Bitcoin Market Update – July 7, 2021

Audio: Listen to this article

The market continues to look for direction as we see a steep decline in volume across the exchanges. We’re not seeing much activity on-chain with the declining demand. However, the pre-existing trend of coins moving from short-term to longer-term investors is continuing to hold.
Price continues to range between $30K-35K and will continue to range until either sellers are exhausted, or institutional demand returns. It appears we are in a “sell in May and go away” regime. The process of understanding Bitcoin is no different for institutional investors than it is for individual investors. It requires time, focus, and research. This current phase of consolidation and accumulation will remove a considerable amount of supply if and when demand returns at the end of the summer.

As we continue through this mid-cycle correction, we continue to see press releases indicating continuing infrastructure development, strategic partnerships, and venture capital allocations into Bitcoin and crypto-centered companies. Infrastructure development is a crucial component to continued market growth as it is typically a lack of infrastructure that puts out the fire on bull markets. Broad infrastructure development brings new waves of investors by making Bitcoin more accessible and provides investors with a range of options to gain exposure. Therefore, it’s essential to continue to monitor how, where, and the scale at which new infrastructure is being developed to support the Bitcoin and broader crypto ecosystem.

Patience is Crucial
For long-term investors, patience is critical during periods of consolidation. I harken back to a similar timeframe of incredible opportunity, the dot-com boom in the late ’90s.  In 1998, Paul Krugman, the Nobel-prize winning economist that serves on the Editorial Board of the New York Times, famously stated, “The growth of the Internet will slow drastically, as the flaw in ‘Metcalfe’s law’ becomes apparent: most people have nothing to say to each other! By 2005, it will become clear that the Internet’s impact on the economy has been no greater than the fax machines.”

Paul Krugman and many others at the time failed to properly assess the value of an open, permissionless, and decentralized entity that lowered the barriers of access to information and created an environment that enabled peer-to-peer communication. Google, Amazon, eBay, and many others capitalized on the Internet precisely because it had a decentralized value-set. Established brands like Sears missed or delayed building an internet presence because they operated under a different status-quo value-set. Investors that saw the value of the Internet as integral to the success of Google, Amazon, and eBay were handsomely rewarded for the risk of putting conviction in a new regime.

Paul Krugman and others in the media and finance establishment continue to see Bitcoin as a “trend” that will subside as they expected the Internet “craze” to subside. Yet, as they’ve been proven wrong each year, Bitcoin investors have been rewarded for their conviction year after year.

Will this trend of Bitcoin’s success continue to play out? No one knows for sure, but there certainly has never been a more bullish setup for patient investors than right now.