Bitcoin Price Pumping This Week
Bull Market or Dead-Cat Bounce?
I’m old enough to remember when Bitcoin was trading at $17,900. Actually, that was last month.
Since then, the price of one Bitcoin has rebounded to $24,200 as of this writing on Wednesday. That’s a 35 percent surge in just a few weeks. Real head-spinning stuff.
Is the bull market back on? Circa 2021? Or 2017? Those were some parabolic moves. Bitcoin surged to $69,000 last year, and in 2017, shot up from $1,000 to $19,000. Say what you want about Bitcoin, but it keeps you entertained.
Moving in Tandem With Stocks - Still
Pet peeve: Bitcoin has recently been almost perfectly correlated to tech stocks. I’ve written about it many times. It makes no sense. I won’t go into the full-on rant again. Bitcoin and the NASDAQ stock index both started really pumping on July 14th.
Bitcoin should not be affected by corporate earnings, by interest rates, by supply chain issues, by inflation numbers. And yet, here we are.
As I’ve said many times before:
Bitcoin is so misunderstood.
And we are so early.
Is This Rally Just a Dead-Cat Bounce?
“The name dead cat bounce is based on the notion that even a dead cat will bounce if it falls far enough and fast enough. It is an example of a sucker's rally.” - Investopedia definition.
Bitcoin bears are saying that we are going lower, and that this recent pump is indeed just a dead-cat bounce. If I had to wager a guess, I’d say it is not just a “sucker’s rally” before we go to zero. There are too many knowledgeable, informed Bitcoin buyers out there that will keep stacking. They realize that the technology has a future and that no economic noise can harm Bitcoin.
Will We Be Making Plans For the $100K Parties?
Laser Eyes going back on? What’s the good news pumping the price of Bitcoin? Actually, Bitcoin just keeps doing what it has always done. The network runs perfectly, securely, without interruption. Bitcoin doesn’t care about the stock markets or economic indicators.
So what’s driving us higher? With all his bad economic news, mediocre corporate earnings, and inflation raging? I sincerely believe that it’s the ever-increasing adoption. More and more smaller players (“plebs”) are dipping their toe in the water and continuing to Dollar Cost Average into Bitcoin. The “DCA Army” has learned about Bitcoin and is committed to its future, regardless of the noise in the investment markets.
The accumulation by smaller holders and the number of Bitcoin addresses keeps growing, as evidenced by the following chart:
Have we reached a bottom for this cycle? I think we’ve reached a range that could be called a cycle bottom. With all the bad economic news out there, and with the meltdown of crypto exchanges and stablecoins, Bitcoin, The King, has held up remarkably well.
Do we take off to $100,000 this year? I don’t know, but Bitcoin has gone on runs like that before. And then some. I wouldn’t bet against it.
Tesla Sells 75% of Its Bitcoin for $936 million
That’s right, Elon Musk, who can’t keep his name out of the headlines these days, has announced that Tesla sold 75% of its Bitcoin holdings during the second quarter. The announcement came during Tesla’s earnings call, when it disclosed that they had crushed earnings estimates for the quarter. Tesla’s cost basis was about $30,000 per coin, so it seems they about broke even on the trade.
The selling was understandable, since he has a board of directors to answer to, and the company needed to raise some cash. Tesla still holds about 10,000 coins, worth around $240,000,000. I take that as a sign that he’s still a believer. It also shows major corporations that there’s ample liquidity in the Bitcoin market to withstand some selling.
That all seems very bullish to me.
This Month in Bitcoin History
In July 2014, the island nation of Jersey, between England and France, approved the world’s first Bitcoin investment fund. This made it possible for major investors such as pension funds and insurance companies to invest in Bitcoin.
"For institutions there are no options right now. This is institutional strength and it's an absolute world first." - Daniel Masters, Global Advisors Bitcoin Investment Fund.
The United States has still not approved a spot Bitcoin ETF fund.
Recommended Bitcoin Tools, Platforms, Podcasts:
Gemini - My choice for buying and HODLing Bitcoin, rated tops for safety and security. User-friendly platform and phone app. Earn Bitcoin rewards as well with the Gemini Credit Card.
Arculus - The crypto hardware wallet from Arculus is one of the best products on the market for storing your coins. Very easy to set up and to use, and very affordable.
Lolli - The Lolli shopping app lets you earn great Bitcoin rewards on practically everything you buy, whether you’re shopping on your phone, computer, or in-person.
Twitter - Follow The Bitcoin Files on Twitter at @BitcoinNewslet1 for all of my articles, commentary and links to my contributions to Bitcoin Magazine.
Medium - Check out my writings on Medium, including articles not featured in the newsletter. Join my 500 other followers who read and write about crypto. medium.com/@rickmulvey
Podcasts - To hear the top names in Bitcoin, and learn more than you could imagine, check out The Pomp Podcast with Anthony Pompliano, What Bitcoin Did with Peter McCormack, and The Wolf of All Streets Podcast with Scott Melker.
Issue No. 66, July 22, 2022
Rick Mulvey is a CPA, crypto consultant, and frequent contributor to Bitcoin Magazine. He writes about all things Bitcoin, and yells at the Yankees and Giants. He also runs marathons and makes wine, neither professionally.