This is an opinion editorial by Mickey Koss, a West Point graduate with a degree in economics. He spent four years in the Infantry before joining the Finance Corps.
Sorry guys. Time to pack it. Bitcoin is dead again.
was a joke And for Peter Schiff’s sake, I’ll leave the gold 10-year chart below just for fun. Pretty wild ride for a 17% gain over the past decade. I thought these sleepers should have been given less time preference?
In my original article, I discussed the difference between signal and noise and how mass media encourages clicks through misleading headlines. I decided to write a follow-up discussing the bitcoin price signals I’ve seen over the past week or two.
As all benchmarks lose their mind over the recent market crash below the previous all-time high, I am trying to remain objective by identifying hidden price signals through fear articles spread all over the internet.
price vs market cap
Doing a little research on the coin market cap, you can clearly see the price of bitcoin breaking past all-time highs amid massive capitulation, liquidations and selling in general bearish sentiment.
If you convert the chart to market cap instead of price, it paints a slightly different picture.
While the shapes look similar, you can see the difference more clearly if you dig into the numbers. In 2017, bitcoin peaked at $14 billion in 24-hour volume with a $296 billion market cap. As of June 19, 2022, bitcoin is down (for now) at a market cap of $367 billion with $44 billion in 24-hour volume.
If you keep averaging dollar costs during this period, you not only capture a larger portion of a reliably enforced, digitally scarce network, you will also have access to a more liquid value network than if you had Pass your hard-earned coin.
Wallets, HODLers, and Hash Rate Oh My
Wallet growth is also on the rise. The trend is clearly up and to the right, with a bit of noise on the right tail, experiencing an increase of around 45% over the past two years.
In addition to non-zero wallet growth, wallets with 0.1 to 1 BTC have been increasing since July 2021. In my view this indicates steady growth of serious plab-level investors, rather than a pattern of panicked tourists leaving the market. Perhaps the skin in the game encourages the proof of work required to learn the value of bitcoin, rather than just focusing on the price.
In terms of HODLers, the amount of bitcoin held by long-term holders has increased by about 20% since April 2021 and remains relatively stable, even slowing from the all-time high last fall. Despite grinding. It doesn’t seem too slow to me. Sellers barely dented long-term holder supplies.
Chut has the final hash rate. There are many sensational articles about the declining hash rate and the dedication of miners. If you actually read the article, it’s not that shocking. The hash rate has gone down which hasn’t been seen for almost four months. Shocking, disgusting.
Would Clemente paint a darker picture, yet my conclusion is still the same. If I remember correctly, bitcoin was still secure two years ago and was able to survive attack and exploitation. As miners exit the network, the difficulty should adjust downward in the coming weeks, making it more profitable for those able to hang in there. It is a self-improvement system.
Bitcoin is not only protected by a wall of pure energy through miners. It is also protected by a vast army of rare and expensive computing equipment; Tools are also scarce.
Even if you miraculously had the power infrastructure to attack the network, luckily you had your hands on computing power. I think we’ll be fine.
Despite the recent drop in the hash rate, the macro trend is still up and to the right. As SimplyBitcoin’s Nikko likes to say, incentives are stronger than coercion. Incentives take time to play out. Don’t let ephemeral noises scare you off your situation.
stop eating whales
“We some, we some happy, we band of brothers; for him today [HODLs their stack] I will have my brother with me” – King Henry V on Bitcoin, circa 1599
Stop feeding the whales. As traders and tourists panic and sell their piles, the whales begin to feast. What do they know that you don’t? They are seeing adoptions increasing almost every day.
Warren Buffett says be afraid when others are greedy, and be greedy when others are afraid. How about this: Dollar-cost averaging and be greedy no matter what other people think or feel. (Maybe a little extra greedy when everyone else is going crazy, like right now).
Never forget the constant devaluation of your dollar. Before the big boys really start figuring it out, stake your claim to totally rare digital real estate. I know that’s what I’ll do. When in doubt, stay calm, zoom out and stack the sets.
This is a guest post by Mickey Koss. The opinions expressed are solely their own and do not necessarily reflect those of BTC Inc. or Bitcoin Magazine.