Institutions are showing the green light, equities have rallied, Ether is waking up ahead of the fabled Merge, so where is Bitcoin among all this positive activity?
Regarding talk of sizable institutions showing interest in crypto, there is no larger asset manager than Blackrock, which recently announced that it was partnering with Coinbase to offer a private bitcoin trust for its institutional clients, enabling direct exposure to the prime digital asset.
For a couple of years now, a growing narrative around bitcoin has been that the institutions are coming. This has implied that when bitcoin starts to be accepted as a legitimate asset class, large investment entities will see it as requisite to include bitcoin allocation in their assets under management.
Having said that this should then create a snowball effect, or become game theory in action, as bitcoiners like to say (also referring to adoption by nation states), whereby no large buyer wants to be the last one on the board paying premium rates for its stack. On top of that, throw in retail FOMO, and the proposed view would then consist mainly of surging green candles and rampaging bulls. Or so the stories go.
Relatedly, we have bitcoin’s correlation with equities, which had, prior to crypto tanking heavily in June, become stronger than ever, suggesting that bitcoin might be migrating towards the financial mainstream.
Turning to Ethereum, we see a great deal of hype and anticipation around the Ethereum Merge, which will see the number two blockchain by market cap switch to a proof-of-stake protocol.
This is a long-anticipated event that is expected, potentially, to shake up and stimulate the crypto world, in which rising sentiment lifts all blockchain boats. Indications that the Merge will go ahead in September have been accompanied by a substantial recovery in the price of Ether.
All of this means that bitcoin prices might be expected to rise, and to be clear, there has been upward movement. However, performance has not matched that of either equities or Ether, and, in general, has not tallied with bullish takes, taking into consideration the news of Blackrock and the extent to which such stories can sometimes move the market.
A Self-Enforcing Pattern
So, what does this indicate? Is the bear phase so deep,…
