We Be Moonin’

We Be Moonin’

Bitcoin blasted through US$20k like it was tissue paper. When moon? Now. Now moon.

So, where were you on the night of December 17, 2020? Were you out celebrating the festive season with your friends and loved ones? Or were you staring at a screen in utter disbelief as the bitcoin price not only smashed through its previous all-time high, but then went on to add another 15%, quite literally leaving it in uncharted territory?

You have to hand it to bitcoin: it has a flair for the dramatic. It took precisely two years and 365 days to blast through to a new all-time high (thanks to the Leap Day this year), and it also marked almost exactly two years since it hit its bear market low of US$3284. There’s just something about the middle of December…

But, hell. That’s all window-dressing on bitcoin’s best year. A year that has seen it more than triple in value since January 1, a year that saw its third halving, its biggest ever one day drop and the kind of institutional acceptance that those of us who were around in 2017 could barely have dreamed of. While that golden year can still beat 2020 for sheer, vertical value increase, this was the year that bitcoin proved that it was here to stay. And, well, I got a good feeling about 2021…

To the victor

Looking back at everything that’s happened in the past three years, it seems so clear. Of course bitcoin needed to cool off after the 2017 bubble. Of course the space just needed time to mature. Of course another halving would lead to a runaway price increase. Of course it was always going to make new highs.

But the thing is, none of that was destined to happen. While from a technical standpoint the market needed to chill, and the industry certainly needed to grow up, there was never any guarantee bitcoin would thrive like it has, and certainly not at the speed that it has.

We can thank the thing that’s also made 2020 the worst year since, let’s say, 1945: the goddamn coronavirus. Was it not for the arrival of COVID-19 and the unprecedented levels of money printing that it caused - one-fifth of all the US dollars in existence have been created since March – it’s hard to know whether bitcoin would have emerged as the inflation-busting monetary alternative that it has. Eleven years on and it’s playing out just like Satoshi said it would.

A rich person’s game

If I had to pick the single most important crypto moment from this year, it’d be May 11, a few days before the Halvening, when billionaire investor Paul Tudor Jones announced that he’d put 1-2% of his wealth into bitcoin as a hedge against monetary inflation.

That was the validation that bitcoin needed, a starter’s pistol for every other ultra high-net-worth individual to think about putting some cash into bitcoin. Better than leaving it in a government bond to slowly shed its value as the seismic shock of all that money printing filters through to the economy at large.

Since then we’ve seen billionaires, major managed investment funds and some of the world’s biggest companies announce that they were taking a position in bitcoin. American exchange Coinbase just announced that it’s going to IPO at a valuation of around US$28 billion. The institutional interest is real, and it’s just getting started.

Next, the world

If the bitcoin cycle repeats once again, then what we’ve seen this year is analogous to 2016, a year that also started in the doldrums before soaring to December highs. Twelve months later the price had gone 20x. While nothing is guaranteed and, of course, there will be pullbacks, corrections and moments when it feels like everything is falling apart, the key takeaway is that we are still early.

Will 2021 be the year that corporate FOMO kicks in? How high will the price have to get before the retail market goes absolutely HAM and you’re chatting trading strategies with your barista?

More importantly, what will you do? Will you HODL or will you sell? What’s your price target? Will you be strong enough to sell when you get there, or will the lure of outrageous gains keep you playing chicken with the moment of inevitable collapse?

All this and more in 2021. Merry Christmas, one and all.

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