Bitcoin Above $30,000: Why The Rip?
Looking for an explanation on bitcoin's latest bullish price action leaves us coming back to the same conundrum. Analyzing bitcoin's cycle in 8 charts.
Dear readers,
Everybody craves a linear connection, especially when bitcoin has one of its hallmark +10% days that leaves many scratching their heads. A reader reached out to us trying to understand the “why” of it all—of course, favorable liquidity conditions due to the modest TGA refill, reignited risk-taking behavior in markets, and a wave of ETF hopefulness started by BlackRock have something to do with it.
Rather than exploring broad market conditions to explain a uniquely bitcoin-native bout of outperformance, let’s analyze and explain precisely how bitcoin’s price cycles have a lot to do with its supply schedule being sliced in half every four years. Sitting on the launchpad with 44,500 blocks to go until the halving, are you ready for liftoff?
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If you’ve been watching our YouTube episodes, you’ll notice that we almost always ask our bitcoin-oriented guests their opinions on bitcoin halvings. It’s all for a very important reason—if we can confirm that bitcoin is indeed driven by these four-year cycles, it begins to form a unique fundamental study as opposed to the more degenerate-gambling vibe that “crypto” broadly seems to take.
Now, turning to this week’s price action, and falling back on a far-too-zoomed-out cycle theory doesn’t cut it in terms of a proper explanation. Therefore, we must look at the headlines surrounding BlackRock, Fidelity, and ETF proposals. BlackRock’s open-end fund application, demonstrating the company’s strong pivot toward bitcoin, has turned the tide of recent dismal performance. Nonexistent liquidity has been displaced with new investor capital eager to prematurely front-run any potential ETF approval and the tidal wave of institutional buying that will follow.