Stable Floor, Lower Ceiling?

In early April, I spoke about bitcoin liquidity and HODL waves with the takeaway being that people who hold bitcoin longer are more likely to continue holding.

It’s a natural line of thinking but there’s a significant jump in long term conviction once you’ve held for at least three to five years.

As the number of long term bitcoin holders grows though, the amount of bitcoin available to trade on the open market shrinks.

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The US spot bitcoin ETFs have been an eye-opener. Their launch kicked off a new wave of retail and smaller-scale institutional adoption.

Bitcoin is now both a risk-on or risk-off asset depending on the holder. We’ve entered a period where bitcoin is proving to be a long term store of value.

Bitcoin is no longer just a speculative asset. If anything, derivative, levered fund products are filling that speculative gap that bitcoin once owned and that then altcoins took over. Now, the big long term money is long bitcoin or the bitcoin ETFs.

Short term traders are exploring levered funds and the altcoin market is left competing amongst itself for market share.

This Cointelegraph article nailed it:

This new market plumbing is both a blessing and a bottleneck. Liquidity is deeper than ever, but it is not as kinetic. Long-horizon capital doesn’t chase candles. It waits for basis points. That creates a more stable floor but a lower ceiling. It also suppresses the retail euphoria that once catalyzed altseasons and speculative parabolas.

The frontier has not disappeared — it has been absorbed.

Mainstreaming

Bitcoin is mainstreaming.

The result of greater adoption, especially with institutions and Wall Street, is greater stability in terms of price action.

The mainstreaming of bitcoin has begun and there’s no turning back. There’s a satisfying irony in the fact that $100k bitcoin is what it takes to spur on a new wave of bitcoin holders and investors when the potential upside is now likely more subdued than in prior market cycles.

In short…

Bitcoin has made it.

It’s part of the “diversified portfolio” conversation.

That’s part of why I talk about bitcoin so much. Someone has to. The asset has proven over 16+ years that it has a place in most portfolios.

It can be a hedge akin to gold, a growth play akin to Amazon, or a value play like Berkshire Hathaway depending on the given portfolio.

Don’t get me wrong—I still see the current bull market touching between $125,000 and $350,000 but the volatility may decrease by year-end into next cycle.

I spoke about long and short term price levels last month. Next cycle is the one to watch. Think 2029-2030—the likely time period for the next bull market.

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