Square's Cash App (disclaimer: sponsor of the rag and the pod) produced a lot of revenue and profit via bitcoin selling in Q3 of this year. Over the course of the quarter Cash App added new bitcoin buyers and existing buyers increased the volume of bitcoin they were purchasing on the app. If the chart above is to believed (I can't verify the average cost of bitcoin purchased by Square on behalf of their customers), the amount of bitcoin being scooped up by Square is double the amount of newly mined bitcoins being distributed to the network over the same time period.
When you factor in the fact that Digital Currency Group is doing something similar for their GBTC product, other companies are entering the market, and the last halving of the block subsidy is now 6-months behind us; it's hard not to imagine a serious liquidity crunch coming to the market for bitcoins. As the price approaches all time highs, individuals are getting more and more confident that the price will surpass it and likely follow the fractal trend up and to the right that the price of bitcoin has followed throughout the first 12 years of its existence, making them more likely to hold their coins. Keeping them off of the market from perspective buyers.
Once that is factored in, think about the type of individual who has been on the sidelines and will probably be chasing these gains as the trade becomes more and more popular; institutional investors, corporations and high net worth individuals who have a lot of cash to throw into the liquidity crunch. These types of investors are going to want to move in with size to make up for lost time and sats that could have been stacked at lower prices. This scenario, if it plays out (totally possible it doesn't), will create intraday price moves that will be awe inspiring. Prepare yourselves accordingly.
Thank you for stomaching my price talk. I try to avoid it as much as possible, but the conditions that exist right now make it extremely hard not to point out what is potentially developing in the markets.
Make sure you take custody of your own coins!
Having a baby that can sleep in the stroller while at dinner is a godsend.
Enjoy your weekend, freaks.