The BTC ETF has happened and nothing. There has been a lot of volatility before the announcement but as market theory suggests, the ETF was priced in. You can probably get an estimation from the gyrations what would of happened if the SEC had bounced the ETF’s but that didn’t happen.
Everyone was saying the price would fall on the announcement but it hasn’t, again because it was priced in. Lone of the high probability trades in any market is that if everyone is predicting it, the opposite will happen. This is because if everyone expects it, it has already been traded away.
So now this is out of the way, what will happen?
Firstly, there are a lot of ETF for Bitcoin now. Far to many. So there is going to be a rucous as the fight for being ‘the’ Bitcoin ETF. This should effect the price because the providers will have to go promoting their instrument and drum up trade in mainstream investor land. This should drive interest. Meanwhile mainstreet has been watching the rise to $40,000+and will likely heed offers. This will support Bitcoins value as expected.
The there is the ‘halvening,’ which to me is a fundamental and strategic driver. Bitcoin is based around the idea of ‘code is law’ while dynamics spawn by puny humans are difficult to rely on. While ETF’s are a tangle of people frail and struggling, the halvening is an immutable event about to cut supply in half with no ifs no buts, no one to say otherwise or rug or pivot. To me this fact is much more powerful for the price of Bitcoin. It happens on the 22 April 2024.
Previously it was the grinding effect of the last one that catapulted Bitcoin in a vertical, but it would seem that Bitcoin is now a more efficient market and its effect are already folding into the price. In the world of efficient markets today’s price is a amalgam of discounted future values projected out to an event horizon. In the previous era of emerging crypto infrastructure and aromatic players making stuff up as they went along, this process was extremely primitive, but now as we see from the lead up to the ETF, its much more like classical markets and is able to absorb a lot more value wave functions into the current value.
Lets have a look at the story so far from the perspective of the chart.
Here we are.
Lers not hedge here lets look at what the Bitcoin maxis see and expect.
Here we go.
I’ve left this chart ugly so everyone can see its a ‘’vision’ not a product of deep quantitative analysis.
…but this can absolutely happen and would value Bitcoin at about the same as Apple or about 20% of Gold’s market cap.
This trajectory will be pretty easy to follow and the logic of the halvening should see the Bitcoin price continue to elevate.
The sensible way to play it remains ‘dollar cost averaging’ and the sensible thing to consider is while the upside is extremely tantalising Bitcoin is quite capable of going on this ride and being back to these levels in a couple of years in what would be just another in a series of ever increasing boom crash cycles.
Its not good enough to ride the beast to the moon only to ride it back to the turf so the key is not jumping on but knowing when you will jump off. For me that trigger will be if it hits $80,000 but that’s neither in stone or anything but a mental not to myself to leave the casino with a sack of cash rather than see the game take it all back.
Remember too that its not just the rice of Bitcoin that can strip your winning, high risk = high reward, but that risk is more than the price going against your expectations. There is a huge issue of counterparty risk, security risk and general risk management. Getting to cash out your winning is no mean feat, so brace yourself now for the months ahead.
Don’t order the Lambo yet and if you take delivery don’t wrap it around a lamp post.