The Bitcoin Stampede is Coming

Today, the popular mobile payments company Square announced that it’s acquired $50 million dollars in bitcoin. This comes on the heels of the recent announcement last month that Microstrategy had invested their entire treasury of $420 million into bitcoin.

Institutions are beginning to catch on to the idea of holding bitcoin on their balance sheet — and this appears to only be the start. Multiple custodians in the bitcoin space have suggested that they are working with other institutions and businesses to acquire bitcoin. At the same time, Wyoming has created groundbreaking legal framework for bitcoin exchanges to get a banking license.

This sort of news, coupled with the extraordinary leaps in bitcoin’s tech architecture and UI over the last few years, suggests to me that the bitcoin market is on the verge of something massive.

Bitcoin’s price is extremely momentum-driven. Bullish price action begets more bullish price action, just like bearish price action causes more bearish price action. Recently we have been in one of the most non-volatile, neutral price actions in bitcoin’s history. I don’t think it continues for much longer.

As bitcoin’s value grows it will hit a “critical mass” upon which companies all over the world with large balance sheets will suddenly find it prudent to place a small amount of their cash into bitcoin. Bitcoin’s market cap at $200 billion is currently holding these companies back (Google can’t effectively buy $5 billion worth of bitcoin today).

But as bitcoin’s market cap closes in on $1 trillion the flood gates will open and the companies will come. Then, the bullish momentum will beget more bullish momentum. Bitcoin’s price will hit levels that would be crazy to suggest today, and Square and Microstrategy will look like luminaries among the institutional FOMO!

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