Weekly Market Overview
Well it’s not such a good look in the market this week, with Bitcoin down to around $38,000 and Ethereum down to $2,800. There was quite a steep drop in the last 24 hours - but it’s reflected in the traditional global share market indexes as well. So no real surprises there.
We're stuck in the price range we’ve been in over the past few weeks. Struggling to make any kind of headway up or down. Dave The Wave, who is a very good technical analyst, puts things into perspective. He said that considering where we are - halfway to the next Bitcoin halving - we are where we should be price-wise. It suggests that Bitcoin is kind of coiling like a spring and we're going to break the range, either down or up, and it could be explosive in either direction.
There's no getting around that it's volatile across all markets, and the geopolitical stage is volatile as well. Are global economies on the brink of recessions? They probably are, and it doesn't bode well in the short term. But it doesn't necessarily mean we will get a steep fall back into the buy zone? If we do, I don't really see it as a bad thing either.
We’ve talked about this before. Anytime Bitcoin is in the buy zone, that has historically been a really excellent time to buy. So I guess it's a roundabout way of saying ‘don't worry too much.’ In the long term I think everything will be fine. But there is a risk of extreme volatility ahead, as global markets react to the fragile, global economic situation. And as I mentioned it's not just Bitcoin. Tesla had a very steep drop yesterday. I think the reason for that is really what Elon is doing in terms of buying Twitter. Tesla investors are not too impressed by what Elon is doing. I mean, they've been here before. Elon is a volatile guy. He does his own thing, and that has sometimes been reflected in the Tesla price. But it’s not just Tesla, all tech stocks have had a tough year, and Bitcoin is at the moment, really closely correlated to tech stocks.
Elon’s big plans for Twitter
Elon has bought Twitter for about $40 billion. It's not all his own money, but a significant amount of it is - collateralized against his Tesla stock. Which is one reason why Tesla investors have taken a slightly dim view - in the short term, at least.
But it's interesting what Elon is doing. I've talked here on the Crypto World Cafe about my love for the Twitter platform. Elon calls it the digital Town Square. He says that free speech is the bedrock of a functioning democracy. He also says he wants to make Twitter better than ever, by enhancing the product with new features, the algorithms open source to increase trust, defeat the spam bots, and authenticate all users. Twitter has tremendous potential. Currently it's not a huge social network by any standards compared to Facebook, Instagram, Snapchat, or Tiktok. Twitter's user base is much, much smaller. But I do think it's interesting that Elon recognises the promise and potential of Twitter, and is prepared to put skin in the game
Interestingly, the people at Twitter are not impressed. They are very, very heavily Democrat, very heavily left leaning.
The crypto zeitgeist
Elon is going on about free speech and talks about being anti-woke, which does tend to get the Democrats a little bit worked up. So, the reason I bring this up is, I think there's something interesting happening in politics at the moment as well.
58% of US voters are open to backing an independent candidate if they're faced with Biden and Trump again. I think crypto is really capturing the zeitgeist in a quite an intriguing new way, and really starting to disrupt not just the financial system, but also politics.
Crypto libertarians are very vocal in their support of free speech, and I think what you're going to find is people are so disillusioned with modern politics, that you might see the rise of what they call the ‘single issue voter.’
Bitcoin holders is a group that’s growing, fast, fast, fast, that is becoming an extremely powerful voting bloc. I think a lot of them could be convinced to become single issue voters. By that I mean whatever party or candidate decides to back Bitcoin and crypto the hardest will get those votes. It's as simple as that. It makes sense to me. I can see myself being a Bitcoin single issue voter in a year or two, so just something to think about.
Now back to Elon buying Twitter. Jack Dorsey who was the founder of Twitter and has been CEO off and on for most of Twitter's life, has become a hard hardcore Bitcoiner himself. He says, ‘I'm happy Twitter will continue to serve the public conversation around the world, and to the stars.’ It's quite an interesting turn of phrase. Elon’s takeover of Twitter wouldn't have happened without Mr. Dorsey's endorsement - who stands to make around 950 million. That'll give him a little bit of cash to buy the Bitcoin dip.
My theory is that Elon will try to run Twitter from satellites, with no control by any government. SpaceX sits beyond local internet systems and is hard to censor - as Ukraine has shown. So it’s fascinating to consider that perhaps he will try and run it from the Starlink satellite system, which has effectively become a kind of completely independent internet platform. Elon tweeted today. So he says ‘Aspera Ad Astra], which is Latin for ‘through difficulties to the stars.’ I think the key point here is that the world is changing fast and you need to look ahead - be informed about what’s going on and take a long term view.
Exponential crypto adoption.
We've talked before on this show about the Exponential Age. And what happens when these censorship resistant blockchain networks start to hit the vertical part of the S curve, where we see exponential growth. Adoption continues at pace and that kind of free, independent, slightly rebellious Crypto Zeitgeist begins to take root.
And as we’ve discussed before, it’s taking root in some of the world’s largest and most conservative financial organisations. The Wall Street Journal reports that Fidelity is adding Bitcoin as an option for 401 K plans later this year. Fidelity is the first major retirement plan provider to do so. That means the 23,000 companies that use Fidelity to administer their retirement plans will have the option to put Bitcoin on the menu. This has kind of gone under the radar, but I think that's pretty big news. And again, just shows that we're talking about the Crypto Zeitgeist. Bitcoin is getting its tentacles everywhere. The mainstream financial system is being infiltrated by Bitcoin as Bitcoin goes legit. And you know, it starts slowly, and then suddenly - exponential growth happens. All because people get crypto and what it can mean for their lives - in the context of the rapidly changing world we live it.
I hope you enjoyed this edition of the Crypto Wealth Cafe. We'll see you again next week. Bye for now.