Capitulation Brings Resolve

Watching the markets with a constant gaze will bring you every emotion in the spectrum. No matter the asset, if you are invested in it you will feel emotions when it dips or rises. It’s human nature to feel these emotions because if it's your personal account, it represents your future livelihood.

I wrote about buying blood in the market and what had been happening with the price of Bitcoin in a prior newsletter here.

Today’s idea is related to my original post but aims to offer more insight into what is currently happening with Bitcoin’s price and what psychological effects dealing with capitulations can have on you.

First, let’s look at the price of Bitcoin.

As I sit here writing this, I woke up to see Bitcoin had dipped below the price point of $55,000 and currently sits a little above $56,000. This has continued the month-long price decrease and extended dip since the halving occurred in April of this year.

There are a couple of reasons for this recent dip but the following post by Joe Burnett summarizes exactly what I believe is going on.

A government, Germany, is publicly selling an amount of Bitcoin and not pushing the sales to over-the-counter buyers. This means their Bitcoin is filling outstanding buy orders. Since whales control the markets, these whales don’t want to be the one holding a “buy” of Bitcoin at a higher price than if they lowered their bid, thus, the price of Bitcoin has dipped.

Additionally, Mt. Gox has started repayment claims of nearly $9 billion in Bitcoin for users who had their Bitcoin hacked off the exchange in 2014. This has further added to the perceived sell pressure facing Bitcoin and has led to more holders selling.

I personally believe these sell events are short-term in nature and offer nothing more than a premium buying opportunity for anyone who still believes in Bitcoin. If you understand the effects of the Bitcoin halving and the typical timelines and historical patterns for what happens with the price of Bitcoin in the months following, I believe this is the logical belief to have.

However, I cannot predict what or when the bottom of this dip in price will be.

Nor can I tell anyone how much or what to buy with their money.

But I can say that the events occurring have done nothing to shake my belief in the future of Bitcoin and I will personally be using this downward price action as an opportunity to purchase some cheap SATs.

With my opinion stated, it’s important to discuss where my opinion came from: capitulation.

Bitcoin has “died” over 400 times since 2010 according to critics and skeptics around the world via various interviews, blog posts, and statements. Yet, Bitcoin still lives, growing every day.

Bitcoin has experienced multiple bear markets where the price cooled off from prior upward trajectories. After every downturn, it rebounded and found new highs.

I recognize that in the midst of watching the price of an asset you hold continue to fall, it can be extremely difficult to avoid the clutches of doubt and regret that capitulation can bring.

However, if you do, you emerge with a greater resolve in the asset you hold than before.

In my personal experience, I have found that any dip or sustained period of time where the price of Bitcoin has fallen, none of the reasons have been due to any fundamental issue with Bitcoin itself. Nothing has been a direct result of Bitcoin lacking in any specific way. Instead, any of the macroeconomic events that have impacted Bitcoin have only impacted it in a temporary time perspective.

In the years since I first found Bitcoin, I have continued to learn more about what Bitcoin is on a seemingly daily basis.

Periods of capitulation have forced me to rationalize and understand what I am holding because the converse would be selling into a dip. When the option is to stay in or leave, I know where I stand.

Capitulation has made me stronger. It hasn’t broken me.

Periods of capitulation brought me resolve.

My belief is firm.

My visions of the future are clear in my mind.

My time horizon is low.

All of these factors mean I don’t quake in my boots when I see the price of Bitcoin has dipped.

Relating to the recent dip in price, the fundamentals have not changed and the macro-economic sphere has adopted Bitcoin like never before in history.

I only view this as a minor blip in the path to a world of hyperbitcoinoization.

This is an opportunity.

An opportunity brought about by price capitulation but recognized by the resolve formed from being here before.

If you are new to Bitcoin, capitulation will either break you or make you. Those are the only two options.

Stack SATs.

The views and opinions expressed here are for entertainment purposes only and should, in no way, be interpreted as financial or investment advice. Always conduct your own research when making an investment or trading decision, as each such move involves risk. The team members behind Triana are not financial advisors and do not claim to be qualified to convey information or advice that a registered financial advisor would convey to clients as guidance. Nothing contained in this e-mail/article constitutes, or shall be construed as, an offering of financial instruments, investment advice, or recommendations of an investment strategy. If you are seeking financial advice, find a professional who is right for you.