Have you looked at the Bitcoin price recently?!
This article is an argument against all of the mainstream journalists who finger-point to the Bitcoin price but don't compare it to the current market situation.
This article is a dedication to the fun and amazing time I had at Bitcoin Amsterdam. The title is a statement by the Financial Times journalist Jemima Kelly.
She was a guest on one of the earliest panels on day 2. Originally the panel was dedicated to Bitcoin’s perception in the media landscape, but it quickly became a shouting fest between plebs and journalists.
It would be very easy for me to bash Jemima, but this is not what this article is about. I want to use her statement as a nocoiner and show how that thought is not only simple but irresponsible to have. Bitcoin has crashed since its all-time high, but there is a lot more to unpack in the financial markets as well.
The price is down, but is it related to speculation or something else?
Bitcoin’s price is the main attraction for many people. Most plebs who got on board with it got in it for a quick return. Depending on when you got in, this was achievable within 10 months.
Take March 2020 as an example. A lot of people got onboard at $3000 per Bitcoin and rode the wave up to $30’000. If they cashed out, their return was 10x. Something you usually only get, if you’re on the inside of a fast-growing business that just IPO’d. This is a big problem for Bitcoin. Many people expect this kind of return every year, however they ignore the fact that Bitcoin has its own cycles and more often than not is in a downward trend.
Especially the last two years, with unlimited money printing and government intervention in the markets, resulted in many investments in risk-on assets. Bitcoin is one of those assets and has correlated more and more with tech stocks or indices. Whether that be the NASDAQ or stocks like Apple. Most of them also had a massive bull run between 2020 and 2021.
However, we are living in another reality these days. Wars, corruption, and incompetence of bankers are the main reasons, we see lower numbers every day. This is essential for this bear market. Bitcoin is trending down these days because it’s one of the first positions in many portfolios which is easy to liquidate.
You saw that in the first weeks of the Ukraine war. People were afraid of financial unrest and sold most of their risk-on assets. Tech stocks and indices like NASDAQ and Bitcoin were the ones tanking very quickly. The only real issue within the Bitcoin circles was the time between May and June 2022. A time in which we saw the incompetence of large institutions and a central point of attack with lending platforms.
Once the dust settled, Bitcoin found itself between $17’500 and $20’000. A range in which the price has been trading for a few months now. This resulted in it being less volatile than big indices.
I often like to compare Bitcoin to the financial markets, as this is the system it’s trying to replace. Personally, I believe that we will never be able to beat that system. Banks can simply print more money and have more power, but Bitcoin is a freedom technology for third-world countries and allows them to create parallel universes. I might be wrong about this one, but for now, I see an alternative to the legacy system and not a replacement. That doesn’t mean that we can’t compare it to traditional assets.
Let’s take a look at the Bitcoin price in USD and 30-year government bonds in the UK. These bonds are usually a safe haven for institutional investors and are a key indicator of the UK economy. Even though we’re in a recession, you would never expect them to be down by more than 15% right? Have a look at the following image:
This is a comparison between Bitcoin in white and the bonds in orange. As you can see, year to date, the bonds are down 44% as well! Bitcoin is down 59%, which is what you can expect from a risk-on asset.
Which is something many risk-on investors don’t worry about, as these kinds of assets are very quick to respond and often recover in the next bull market. Bonds however are different. They need a big push by central banks or some form of legislation to make up for that loss. Which is what you see with the Bank of England nowadays.
Let’s also compare Bitcoin to other risk-on assets. This might be an easier comparison than the one to state-owned assets. I chose two stocks for this comparison. One is Amazon in orange and the other is Netflix in teal.
Why did I take two assets to compare? Simple, I wanted to highlight how Bitcoin is in between two giants in their industries. Netflix is without a doubt a household name in the media industry and Amazon is the king of online shopping.
If you take a close look at the chart pattern of Bitcoin and Netflix, you would realize that they’re almost the same. Yet, we don’t read about Netflix’s decline on a daily basis.
Amazon and Bitcoin were pretty spot-on up until mid-June. This is when we saw the liquidations in the crypto markets. A crisis that resulted in a small dip for Bitcoin. If that didn’t happen, I’m sure Bitcoin would follow a similar price pattern.
Now, I’m not an analyst or chart specialist. But doing something as simple as a comparison between all of these assets should show you that Bitcoin’s position in the market is not the one of a newbie anymore, but rather one of a veteran who’s playing along.
The signals are there, you just need to know where to look!
We don’t know what the future holds. But what we do know are the facts. If a nocoiner stops looking at the price only and starts understanding the mechanisms behind Bitcoin, he or she would end up realizing how strong its position on the market is.
This will only increase in the near future, as we have a new halving on the horizon, which will decrease Bitcoin inflation. Venture capital money is flowing into alternative mining infrastructures as well. I met one of these solutions in Amsterdam. They use heat and extensive energy from a mining farm to grow vegetables. Something mainstream outlets should feature, as this is a proper renewable energy solution.
Payment solutions like Strike have secured an $80 million Series B investment round to further expand their payment service. I haven’t even mentioned the growing interest of finance giants like BlackRock or Fidelity.
All of these are positive signals which will further strengthen the Bitcoin ecosystem. And might I add, how all of these investments have been made in a bear market. Imagine the demand, once the price picks up.
If every nocoiner would do that kind of research, they would end up realizing how thriving this ecosystem is and how we’re not here to kill the planet or rip people off with scams, but rather that we’re eager to build an alternative.
With that in mind, I really hope to see more nocoiner’s at Bitcoin-only conferences, as they show us plebs what we still need to do in the education space.
If you’re still unsure about Bitcoin or want to find out more about it, make sure to watch out for local meet-ups or grab a ticket to the next conference.