By rahmat hidayat

Thursday, December 5, 2024

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Bitcoin Trading Over $100k

The Blockchain Sector @ 2024-12-05

Dec 5

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We finally got there, at time of writing Bitcoin is trading over $100k USD for the first time ever across all major exchanges.

In this newsletter I’m going to discuss what is driving the markets and how Microstrategy is buying up so much BTC.

📈 From Scam to Wall Street Darling

In early 2023, Bitcoin was trading at $17,000, recovering from the FTX collapse and industry turmoil. Fast forward to December 2024, and institutional adoption has redefined its trajectory:

ETF Momentum - The approval and rollout of Bitcoin & Ethereum ETFs by major players like BlackRock and Fidelity has legitimized crypto in traditional finance.
Institutional Investments - Wall Street's embrace of Bitcoin has shifted its perception from a scammy speculative gamble to a mainstream asset class. There are huge asset managers allocating capital to digital assets. The most important of these is MicroStrategy currently.

Let’s take a look at how they are buying up so much Bitcoin.

📊 MicroStrategy's Bitcoin Strategy

MicroStrategy has become synonymous with it’s Bitcoin treasury strategy.

It raises capital through equity and debt, including zero-interest convertible notes.

Proceeds are used to buy Bitcoin, driving its price—and MicroStrategy’s stock—higher in a feedback loop.
Critics liken this strategy to a Ponzi scheme, but it has solidified the company as a Bitcoin powerhouse.
There are some suggestions it could get included in the SP500 next year.

📉 Where We Are In The Cycle

Bitcoin’s four year cycles persists until proven otherwise. I’m perhaps the biggest proponent of a longer term supercycle but I don’t have conviction that we wont see hard times for the industry in the future as well.

While optimism runs high, history suggests a potential bear market will come along at some point.

I don’t know about you but I’m feeling pretty euphoric and this is the time of maximum risk in the markets.

Can we go higher from here? Absolutely and I expect we will. But at some point it’ll come crashing down and the optimism around digital assets will rotate back to scepticism. Greed will turn to fear, there will be a rush to the exits and markets will tank.

Proceed with caution and a healthy amount of pessimism.

Bitcoin’s long term journey is far from over. As regulation evolves and institutional adoption grows, the market will mature, volatility will calm and it will become a safe have rather than a speculative asset. Something I’ve spoken about previously here:

Bitcoin Flight To Safety

Mar 8

As Bitcoin consolidates on the verge of making a new all time high it all seems somewhat inevitable in hindsight. Now ETF’s are approved and institutions are onboard where does the next Bitcoin narrative come from? Where does it go from here?

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