A flight to quality, a bid driven by a potential bitcoin ETF approval, the collapse of FTX far back in the rearview, and the building fear of missing out are some reasons bitcoin's price has jumped. Bitcoin is up around 26% over the last two weeks.
While the recent positive momentum is welcome, at Eaglebrook, we view bitcoin as not a trade but a generational opportunity with the upside materializing over a long-term investment horizon.
As bitcoin takes on the ups and downs of an emerging asset and deals with roadblocks in the form of bad actors, regulatory hurdles, misconceptions, and the volatility of an emerging innovation, the small wins and steady progress provide a glimpse of the light at the end of the tunnel.
These past two weeks showcase bitcoin's potential sudden upward price pressure when catalysts emerge. Over time, the positives for bitcoin should compound, driving the price higher, while the roadblocks fall by the wayside, leaving a clear path for accelerating adoption.
To be sure, there will be more bumps ahead with volatile price movements, but what will also continue is the drumbeat of education and adoption, the long-term catalysts for bitcoin. With a spot bitcoin ETF and the anticipated associated flow of capital into bitcoin, an update to the Fair Value Accounting rule now allowing bitcoin on companies’ balance sheets, and the halving steadily approaching, the catalysts are in place for further price appreciation. Plan Accordingly.