WHY isn’t Bitcoin‘s price going up? “The Great Rotation”

Why isn't Bitcoin's price going up? It's called the great rotation. Why is it that OGs are selling some of their Bitcoin? Why was it that early investors in Facebook, Amazon, Google, uh Tesla, uh Facebook, and uh all the other Magnificent Seven stocks? Why was it that some of their early investors sold some of their stock as soon as the six-month lockup period expired after their IPOs? All of those are great questions. Let's walk through it. First of all, Bitcoin's price seems to be stuck. Why is it stuck? Well, it's stuck because some OGs are selling their Bitcoin. Well, why are original Bitcoiners, OG Bitcoiners, selling some of their Bitcoin? The answer is I don't know. But it happens with every asset after an asset goes public. I talked a lot in 2014 how, sorry, 2024, last year, 2024. I talked a lot in 2024 about how uh the Bitcoin exchange traded funds, ETFs that went live in January of 2024 was kind of like Bitcoin's IPO, initial public offering. It was the first time that Bitcoin officially had an institutional stamp of approval. It could be adopted. It could be traded. It could be held by corporations. It was really the massive mega coming out party for Bitcoin in January of 2024. First of all, you'll remember Bitcoin actually dipped for the month following the launch of the ETFs, which of course made no sense. Like why would people be selling Bitcoin after the biggest event of the decade for Bitcoin? Um, and the answer is it doesn't make any sense, but human behavior often does not make any sense. But this is a common phenomenon when an asset goes public that early investors in an asset wait a long time until they're ready to liquidate some of their investment to improve the lives of themselves and their families. Look, maybe they want to buy a nice house for every one of their kids and they have like four, five, six kids. Well, that's like multiple millions of dollars if you're going to buy all your kids a nice house. U maybe you want to go on nice vacations. I don't know. I don't know why people sell any asset. But the same thing happened with the magnificent seven stocks which are the seven highest performing uh companies on the US stock exchange which includes let's see if I can list them. Amazon, Apple, Microsoft, Google, Facebook, Nvidia, and Tesla. Yeah, all seven right there. So, the same thing happened where they each went public. some period of time passed and when a company goes public, insiders, which are people that already own the stock prior to the initial public offering, are not allowed to sell the stock, usually for at least 6 months. And so, initially after a company goes public, everybody's in what's called a lockup. During that lockup, nobody can sell their stock if they own the stock prior to the initial public offering. Obviously, Bitcoin didn't have a lockup, which is probably why the price dipped immediately after the ETFs were launched because people who could sell it are like, "Oh, well, now the big exciting news event, which are the Bitcoin ETFs, now that it happened, I guess I'll sell some." Which again does not make any sense in my opinion. And I said that back then. In fact, the very first video I ever did about Bitcoin, I did on March 24 of 2024. So, literally I did it two weeks into the one month dip after uh the ETFs went live. Actually, it dipped from I don't know, maybe that timing is not exactly right. But the short take is part of the reason I did that video was because I was like the price of Bitcoin doesn't make any sense. Like you should buy more of it because you know it's way lower than it ought to be. Which was true because back then it was in the 40,000s and now it's in theund over 100,000. Uh so but why did why why why is it that when a when an asset goes public like more or less Bitcoin did? Well, it's because early investors want to sell some. I don't know why they do it. I honestly don't know why they do it. In my case, obviously I was the original investor in Bombgar Corporation, which was my company. So when I sold Bombgar Corporation in 2014, 11 years ago, for the very first time, I did diversify the vast majority of my investment. In fact, the original investors required us to keep 25% of our holdings but mandated that we sell 75% of the holdings to them. They were acquiring the company. They wanted to own a majority of the stock and uh we had the choice of you know or not the choice we had to roll forward 25% of our stock holdings but that involved selling 75% of our stock holdings to the company that was acquiring Bombgard Corporation. They asked if we wanted to keep a little more than 25% up to as much as 30%. I said yes, but ultimately there were too many people that wanted to keep more than 25%. So they ultimately did not allow anybody to keep more than 25%. So I actually wanted to keep holding more Bombgar Corporation stock than just the 25% we were required to hold, but they would not let us. That was part of the acquisition of the company. They wanted to own the majority of the stock uh themselves, which made sense. we were selling the company. So that made sense. Okay. So, but after the second sale of the company, the first sale was in 2014, the second sale was in 2016, they required everybody to liquidate all their stock. So, I was not in a position where I could have continued to hold Bombgar Corporation stock. Um, but in that case, I understand why people diversify. It's a new owner. There's all sorts of risk, right? They could screw the company up by screwing up the culture. They could screw up the execution. They could launch products that don't make sense. They could make acquisitions that don't make sense. There's a thousand ways for them to mess up the company. And as a result of that, in my opinion, it makes sense why someone, you know, sells stock that is early in a company when it goes public or in our case when we were acquired as opposed to continue to hold on to it. That made sense to me. But again, Bitcoin is not a stock. You're not dealing with any of those risks. You don't have execution risk. you don't have, you know, product market fit risk. All of the risks that would lead somebody to sell co to sell stock in Tesla, Amazon, Apple, Facebook, Google, uh, Nvidia, or Tesla. I may have duplicated one there. All of the things that would lead somebody to sell stock in a company like that do not apply to Bitcoin. It's a currency. It's not subject to any of those risks. So, I don't know why OG Bitcoiners are selling some of their Bitcoin. We know they are because you can look on the blockchain and you can see that every day or every week, every month, some of that early Bitcoin comes alive. It gets moved over to Binance or Coinbase or somewhere and sold to the marketplace. That's why you can still buy Bitcoin for $106,000. But I don't know what they're doing. I don't know what these people are spending their money on. I don't know why they're deciding that, you know, they want to buy a bigger house. They want to build an expansion on their house. They want to buy a boat. They want to buy a yacht. They want to buy, go on nice vacations. I guess they just do all those things for the same reasons everybody do does all those things. But what we do know is the same thing happens when a company goes public. And if the same thing happens when a company goes public that early investors go through a great rotation where early investors sell a portion of the stock or the asset to new investors, then it's perfectly logical the same thing would happen to Bitcoin. And the same thing is happening to Bitcoin. that exact same dynamic is playing out which is why the price is not higher. One second. Now, interestingly, I've never actually seen any studies on what people do with those, you know, the money they get from that. The early investors in in any of those seven companies I listed. I don't know what they did when they sold that early stock. I don't know if they diversified into other assets. I don't know if they bought nice things. I mean, I just don't know. I don't know what they did, but they did it. We know that that's what they did, and we know that's what people are doing with Bitcoin now. Now, we also know there's a finite amount of Bitcoin that OG Bitcoiners are willing to part with. Just same with any public company. The early investors do not sell all their stock, right? They sell a portion of it, a portion of it, until they have everything in their life balanced the way they want. They have the right the right amount of precious metals, the right amount of fine art, the right amount of nice things, the right amount of vacations, the right amount of real estate, whatever it is that gets them excited to wake up in the morning and wanting to own whatever it is they own. Once that is balanced the way they want it, they stop selling the asset. It doesn't matter if it's a company stock or if it's a precious metal or fine art, whatever. When they have everything balanced the way they want, they stop selling it. That day will come for Bitcoin any day now. I mean, I don't know which any day now, but any day now, those OG Bitcoiners will decide that at a price above $100,000, they have sold as much as they want to sell, whatever amount that is, and the supply will dry up. Well, we know we know the demand is there because all of this uh Bitcoin is be uh every sold Bitcoin is a bought Bitcoin. Every bought Bitcoin is a sold Bitcoin. So, we know that uh one second here. We know that all this Bitcoin is getting bought up and it's just a matter of time until there is uh you know demand outstrip supply. So, that's what we're waiting for. We're waiting for demand to outstrip supply for the supply of uh Bitcoin that OG Bitcoiners are willing to sell to dry up and the price will go up because that's what has to happen. When you're balancing supply and demand of a finite asset like Bitcoin, you can't make more of it the way you can with a company. Um, you can't dig more of it out of the ground the way you can with gold. You can't issue more of it like a company does with stock. Um, so the price has to go up because it is fixed and finite. So that day will come. Uh, in the meantime, we wait. We're patient. And we should be thankful that we can still buy Bitcoin for $106,000 per coin. That is a blessing. And a bunch of people are going to wish they had bought a bunch more Bitcoin. Uh, as soon as the price goes up, everybody's going to wish they had bought more. And that you can do that right now. Right now, you can buy more Bitcoin. And it doesn't matter why the OGs are selling. At some point, they'll stop. The price will go up. And what matters is how much will Bitcoin will you own when that happens.