In the investing world there is a famous phrase; “Sell in May, and go away.” For many reasons, stocks traditionally do next to nothing during the summer. In the US the weather has become great, school is out, and people are enjoying the outdoors or going on vacations. You could sleep the entire summer and return in the Fall, without missing anything.
However, throughout Bitcoin’s brief history, it has been different. It has defied all expectations to get to where it is today, but to do that it has also been the most volatile financial asset on the planet. Going from being worthless upon its creation, eventually soaring all the way up to $69k before coming back down.
Even though its appreciation of value is unprecedented in the financial market, Bitcoiners know that we have even come close to reaching its full potential. Experts have predicted that Bitcoin could reach a price of $200k-$500k in the next bull cycle, and even reach $1 million within a decade. For all of this to happen, Bitcoin needs to gain adoption like it has never seen before.
And believe it or not, that adoption is currently happening. Wall Street and the largest investment funds have now entered the Bitcoin market. BlackRock, the largest investment fund and arguably most powerful company in the world, recently announced to the world that they were filing for a spot Bitcoin ETF. This was the shot heard around the world. Bitcoin in an instant went from being a taboo in the investing world, to being a market you couldn’t afford being last to join. The stampede rush of adoption from the biggest players had begun.
While this will eventually pump our Bitcoin bags and make all of those price predictions come true. There is also a lot of baggage that comes with it as well. Perhaps the biggest is that this means Bitcoin will perform similarly to other assets like stocks. When investors go away from the summer, this also means they will be away from the crypto market. Meaning the phrase, “sell in May and go away.” will apply directly to Bitcoin as well.
However, the reality is that this already began two years ago. Beginning in 2021 after Bitcoin’s price soared, each summer Bitcoin has done next to nothing in price.
In May of 2021, Bitcoin had just reached a new all-time high of $64k, but then endless FUD came our way. Tesla had sold some Bitcoin, Elon Musk had concerns about mining energy, China banned Bitcoin, and regulations in the US were being discussed. Bitcoin hovered around $30k throughout the entire summer before finally soaring again in the fall. We saw a similar story in 2022. Bitcoin had soared back up to $45k, but then Luna/UST depegged and caused the summer of insolvencies. After the initial price chaos, Bitcoin remained in the same price zone for the entire summer.
Fast-forwarding to today in 2023, Bitcoin has once again done next to nothing during the summer. One or two years of this price action could be considered a coincidence, but three years in a year make it undeniable. Bitcoin is acting just like all other financial assets during this period.
But it doesn’t mean it will always behave the same. While the summer has been boring, the truth is that there has been very little news or developments happening in the Bitcoin and crypto market. That is how the bear market always operates. The biggest news of the summer was the announcement that BlackRock was APPLYING for a spot Bitcoin ETF, not that it has been approved. In fact, this has been the biggest story in Bitcoin in the last two months.
This just shows how slow this summer has actually been.
With that said, it is important that we don’t downplay the BlackRock application news. It is truly monumental news, and will likely be the catalyst that finally sends Bitcoin over $100k. Until the economy recovers, the ETF being approved and the Bitcoin halving are the only bullish factors on the horizon for BTC. That is the real reason why Bitcoin has been so boring recently.
The future for Bitcoin is incredibly bullish, and I believe that all of those outlandish price predictions will eventually come true. However, for now, we must bide our time and wait. This is actually a great opportunity to accumulate before the storm arrives.
How about you? Why do you think Bitcoin has been so boring this summer
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As always, thank you for reading!
