It’s awfully bearish out there and the HODLers don’t seem to care

Weekly News

For those of you who were around in the 2016/17 Bitcoin bull-market, you will probably remember a lot of talk around Technical Analysis. 

‘If the volume is low when Bitcoin hits the MA20, then we’re dropping another 22% blah blah blah. 

Like we said on the Morning Shot with Roman Cabanac, Technical Analysis is pretty much horoscopes for men. 

What we are more focused on, is the On-Chain analytics of Bitcoin.

What is this you ask? Well, since the formation of analytics platforms such as Glassnode, we all have a holistic, open and transparent view of what is transpiring on Bitcoin’s ledger. Since Bitcoin’s blockchain is incredibly transparent, we can see things such as how long every wallet has held Bitcoin, how much Bitcoin ‘long-term’ wallets are acquiring and how much Bitcoin wallets with over 1,000 BTC are buying. 

You cannot find this in any other asset class, since Bitcoin is the only truly decentralized, honest and open protocol on this planet (every Altcoin has a sense of centricity to it). 

What these behavioural analytics tell you is exactly what the different types of users on Bitcoin are doing. From their behaviour, you can then probabilistically determine what will happen with short and long term price movements.  

Willy Woo is a great analyst to follow on Twitter and he recently outlined some interesting things happening on-chain:

Liquid Supply Change: this is essentially how much Bitcoin is being sold or moved from liquid, speculative accounts to illiquid, long-term HODLer (people who Hold On for Dear Life) accounts. The latter can be determined by looking at their historical behaviour. These are addresses that hardly sell and tend to accumulate Bitcoin consistently. The below graph shows that the HODLers are acquiring more than the speculators are selling and thus, there is a good chance that a price floor has been set for this accumulation period. It means that there is little sell volume left. 

User Growth: this is the amount of new addresses with >0 balance that is created on the blockchain over time. 

In 2018, we saw a massive drop in users as addresses sold their Bitcoin through the Bear market. 

We recently saw a drop-off in users as the bull market slowed down in April/May 2021 but we are once again seeing a large increase in new addresses.

These two factors do not point to any basis that the bull market has ended. In fact, they point to the opposite. 

If you are worried about the recent price action, please always remember the importance of Accumulation periods that flush-out short-term speculators. These drops in prices create price floors, build foundations for long-term holders and in the long-term, look like little ‘blips’ in the overall price chart. 

If you believe that governments will continue to inflate their over-indebtedness and that Bitcoin is a long-term asset, then enjoy these calmer periods. 

*For more thorough analysis, view Willy Woo’s thread here

Some of the other news items for the week are:

1. Microstrategy completed $500m Bitcoin purchase

Microstrategy purchased another 13,005 Bitcoin at an average price of ~$37,617.

As of 21 June 2021, Microstrategy has surpassed 100,000 BTC. They now hold over 105,000 Bitcoin and bought them all at an average price of ~$26,000. 

Microstrategy effectively holds around 0.5% of the total supply of Bitcoin now and it seems they are now working towards acquiring another $1bn of Bitcoin in the near future, based on previous statements. 

No wonder they call Michael Saylor ‘The Chad’.

2. China bans Bitcoin mining in Sichuan province

The Sichuan branch of the National Development and Reform Commission (NDRC) and the Sichuan Energy Bureau has ordered all mining operations in the province to shut down. There have been videos shared on Chinese social media that confirm this.

So, after the 1,000th attempt China did ‘ban’ Bitcoin! Sichuan is the largest green or hydro-powered mining operation in China, so this is seen by many as a big blow to Bitcoin.

However, this is not as bad as it actually sounds. In the immediate term, the hash-rate will go down but Bitcoin’s Difficulty Adjustment algorithm will balance this out on the 29th of June. Blocks will be confirmed every 10 minutes and Bitcoin will carry on as it always does.

In 2016, China did a heavy crackdown on crypto exchanges in China. One of the exchanges who fled China to friendlier territories was Binance. This move of theirs allowed them to become the multi-Billion dollar behemoth they are now.

Expect these mining operations to move their infrastructure in the same manner and in no time, Bitcoin’s hash rate will be at all time highs. One large mining operation is currently moving all of their equipment to Maryland.

As the saying goes, ‘Invest in anything that China bans.’

To summarise, we believe this is a very positive thing to happen as Bitcoin mining pools definitely need to become more distributed and thus, more decentralised and secure.

3. Miami, Paraguay and others entice the Chinese miners

Miami mayor, Francis Suarez who has previously publicly declared that he owns Bitcoin, wants the Chinese miners to come to his city.

“We want to make sure that our city has an opportunity to compete,” Suarez told CNBC. “We’re talking to a lot of companies and just telling them, ‘Hey, we want you to be here.’”

Mayor Suarez also hosted the Bitcoin 2021 Miami conference which was the largest Bitcoin conference to date. As the US states are quite competitive, expect other states such as Wyoming and others to also adopt a similar paradigm.

There is also talk of miners moving to El Salvador due to its wealth of green energy and there are also statements coming from the Paraguay government that they want these miners to bring their capital to these countries.

Only time will tell where these miners will choose to go, but thankfully the year-on-year Fear, Uncertainty and Doubt (FUD) that is spread by the Chinese government on Bitcoin will soon become a thing of the past. 

Which nation is next?

Since the president of El Salvador made Bitcoin a legal tender in his country (which was less than two weeks ago) there have been politicians from 8 countries that have speculated their own adoption of Bitcoin. 

It is incredible to see such a proactive and positive narrative on Bitcoin adoption in such a quick time frame. Most prudent people on the side would only see this as pure speculation with no merit. But maybe the sheer amount of Dollars that America has and plans to print is the primary driver of this acceleration in adoption? You see, Americans receive the rewards of quantitative easing, but Dollar-denominated countries only receive inflation and dilution of their wealth. 

That is why these politicians are jumping at this opportunity, now that there is a precedent in place. They are extremely eager to act on something that can help their constituents that is not Populistic in nature, but based on soundness of money. They believe Bitcoin can help their citizens save their wealth, which in turn will drive their economies forward. 

Politicians such as Gabriel Silva in Panama and Carlitos Rejala of Paraguay are driving this adoption through legislation and some are even saying this could be accepted by their parliament within 1-3 months.

There will only ever be 21million Bitcoin, that is a certainty. The countries that adopt Bitcoin are not a certainty but we are definitely seeing a ‘domino effect’ as Jeff Booth explains in this great podcast

It is not unreasonable to assume that global powers such as Russia and alike will eventually adopt a Bitcoin standard. One of Russia’s biggest goals is to remove itself from the Petrodollar – that is known by many. By adopting something that is globalised and not controlled by any competitor, would probably be the smartest thing they ever did. Even Russian Billionaires such as Oleg Deripaska are calling for Russia to adopt Bitcoin as legal tender
Whatever happens next, it is definitely an exciting time for Bitcoin. The IMF and other central powers are certainly not going to take this lying down. Bitcoin has a lot of fights ahead of it and every fight will only make it stronger. 

Last week we had an incredibly interesting discussion with Dawie Roodt about the history of money, self-sovereignty, what happens next and of course, Bitcoin. You can catch our podcast on all our channels. 

Bitvice Podcasts and Media

Last week we had an incredibly interesting discussion with Dawie Roodt about the history of money, self-sovereignty, what happens next and of course, Bitcoin. You can catch our podcast on all our channels. 

This week we will be chatting with Hermann Vivier about Bitcoin, personal responsibility and freedom. This continues to be an imperative point that we need to discuss as Expropriation without Compensation becomes a reality and as Jeff Booth puts it, “Bitcoin is the only property right that has ever existed that the government cannot take away from you.”

You can follow our discussions on YouTube or via our podcast on Spotify,Google Podcasts or Apple Podcasts. If you are listening on a different podcast app, here is our RSS feed.

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You will earn 0.25% of every referred order, paid in Bitcoin once a month to your

Bitcoin address on record. It’s that easy!

If you want to learn more, check out our post here.

And lastly, the price of Bitcoin might be keeping you down but there’s thousands out there who are Stacking Sats quietly. It’s always darkest before dawn!


Not your keys, not your coins.

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