Bitcoin always has a passionately felt narrative, but never before as deafening as this one. I have been following Bitcoin closely for eight years, and it is rare that the story screams to this degree.

Watch Musk

Source: Bloomberg. Bitcoin intraday since 26 Jan 2021 — Elon Musk tweets shown.

An eight-fold surge in 300 days is rare


A four-fold surge over 300 days is also rare


The trend is your friend

What is remarkable is how this trendline has stood the test of time. I first spotted it in 2016 and highlighted the 118% annualised rate of return. In 2017 it sped away only to return by late 2018. It broke lower in March 2020, during the broad financial meltdown, and is once again trading back above. The trend currently sits around $19,100, which is 46% below the current price. Small beer in the big scheme of things perhaps; after all, the trend will be back to the current price by the end of 2021.

The long-term trend more than doubles your money every year

Source: Bloomberg. Bitcoin log scale with a 118% trendline since 2015.

Feeding the miners

Over the course of 2017, the value of the Bitcoin Network escalated from $14.5 bn to $291.8 bn. For that that huge amount of value creation, the miners were rewarded with $3.7 bn.

The importance of institutions

Pre-2020, institutional investment was helpful, but retail overwhelmed it. In future, this has to reverse because the sums required by the miners escalate rapidly.

Source: Institutional fund flows less miner first spend in $US since Aug 2017.
Source: Institutional fund flows less miner first spend in $US since Sep 2020.

Applied data for digital asset investors. ByteTree provides real-time data, fundamentals, technical and deep blockchain market analysis for Bitcoin, and more.

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