2021W48 - WTF has happened in bitcoin this week?
Bitcoin is going to be more than fine.
TLDR: Bitcoin Dip, Nations and Public Companies buying the dip, Plebs buying the dip, Miners accumulating bitcoin for their reserves.
Hey there niblings, it’s uncle Bam again, with a summary of the most insightful events in the Bitcoin space. Back at it again digesting all the important news for you.
I feel the need to talk about two important topics this week, one which affects all of us as savers, but another one that affects every single human being. Im aware that we just experience a dip, and bitcoin’s volatility might get scary, but throughout this piece you will realize:
Bitcoin will be all right
People need bitcoin, and we shall do our best to make it better.
It is quite simple, inflation is kicking in, and the great leaders who never lied to us, have just told us that:
“It is time to retire the word transitory when describing inflation” - Jerome Powell, Chairman of the Federal Reserve.
So what does this mean? The thing is simple, fiat currency is not hard money. If you utilize a store of value (money) that is easy to inflate, then you will end up having no value left. This is happening all over the world. More than 1.4 billion people on this planet are currently living under double, triple or quadruple digit inflation, experiencing the value of their savings diminish over time and often trying to find an escape towards U.S. dollar which is still considered the strongest currency of them all, which in turns allows the U.S. central bank to print excessive amounts of dollars with lesser repercussions, in other words, exporting inflation to developing countries.
“History has shown that governments will inevitably succumb to the temptation of inflating the money supply.” - Saifedean Ammous
Bitcoin, is a win and help win system model. You can’t decide to inflate the currency, each bitcoin you buy, is a bitcoin that can’t be bought by someone else. It takes energy and time to create new bitcoins, the issuance is ruled by math and is decreasing every four years making it the scarcest asset on earth.
When you buy bitcoin, you help every single other participant of the network to experience appreciation by taking supply out of the trading market, while helping yourself by saving for a prosperous future.
So there is a great incentive to buy, utilize it, but not selling it back for fiat currency.
But why is it crashing down? And does it matter? ..
During this past week..
1. MicroStrategy, ran by the chad stacker Michael Saylor, has added 7,002 bitcoin to its holdings in a purchase of $14.4 million, acquired at an average price of $59,187 per bitcoin. With these new purchase, the company currently holds 121,044 or 0.57% of the total bitcoin supply
2. El Salvador’s president, Nayib Bukele, has announced to have purchase 150 more bitcoin for the country’s balance sheet.
3. Justin Sun, bought the bitcoin dip to accompany El Salvador.
To which Nayib responded to match with 50 more coins.
Justin is known for being an early bitcoin investor and the leader of TRON, although we can’t confirm he actually bought this dip, we can at least confirm he could have the funds to do so.
4. Hut 8, the Canadian miner has deposited all of its 256 bitcoin mined in November into custody, and kept true to its word early this year, by sustaining a "HODL" strategy. The company now holds 5,242 bitcoin in reserve.
5. Bitcoin Miner Griid Infrastructure LLC announced they have entered into a definitive merger agreement with Adit EdTech Acquisition Corp. to list on the New York Stock Exchange (NYSE). Through this merge, the value of the combined companies lies at about $3.3 billion.
6. Riot Blockchain, the bitcoin mining company, buys electrical supplier Ess Metron for $50 Million.
7. Bitfarms has surpassed 3,000 newly issued coins in 2021, and 96% was deposited into custody.
8. The First Bitcoin ETF in Canada is now allowing Canadians to receive a monthly bitcoin yield through a new ETF listed under the ticker BTCY.B.
9. 2TM, a Brazilian Bitcoin exchange, raises $50 million in extension round.
10. Jack Dorsey steps down as the CEO of Twitter, he will now be fully focused on bitcoin.
Square, the payments giant, will change its corporate name to Block In. Square Crypto, has changed its name to Spiral.
“The company is only focused on bitcoin, and it made sense to reflect it through their name. Spiral can be seen as an ever growing mechanism starting from a single point, encompassing more and more spaces until it ends up reaching everything”
11. Compute North will host over 100,000 of Marathon’s miners across the U.S., helping the firm’s operations become 77% carbon neutral.
12. Kozum, Croatia's largest food retailer has enabled bitcoin as a payment option in its online shop.
“Cryptocurrency owners can buy and pay for groceries, hygiene, and household items and other products from the rich offer of our online store with more than 12,000 products" - Kozum
13. Goldman Sachs and other Wall Street banks are exploring ways to do institutional cash loans with bitcoin as collateral.
14. Michael Saylor explains bitcoin on Tucker Carlson Today. This could be the best video to introduce newcomers into bitcoin, and having a wide understanding of the effect inflation has on our currencies and our lives.
As a summary note..
Every week Uncle Bam brings you the headlines of what is happening on the bitcoin space. And whenever there is a dip in the market, it seems that people forget everything all the progress and development that is actually going on, and enter into a overwhelming thinking state of despair:
-”The cycle is over..”, “I should have sold”.., “Im so weak”,.. “I don’t even understand bitcoin”.. “Im just an island boi”.. etc etc.
It all just depends the time frame we have in our heads, and if we haven’t adopted by now a low time preference mindset, then it is time to do so through practice and conviction. Bitcoin is the greatest asset ever existed, with less restrictions on trading activity compared to the traditional markets. Sadly there are options to use incredibly high amounts of leverage, meaning people could get exposure to the appreciation 20x, 50x and even 100x the amount of their collateral, making them susceptible for liquidation and to force sell their “not so beloved” bitcoin. So there is that, people get greedy, liquidations happen, and we experience big corrections in the market.
But just remember MANY people are not selling their bitcoin.
And it seems that small players are accumulating harder and harder, making us “plebs” become a bigger representation of the network, step by step.
With addresses below 1 bitcoin growing to represent 5% of the entire network, metric which was 3% at the end of 2017.
An army of strong believers, who harness the opportunity of every dip classifying it as “a bitcoin sale”, and trying to buy as much as possible, as if they were not going to see bitcoin at these discounted prices ever again.. Which eventually it will become a self fulfilling prophecy.
In these chart from Willy Woo, it displays how the “shrimps” or players under 1 bitcoin, have been accumulating on the previous two downturns, differently from 2017, when they were selling and flocking away.
So what has changed? Why are people buying the dips with more enthusiast as couple of years ago? I guess bitcoin is just growing in adoption, and slowly becoming a recognized store of value. Maybe people are getting tired of politicians to tell them things will be alright, and then experiencing a severe loss of purchasing power through inflation. Or maybe bitcoin is just becoming hard money, and people will tend to adopt whichever money seems a stronger fit.
“History shows it is not possible to insulate yourself from the consequences of others holding money that is harder than yours.” - Saifedean Ammous
Have a great weekend niblings.
Stay humble & stack sats.
How to buy bitcoin? (With Relai through Revolut)
If you are in Europe, I made a pretty simple guide with 3 steps, which avoids you having to set up an account on an exchange, give them all of your personal information, plus custody of your funds.
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