For Contrarian Investors, Here Are the 3 Reasons to Smile With the Bitcoin Price at $19K.
"Buy when there's blood in the streets, even if the blood is your own."
The price of Bitcoin is currently just over $19K.
Faced with this price, you can see several reactions. On the one hand, you have those who will tell you that this is just the beginning of the fall of Bitcoin and that its price will soon go to zero. You have the gold bugs like Peter Schiff here.
You have those who bought Bitcoin at the Bull Market in 2021 without knowing what they were doing and are now panicking or have already capitulated. For them, it's a total disappointment, even anger. Some might even tell you that Bitcoin was just smoke and mirrors after all. Resentment makes some people say amazing things.
And then you have the Bitcoiners for whom a Bitcoin under $20K is a dream. Not that these Bitcoiners want to see the price of Bitcoin fall, but since they understand the reason for Bitcoin, they know that a Bitcoin at this price level is a unique opportunity.
Unique as long as you can take a long-term view with Bitcoin.
This is something Michael J. Saylor has been doing since he fully embraced the Bitcoin revolution in the summer of 2020. He just announced that MicroStrategy was buying the crash since we can no longer talk about a dip at this level:
MicroStrategy has therefore added 480 more BTC, making the company now hold 129,699 BTC. If you want to buy Bitcoin in DCA mode like Michael J. Saylor, this is where you can find a breakdown of all the MicroStrategy's purchases so far:
https://www.bitcoinpriceinwords.com/bitcoindcalikesaylor.htm
In the aftermath, El Salvador's President Nayib Bukele thanked all the Bitcoin sellers for allowing him to strengthen what his country holds at a lower cost:
El Salvador now holds an additional 80 BTC.
As you can see, when you have faith in the Bitcoin revolution, the current extreme fear in the market is your opportunity.
Some investors still doubt it, so I'm going to give you 3 reasons to smile if you're one of those usual contrarian investors. This may or may not convince you of the current opportunity.
1. Fear of the masses is an opportunity for smart investors
Baron Rothschild was an 18th-century British nobleman and member of the Rothschild banking family. Rothschild made his fortune by buying in the panic after the battle of Waterloo against Napoleon. His investment motto should sound familiar in today's market environment:
“Buy when there's blood in the streets, even if the blood is your own.”
This is contrarian investing at its core: the firm believes that the worse things look in the market, the better the profit opportunities.
With Bitcoin, we're in the middle of it. While Bitcoin's fundamentals continue to strengthen, its price is suffering from the current macroeconomic environment, with a global recession looming for the year, and following persistent high inflation.
However, Bitcoin will emerge stronger from the current bloodbath. It always does. As long as the fundamentals are still the same, you can smile when you see Bitcoin at a price of $19K when its price was $69K in November 2021.
2. Low volumes show us that no one is interested in Bitcoin anymore
The low volumes in the spot market confirm that no one is interested in Bitcoin right now among the general public. The retail investors are long gone. When we see that even the ounce of gold is falling now and that the 10-year US Treasury bond rate has just dropped below 3%, we wonder where investors are putting their money now.
Under their mattress perhaps?
I have more confidence in the most secure decentralized network in the world to protect the fruits of my labor than in my mattress. But everyone has to make their own choices, as I've told you many times.
From there, you have to keep in mind that when fear is at its peak, there is no better time to buy a strong asset like Bitcoin. The fact that no one is buying Bitcoin right now should not worry you, but rather make you open your eyes to the current opportunity.
3. Those who don't understand Bitcoin are overreacting because they mistakenly think that Bitcoin is a risk-on asset
Bitcoin gives you incredible security in a world that is more uncertain than ever. Bitcoin is a unit of wealth tied to no government and no central bank. The opposite of fiat currencies that are just units of debt.
When you understand Bitcoin, you understand that it is a risk-off asset:
Many will be surprised by my assertion, except those who have understood the reason for Bitcoin. That's the case with Bill Miller, who sees Bitcoin as his best insurance policy against a potential financial disaster.
Of course, you are entitled to disagree, but before you make the mistake of mistakenly seeing Bitcoin as a risk-on asset, you should take the time to fully study the why of Bitcoin and how its unique decentralized system works.
Then you will better understand my assertion.
Some reading
Mid-Year Review 2022 – 10 Lessons for the Financial Markets. The hardest part is probably still to come.
Here Is Why the G7 Ban on Russian Gold Is a Game-Changer, Even for Bitcoiners. This ban brings us closer to the scenario long anticipated by gold bugs.
Always a Contrarian, Michael Burry Predicts a Bullwhip Effect in the Months to Come. Some of the economic data in America point in his direction.
Recession, Stagflation, Hyperinflation, Big One … Here Is Why You Read Everything and Its Opposite. All these phenomena are intertwined and this is something to be desired.
The 7 Stages of a Bear Market – Where Are We With Bitcoin? Probably between panic and accumulation/stabilization.
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