There are so many things different about the break in Bitcoin this time around.
You know what I don’t see? Any articles about its creator, Satoshi Nakamoto. Anyone tweeting about Bitcoin’s latest “cost recovery” mining costs. I don’t even see any big pieces of thought or endless public relations plots about how the blockchain will be change everything. No one is talking about blockchain, period!
All the smart people used to cuddle at Bitcoin but say, man, but this blockchain thing is the real story. Actually, it wasn’t. The truth was when Blythe Masters stepped down as CEO of Digital Assets in late 2018. (Masters is the finance rockstar credited with inventing the credit default swap.) “Masters were the public face of the ‘blockchain, not Bitcoin’ philosophy ., ”Bloomberg wrote at the time. As of last year, she worked with Motive Partners, an investment firm that has “nothing to do with blockchain,” per the Financial Times.
Nothing matters now. The story is simply “everyone buys Bitcoin, so you might as well buy some.” We spoke yesterday about the huge pool of institutional capital that is starting to flood into the cryptocurrency. Bill Miller – who is having another huge year – emailed a few extra points about how much demand could exceed supply. There are an estimated 47 million millionaires globally, he notes, “so if every millionaire wanted to own only one Bitcoin, they couldn’t do it,” given Bitcoin’s fixed cap of 21 million coins.
Also, Miller adds, low-turnover retail aficionados are thought to own 95% of current supply, leaving a tiny slice of pie available to the growing hordes who want to own some. Add it all up and it’s no surprise that Bitcoin not only burst through $ 20,000 yesterday, but increased over $ 23,000 today. Scott Minerd of Guggenheim now says he could hit $ 400,000. Sure, why not?
I also think traders who have their hands on it want to take the thing to the moon right now in order to show some impressive “alpha” at the end of the year. “So today’s subject line; it’s the same one from last Thursday, except for that time it was about chasing the IPO for DoorDash and Airbnb. The hunt is on for everything at this time. The Momentum ETF hit a new high ever, Stifel points out. This headline sums it all up: “JP Morgan is creating a ‘YOLO’ trade to bet on Ark ETFs.” Ark is the company Cathie Wood who is all part of Tesla, talking about momentum. Now you can own structured leveraged products on top of that!
So what happens when we turn the calendar to 2021? A healthy replacement perhaps, a blow away top. The vaccine is bringing back normalcy, the 10 years are going above 1%, maybe the dollar is even strengthening, the high flyers are all coming down to earth. Or as everyone seems to be expecting this, maybe not.
Perhaps Satoshi is revealing himself, he says “to hack with this fixed supply thing of 21 million,” and Bitcoin is inserting in spectacular fashion. Because that’s about the only thing we can see bursting its bubble of enthusiasm right now.
See you at 1pm!