This week in Bitcoin
This Week In Bitcoin is a new segment covering the week’s happenings in the Bitcoin industry, covering all the important news and analysis.
Although Bitcoin has seen relatively steady gains over the past week, jumping to nearly $40K, it was only a matter of time before Elon Musk started his campaign of Fear, Uncertainty and Doubt (FUD) again, Tweet the breakup meme Coupled with the bitcoin hashtag early Friday morning, the bitcoin price plummeted by as much as 7%. Of course, this was to be expected given that Musk didn’t seem to resist a FUD rollout, as he had previously done with Tesla stock before the Securities and Exchange Commission (SEC) came knocking.
As the market prepares for Bitcoin 2021 in Miami this weekend, it looked like there will be few developments during the week outside of the announcements at this conference. Indeed, the president of El Salvador has announced that he will introduce a bill that would implement bitcoin as a 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; Norwegian Finance Minister Suggests an Imminent Bitcoin Hack; Coinbase has integrated its debit card with Apple and Google mobile wallets allowing payments with Bitcoin; And Paxful launched Paxful Pay, allowing merchants to accept bitcoin as a payment method.
Bitcoin was preparing for a breakout this week, as it approached $40,000 before Musk decided to rain in the show. Combined with the ongoing FUD, the current decline is nothing new if you are familiar with the movement of bitcoin over the past decade. The chart above, courtesy of Bloqport, analyzes the uptrend of 2017, and clearly shows that there are several big short-term declines up to $20,000.. The current uptrend is no different, and while there are more eyes and hands on Bitcoin this time around, it’s not There is a reason not to expect a hack soon.
Bullish: short term
As I mentioned last week, the current uptrend is far from over, experts say Kathy Wood agree. More and more people are suggesting that a price breakout is imminent, so why do we consider that this is not the case?
El Salvador’s decision to “legitimize” bitcoin and make it legal tender in the country is incredibly bullish. 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 suit. In all likelihood, emerging markets will be the first to follow suit, especially those using the US dollar as their reserve currency. The US move to issue more bonds and print more money will have an impact on the value of the dollar, affecting those who depend on it. El Salvador may be the first among many countries to adopt Bitcoin.
Google’s lifting of the ban on cryptocurrency ads will have a huge impact on the market over the coming months as it will be easier to collect impressions on Bitcoin content. Similarly, as Coinbase, Paxful, and others follow PayPal in enabling payments for goods and services with Bitcoin, we are likely to see an increase in adoption, even if most die-hard Bitcoin users suggest HODLing. The naysayers who have spent years saying that bitcoin doesn’t qualify as a currency because you can’t spend it anywhere will calm down, like they do when the price is rising rapidly.
Institutional investors are seeing an increase in interest in assets like bitcoin, with Standard Chartered And the Guggenheim Investments Both are looking to enter funds with bitcoin exposure. Then there is the Taproot upgrade 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.
I am reviewing my long-term forecast from last week to the upside. Although this uptrend will eventually peak and see a major correction in the near future, there is growing hope for Bitcoin in the longer term.
Besides miners moving to “greener” equipment and electricity sources, states like Texas and countries like El Salvador’s embrace of bitcoin are likely to generate more sovereigns to follow suit. Companies moving to accept bitcoin will not only benefit consumers and merchants alike but the market as well, despite its volatility.
As the legal framework around the world begins to take shape for Bitcoin, we are likely to see more investors joining the fray. Whether Bitcoiners like it or not, the increasing amount of institutional investors investing in Bitcoin is likely to bring more individual investors, the former bringing more safety and community confidence to the latter.
Saying things like “look at the bigger picture” or “every cloud has a positive side” may sound cliché, but they are true when approaching the current state of the market. Yes, it would be great to see a breakout and Bitcoin cross $65,000 in the next week or two, but it is important to take a step back and see what happens.
Bitcoin may not have performed very well with dips and sideways movement over the past few weeks, but it has remained relatively flat. I’m sure the news and events from last week weren’t priced in, though it’s unclear if it’s because newcomers are selling out in a panic or whales are suppressing the price. What is clear is that Bitcoin is experiencing a positive reaction from the world. Countries are opening up to the idea of bitcoin and big companies are jumping on board.
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 hundreds of billions of dollars. The world’s largest investors and companies either keep it on their balance sheets or are considering doing so. One thing is for sure: Bitcoin has already left its mark and is here to stay. No amount of FUD, misinformation, or “experience” can deny this.
Overall, the short term looks bright, and to use a phrase I read on Twitter, let’s get rid of our “mayonnaise hands” and bring Bitcoin to the moon.
This is a guest post by Dion Guillaume. The opinions expressed are their own and do not necessarily reflect the opinions of BTC Inc. or Bitcoin Magazine.