BTC Slides; Infrastructure Bill Signed Into Law
Time in the market > timing the market.
Well, I’ll tell you what, it is much more enjoyable writing these newsletters when prices are ripping versus cooling off. I thought that the crypto Gods would at least give me a bit of a break for my 50th newsletter but hey, here we are.
Sitting here sub-$60k makes it really tough to take any of these pundits on crypto-Twitter who are calling for $100K-$220k per BTC by year-end seriously. However, when I started working in this space around this time in 2017, I witnessed some crazy sh**…some of you were there as well but it’s easy to forget so let’s recap.
So, my first day at Coinsquare was November 21st 2017 and BTC was trading at ~$8K after an 800% gain from the beginning of the year. It was an amazing environment to say the least. Ah, the pre-covid era. There were crypto events every single night in Toronto and I quickly built my network and reputation as the guy to call if you need to get a large trade done — it was a blast. Everyday was a new all time high and within my first 30 days Bitcoin bounced around (somewhat similar to what we’re seeing now) before ripping up to nearly $20k on December 15th! Unfortunately, we all know what happened next but my point is, things can happen very fast. By no means am I saying that we’re going to repeat, but if we did things could get crazy, quickly.
Obviously, the dynamic is different and the market is so much bigger than it was back in those days. There needs to be a lot more capital flowing into BTC to take it to levels that would compare on a relative basis. This is why, even though I lived through it, I’m still weary of some of these price targets. That being said, there was nothing going for Bitcoin and the broader crypto market in 2017 compared to today — just pure speculative hype. So much has changed over the past 4 years and this cannot be ignored. Back then, exchanges were getting hacked, founders were disappearing with hundreds of millions of client dollars, and there was so much retail demand that Binance trading accounts were being sold in the secondary market for tens of thousands of dollars as exchanges were so backed up with customer support tickets that they had to stop taking in new accounts. It was madness!
The point is, this recent run up to $69k has been the quietest all time high I’ve ever experienced. All it takes is another tweet from Elon or something like this to spark a frenzy. I’m looking forward to what the rest of the year has in store.
What we saw at the desk — by Dan Wright
Following up on my previous note, we are seeing a lot more corporates come across the desk looking to hold BTC and ETH on their balance sheets. Inflation numbers are creating a flight to safety and companies are realizing that sitting on cash is reducing their buying power.
Leveraged selling has taken over the market this week after touching new all time highs. We can attribute this sell off to overbought technicals and the infrastructure bill which was passed that included the disconcerting crypto provisions that took our space by storm last month. Fundamentals have not changed and we are seeing it directly on the desk with heavy buying on the dip. BTC/USD has broken below near term support and could test the 50 FIB retracement level of $54,430. ETH/USD is currently sitting at $4k support with a potential test of $3,678 below that. Daily charts below give you a better visual. End of the week usually has traders closing positions so watch for a turnaround.
A quick update on the infrastructure bill
Earlier this week, Biden signed the $1.2 trillion infrastructure bill (brrr) into law. Despite our best efforts, it included the crypto provisions in full form — pretty devastating and likely a catalyst to this week’s sell off. I wrote about the Bill in detail here and followed up with an update here in case you need a refresh.
But there’s been a new attempt with massive support by members of congress to fix everything wrong with the infrastructure bill.
We’re not giving up so easily. We’re all going to make it!
In case you missed it…
- Another $2.5bn flooding into crypto https://www.forbes.com/sites/jonathanponciano/2021/11/15/billionaire-coinbase-cofounder-nabs-25-billion-for-cryptos-biggest-venture-fund-ever/?sh=28d24a05159e
- Out with the old, in with the new: Staples Center renamed Crypto.com https://ca.sports.yahoo.com/news/report-staples-center-to-be-renamed-cryptocom-arena-in-largest-naming-right-deal-in-history-050426958.html
- C’mon Jack! Twitter CFO rules out buying BTC for treasury https://fortune.com/2021/11/16/jack-dorsey-bitcoin-twitter-crypto-square/
- Fidelity Canada to launch Bitcoin custody services https://finance.yahoo.com/news/fidelity-clearing-canada-unveils-canadas-173800939.html
- Another one: NYDIG and Houston Rockets partnership https://www.prnewswire.com/news-releases/houston-rockets-announce-partnership-with-bitcoin-company-nydig-301425503.html
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