We’re starting to get into winter time, not only in the United States but according to many, it’s about to happen in crypto as well.
You see about every 4 years we go through what’s called Crypto Winter. It’s when all the hype leaves the sector and essentially most of the investors in the space take their ball and go home.
Since Bitcoin was created there have been 3 crypto winters so far and while there definitely does appear to be a pattern, any statisticians will tell you that 3 times is not enough for statistical significance.
What actually matters is what people believe.
I think that Bitcoin is going to $1 Million so why would I sell? If there were millions of people who believed that and continued to Dollar Cost Average into Bitcoin, that would eventually happen just because of the perpetual bid.
If on the other hand the belief was that Bitcoin was going to $0 and everyone believed that, then Bitcoin would go to $0 and that would be the end of that.
If only things were so simple.
The fact is the floor price for Bitcoin has gotten higher and higher during each crypto winter.
The people who keep this floor propped up are the true believers in Bitcoin as an idea and with each crypto cycle their numbers grow. In fact, this group alone, eventually would create the Million Dollar Bitcoin.
But now that institutional investors are here as well who add Bitcoin specifically to their portfolios and are being prudent re-balancers and buy when times are low and sell when times are high will also create a higher floor price for Bitcoin which then helps to bring us closer to The Million Dollar Bitcoin.
Right now we have this buy and sell pressure happening at the same time and a whole bunch of other news items that’s leading to uncertainty in the markets.
So while some people will probably always believe in the 4 year cycle and sell based on that time frame, all this will do is create dips that the people who want to buy and believe in Bitcoin for the longer term can use to their advantage.