Time in the Market
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BITCOIN 2024 :- THE BAPTISM TO THE BOARDROOM

This year, ‘Bitcoin was Baptized’ by BlackRock, signifying a monumental shift in its acceptance and legitimacy. However, the anticipated public ceremony of this event – the approval of a Bitcoin ETF – symbolizes Bitcoin’s ultimate ascension to a seat at the boardroom table. 

It’s not just a financial milestone; it’s a rite of passage, heralding Bitcoin’s arrival into the upper echelons of the financial world and at Boardrooms around the globe.

The Price is Rising: A Snapshot of Bitcoin’s Recent Surge

In the past 30 days, Bitcoin has witnessed a significant uptick in value, marking a 23% increase. This trend is even more pronounced in shorter timeframes, with a 16% rise in the last 14 days and a notable 14% in just the past week. Today, Bitcoin’s price is $43,482.86, with a 24-hour trading volume of $25,487,456,572.82. Although a slight decline of 1.22% in the last 24 hours, the overall 14.27% increase in the past week is remarkable.

In contrast to Bitcoin’s impressive performance, gold has also achieved a new all-time high but shows a modest year-over-year increase of about 13%. This could be more impressive when compared to the S&P 500’s 19% rise over the same period. Such comparisons become even more striking when considering Bitcoin’s staggering surge of over 150% since the beginning of the year. This remarkable growth can partly be attributed to the market’s relative illiquidity, with about 70% of all Bitcoin remaining unmoved for over a year. This aspect underscores the growing stability and holding sentiment within the Bitcoin market.

With a circulating supply of 20 million BTC, Bitcoin’s market capitalization is an impressive $850,844,472,078. These figures reflect the asset’s growing acceptance and underscore its potential as a hedge against traditional market fluctuations, a key consideration for professionals in the commodities sector.

Understanding Bitcoin’s Journey Towards Mainstream Adoption

The path to widespread acceptance of Bitcoin is incremental, characterized by initial bootstrapping and gradual long-term adoption. Its growing user base enhances its value, similar to the dynamics observed in the rise of social networks. This gradual adoption process is vital for understanding Bitcoin’s potential role in the global economy.

Bitcoin’s Unique Applications: Empowering Users Beyond Traditional Finance

  • Portable, Scarce Savings: 

Bitcoin’s design as a decentralized global ledger offers unmatched security and portability. Its ability to store significant value, accessible worldwide with just a memorized seed phrase, is a game-changer, especially compared to traditional assets like gold or cash.

  • Financial Inclusion and Autonomy: 

Bitcoin provides an alternative for those marginalized by traditional financial systems. It serves as a critical tool for financial inclusion, offering a lifeline for individuals or entities facing restrictions in conventional payment systems.

  • Unconventional Market Dynamics: 

An exciting trend in the Bitcoin market contradicts typical financial behavior. Unlike usual market trends where assets are sold as prices rise, Bitcoin holders show increased conviction by not selling their assets. 

This growing trend of holding, even as the price escalates, indicates a strong belief in Bitcoin’s long-term value. Retail investors, particularly those holding one Bitcoin or less, are actively purchasing more Bitcoin, outpacing the net new supply entering the market daily. 

This retail-driven demand is a significant factor in pushing Bitcoin’s price upward. Moreover, institutional interest, ETF speculation, and anticipatory moves in response to potential interest rate cuts are adding momentum to Bitcoin’s growth. These factors collectively suggest that Bitcoin’s upward trajectory will likely continue over 18 to 24 months.

Global Salability and Liquidity

Despite its youth and volatility, Bitcoin has established itself as a highly scalable and liquid asset on a global scale. Among various currencies and assets worldwide, Bitcoin’s acceptance and ease of transaction place it in a strong position, often surpassing many traditional forms of currency.

The current state of the Treasury market exemplifies a significant shift in global financial dynamics. Historically, countries like China and Japan were major buyers of U.S. treasuries, holding about 22% a decade ago. However, this figure has drastically reduced to just 7% today, indicating a waning interest from these traditional powerhouses. This change raises critical questions about future demand for U.S. treasuries.

Interestingly, stablecoin issuers have emerged as significant players in this domain. Currently ranked as the 16th largest holder of U.S. treasuries, their role in the financial ecosystem is rapidly expanding. This trend suggests that if traditional treasury buying declines, digital asset entities, including stablecoin issuers, could become top holders of U.S. treasuries. This possibility presents a compelling argument against restrictive regulations on digital assets as they become increasingly intertwined with traditional financial structures.

Moreover, the Treasury market’s overall performance, with instruments like TLT down 22% over the last five years, underscores the need for new buyers. The digital assets space, mainly through stablecoins, is poised to fill this gap, potentially reshaping the landscape of government debt ownership. This development reflects the growing influence of digital assets in niche markets and as a cornerstone in the broader financial world.

Resilience in the Face of Adversity

Bitcoin has consistently demonstrated robustness, particularly in response to regulatory and technological challenges. The incident of China’s crackdown on Bitcoin mining in 2021 highlighted this resilience, with Bitcoin rapidly adapting and maintaining functionality despite significant network disruptions.

The Sustained Momentum and Future Prospects of Bitcoin

Bitcoin remains a technology with inherent risks and uncertainties. However, its consistent performance, adaptability, and growing acceptance speak volumes about its potential role in the global financial ecosystem. The future trajectory of Bitcoin appears even more promising when considering a series of upcoming economic events and trends.

Looking back to 2020, it was predicted that a combination of monetary policy decisions and inherent Bitcoin market mechanisms would act as rocket fuel for its value. This prediction is setting up to repeat itself. With interest rates slightly higher than the average over the last 15 years, there’s an expectation of a return to loose monetary policy accompanied by money printing. Moreover, the anticipated approval of a Bitcoin ETF in Q1, followed by the Bitcoin halving event in early Q2, is expected to create both a demand and a supply shock in the Bitcoin market.

These factors will likely significantly increase Bitcoin’s price as the market adjusts to accommodate the increased demand against a backdrop of reduced supply post-halving. This anticipated rally is seen not just as a temporary surge but as a precursor to what might be a much larger bull market in Bitcoin. This scenario reinforces that the current momentum is just the beginning of a more substantial and sustained rise in Bitcoin’s value, making it an increasingly important asset in the global financial ecosystem.

Bitcoin’s journey from a digital curiosity to a boardroom staple is remarkable. Its ‘baptism’ by major financial players like BlackRock is a testament to its growing influence and acceptance.

The forthcoming ETF approval is not just a procedural step; it’s a public coronation, a formal acknowledgment of Bitcoin’s maturity and its irrevocable place at the high table of finance. As we witness this historic transition, it becomes clear that Bitcoin is no longer an outsider looking in – it’s a key player shaping the future of finance.

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