I’ve been fully invested in Bitcoin for more than a year, and nearly so for the past three - and before that, briefly owned (a small position) during the December 2013 – January 2014 Mt Gox bubble.  During this time, I have NEVER been a period when the price wasn’t, on an essentially DAILY basis, SURGING or PLUNGING.  Which is why the current environment is so eerie…of, as of this week, ALL-TIME LOW price volatility.

https://twitter.com/charliebilello/status/1055618251768643587

Yes, the asset that quite literally, has been the most volatile in financial market history, has suddenly fallen into a stupor of relative calm - amidst a confluence of fundamental factors, in the crypto sector AND macroeconomic environment, that are undoubtedly fostering extremely strong views on Bitcoin’s future…at a time of extremely low trading volume and liquidity.  In other words, the type of environment when price volatility would be expected to INCREASE, not decrease.  So, what does it all mean?

Frankly, I’m at a loss, but for a few potential explanations.  The first being, that the period between bear and bull market cycles is often characterized by trading “purgatories” – in which selling pressure is exhausted, but buying interest too weak to take prices higher.  

Not that “past is prologue,” but history often “rhymes” – even in financial markets.  Thus, it’s entirely possible Bitcoin is “repeating” what it did after the “Mt Gox cycle”; i.e, after bottoming at $200 in January 2015 – a year after the January 2014 top – it traded between $200 and $300 for nine months…before finally breaking out in September 2015, en route to an historic two-year bull run.

Of course, the fundamentals of 2015 and 2018 are miles apart – as back then, Bitcoin was a microcap “curiosity”…as opposed to today, when it’s been a $100 billion-plus asset for a full year; with a record hash rate, exploding technology and infrastructure investment, rising institutional interest, and increasingly obvious use cases…amidst an increasingly unstable fiat currency regime, in which Precious Metals – the PREVIOUS sound money leader – have all but died as monetary assets.

Yes, an argument can be made that it’s simply the “eye of the hurricane,” or “calm before the storm.” Or that investors are waiting on imminent SEC announcements regarding Bakkt physically-backed Bitcoin futures and the SolidX/Van Eck Bitcoin ETF.  Also, that fears about “stable coins” like Tether are preventing cryptocurrency exchange deposits – and thus, investment in Bitcoin.  However, with Tether nearly back to $1.00, and Bitfinex operating normally, it’s hard to make that argument – especially as several other stable coins have recently been approved for trading.  

In other words, there’s no overarching reason to look to – yielding the “Occam’s Razor” conclusion that perhaps, Bitcoin has simply graduated to a higher plateau of valuation, awaiting the catalyst for the next move higher.  That’s my belief – particularly now that the “Hoffman Line” – of said $100 billion market cap – has been maintained for more than a year…most of it, amidst a brutal crypto bear market.  That’s why I continue to HODL BTC with offline hardware storage devices – and recommend YOU do so as well!