This week in Bitcoin
This Week In Bitcoin is a new segment that covers the events of the week that occurred in the Bitcoin industry, covering all the important news and analysis.
Although bitcoin posted relatively steady gains over the past week, climbing to nearly $ 40,000, it was only a matter of time before Elon Musk began his campaign of fear, uncertainty, and doubt (FUD) again. tweeting a breakup meme along with the Bitcoin hashtag early Friday morning, which caused the price of bitcoin to drop as much as 7%. Of course, this was to be expected, as Musk seems not to be reluctant to spread the word about FUD, as he had previously done with Tesla shares before the Securities and Exchange Commission (SEC). came calling.
As the market readied for Bitcoin 2021 in Miami this weekend, it looked like there would be little development during the week outside of the announcements at this conference. In fact, the president of El Salvador announced that he will introduce a bill that would implement bitcoin as legal tender, becoming the first to do so and paving the way for others to follow. While this was major news coming out of the conference, there was more news outside of Bitcoin 2021: Google lifted its 2018 ban on cryptocurrency ads on its network; Norway’s Finance Minister suggested an imminent bitcoin breakout; Coinbase integrated its debit card with Apple and Google mobile wallets allowing bitcoin payments; and Paxful launched Paxful Pay, allowing merchants to accept bitcoin as a payment method.
Chart of the week
Bitcoin has been preparing for a breakout this week, approaching $ 40,000 before Musk decided to rain on the parade. Coupled with the continued FUD, the current drop is nothing new if you are familiar with the movement of bitcoin over the last decade. The chart above, courtesy of Bloqport, looks at the 2017 bull run and clearly shows that there were several sizable drops in the run to $ 20,000. The current bull run is no different as well, although this time there are more eyes and hands on Bitcoin. , there is no reason not to expect a breakup soon.
Bullish: Short term
As I mentioned last week, the current bull run is far from over, and experts like Cathie Wood agree. More and more people are suggesting that a price break is imminent, so why should we consider that not the case?
El Salvador’s decision to “legalize” bitcoin and make it legal tender in the country is incredibly optimistic. As the first country to do so, El Salvador will not only act as a “guinea pig,” but will also pave the way for other countries to follow. In all likelihood, emerging markets will be the first to do the same, especially those that use the US dollar as a reserve currency. America’s decision to issue more bonds and print more money will impact the value of the dollar and affect those who depend most on it. El Salvador may be the first of many countries to adopt Bitcoin.
Google’s lifting of the cryptocurrency ad ban will have a huge impact on the market in the coming months as it will be easier to collect impressions on Bitcoin content. Similarly, as Coinbase, Paxful, and others follow PayPal to enable payment for goods and services using bitcoin, adoption is likely to grow, even if most staunch bitcoin users would suggest HODLing. Naysayers who have spent years saying that bitcoin does not qualify as a currency because it cannot be spent anywhere will be reassured, just as they do when the price rises rapidly.
Institutional investors are seeing a surge in interest in assets like bitcoin, with Standard chartered Y Guggenheim Investments both looking towards the introduction of funds with exposure to bitcoin. Then there is the Taproot update that appears to be a done deal for the Bitcoin network as more and more miners signal their support. Taproot will bring more privacy, lower transaction fees, and more flexibility around smart contracts on the Bitcoin network.
Bullish: long term
I am revising my long-term outlook from last week to bullish. Although this bull run will eventually peak and see a considerable correction in the near future, there is growing hope for bitcoin in the long term.
As well as miners moving to more “greener” equipment and sources of electricity, the favorable adoption of bitcoin in states like Texas and countries like El Salvador is likely to generate more sovereign entities to follow suit. Businesses moving to accept bitcoins will not only benefit consumers and merchants alike, but the market as well, despite its volatility.
As the legal framework begins to form around the world for bitcoin, we are likely to see more investors join the fray. Whether Bitcoiners like it or not, increasing numbers of institutional investors investing in bitcoins are likely to attract more individual investors as the former bring more security and trust to the community for the latter.
Saying things like “look at the big picture” or “every cloud has a silver lining” may seem like a cliché, but it is true when you approach the current state of the market. Yes, it would be great to see a breakout and bitcoin break above $ 65,000 in the next week or two, but it’s important to take a step back and look at what’s to come.
Bitcoin’s performance may not look too favorable with the dips and sideways movement over the past few weeks, but it has been relatively stable. I am sure the news and events of the past week have not been included in the price, although it is unclear if that is because newcomers are selling out in a panic or the whales are slashing the price. What is clear is that Bitcoin is seeing a favorable reaction from the world. Countries are opening up to the idea of Bitcoin and big companies are joining in.
Yes, Bitcoin still has a long way to go in terms of mass adoption, but it’s easy to forget that its market capitalization is in the hundreds of billions of dollars. The world’s leading investors and companies keep it on their balance sheets or are considering doing so. One thing is for sure: Bitcoin has already made its mark and is here to stay. No amount of FUD, misinformation, or “experience” can deny that.
Overall, the short term looks bright and, to use a phrase I read on Twitter, let’s shake “May hands” and take bitcoin to the moon.
This is a guest post by Dion Guillaume. The opinions expressed are entirely my own and do not necessarily reflect those of BTC Inc. or Bitcoin Magazine.