Bitcoin reclaimed the $10,000 mark in triumphant fashion this week, surging as high as $14,000 before retracing a bit of its recent parabolic move.
While commenting on price is never advised in such a volatile and nascent market, there are some data points that indicate this crypto price surge is different than ones of the past.
For the first time, there has been a fundamental decoupling between Bitcoin and alt-coins (broadly defined as crypto assets other than BTC). Bitcoin dominance as a % of total digital asset market cap has reached an all-time high of 65%, as Bitcoin sucked all the air out of the room.
So what is really behind this decoupling? The case is strengthening that mass adoption for crypto assets will first be driven by censorship resistant, non-sovereign, borderless money (as represented by Bitcoin). The addressable market for global state-free money is estimated to be in excess of $100tn, with 500m people who live in countries with 10% inflation. Add on the $20tn - $30tn stashed by the super wealthy in off-shore bank accounts, and the opportunity set for Bitcoin still seems barely untapped.
Lastly, qualified custodians such as Fidelity have moved to bring their digital storage and security services online for large institutional investors. So while we are still very early in the emergence of digital assets, it seems that Bitcoin has truly separated itself from the pack.
Separating The Wheat From The Chaff
Tether, not Libra, may be the cryptocurrency behind Bitcoin’s surge - According to Quartz, Bitcoin’s recent rise appears to coincide with the creation of new Tether tokens. Read more
Cryptocurrencies, in some form or another, are probably here to stay - Bitcoin has been bouncing back, after having spent much of 2018 below $4,000. There are many different theories as to why this is the case - the U.S. and China trade war, a possible wealth tax in the U.S., Facebook's introduction of Libra, and geopolitical tensions across the world. Read more
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