From “Itchy” Hands to “Diamond” Hands: Here’s What’s Next for Bitcoin

From “Itchy” Hands to “Diamond” Hands: Here’s What’s Next for Bitcoin

After hitting a high of $73,800 in March, bitcoin has spent the last five months grinding lower.

A bevy of short-term headwinds have developed, knocking the price lower.

We’ve seen the German government dump $3 billion worth of bitcoin onto the market with little care as to the price it received.

We’ve also seen the U.S. government send roughly $1 billion in BTC to exchange wallets to be sold

But the biggest psychological overhang has been the $8.5 billion worth of bitcoin that courts recently distributed to the creditors of the defunct Mt. Gox bitcoin exchange.

At one point, Mt. Gox was the largest bitcoin trading hub in the world, with 70% of all bitcoin trading volume handled on the exchange.

In 2014, a devastating hack led to the theft of 850,000 bitcoin. Back then, bitcoin was trading for as low as $111.

After a 10-year wait, investors have made as much as 500x their money from their bitcoin holdings. It’s logical to assume some of them will cash in.

If you are a savvy long-term buyer of bitcoin, you know this overhang of coins is out there. So you have to ask yourself: “Am I in a hurry to buy bitcoin or will I wait and let the desperate sellers come to me?”

Friends, you don’t get to manage or accumulate a lot of money by being irrational with it.

If you know there are billions of dollars’ worth of sellers itching to sell, then you wait and you let the price come to you.

And that is exactly what is happening right now…

This overhang of “itchy” bitcoin is a gift to “diamond hand” (long term) investors… Not a curse. But training yourself to be a buyer when prices are weak will be the hardest thing you ever do when it comes to investing.

To do that, you have to know the value of an asset is… And what its value will likely be in the future.

For instance, if you understand the car market, you know when a certain make and model that’s in a certain condition is being mispriced by the market. The same is true for many other assets, including bitcoin.

Over the near-decade I’ve covered this new asset class, I’ve learned that the best metric to value bitcoin is adoption.

Adoption: The Key Driver of Bitcoin’s Value