Paul Tudor Jones II’s investments, Square’s investments, MicroStategy’s investments, the arrival of PayPal and the arrival of JP Morgan Chase’s new cryptocurrency. All of this in the middle of a pandemic. News of all of these events has reached the ears of Wall Street. The word “Bitcoin” sounds like thunder. It is not very difficult to understand the reasons for the current climate of optimism. Of course there are reasons for optimism.
But the slowdown in recent days is evidence that we cannot easily fall prey to greed. Let’s take it easy. Bit by bit. The road is long and full of ups and downs.
Now let’s talk about the most read news of the week.
As is customary in these cases, we know the sin but not the sinner. An anonymous hodler has just completed the largest dollar transaction in Bitcoin’s history. We’re talking 88,857 BTC to be precise. And the coins were confirmed in block 654,364 on October 26, paying a commission of only $ 3.58. The transaction broke a record in fiat currency. The previous record was set last April by a Bitfinex account.
The honor of being the highest transaction in BTC is held by the Mt. Gox Exchange in 2011 for an amount of 550,000 BTC with a current value in fiat of $ 1.32 million. Times change.
What I liked best about this news is that the event was reported but no responsibility is attributed to the whale regarding the price of Bitcoin. The mysterious whale in this room is often used as an explanation for what has no explanation. Fortunately, we did not get caught in that temptation on this occasion.
If Apple’s Tim Cook commented in an interview that Apple’s value (currently valued at more than $ 2 trillion) would be $ 8 trillion in the next few years, we’d say he’s exaggerating. Analysts will likely receive your estimates with great skepticism. Because increasing in millions is not the same as increasing in billions. A billion dollar company could become a 200 billion dollar company in no time. But jumping from 200 billion to 8 billion is an entirely different achievement.
Let’s say we lead a sedentary life and one fine day we start jogging to record our process in a journal. In the first few months we will notice exponential processes. Our physical endurance has been multiplied many times over. And after a few months we will certainly be faster. We could be so good that you can think of races in the next Olympics. If we use our initial process to create our projections, it means that in 10 years we would be running at the speed of light. In other words, we forgot to consider the limits of physics and biology. In the bitcoin community, we often forget to consider capital limits when creating projections. We make the projections assuming that capital is infinite.
Bitcoin in 500 thousand, in one million and in 10 million. Billions are spoken of as if they were grains of rice. Gold has a capitalization of more than $ 8 trillion. But gold plays a key role in the world economy. Many things have to happen first for Bitcoin to achieve the same status. It’s not about writing numbers in a calculator.
The Winklevoss twins are a stakeholder. They are Bitcoin holders, like many of us. It is in our best interest for Bitcoin to grow in value. However, sometimes you have to step on the floor. And remember from time to time that the capital available in the world is not infinite.
All of a sudden, it’s too early to speak of $ 500,000 per unit. However, the goal of 20,000 is a much more accessible goal. In 2017, Bitcoin fundamentals didn’t justify this rating, but I think we’ve grown enough to deserve that price now. This is not the first time we are here. We were here in the past and soon regressed. I’m afraid it is too early to win. We need to do a lot more scans and tests with the price first. It won’t be easy and we have yet to see how we end the year.
But everything seems to indicate that 2021 will be the year that our old all-time high will be broken. Now that we’re in the euphoria, many think we’ll get there in a couple of rallies. But the battle for 20,000 will certainly be tougher than expected. The good news is that today we are closer than ever. This time we were able to cross the finish line and keep it.
Well, it is obvious that after such an ascent we found a ceiling. The moment your neighbor and your grandfather’s friend call you to let you know that they are thinking of buying Bitcoin is when you find out that greed is going through the roof and the price will go down. The point is not that there are sales at the top. That is normal. A lot of us sold something upstairs. The interesting thing is to see the strength of the new support. We could fall more. The correction, however, was extremely modest. I mean it wasn’t such a massive sale. Good sign.
Here is a problem. Old tools are used to regulate new instruments. This implies that everything is more interpretation than law. This poses a problem for everyone as the rules of the game are not very clear. It’s not good for the authorities. And it’s not good for bitcoin. Regulatory ambiguities have a negative impact on the industry. And there is never a lack of a regulatory authority officer who wants someone’s head as a trophy to justify his salary.
Part of the problem is that regulators are at a snail’s pace with the new rules. And the bitcoin community is too anarchic to come up with collective proposals. That means that crypto companies are on hold. In the absence of regular clarity, any action can be a mistake.