Bitcoin Explained: Whales have built a new floor. Wat?

Hello, Moni Maker! Tony ฿ is here today. Yes, the one who knows everything about bitcoin! We decided to invite Tony to our Gem City every week or two to talk about bitcoin… the events that happened to the first cryptocurrency during the week. Let’s go!

Time Frame: 12.07–19.07

Despite the unrelenting cries of the bears and the skepticism of “traditionalists,” bitcoin whales are putting their money where their mouth is and have already built the most serious level of support since Black Thursday, which shook up all markets last year. Whalemap data shows large trading volumes at ~$30,000. Despite the recent drop to ~$29,000 the price recovered quickly; we will continue to monitor BTC movement, but for now the whales are not giving up.

Let everyone decide for themselves — you want to wait for $20,000, or maybe even $10,000 bitcoin — go ahead! Sell or short at your own risk.

The newcomers aren’t lagging behind.

The newbies aren’t gonna bite the dust either — the number of retail investors — holders of 0.01–0.1 BTC (turquoise line) showed exponential growth this year, overtaking the rate of 0.1–1 BTC holders’ growth (purple line).

According to Glassnode, the first group has more than 175,000 users and the second group has more than 700,000. By comparison, during the Bitcoin hysteria of late 2017, these numbers were almost half as high.

This puts retail investors in front of the traditional banks and S&P 500 companies whose balance sheets have no BTC on their balance sheets. That’s the power of a true peer-to-peer network — bottom-up development.

Institutions have a better option

Last week, the market price of GBTC continued to trade at a notable discount, ranging from -11.0% to -15.3%. While the discount has recovered from an all-time low of -21.3% to NAV, any significant and persistent discount is indicative of a lack of demand.

Bitcoin Magazine previously expressed the (logical) opinion that a significant discount to GBTC stock would distract large investors from the spot market, pushing them to invest specifically in the Grayscale product, which would prevent the spot price from rising despite significant institutional acquisitions.

The Great Miners’ Exodus

Black Rock Petroleum Company announced an agreement with Optimum Mining Host to host and operate up to one million bitcoin miners that will be exported from China to Canada by OMH for deployment at three natural gas production facilities located in the Canadian province of Alberta.

The miners will be delivered to the sites gradually, but they clearly won’t have to wander in the desert for 40 years — they know where to go, and they’ll get a ride anyway. In short, record-high Bitcoin hash rates are just around the corner, and historically this has only led to one result🚀.

Speculators are on a hopium rehab

Open futures interest is stuck around $10.7M to $13M, 57% below April’s ATH. Daily volumes dumped to about $45 billion (January 2021 levels) as well, 60%+ below the peak. The destiny of futures was followed by the more subtle instruments, Options, which have fallen 67% to their December 2020 levels.

It looks like shorters and overleveraged traders are licking their wounds and waiting for an obvious confirmation of the trend direction. If you’re adventurous, you can try to play ahead, but it’s advisable to avoid leverage and short positions;)

The moral is simple and repeated from all screens: “trading cryptocurrencies are associated with risks, don’t invest more than you can afford to lose”. In the case of Bitcoin, there’s a lifehack — even if you buy the top and wait for 4 years, you’ll get into green, but derivatives trading, shorting and leveraged trading make that lifehack obsolete. All in all, BTC trading is still better than lottery tickets, roulette, or one-armed bandit, but be prepared for the worst — it’s much nicer to take the cream off profitable trades when you are ready to lose it all than the other way around.

Thank you for your attention, and here’s a meme for the road: