Six Reasons why One can be Bullish About Bitcoin Now

  • As Bitcoin dropped 1% from its $12,000 mark this week, naysayers claim that the rally to an all-time high is over.
  • Dave Portney, the founder of Barstool Sports and a celebrity day trader, has bought bitcoin with the help of Winklevoss Twins this week.
  • Charles Edwards, fund manager at the Capriole Fund tweeted the reasons for how holding bitcoin now won’t be a downbeat in the long run. 

Bitcoin is one of the earliest cryptocurrencies which had widespread popularity and success. Many investors started to show much attention and curiosity in it. However, now investors broke into three categories since marking a high of $12,000 and falling again.

The first took a bearish perspective and assumed that the bitcoin will drop to $7500-$8500 or even less. The second envisioned a phase where the price of bitcoin will be pinned to $9000 – $11000 and forms a strong base for other investors. Finally, the remaining sector was quite bullish on bitcoin as they are expecting it would take a parabolic breakdown and rally up to $13,000 soon.

- Advertisement -

Charles Edwards, fund manager at the Capriole Fund tweeted the reasons for how holding bitcoin now won’t be a downbeat in the long run. 

Here are the convergence of six fundamental trends he cited in his tweet.

Dave Portnoy Adopted bitcoin

This week Dave Portnoy bought bitcoin with the help of Winklevoss Twins and plans on his own cryptocurrency “DaveCoin”. Writing on Twitter, the internet star declared that now he is the baron of bitcoin. This move can be supportive for cryptocurrencies like Bitcoin as millions of his followers will be exposed to them on a regular basis.

Digital Dollar Soon be Rolled out by Federal Reserve

The Federal Reserve, the central banking system of the USA is making plans to introduce crypto dollars in collaboration with MIT. The bank feels like this initiative will be an effective counter for private cryptocurrencies like Libra.

Lael Brainard, member of central board of Governors has not disclosed whether this idea will materialise into an actual crypto asset. She added that  this move of digitization of finance will increase Bitcoin’s value.

Tether’s market Cap has a rapid surge

Many crypto analysts believe that Tether’s market capitalization and issuance as the major indicators for the increase of Bitcoin price. There is a strong correlation between Bitcoin and tether which took a delay of 32 days between their price action throughout 2018 and 2019. As of July, the tether’s market cap has reached more than $10 billion. However, this correlation is narrowing this year.

Large Sum of Unmoved Bitcoin supply

Most part of the Bitcoin was unmoved over a year. Till date, the amount of unmoved bitcoin has reached an all time high of 44% and  has been increasing significantly. Usually, the coins are held in the same wallet address for 180 or 2 years.

In this notion, Bitcoin is increasingly becoming a store of value rather than a medium of exchange. Furthermore, bitcoin price and the amount of wallet addresses holding the digital asset has a strong correlation between them.

 Not everyone is on the same side, Adamant Capital Founding Partner Tuur Demeester countered that it is not sure how one can keep bitcoin in the storage for long and the risk of coins being lost.

Massive Bitcoin Accumulation Trend

Currently, Bitcoin is in a phase where it’s becoming strong within the upper $11,000 region. This indicates that investors are taking a long-term approach to their bitcoin investment. Once the accumulation trend continues, bitcoin will build a strong base for higher movement.

 Mining becoming Profitable with Low Energy Costs

Over the past few weeks, investors started to pay higher transaction fees for their block to get processed earlier than others which is benefitting the miners. Energy costs which is a major concern for miners have been cut down as they shifted their production to China. 

This may be a great chance for others to get into mining. However, the difficulty for mining has increased on an overall basis and become a barrier for others to enter the industry in turn profiting the current miners. Moreover, the May 11 halving made sure that there won’t be higher transaction fees.

All these confluences are according to Charles Edwards, there are other analysts too. Flib Flib, for instance stated three reasons why Bitcoin could squeeze higher. This usually includes scarcity of bitcoin, the May 11 halving and the backdrop of heightened levels of inflation. The funding rate in BitMEX is also favoring a bullish reversal. Although there are several these factors, there remain some overhanging risks that may dampen any attempt at recovery. 

While the asset class has grown significantly, it remains relatively small and highly volatile. It became quite confusing for naive investors to decide whether to insert a bit of bitcoin or no, but analysts show strong assertions towards  investment.

How useful was this post?

Click on a thumb to rate it!

We are sorry that this post was not useful for you!

Let us improve this post!

Tell us how we can improve this post?

Download our App for getting faster updates at your fingertips.

Ritika Sharma
Ritika Kumari Sharma is an Economics Honors graduate from the University of Calcutta. She is completely into finance and believes that cryptocurrencies are the future. She is an enthusiast learner about the cryptocurrency and blockchain technology.

Similar Articles



Please enter your comment!
Please enter your name here

We Recommend

Top Rated Trading Platforms

Top Rated Cryptocurrency Exchange