2020 has been the year of the long-awaited beginning of mass adoption.
Bitcoiners have always known that the time would eventually come when growing numbers of people and organizations would begin to understand the technology of bitcoin and realize the extraordinary value proposition that it presents.
Unlike other cryptocurrencies, Bitcoin has no central marketing team or organized brand – only volunteer programmers and outspoken users who promote it organically.
Bitcoin is the only blockchain to have survived “in the wild,” in the absence of a centralized team and community maintaining it.
And Bitcoin is the hardest money ever known, with a supply limit of 21 million.
As Bitcoin dominance increases and the USD price continues making new all-time highs above $20,000, and even $29,000, it’s important to take stock of how this happened.
There are two main groups of factors driving this bull market and increase in bitcoin dominance. They include:
1) Corporate and institutional investment, and
2) Network strength.
I’ll leave the second topic for another article. Here we’ll briefly examine the first through seven headlines that made the world take a second look at the king of crypto.
MicroStrategy Puts $425 Million Into Bitcoin
This was the move that sparked corporate bitcoin FOMO (fear of missing out).
Michael Saylor, CEO of MicroStrategy has been doing interviews all over the place for months now.
He speaks very competently about Bitcoin. He did his homework, as anyone investing $425 million ought to, and it shows.
MicroStrategy has made roughly $775 million dollars in a matter of months, assuming their average entry point was about $8,000 per BTC.
More recently, MicroStrategy has issued a $650 million bond offering, the proceeds from which will be used to acquire even more bitcoin.
PayPal Enables Crypto Purchases
PayPal brought crypto to over 300 million people by giving users the power to buy and sell Bitcoin, Ethereum, and a few other cryptocurrencies.
The service only allows users to buy and sell within their account. The PayPal wallets don’t have any functionality that allows users to send coins off the platform. There’s also counterparty risk involved.
Still, the announcement alone was yet another huge public endorsement for crypto.
Paul Tudor Jones
Perhaps the single biggest crypto headline of 2020 involved famous hedge fund manager Paul Tudor Jones. News of his bullishness sparked smart money FOMO, with many other prominent billionaires and multi-millionaire investors following in the months afterward.
It’s worth noting that Paul Tudor Jones made his announcement prior to everything else that happened with Bitcoin in 2020.
In other words, it can be said that Jones’ approval gave others the green light to investigate and invest in bitcoin.
Raoul Pal might be the biggest bitcoin bull on the planet.
The famous macro investor and Real Vision CEO has said that “there is no other asset worth owning” besides bitcoin. The majority of his liquid portfolio is now in bitcoin.
Pal creates a lot of great free content about bitcoin, gold, and macro investing in general through his Real Vision platform.
Druckenmiller is another hedge fund billionaire who has turned bullish on bitcoin.
In November, the legendary investor said he had “warmed up” to bitcoin as a store of value.
Welcome to the club, Stan.
Jack Dorsey’s Square payments app invested $50 million of its cash reserves in bitcoin, following MicroStrategy’s lead.
This represents a much smaller allocation than MicroStrategy but still adds to the corporate FOMO effect.
Crypto Indexes on NYSE
In early December, it was announced that S&P Dow Jones Indices would be creating an index to track the performance of cryptocurrency. They plan to partner with crypto data company Lukka for the endeavor.
Bloomberg and Nasdaq have also created crypto indexes, but S&P Dow Jones doing so represents an even bigger leap forward in mainstream adoption.
This is Only the Beginning of Bitcoin Dominance
There are other important bitcoin headlines from 2020 not covered here as well, and some big money has come into the space just during the last few days alone.
One factor that someone on LinkedIn mentioned is Grayscale. The Bitcoin Grayscale Trust (GBTC) is rumored to have been buying all of the new bitcoin being mined each day. That means all the demand coming from everywhere else will necessarily bid up the price of BTC, because there is no new supply coming online.
This is the way that bitcoin dominance has always been destined to go. Everyone who understands hard money knew that this was going to happen at some point.
If you owned Bitcoin prior to 2020, congratulations. You happened to seize upon what might be the only opportunity in our lifetimes to front-run the “smart money.”
People like Stanley Druckenmiller and Paul Tudor Jones are the smart money – they get into profitable trades before everyone else. It’s almost unheard of for the average person to pick a trade before those kinds of investors.
2021 will also likely see new all-time highs for Bitcoin as well, and volatility could be reduced. Now that everyone understands the importance of holding hard money, they will be less likely to sell for short term fiat-denominated gains.