Hello everyone,
The purpose of this letter is to inform you about the current crypto-asset market situation. This letter is not investment advice, but merely a sharing of my personal point of view.
At the time of writing, the price of Bitcoin is 33,000 $. We are still in a range (price range) between 30,000 $ and 37,000 $ for 4 weeks.
- Long-term cycle: The bull market is intact and user growth continues to increase parabolically. The fundamentals of the crypto-asset sector and Bitcoin are still in the green. There is a strong decorrelation between the price of Bitcoin today and these fundamentals. We have not seen such an opportunity since the fourth quarter of 2020. The next supply shock is quietly building up unnoticed.
- Medium-term cycle: Bullish, we are in a phase of coin accumulation by strong hands (professionals, companies, funds, etc.) and long-term investors who are quietly absorbing Bitcoin coins, having stopped selling for several weeks.
- Short-term cycle: Neutral, we are in a phase of price contraction, which means that the Bitcoin price is waiting to take a direction. Volumes are low. A breakdown below 30 $ would bring a short- and medium-term bearish outlook, and a breakout above 42 $ would mean a resumption of the bull market that started in late 2020.
We are in a «tense» phase where fundamentals and network growth are increasing, but the price is currently driven by speculators' fear and short-term technical analysis. However, it must be noted that fundamentals always prevail in the long term.
There is a market law where long periods of low volatility are followed by significant price movements.
We believe the market is tight and ready to bounce back up quickly.
We can also note large amounts of bitcoin leaving exchanges to be stored in secure wallets (cold wallets). This metric indicates that a supply shock is approaching, similar to the one in December 2020.
Next, here is an overview of the amount of BTC held by private and public companies, as well as by ETF (Exchange Traded Funds, index funds).
Two countries currently hold Bitcoins: Bulgaria and Ukraine, respectively amounting to 6.945 billion of $ and 1,508 Billions of $.
Total Bitcoin held by each entity category
We can notice that since 2020/2021, the number of large institutions exposing themselves to Bitcoin directly or indirectly has only grown, which once again means that the network's fundamentals are still present.
The great migration of mining facilities continues, but we saw an initial rebound in the Hash Rate (which is the mining difficulty, mining being, simply put, a process of securing Bitcoin blockchain transactions).
Which means that mining farms being driven out by the Chinese government are moving to Kazakhstan or the United States. This is good news for the Bitcoin network because this major migration will improve its decentralization.
News
In case you weren't already aware, a piece of news that will make history in the world of crypto-assets is that of Bitcoin, which was recognized as legal tender in El Salvador. That is to say, the country's merchants will be obligated to accept this payment method exactly like the euro in France.
With more than 70 % of El Salvador's population being unbanked, this is a true revolution for the country and its people, who will no longer be under the yoke of the US dollar thanks to the Bitcoin network, which belongs to no one.
This news created a wave of engagement from other countries, notably Paraguay who is looking closely into the matter, but also Argentina with a senator proposing that workers can choose Bitcoin for the payment of their salary.
The number of available bitcoins would never exceed 14 million, according to this search for the company Cane Island. This surprisingly low ceiling is reportedly due to BTC losses which, following various events, have become permanently inaccessible.
The amount of investments made by institutional players and the venture capital funds in a given sector make it possible to measure the interest of major financial players in this sector.
Crypto and blockchain company funding soared in the second quarter of 2021.
A total of 497 financing operations took place during the period.
Excluding BlockOne’s $9.7 billion capital injection into the crypto exchange ”Bullish,” the second quarter saw $6.2 billion in private funding directed toward the digital asset industry. This represents a 90% increase compared to the previous quarter.
Source : The Block Crypto
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— Warning —
This is not investment advice, no one can predict the future.
You are solely responsible for your own investment decisions.
We are not responsible for any losses resulting from a decision made based on the information in this letter.
