The Brief for December 14, 2020

Good morning!

Bitcoin’s price keeps trying to get back to its all-time high and each attempt ends lower and lower, farther and farther from that goal. Is this a sign of weakening strength or just the market collecting itself before one last push into the $20,000s?

On-chain data shows interesting trends since bitcoin went over the psychologically-significant price of $13,700:

• Number of wallets with more than .01 BTC dropped

• Number of wallets with more than .1 BTC dropped

• Number of wallets with 1-10 BTC went up

• Number of wallets with more than 10 BTC dropped

• Number of wallets with more than 100 BTC dropped

What is it about that 1-10 bitcoin level that matters to people? What did those other people do with their bitcoins? Why did so many get rid of them?

Why are whales dumping their bitcoins? Why aren’t we seeing new small HODLers enter to pick up the slack? Perhaps a lot of new buyers are starting at 1-10 bitcoins? Or using investment funds and derivatives to get into the market, and as a result, don’t get captured in this data because they never create a wallet?

Is everything different now that institutions are getting in? Should we wait for a crash to $14k? Buy now because we’re going to the moon?

We shall see! If I knew the answers, I would share them with you. Catch my most recent video for my thoughts:

Also, I really encourage you to watch this video from October 24, 2020. It’s all about mindset.

Premium subscribers, follow my plan and we’ll be ok regardless of where bitcoin’s price goes from here.

Altcoins will follow bitcoin, as always, but your particular altcoin may follow at a different pace, up or down more or less than bitcoin. Don’t sweat it! Average in.

I’ll soon publish a special issue about bitcoin/altcoin diversification. For now, check out a few articles and a podcast, below.

Listen to MicroStrategy’s take on business investment in bitcoin on the What Bitcoin Did podcast. How soon until everybody else starts saying the same thing he does?

• Spain’s Second-Largest Bank Will Soon Launch Crypto Services: Sources

  • Bottom line: Spanish bank BBVA will launch crypto trading and custody through its Swiss private banking unit.

  • My take: BBVA is one of the biggest, oldest banks in Europe with total assets in the top-50 worldwide. Every time a large, reputable, established company gets into crypto, it makes it easier for the next one to do so. Nobody cares about Kraken’s bank charter but when a top 50 bank gets into crypto, people notice. At least, the people who really matter.

  • Why we care: it’s yet another way for people to get into crypto and another client base that will get targeted ads and upsells into crypto products.

• G7 Finance Officials Back Need to Regulate Digital Currencies: Treasury

  • Bottom line: the leaders of most of the world’s largest economies say they need global rules about cryptocurrency.

  • My take: good luck with that. When’s the last time you saw a global governmental organization act swiftly, decisively, and effectively on anything?

  • Why we care: because this talk will only get worse—and less relevant—as the cryptocurrency markets grow and blockchain technology gets better. These guys may want honest crypto regs but they’re actually reacting to Facebook’s Libr-, er, I mean, “Diem.” If they’re freaking out about a Facebook product that hasn’t even launched, just wait until bitcoin hits the $3 trillion market cap. Then you’ll see some real urgency behind these statements.

Relax and enjoy the ride!