Introduction I tweeted the other day that I had an epiphany regarding Bitcoin’s (BTC) future price action (PA). Strictly speaking, that is inaccurate: one cannot have a sudden realization about something that hasn’t yet occurred. BUT, what I have had is a sudden attack of clarity about where I think where BTC is headed and how it will get there.
You make some good points, however, are there enough institutional investors to sustain the rally? There are millions of retailer investors. How many institutional investors are there?
"Given that BTC has a fixed supply (or more correctly, a very slowly inflating supply), PA is most correctly estimated by how (in)elastic the market is relative to the lot sizes that the current crop of buyers is seeking to acquire." - this is a profound insight
"the generational transfer of coins from OG whales to new whales is nearing its completion" - I am curious what data you have to support this claim?
"virtually all new institutional investors entering the market here forward will be able to buy their desired lot sizes from only one source: the 20% float, which is held mostly by mid- and small-size retail investors (along with the +/- 900 new coins minted daily)" a great reminder when tempted by FUD.
"If the average retail investor during the late-2017 mania could afford to buy only 0.5 BTC when the price was $10K, what would the price of 1 BTC be if the current crop of institutional investors could afford to buy only 0.5 BTC?
ONE-HUNDRED MILLION DOLLARS ($100M/BTC * 0.5 BTC = $50M)." - I believe I understand the math, but I am not following why this is relevant. Probably just missing something. Where did you get $100,000,000 (I assume this is the pot of $ the institutional investors would bring in aggregate)? If so, why is it relevant that it would take $100,000,000 to buy one Bitcoin? Surely as they pile in they will but it cheaper than that. Thanks for any clarification on this.
"Not all of you are likely old enough to remember the so-called Great Financial Crisis in detail, but I remember it vividly. So many pundits at the time were calling for rampant inflation due to Fed quantitative easing, including our favorite punching bag, Peter Schiff, and yet it simply never materialized. In retrospect, it seems obvious now the reasons we didn’t experience (hyper)inflation." - for those of us not old enough to remember, and not precious enough to see the obvious reasons - why did we not experience (hyper)inflation?
All in all I thought the article was brilliant - thank you!!
You make some good points, however, are there enough institutional investors to sustain the rally? There are millions of retailer investors. How many institutional investors are there?
Some quotes and thoughts:
"Given that BTC has a fixed supply (or more correctly, a very slowly inflating supply), PA is most correctly estimated by how (in)elastic the market is relative to the lot sizes that the current crop of buyers is seeking to acquire." - this is a profound insight
"the generational transfer of coins from OG whales to new whales is nearing its completion" - I am curious what data you have to support this claim?
"virtually all new institutional investors entering the market here forward will be able to buy their desired lot sizes from only one source: the 20% float, which is held mostly by mid- and small-size retail investors (along with the +/- 900 new coins minted daily)" a great reminder when tempted by FUD.
"If the average retail investor during the late-2017 mania could afford to buy only 0.5 BTC when the price was $10K, what would the price of 1 BTC be if the current crop of institutional investors could afford to buy only 0.5 BTC?
ONE-HUNDRED MILLION DOLLARS ($100M/BTC * 0.5 BTC = $50M)." - I believe I understand the math, but I am not following why this is relevant. Probably just missing something. Where did you get $100,000,000 (I assume this is the pot of $ the institutional investors would bring in aggregate)? If so, why is it relevant that it would take $100,000,000 to buy one Bitcoin? Surely as they pile in they will but it cheaper than that. Thanks for any clarification on this.
"Not all of you are likely old enough to remember the so-called Great Financial Crisis in detail, but I remember it vividly. So many pundits at the time were calling for rampant inflation due to Fed quantitative easing, including our favorite punching bag, Peter Schiff, and yet it simply never materialized. In retrospect, it seems obvious now the reasons we didn’t experience (hyper)inflation." - for those of us not old enough to remember, and not precious enough to see the obvious reasons - why did we not experience (hyper)inflation?
All in all I thought the article was brilliant - thank you!!