HUGE INSTITUTIONS BOUGHT BITCOIN (Tesla and others)
After the 2020 Bitcoin Halving institutions and even countries started to adopt bitcoin and other coins as part of their investment portfolio as well as for use. This process of an asset being institutionalized comes with quite a few changes for investors. Of course there will be regulatory changes but for now I would like to stick to the changes from a price action/investment standpoint.
Bitcoins 4 year halving cycles have been profound with lots of volatility, thousands of percentages in gains and huge corrections. It has been a top performing asset in the last 12 years. Institutions adopting bitcoin and other cryptos is only going to help the long term investors but it will come with some changes. First being, the stabilization of the 4 year cycle movement. When an institution like MicroStrategy buys bitcoin they have no intention of selling. They are allocating bitcoin to their portfolio for the long run. Yes, we did see some institutions like Tesla sell their bitcoin but I can tell you that if crypto continues its growth there will be more institutional bag holders than not.
So how will this change what investors have seen in the past?
The cycles will flatten out into steadier growth. The huge parabolas and corrections that we are seeing, and have seen in the past, will be toned down. Majority of the owners will be institutions. If this is the case then we can expect pullbacks and corrections to find their bottom much quicker (where there is no more sellers). It is possible that right now may be an example of that if bitcoins price doesn't go any lower. The first photo is the run prior to the 2016 halving showing its 84% correction. Second is the most recent run after the 2020 halving showing a 74% correction. I expect this trend to continue with the growth of crypto.
Retail investors will continue to buy and sell but their transactions will not move the markets as much. Bitcoin Whales will become less powerful with their ability to move the markets as well. Its really a simple concept that comes down to this... As Bitcoin and the entire market become a multi-trillion dollar asset everything will become less sporadic.
Utility will also increase adoption; This too helps grow and stabilize the market. Crypto projects/companies will settle in their niche performing legit functions using blockchain technology. VeChain is a good example of this. With their advanced traceability they are partnering with lots of companies to integrate and utilize their blockchain tech. They are the UFC's first layer 1 partner.
We have seen other simple quality forms of crypto utility like Ukrainian funding during their countries attack. Or even El Salvador using bitcoin as a currency and distributing it to the people of the country. Remember as countries make clear their regulations for crypto, more institutions will be incentivized for allocations. Big tech just wants to play by the rules.