7 Catalysts for a Bitcoin Bull Market in 2021
Institutions are coming. Paul Tudor Jones, an iconic Wall Street investor with tens of billions of dollars AUM, announced earlier this year his foray into crypto, allocating as much as 2% of his gargantuan portfolio to BTC.
Similarly, Ray Dalio has taken a hard stance since the beginning of this year, declaring his fear of the Federal Reserve’s Money Printing, trashing the prospect of cash, and disseminating QE’s effects on other markets. In his analysis, he stated a heavy propensity for hard money assets with fixed or limited supplies that serve as a store of wealth. When asked about Bitcoin, he responded “Bitcoin is not effective in either of those cases now,” referring to Bitcoin’s volatility. While Bitcoin’s wild swings still gives credence to Bitcoin as a store of wealth skepticisms, a quick glance at a Bitcoin logarithmic scale shows that over time, Bitcoin has seen diminishing beta and prolonged market cycles, which are the qualities of a maturing asset class attempting to find its fair market value.
Should Dalio finally be convinced to consider Bitcoin a comparable monetary hedge to gold, his taking an initial position would likely be in the same ballpark as Tudor Jones, and the announcement itself would only add ammunition to Bitcoin bulls’ statement that institutions are in fact coming.
Layer 2 “Lightning Network” successfully scales Bitcoin.
One of the principal arguments against Bitcoin and other cryptos as a medium of exchange in 2017 was slow transaction speeds and high transaction fees during times of high volume. The layer 2 scaling solution built on top of the existing Bitcoin blockchain is designed to process Bitcoin transactions orders of magnitude faster and reduce transaction fees to mere fractions of what they have been historically. Should the launch proceed without major fault, the daily hundreds of thousands of Bitcoin transactions and hundreds of millions in transaction volume should see be executed exponentially faster and cheaper for all parties indefinitely. This eliminates the inadvertent ‘cap’ where it no longer is financially viable to transact over the Bitcoin network. Faster transaction times and cheaper fees are huge advantages for businesses, merchants, and individuals who deal with high or even moderate volumes of transactions per day, allowing them a superior payments service at a reduced cost. If the Lightning upgrade is a success, its capabilities should sell itself, and a wave of businesses of all kinds could begin accepting Bitcoin as another payments option.
First Sovereign Nation to Hold Bitcoin Reserves
For centuries, nation-states have kept significant gold reserves hidden away in heavy-duty vaults guarded by armed soldiers for the commonly-known economic reasons: store of wealth, and emergency protection in times of currency devaluation (e.g. Venezuela). These reserves also allow a country an extra allotment of assets that, especially in uncertain times, can be traded or exchanged at a premium to nearly any nation-state or entity.
Bitcoin ETF Approval
As history has shown, when an asset becomes investable for the first time by retail investors through means of a publicly-tradable ETF, the asset tends to performance very well, if only for increased investor exposure. Grayscale’s Bitcoin Trust has already proven that there is institutional interest in Bitcoin, and increasingly so year over year, but an ETF would be even more universally accessible, widening the gates to which average investors can buy Bitcoin without signing up to an exchange.
FAANG conglomerates begin accepting BTC as payments
We’ve already started to see early stages of this as Twitter and Reddit have made initial integrations, but once global retailer Amazon, Video Streaming leader Netflix, Electronics juggernaught Apple, Big Data/Social Media giant Facebook, and others announce official acceptance of Bitcoin on their platforms, hundreds of millions of people’s attention will be introduced to Bitcoin for the first time.
Roger Ver re-backs Bitcoin Core
“Bitcoin Jesus” as he is commonly known, famously announced his allegiance to Bitcoin Cash during the Bitcoin Fork in 2017. He cited Bitcoin Cash’s more fungible properties and faster transaction times that align more closely to the original intent of Bitcoin as conceptualized by Satoshi Nakamoto in the Bitcoin white paper. Interestingly, in a recent episode on the Pomp Podcast, Ver exclaimed that he is not opposed to switching his allegiance from Bitcoin Cash to Bitcoin “Core” as the original Bitcoin fork is now known. However, this would only happen if Bitcoin Core’s layer 2 scaling solution “Lightning Network” network upgrade successfully allowed Bitcoin to scale transaction times and reduce transaction fees by orders of magnitude as they are theorized to be capable of. In the event the launch of the Lightning Network is a success and Bitcoin Core outperforms Bitcoin Cash as a fungible medium of exchange, Ver’s return to the Bitcoin Core camp would be a momentous bullish factor and would probably consolidate a large group of followers into the Bitcoin camp once again.
Peter Schiff admits he was wrong about Bitcoin being Gold 2.0
As is usually the case when an asset enters the powerful, face-melting momentum of a third wave in an Elliott Wave Cycle, doubters turn believers, caving to their emotions for fear of missing out on further gains. Max Keiser recently presented a Twitter poll asking his followers at what Bitcoin price they believe Schiff will capitulate and panic-buy Bitcoin. If (when) Bitcoin’s next bull market is officially underway and setting new all-time highs, the pressure of opportunity cost of superior gains may be enough to persuade Schiff to finally concede Bitcoin’s outperformance of his precious gold and to take a sizable position in Bitcoin. This would be a big validation of Bitcoin as a comparable if not superior alternative to gold as a monetary and inflationary hedge asset, and his legion of gold bugs very well may follow his investment decision.
I take time out of my day to share these with the community completely free. If you enjoy these posts, please support the channel by “Tipping” this post below, or using either of the referral links below. They cost you nothing and give me a small reward, which makes me a little happier to share these personal analyses with you at no cost.
Originally published at https://www.publish0x.com.