15 Nov 2020
Eric's November Thoughts$16,236.40 per bitcoin.
It feels like the question on everyone’s mind right now is whether this is the beginning of another monstrous bitcoin bull run. But at the same time, I’m not sure who would think that it isn’t. Why wouldn’t it be? In this moment, it’s as if all of our wishes are coming true.If you cannot clearly see why that is, let’s jog our memory together.Let me make clear that I’m not writing this to incite hype. $16,236.40 per bitcoin isn’t only the price bitcoin is trading at right now, it is also the exact price point at which I once shorted bitcoin almost 3 years ago. In the article titled “Shorting the Great Bitcoin Bull” I laid out my arguments for why I thought the market was penetratingly overheated and why the assumptions people were making were off. I’d have no trouble writing a similar article today if the circumstances were the same. But that simply isn’t the case.The year 2020 has been a two-sided coin for bitcoin. On the one hand, we’re witnessing the greatest monetary expansion in the history of the developed world—an absolute dream scenario for bitcoin. On the other hand, bitcoin not only suffered tremendously (BTCUSD -60%) during the coronavirus crash, but it also traded like a leveraged S&P 500 ETF for substantial periods of time after that. Throughout this turmoil, we’ve all been waiting for the right pieces to come together so that bitcoin could break free from those shackles. The first thing we needed was for the looming threat of a total market collapse to dissipate. With the S&P 500 trading at its all-time high even while the much-dreaded winter surge of coronavirus cases is upon us, it’s unclear if the market is rallying because of the Pfizer vaccine optimism, or because the game is rigged either way (virus = QE, no virus = good).