Waiting for $55,000 bitcoin? Here’s why that is FOOLISH

Are you waiting for Bitcoin to be worth less than $55,000? Perhaps 50,000 or 45,000 or even 40,000? Here's why that is foolish. To understand why that's foolish, first of all, you should follow James Check, my favorite Bitcoin analyst, and he can give you a thousand other reasons, but I want to cover just one. So, first of all, with any financial asset, there's something called long-term holders and short-term holders, LTH and STH. Okay, so STH or short-term holders are people that have held the asset for less than 155 days, which is about 5 months. Long-term holders are people that have held the asset for more than 155 days, which is more than 5 months. Now, why 155 days? Well, because scientific study after scientific study after scientific study shows that for financial assets, if you hold something for 155 days, chances are you're going to keep holding it. It doesn't matter whether it's corn or soybeans or wheat futures contracts, whatever, or if it's gold or silver, or if it's stocks or bonds or whatever, just human psychology is such that when you hold something for less than 5 months, you have a much higher probability to be the kind of person that's still plans to flip that thing or buy and sell it. Uh and if you hold it for more than 5 months, statistically, you're more likely to continue to hold it. So, during this Bitcoin bear market, we saw the price fall from $126,000 down to $60,000 on February 5th earlier this year. Okay, from that point forward, it was about 5 months of grinding sideways near the bottom near in the low 60,000s. We had a one, you know, short run up to above 80, then right back down. Anyway, so the bottom of this Bitcoin bear market was on July 1st, about 5 months later. Now, let's think about this. If Bitcoin were going to go lower, you have to buy the Bitcoin from somebody. You can't buy the Bitcoin from nobody, right? Someone has to sell you the Bitcoin for 55,000 or 50,000 or 45 or whatever price you want. Somebody has to buy it has to sell it. But, 100% of the people that could buy that could sell the Bitcoin to you are either long-term holders that have been holding longer than February, meaning they were not washed out by the price drop down to 60, which was the price paying capitulation, and they were also not washed out by the time paying capitulation on July 1st just under 58,000. So, the long-term holders are probably not going to sell you Bitcoin for prices below 58,000 or 60,000 because they already had a chance to capitulate. They already did not get scared out scared out by the price paying capitulation or worn out by the time paying capitulation, which is the grinding sideways that just drives everybody crazy and washes people out. So, the long-term holders, if you think the long-term holders are going to sell you Bitcoin for prices below $58,000, then why didn't they do that back in February when the price was plunging or in early July when the price hit the low point of this bear market? If they held through both of those, why do you think they're going to suddenly capitulate and sell you their Bitcoin at 50 or 55 or 45? Because they already had a chance in two very scary times, the price paying, which is actually scary scary, and the time paying, which is just brutal because it just goes on and on and on for 5 months. They already held through all that. So, why are all those long-term holders that held through all of that, why are they going to suddenly wake up tomorrow and decide that they want to part with their Bitcoin for $45,000 by selling it to you? They're not going to. Those people have already capitulated. Okay. So, the long-term holders have already held through all of that. So, they're probably not going to sell you their Bitcoin for cheaper than those prices cuz they already had a chance to sell it for more than those prices, and they've already experienced all the pain. Why are they going to come wake up on the other side of all the pain and suddenly want to sell you their Bitcoin for cheap? All right, so then there are short-term holders. But the short-term holders are people that have bought that Bitcoin that they're holding in the last 5 months. Well, what do we know about the last 5 months? The entirety of the last 5 months has been the time pain capitulation. That time period post February 5th, which means all of those short-term holders bought Bitcoin at the bottom. Now, what sort of people do you think buy Bitcoin at the bottom? Is it the sort of people who are going to turn around and capitulate the next day? Buy it at 60,000 and then sell it to you at 45? No. Nobody that does not have extremely high conviction is buying Bitcoin at the bottom of a bear market. The only people buying Bitcoin at the bottom of a bear market are very high conviction holders. They're people like me. They're people who know what they own. They want more of it. They're buying it at the bottom, and they intend to hold it for practically ever. Like forever. Okay, so why are those people going to sell you the Bitcoin? They already believe they're buying at the bottom of the bear market, and if it goes lower, they're going to buy more. Now, I'm 100% exposed, but I actually was ready to buy more Bitcoin. In fact, I had two I had moved two Bitcoin over to cold storage from cold storage over to Coinbase and Strike with the intention of buying additional Bitcoin, a substantial amount, at least $20,000 using Bitcoin back loans at 57,000. Well, guess what? $57,000 never came, which was fine with me cuz I didn't really want the extra debt anyway. I just was going to find it irresistible. I I still have a $10,000 Bitcoin back loan at 63,000 and another 10,000 at 67,000, which I bought on the way down. And that was my plan. My plan was I'll buy $10,000 at 67, I'll buy another $10,000 at 63, and I'll buy at least 20,000, but likely up to 50,000 on if the price goes from 57,000 and below. So, I was going to you know, I don't know, buy $20,000 at 57,000 and maybe I don't know, another 20 or 30,000 dollars of Bitcoin using Bitcoin back loans if the price dipped to like 54,000 or something like that. But, I did not get a chance to do that. So, instead I gave away most of that Bitcoin or half of it in free BitKey giveaways on Twitter. And then the rest of it I moved back to cold storage. So, [laughter] anyway, I never got the chance to to open those Bitcoin back loans, but I would have. And again, the question is what kind of people are buying Bitcoin at the very bottom of a bear market? And the answer is people like me using Bitcoin back loans and every available scrap of, you know, nickels and pennies and quarters from under the couch cushions. Those kind of people. So, is somebody like me buying Bitcoin at 67 and 63 going to turn around and capitulate to you at 45? Are you kidding me? At 45 I'm like stacking a third of my entire stack on Bitcoin back loans and buying substantially more Bitcoin. I mean, like there's no way I'm capitulating. So, nobody that's buying Bitcoin after February 5th, none of those people are weak-handed people. You don't have people that are weak-handed that watch an asset go from 126,000 down to 60,000 and think, "Ooh, I have no conviction. I think I'll buy the asset now and then if it drops even farther I'll capitulate and sell." No. So, the market was entirely made up of only two kinds of people. Short-term holders who had bought it at the bottom of the bear market and were planning to hold forever and long-term holders who had already lived through the entire bear market and were also planning to hold forever. Now, obviously that's not perfect in that there's always somebody selling and somebody buying and, you know, somebody needs to repair their air conditioner or, you know, I don't know. You know, people sell Bitcoin for all sorts of reasons. But, anybody that thinks they're going to buy Bitcoin for $55,000 or less, who's is to sell it to you? It's not going to be the long-term holders because they already lived through the bear market and now they're reaping the rewards. And it's not going to be the short-term holders cuz they literally bought, by definition, in the last 5 months in the bear market. So, they're obviously not going to sell it to you, either. Now, you might get some people who bought Bitcoin between 77,000 and 82,000 that are willing to, you know, if the price starts dropping, they might capitulate and they think, "Ooh, it's going to go lower and I'm going to buy back in." So, what? The price might push down a little bit, but you're not getting down to anywhere close to the levels you think you're going to buy it if you think you're going to buy Bitcoin at less than 60,000. So, that is my question for all the people out there that are so positive they're still going to have a chance to buy Bitcoin for cheaper than any of the prices this year. That is my question. Who's going to sell it to you? Not the long-term holders and not the short-term holders. And guess what? The entire market is only made up of two groups of people, long-term holders and short-term holders. And if neither of those groups of people is going to sell you Bitcoin for 55 or 50 or 45, who is going to sell you Bitcoin at those prices? And the answer is nobody. Nobody's going to buy you sell you Bitcoin at those prices, which is why you're not going to buy Bitcoin at those prices. So, you can either buy now or, most likely, you can buy at higher prices, not lower prices, higher prices. Now, could the price dip from 78,000 to 75 or 72 or Sure, anything can happen. I just don't see any way that the long-term holders or the short-term holders are going to suddenly start capitulating at substantially lower prices than they've already had a chance to capitulate already. I just don't see it happening and neither does James Check and neither, frankly, does any rational person I know. So, if I were you, I would buy as much Bitcoin as I could and sit on it as long as conceivably possible because whatever cheap prices you think you're waiting for, I am quite certain that those cheap prices are never going to happen.