s, Elon Musk’s, tweets have had on crypto and their price, specifically BTC and dogecoin (DOGE). On the same day the purchase was announced, February 8, BTC went from the USD 38,000 to the USD 46,000 level. A much smaller price rise, followed by a drop, was seen last week after Tesla had announced it would start accepting payments in BTC.
In a recent Real Vision interview, Woo noted a great number of wallets just hodling BTC without ever selling them, and these often belonging to just every-day individuals holding their coins. But recently, there’s been a larger move of coins from the exchanges and into self-custody, which is a sign of institutional players and high-net-worth individuals coming in, he said.
‘History in the making’ and myths
And as early investors hodl, another old discussion over BTC as a hedge and store of value has resurfaced recently.
In the above-mentioned Real Vision interview, a prominent analyst and CEO of trading firm Factor LLC, Peter Brandt, said that his goal as a trader used to be accumulating more USD, now finding it “a wrong goal” as USD is “the weakest […] most depreciating asset in the world,” he said, adding:
“My mindset has really changed within the last year in terms of moving from bitcoin as a trade to bitcoin as a measure of wealth.”
Brandt said that we’re witnessing “history in the making” and “everybody that’s involved in bitcoin can know they’re really taking part in history,” explaining: “This is just unbelievable. People get caught up in the daily motion and the daily moment of bitcoin without realizing we’re seeing a market advance, unlike anything we’ve really seen before. To have four parabolic advances on a log scale in the course of a ten-year period is just unheard of. I would challenge anybody to find a price chart of any asset or any commodity that has gone through this.”
Meanwhile, Northman Trader founder Sven Henrich argued that “one can make anything a store of value if enough people agree that it is, especially if there is limited supply,” giving rare post stamps and bottles of wine as examples. But is BTC a hedge against the global fiat system? His conclusion is that this is a myth.
Henrich warned that price increases, adoption and popularity don’t validate a long-term thesis, and do not guarantee a winner, and “as long as bitcoin keeps running higher everyone is convinced it is a hedge.” He stated,
“I submit the hedge argument is entirely unproven. Yes, percentage-wise bitcoin has performed tremendously on the way up since last year. But everything in our liquidity-soaked world has performed well and gone up. [F]or as long as equities keep rising on the heels of unprecedented stimulus and monetary intervention then bitcoin is just along for the ride. The real test would come if equities enter a cycle of severe selling and to see bitcoin then hold its own.”
In their latest newsletter, Glassnode also stated that bitcoin’s latest correction was a result of a general downturn in equities. But the question of what will happen to inflation is an important one to consider when looking at the future performance of the stock market and BTC, they added. Currently, markets are seemingly bracing themselves for a significant rise in inflation. Yet, with the excess printing of fiat, “BTC is already challenging gold as the investor’s choice for an ideal inflation hedge.”
“The Fed’s change in focus and policy regime is forcing investors to once again tackle inflation fears, which is great news for Bitcoin,” said Glassnode. And it remains to be seen if “the March and January cycle’s repeat, where people will invest excess income into the markets, or will this time be different.”
Per Chainalysis data, BTC inflows to exchanges this past Sunday reached BTC 28,860, or the lowest level in 365 days.
Meanwhile, Senior Commodity Strategist at Bloomberg Intelligence, Mike McGlone, argued that BTC is becoming a global digital reserve asset, perhaps transitioning toward a risk-off asset.
#Bitcoin in Transition to Risk-Off Reserve Asset: BI Commodity — Well on its way to becoming a global digital reserve asset, a maturation leap in 2021 may be transitioning Bitcoin toward a risk-off asset, in our view. pic.twitter.com/Ycr1LSqEAJ
— Mike McGlone (@mikemcglone11) March 26, 2021
While McGlone does not rule out that BTC might peak at around USD 400,000 this year, Brandt said in the interview that BTC may eventually reach a price of more than USD 200,000. At the time of writing (14:31 UTC), BTC trades at USD 58,009 and is up by 4% in a day and less than 1% in week. It’s up by 25% in a month and 827% in a year.
The Cycle Started, Mike Novogratz Says – Bitcoin Boom Is Here; Jack Dorsey Boosts BTC’s Price
Mike Novogratz is one of the essential names in the crypto space which is celebrating the booming price of Bitcoin.
Check out what he had to share with his followers and Twitter fans:
Crypto wealth is approx 50bps of global wealth. That means if you don’t have at least 1/2 percent invested in crypto you are short the global benchmark. Most institutions are still at 0. As they move in, that number will go to 1 then 2 then….
The cycle has started.— Mike Novogratz (@novogratz) October 16, 2021
Someone hopped in the comments section and said this; ‘Anyone who has not yet embarked on the crypto band wagon is a simple minded idiot who knows nothing about markets, freedom or wealth creation.’
Jack Dorsey boosts the price of BTC
It’s been also revealed that Jack Dorse said that Square could build a BTC mining system – this obviously triggered a more massive price race for the king coin.
At the moment of writing this article, BTC is trading in the green and the king coin is priced at $61,118.15.
CNBC online publication just noted that Square CEO Jack Dorsey said late on Friday the company is considering jumping into BTC mining business.
Dorsey tweeted that the company is considering a “bitcoin mining system based on custom silicon and open source for individuals and businesses worldwide.”
Square is considering building a Bitcoin mining system based on custom silicon and open source for individuals and businesses worldwide. If we do this, we’d follow our hardware wallet model: build in the open in collaboration with the community. First some thoughts and questions.— jack⚡️ (@jack) October 15, 2021
Dorsey’s goal would be to make crypto mining more accessible. We suggest that you check out the complete thread that Dorsey shared on his social media account in order to learn all the available details.
Pantera Capital’s Dan Morehead: Bitcoin (BTC) Already Up 100% in This Bull Run
How big is median increase in Bitcoin (BTC) price in bullish market phases?
As Bitcoin (BTC) reclaims $62,000 level, Dan Morehead, CEO of the first-ever cryptocurrency-focused VC firm in the U.S., shares the comprehensive statistics of the last six bull runs for Bitcoin.
Bitcoin (BTC) price doubled in 87 days: Bull Run 2021
According to the latest tweet by Mr. Morehead, the Bitcoin (BTC) price witnessed a 2x increase in the first 87 days of the ongoing bullish wave.
#bitcoin at $61,000 is 2x from where we mark the start of this new bull market in July.
For perspective, the median bull cycle went up 15x over 300 days.
More thoughts on the state of the market here: https://t.co/g46sxp7Qe6 pic.twitter.com/Iy96sJvZzO— Dan Morehead (@dan_pantera) October 15, 2021
Unlike many other experts, Mr. Morehead identifies two separate “bull run” phases in 2020-2021. During the previous one, between March 16, 2020, and April 14, 2021, it took 394 days for Bitcoin (BTC) to increase its price 13x and print a new all-time high.
According to his infographic, the most impressive rally ended with a 106x increase of the orange coin’s price in 2015-2017.
That said, the median Bitcoin (BTC) price bull run lasted for 300 days and increased the “king coin’s price” by 15x.
Will Bitcoin ETF mark the top of the BTC cycle?
At the same time, according to “The Next Price Era” letter issued by Pantera Capital on Oct. 6, 2021, the hotly-anticipated approval of Bitcoin (BTC) ETFs is listed amidst the possible “sell the news” events.
Mr. Morehead noticed that the launch of CME Bitcoin Futures and Coinbase direct listing triggered painful bear markets:
Will someone please remind the day before the bitcoin ETF officially launches? I might want to take some chips off the table.
As covered by U.Today previously, similar statements were made by CNBC’s Jim Cramer.
The seasoned analyst also revealed his plans to “cash out” 50% of his Ethereum (ETH) bags.
Bitcoin Will Significantly Underperform Altcoin Market As New Crypto Price Era Unfolds: Pantera Capital’s Dan Morehead
The founder and chief executive officer of Pantera Capital says that investors can expect altcoins to outperform Bitcoin (BTC) in the long term.
In a recent edition of Pantera’s Blockchain Letter, the head of the digital asset management firm outlines Dan Morehead’s key quotes from the SALT 2021 conference in New York. During the conference, Morehead said that even though his company has greatly profited from BTC, he emphasized that most future crypto gains will come from altcoin investments.ADVERTISEMENT
“My perspective is: Bitcoin has been amazing – Pantera Bitcoin Fund is up 67,000% since inception. However, I think the majority of future gains will be from tokens outside of Bitcoin. I know that sounds heretical to some people here, but that’s my professional opinion.”
Morehead compares the rise of Bitcoin and its competitors to that of the tech industry boom during the late 1990s.
“It’s like saying in 1998 that [the] majority of future tech gains would come from outside Microsoft.
At the time, Microsoft was worth $218 billion, Apple $3.5 billion, Amazon was $2.2 billion. Google and Facebook were zero – they didn’t even exist. In the years since Microsoft did great – it went up 10x. However, 80% of the tech gains in these five stocks came from outside Microsoft.
That’s the view I have here – I think BTC is going to go up a ton – like 10x. It’s a great investment…[but] I think the broader portfolio is going to outperform.”
At time of writing, BTC has a market cap of $1.156 trillion while all altcoins combined have a market cap of $1.327 trillion, according to CoinMarketCap.