About the Bitcoin price currently:
We saw a new Bitcoin all time high within the last two weeks (October 6) to approx 126k. Then we saw a significant price retreat then a rally, and now a retreat again to 105K currently (it actually went down to 100k on some exchanges).
There are many drivers causing this volatility.
- Macro events causing market jitters – on the world stage, talk of tariffs and rare-earth embargoes are causing risk-on assets to take a step back.
- The spot Bitcoin ETF market has reversed course. After big inflows for many weeks, we have seen greater net outflows of money leaving spot ETF’s which puts pressure on the price and brings it down.
- A lot of expiring options have been occurring this week causing max pain with traders. Anyone expecting growth got hammered, while the shorts made bank.
I would argue that a 17% drawdown is actually incredibly bullish for Bitcoin, now is the time to consider buying the dip. Macro events in Bitcoin’s price historically would cause 50-80% drawdowns – which have been incredible buying opportunities through the carnage. But we are now in a completely different environment with institutional investment in Bitcoin ETF’s. With their inflow of billions and billions of dollars into Bitcoin and taking that Bitcoin off the market – for the most part permanently – this has actually increased the stability of Bitcoin’s price fluctuations where you see far less wild swings in the price. The game theory of Bitcoin is that when more money comes into the asset, the more mature the asset becomes, the less apt to major price volatility over time. This is happening before your eyes. Bitcoin is still a new asset class going on 16 years old. Price exploration is still ongoing. With Bitcoin currently at a two trillion dollar marketcap, it only comprises 0.005% of the world’s assets at 400T (some have this at 665T). We have a long way to grow. Bitcoin is slowly changing from a risk-on to risk-off asset. We’re not there yet, but it is changing.
Be patient.
There are plenty of people disappointed in Bitcoin this year – which I find perplexing. It’s up 63% since it was $67k this time last year. People are disappointed in Strategy’s sideways/downward price movement. Try to keep in mind that this is a long game. Extend your time preference from monthly and quarterly to a 5 year outlook. I think you’ll find that you have made the right choice to continue stacking sats. Bitcoin has enjoyed a 60% CAGR (compound annual growth rate) for every four year halving cycle of its existence. This is greater growth than any asset ever. This trend is expected to continue. Even going a bit bearish at 30% CAGR, you beat the unpublished inflation debasement of 10% by miles. There are people I respect in the industry calling for $1,000,000 per coin by 2030. This is based on math and Bitcoin’s scarcity. The ETF’s are gobbling up Bitcoin. They are buying more Bitcoin than is mined every day. Bitcoin whales (those holding more than 10,000 Bitcoin) are selling to make up the difference. At some point, whales are going to stop providing as much liquidity to the market, and the price is going to go up. It’s that simple.
Stay humble, stack sats.
Did you find this article helpful? If so, consider sending a tip via Bitcoin. Nostr: npub1vmrqfy3sl8sedde67u0knkmam2u8sc5e3dd5ph282zak2zulh6uq3r4js8 LN Tips: brewsbitcoin@strike.me Thanks for your support. Doug
bc1qe5yrg7nf7cxp4g9gq5sw6kwhshk04tmnud529f