- Square and Robinhood have successfully pushed up Bitcoin price in the short-term.
- This is not the end, but the beginning of the making of another 2008.
- Goldman backed Circle acquires suspicious cryptocurrency only exchange Poloniex for a shocking $400 million.
- Rationale makes sense as Goldman needs inventory to start a legitimate cryptocurrency trading desk, and buying on the open market is not an option.
- Institutionalization of Bitcoin makes something inherently worthless to be an “asset” on the balance sheet, a clear repeat of 2008.
Short-term Bullish Catalyst Has Played Out
Back in December I warned everyone about Tether. Tether printing has now stopped, possibly due to the fact that its parent companies Tether Limited and Bitfinex were subpoenaed, and Bitcoin (COIN, OTCQX:GBTC) has collapsed to as low as $6,100 from a high of almost $20,000.
When Bitcoin was cratering, two major consumer finance companies, Square (SQ) and Robinhood, showed strong support for Bitcoin, allowing new money to be brought in. As I discussed in my last article, I was appalled that the companies would shameless promote Bitcoin (not educate, but promote) to its young and uneducated users, creating new bagholders. While Robinhood has not fully implemented its cryptocurrency trading platform (currently in five states), Square has fully enabled cryptocurrency trading on its Cash App for almost all of its users. I had predicted that inflows from the user base of these two companies will have a positive short-term impact on price, and indeed, since the weekend that Square launched its cryptocurrency trading platform, Bitcoin has rallied from $8,000 to as high as $12,000; then soon after Robinhood completed its initial launch on February 22 nd, Bitcoin began its recovery from its lows.