For almost a week now, the price of Bitcoin has fluctuated in the range of $41K-$44K. A range that can have two meanings. It all depends on how you look at it. Those who believe in a bullish scenario, which I am, will tell you that this is an accumulation range and that the market is just waiting for a spark to start another uptrend.
For this to happen, the crucial resistor around the $46K will need to be bypassed, as I explained earlier: https://inbitcoinwetrust.substack.com/p/bottom-seems-in-for-bitcoin-price
Bitcoin will then need to break through the resistance around $49.5K to deal with the $52K resistance. Bitcoin may then break out of the range its price has remained in since early December 2021. As you can see, we are not there yet.
On the other hand, you have bearish advocates who will tell you that macroeconomic conditions will work against Bitcoin in the coming weeks and months. Inflation of 7% in America by December 2021, the Fed expected to raise key interest rates between 3 and 5 times in 2022, and economies that remain under threat from the coming variants of COVID-19.
The stock market even seems to be coming off its euphoria, although that will have to be confirmed as the S&P 500 is still around 4,600. We are far from a stock market crash on Wall Street. A rise in US 10-year Treasury yields is causing fear among some, but others believe there is still time to take profits.
While we wait to learn more about how this situation will play out, you can always check out the 3 scenarios I see for the price of Bitcoin in 2022: https://inbitcoinwetrust.substack.com/p/3-potential-scenarios-for-bitcoin
As always, no guarantees, but happy to feed your thinking.
Everyone is focused on the short-term price of Bitcoin
Having said that, I feel we are wasting too much time right now focusing on the short-term price of Bitcoin. You could say that I am somewhat responsible for this, as I write technical analysis on the short-term price of Bitcoin, while at the same time presenting scenarios for its price.
I'm just meeting the expectations of some in this market where it's hard to gain enough confidence to remain a HODLer no matter what. However, I always remind you that the best strategy for me remains the simplest: Buy Bitcoin, HODL Bitcoin, repeat .
Don't forget to send your bitcoins to cold storage to keep the private keys of your bitcoins in your possession. Not your keys, not your bitcoins . It would be a shame if the Bitcoin revolution was stolen from you by middlemen like banks or PayPal.
PayPal is currently in the headlines as the payments giant has just been sued by three individuals who accuse it of freezing their accounts and confiscating their fiat money without explanation. These three PayPal users just filed a federal lawsuit against PayPal.
We'll see what the outcome is, but it reinforces what I've been saying all along: don't buy bitcoins through intermediaries that prevent you from getting the private keys for your bitcoins . This would expose you to the type of risk where an intermediary can freeze the fruits of your labor for arbitrary reasons.
The Bitcoin market is facing the iceberg illusion
While extreme fear still dominates the Bitcoin market, I feel that Bitcoin is currently in the middle of an iceberg illusion. Let me explain through this illustration I just made:
As you can see, you have the tip of the iceberg on the surface where all the attention in the Bitcoin world is focused. All anyone is talking about right now is the price of Bitcoin or a potential bear market ahead. Instead of panicking, I encourage you to carefully follow 8 indicators to see when a potential bear market is about to happen: https://inbitcoinwetrust.substack.com/p/is-a-bitcoin-bear-market-imminent
Spending all this time focusing on the short-term price of Bitcoin, as well as FUD surrounding Bitcoin's impact on the climate and environment, you should make an effort to look at the tip of the iceberg. It's not easy, you could say. Fortunately for you, it's easier to see this for Bitcoin than for an actual iceberg.
All you have to do is take a step back. What will you see then?
Those with a long-term view can see the Bitcoin revolution going from strength to strength
You will see that Fidelity, one of the largest asset managers in the world with $4.9K assets under management, believes that more governments and maybe even a central bank may buy Bitcoin in 2022. I will let you discover this Fidelity blog post in detail , but here's a passage that stood out to me:
"We also think there's a very high-stakes game theory at play here, which is that if Bitcoin adoption increases, countries that secure few Bitcoins today will be more competitive than their peers." Therefore, even if other countries do not believe in the investment thesis or the adoption of Bitcoin, they will be forced to acquire some as a form of insurance. In other words, a small price may be paid today as a hedge compared to potentially much larger costs years down the road. Therefore, we would not be surprised to see other sovereign nation states acquire Bitcoin in 2022 and perhaps even see a central bank make an acquisition.
Then you'll see that Tonga has already paved the way legally for Bitcoin to be accepted as an official currency by the end of 2022. With game theory in play, I'm sure other countries will soon follow suit. As Fidelity says in its report, the first to embrace the Bitcoin revolution will be the most rewarded next.
Because that's how it always works with the Bitcoin revolution. You always pay your bitcoins at the price you deserve and your patience will always be rewarded.
You'll see that Jack Dorsey, the multi-billionaire entrepreneur who founded Twitter and Square, has turned his words into action. After repeating several times in 2021 that Bitcoin is perhaps the most important area in which he will work in the future, he left his position as CEO of Twitter to devote himself fully to improving the Bitcoin ecosystem.
Bitcoin needs entrepreneurs like Jack Dorsey who want to work to strengthen its foundation. This includes creating a fund to protect developers in the Bitcoin world from potential lawsuits they may face. Without developers, the Bitcoin network could not continue to be the most secure decentralized system in the world.
Then there are the Bitcoin miners. To make mining more efficient, greener and more affordable, Jack Dorsey has just signed up with Block (the new name of Square) to develop the next generation of BTC mining ASICs. This new generation of ASICs will benefit the entire community, as Dorsey explains, and he wants to work to improve Bitcoin's environmental impact:
"Moving to a clean and efficient use of energy is great for Bitcoin's economics, impact and scalability."
This initiative by Block is in addition to the previously announced creation of a hardware wallet.
In the field of mining, where competition between different companies will be fierce, we have just learned that Intel, a technology giant with a market cap of $220B, will enter the Bitcoin mining hardware business. Intel won't be getting into the business with new GPUs, but rather with a new line of processors called "Bonanza Mine." The announcement will be made in detail at the ISSCC 2022 conference, which will be held at the end of February.
This conference is an annual gathering of the best and brightest minds in the chip industry. The presentation announced by Intel is called "Highlighted Chip Releases". We are already looking forward to discovering this in detail.
Regarding the environment, it has just been published the latest report from the Bitcoin Mining Council. In it, we learn that the share of renewable energy used by Bitcoin mining companies that are members of this organization reached 58.5% in the fourth quarter of 2021. This represents an increase of 1% from the third quarter of 2021, and it makes " one of the most sustainable industries globally ".
Here is the comment from Michael J. Saylor after the Bitcoin Mining Council released these numbers:
“This quarter we saw the trend continue with dramatic improvements in the energy efficiency and sustainability of Bitcoin mining due to advances in semiconductor technology, rapid mining growth in North America, an exodus to China, and a global rotation towards sustainable energy and advanced mining techniques.
This is where China's Bitcoin mining ban starts to pay off. America is now the dominant area for Bitcoin hashrate with all the environmental benefits it brings to Bitcoin.
Speaking of hash rate, the Bitcoin network just reached a new ATH:
Those who predicted the end of the Bitcoin network after China banned mining in May 2021 need to face the facts: Bitcoin is antifragile and doesn't need China . The end of China's dominance is effective. There is a good chance that China will regret this strategic mistake in the future.
I haven't even mentioned here the billionaires of traditional finance who continue to invest heavily in Bitcoin because of their ability to take a long-term view. While some waste their time explaining that Bitcoin is a Ponzi scheme , others are acting to take advantage of its revolution at a time when inflation is expected to continue to wreak havoc in the coming months.
Final thoughts
The feeling that comes out of all this for me is that Bitcoin is in the middle of the iceberg illusion. Well, I say Bitcoin as a misnomer because the Bitcoin network continues to move at its own pace block by block. Rather, the Bitcoin market is facing the iceberg illusion.
Those who get caught up in the short term cannot see beyond the top. Those who will benefit most from Bitcoin in the future will step back and see the underwater part. This part, which is the fundamentals of Bitcoin, is getting stronger all the time.
This is the part that will keep the Bitcoin revolution moving forward in the coming months and years. Because without solid foundations, no revolution can triumph. Fortunately, Bitcoin's foundation is getting stronger all the time.