Hello Crypto World 2021!

So, I'm looking forward to seeing how well or poorly this post ages. I have a feeling it will do just fine. But, nostalgia tells me that we will smile with a knowing grin no matter which variation of history takes place.

I am looking at a $38,000 Bitcoin on 1/7/2021.

If you care about money and crypto, read this entire post. It is long. It is worth the lengthiness.

Every day, it seems Bitcoin accomplishes a new all time high. Ethereum is doing amazing things.

We've been watching people giving their post-halving price predictions and though we see the logic behind them, it is still hard to fathom a $150,000 Bitcoin, or a $250,000 Bitcoin in a year or two. More conservative doubters who still believe in the math underlying these guestimates, suggest that the price pressure on scarcity is over-stated, and that previous halving pumps were too little data to make assumptions on future pressure.

I'm not here to provide all of the cases or reasons. I'm here to make a couple of important points.

First of all- human nature. Even our bots are susceptible, because we program them to do a good job on our behalf, and that usually means targeting certain elements and indicators that we would be watching in their place. I say "we", but I haven't used a bot since 2018, other than the custom bot I developed this time last year before that exchange took a nose dive. Back to it.

The first major point that I want to make, and it is an incredibly important one, is this:

Bitcoin has proven that price action moves based on percentages, not actual dollar (or fiat) value. Let me explain.

We have literally watched a 10X happen in an incredibly frustrating, unprecedented world condition. We officially have a $3800 low in 2020 hitting a $38,000 high Jan 7, 2021. That is remarkable. And even better, it isn't because of wild uncautioned random pumpa-mental-illness either. For the longest time, Bitcoin has rarely made moves more than 1-2% at a time, but it has had a history of stalling out at $100-200 high/low moves, even for days, last year at one point for weeks. We have seen literal $4000 days now.

If Bitcoin's movement were solely based on volume and price action, you really need to understand the requirements that science and math dictate for the huge cost of a real pump. People may think "Oh, it ain't no thang; Bitcoin only moved 5%. MYYYY low cap poopcoin did 23% yesterday, bebe". Oh, Oh but it IS a bigger deal with Bitcoin.

The more volume trading a coin, and just as important, the depth of the coin's order book, the more money it takes to move that coin a very small amount. Market buys and sells are the only thing that can determine a change. It takes hundreds, even thousands of Bitcoins to move it's price $100, and now it takes even more. Steady accumulation by a small number of investors means that they continue to have a supply for a continuous time, while others aren't trying to price out with limit sells. You have tens of billions of dollars sitting on the order books for Bitcoin. That is heavy weight in either direction. When you market buy, it will eat through the sell orders one after the next until there isn't anything left. Orders go up far past $150K for Bitcoin and currently, no one has that much buying power. The funds don't exist on planet earth, yet...

But, we think, and operate in terms of percentages, and really, truly, trust me, something incredibly important in economic theory, just got a real use case for the first time this year. Of all the assets on stocks, gold, every category, we speculate based on percentage movement. The higher the price, the more buy/sell pressure there IF the price action is based on an increase in volume. But, even these two factors trail liquidity. You can have a tiny coin go from $0.01 to $10,000 and right back down, if it has thin order books and a few suckers watching pump alerts. It does not take much. People might wonder "why do I care about Bitcoin, then? Why not just look for da pamps, yo?" Sure. Most people do. And, most people get rekkt their first year trading. Lack of volume means that even if you hit your massive sell gain goal target, there is a good chance it won't be able to fill, bc small cap pumps are bogus and do not last. They are super great for the people who organize the pumps, and if you move in 2-3 seconds you might get incredibly lucky. But, the order books are thin, and it means the price will rise looking for funds to fill until there aren't any, and then it will plummet when the engine is done trying to fill them.

With Bitcoin, with a stacked order book that isn't going anywhere soon, unless politics ruins the world, it will never be cheap to pump the price. So, it IS harder for it to move 1% than for a small coin to move 10%, but every position getting filled is as close to a guarantee as anyone could ask for. 

What is remarkable, is that the volume of available positions can fill orders that represent $200, $300, $400 value changes for a $38,000 Bitcoin, because of the people behind this buying action. Remember this is a brand new asset class. Yeah, we've had the Bitcoin for more than a decade, but we're talking hundreds of years of data, compared to a few years with real volume on real exchange platforms. Trust me, it is remarkable. So, percentage is the marker for Bitcoin's price action. If it is worth $1000, it likely will have massive price action of $10, 20, 30. If it is worth $10,000, it may have massive massive massive price action at $100, 200, 300. If it is worth $100,000 it might have massive price action at $1000, 2000, 3000.

You may think this is obvious, or a no brainer. But, it isn't. One thing that we do not know with a category that has never had a single asset this valuable yet... is what effect the price will have on volume of interest.

Example: Imagine, as a video game nerd, that you desperately want to have the high score on the scoreboard of your favorite game. You practice way more than logic permits, and you improve, and you are getting closer and closer to your goal. Your parents are calling you to dinner and only then do you recognize the drool running down your chin. You're obsessed. You are within 100 points of hitting your goal, and someone comes along and beats the high score by 1000 points. WHAT? "I didn't think that is possible!" You get over the shock and disappointment, and start drinking energy drinks and eating protein bars at the desktop, parents have now abandoned the hope of having your company at the dinner table (I'm imagining a world where families still exist and they still share a meal at home). You beat your score, and start to inch closer to the goal. 50 points away. 40. 30. 20. And then, some stranger who is likely on the other side of the globe, yet looking exactly the same as yourself now, with sunken droopy eyes, and a screen-glow complexion, upped their skills and beat the new high score by another 1000 points. You go into a fetal position for a few days and eventually become inspired to give it another go. Rinse. Repeat. For some people, event #1 was all it took to wipe them out emotionally. They're done trying. For others, #2 just gets them pumped to try again. But, it is human nature to either follow, believe in an asset all the way no matter what it takes, and for others, the fear that it is going to challenge the very basis of its existence if it goes any further is enough to get them searching after new hopes and dreams.

What I have just described is the volume compared to price action. This is not in terms of market capitalization, which yes, IS a valuable evaluation of price and value, unlike some assertions. This is in terms of how many people, with how much available funds, continue to have interest in trying to get in, and out, no matter how high the price goes. We know that old HODL's are going to remain for a long time. This only matters because of scarcity. Why? Perhaps not for the reason you think. See, with Bitcoin, you can buy, move it to your private wallet (or often, buy FROM your private wallet), and simply hold it. That asset isn't even available on the order books. Get it? On the order books alone, there can be infinitely more Bitcoins attempted to buy and sell than there are in circulation, but some of them cannot be bought no matter what. Even at $300,000 if it aint for sale, you aint gettin it! So, scarcity DOES matter despite many who do not understand this. Once again, the fact that very few are dissuaded and deterred by this fact is impressive and may actually be served as the first REAL use case in this class.

I can monologue about literally hundreds of valuable data points about what is interesting about this, but I want you to remain interested until the end of this post. The next point I want to make, is that it is in fact easier for Bitcoin to do ridiculous high price action, the longer the positive trend continues, and this is not always the case.

Once again, an example. There is an adage (yeah, that happens a lot in my posts, but I like it and I'm probably older than you, so I have a lot of em stored in the upstairs) that says something is only worth what someone is willing to pay for it. This is true. So, let's pretend there's a used car you really want. It isn't super rare... it isn't the only one that exists on the planet, but it is a fine specimen. It has a street value of $10,000. Bidding starts at $5K, and quickly finds some interest. As it gets closer to $9K, you, and many others, start wondering if they might get lucky on a better deal with another auction. Eventually, the price is going to thin out. It might be just sweet enough a ride to get $11, 12, 13K, but once it hits a certain amount more than its assumed value, not only are people less likely to bid, but there is a good reason why. Even here we have supply and demand. But, let's say it was the only Bond 007 model of a super car. Bidding starts at $50K and quickly surpasses $100K and it keeps going up and up. The crowd bidding is a different group. We probably don't expect to be able to get it for a bargain, and the vast majority of car enthusiasts don't have the capital to buy it at an illogical price. For someone, it is worth owning no matter how extravagant the price.

Now, we have an asset class based on desirability AND scarcity, and both models are being proven their legitimacy.

There are numerous factors that could nuke Bitcoin for good, from issues in mining to energy and once again, the most lethal being the political climate. But, those are the risks. Most people are solely focused on the desire to own and hold, and that is going to put so much pressure on price. But, there is room for entry for every single person, from the guy who wants a good bargain for a rarity at $10K, and the wealthy who don't mind paying $1M for the Bond car. Everyone can get in, and get mileage. Where's the top? I personally believe that as long as Bitcoin is worth owning as a store of value, it will go up in price. Until it becomes difficult to own 1 Satoshi, it can keep going up in price.

The last point I want to make, because this is long, is that timing is everything. Price only matters in relation to volume, liquidity, current price, and time time time time time.

I'll make it simple: when the world was thrown into chaos and fear hit the markets, toilet paper was a rare item, and we were all certain we would be eaten alive by the plague, Bitcoin crossed below $3800. If I wanted to get as much as I could at that low point, like so many others, it would have been irrational, it seems, to buy it all the way up to $10K. Why overpay by more than double the price? In fact, why didn't all the whales accumulate as many as they could? The uncertainty was REAL, yo! Nobody on planet earth knew what was going to happen to the world supply of money, let alone imaginary magical internet money. Billionaires were selling off their gold in case of the worst scenarios. So few were driving that oil "tanked" to -$40! Unbelievable!

So, let me ask you; how would you like a $10,000 Bitcoin now?

Timing is everything.

Ain't gonna happen. Probably never again for those of us watching the market in 10 years. Either global politics will ban our access to blockchains like Bitcoin, or it will be so sky high that no one can afford a single Bitcoin other than Gates and Buffet., who will likely be in Futurama head-jars eating burgers and laughing about being 300 years old.

So much can be said about Bitcoin price action and predictions, but I want to drive home the amazing facts as I see them. It is easy to imagine a $40,000 Bitcoin now that it only means moving from $38,000 to $40K. That is amazing! But, no single person on the planet could provide any solid evidence of the possibility that it would be $10K, $15K, $20K in reality, when crisis hit the globe. Even if it were just regular pump and dump action, at $4000 it is very hard to imagine when, and under what conditions, a Bitcoin could become $40K. We could "believe" it would surpass $150K because of the economics of scarcity and the technology underlying its mining difficulty and scarcity. But, we were not SO certain, that it was worth buying a $15,000 Bitcoin when it was only at $5,000. A few billion dollars of market buys would have done it.

No one on the planet was willing to buy in for double the price. Why not? There are brilliant economists all over the globe. Why didn't any of them take out a loan and buy several Bitcoins and sit back, smile, and have a latte?

Bringing it all together for you. If you believe that Bitcoin moves based on percentage much more so than it does on actual price, and I believe this is the case, then it is absolutely true that it is just as likely, and mathematically almost just as easy, for a $40,000 Bitcoin to double to an $80,000 Bitcoin, as it was for a $4000 Bitcoin to rise to an $8000 Bitcoin. I truly, firmly believe that the interest continues to be there when it hits $100K, 200K, 500K and even $1 Million. I do. Again, if idiots don't wreck it with greed and global Marxist agendas, we can see a $100M Bitcoin. It is the only asset class at this point that could do it, and the math would support the model. Yes it would. Yuh HUH it could! Nanny nanny booboo face.

Do I have a prediction? You know, one of the reasons that I am highly accurate in my trading and in my market predictions, is because I avoid speculating on things that are actually about guess work. I don't like to gamble. I don't like to chase things based on chance. A 50/50 chance of being right to me, is not interesting. If I can narrow that down to something very likely, I'm in.

The way that my brain works, I am flooded with SO many variables, that I simply know too many things that can pull an asset down and out, and things that can make it soar. Literally any price can make sense for Bitcoin at any time, for any reason. There is not enough technical and regulatory control over markets to prevent Bitcoin from going to $1, and there is not a limitation on earning so much in a short time that it could go to $1M. Nothing guarantees the markets would halt to stop potential manipulation on that scale. But, let's pretend that all of the radical extremes do not occur in 2021, and this is based on what I believe counts the most. I am going to guess that $120,000 is now conservative for Bitcoin before the end of the year. I am going to guess that $250,000 is not only likely, but it could actually happen in short pumps similar to opposite correlation of a run on the banks.

Right now, price action is accelerating the more people watch the price go up. If it does super extremes, rich people are going to cash out on the top very quickly. If you have 1000 Bitcoins you bought back at $30,000 and it pumps hard to $100K in a day, you're going to cash out, watch it go down to $40K or so, and start buying back in. You can double your stack of BTC in a matter of hours under these extremes and anyone that owns that much Bitcoin and has it on an order book probably understands the economics enough to do just that.

So, you have my price prediction range, and it still sounds a little crazy. But, we saw a crappy year give us 10X in the most expensive asset, and it has risen from $28,000 to $38,000 in just over 1 week. It isn't hard to imagine a 3X or 4X at this point. So, Iran, stick your nukes in your pockets. China, keep your digital yuan out of my market. Facebook... I don't even care. New administrations, enough with the regulatory clarity. Great Reset? Bite me. Russia... whatever. Europe- please just keep it together for a little while longer. Under the most extreme scenario, I do believe we could see a ceiling $320K Bitcoin but then it actually does hit a limit in some ways that are for another article. I could see it dumping to $20K at the bottom if things get really bad but not market-ending bad. But really, if the world remains somewhat familiar, and that is a big ask, it is not unreasonable to expect $200K this year.

Gordon Freeman, crypto-dude with a meme for all seasons, fighter for good, lover of freedom, trader of cryptocurrencies... out.