That’s not necessarily news for disgruntled Bitcoiners BTC$110,383.04 Bulls putting the planet’s assets at risk have been hitting what appear to be new highs every day for months, but BTC price action remains fairly subdued.
“What if everyone is looking at this wrong?” asks Jordi Visser, a longtime traditional financial asset manager, in a weekend essay titled “Bitcoin’s Silent IPO: Why This Consolidation Isn’t What You Think” (1.5 million views on X and counting).
Although Bitcoin has never had a traditional IPO, Visser argues that the factors that limit price appreciation are much the same as those that cause poor price performance in stock IPOs.
The Tradfi IPO and the following months remind Visser that it is a major liquidity event for early investors, especially in the technology industry.
“Early-stage investors take on a great deal of risk,” Visser wrote. “If the investment is successful, they deserve a huge reward. But ultimately, and this is important, they need to realize that return. They need liquidity. They need an exit. They need to diversify.”
There are countless examples, especially in the technology industry, but consider the 2012 IPO of Facebook (now Meta). The public offering at $38 per share raised $16 billion at a valuation of $104 billion. That’s a strange number now, but at the time it was an amazing amount. A year later, the stock price fell 30% and experts questioned Mark Zuckerberg’s leadership.
More likely than Zack’s failure were the early investors — whether they were friends at Harvard, Silicon Valley types, or the carpenters who used the public markets to assemble Facebook’s first offices (who were paid in stock rather than cash) and used the public markets to realize life-changing profits.
Importantly, Visser said, early investors don’t bid all at once. “They’re allocating their positions systematically. They’re cautious. They don’t want prices to skyrocket. They’re patient. They’ve been waiting for this moment for years. They can wait a few more months to do it right.”
The result was “a sideways grind that everyone was into,” he says. Sound familiar?
economic power will not disappear
“On-chain data tells a clear story if you know how to read it,” Visser says, looking at Bitcoin. “Old coins, coins that haven’t been moved in years, coins that have been dormant since the days when prices were in the single digits, suddenly become very active.”
ETFs, institutional adoption, a friendly regulatory environment…this created an IPO-like situation for early Bitcoin believers.
“For years, liquidity was simply non-existent,” he wrote. “If you tried to sell $100 million of Bitcoin in 2015, the price would collapse. If you tried to sell $1 billion in 2019, it’s the same problem. The market couldn’t absorb it.”
“But now,” he continued, “ETFs are doing institutional bidding. Major companies have Bitcoin on their balance sheets. Sovereign funds are also involved. The market has finally matured to the point where early holders can exit significant positions without causing disruption.”
Again, it doesn’t all happen at once. No one is interested in a collapse in prices. But instead, what happens is a steady and methodical sideways grind and rapid reversal rally.
patience is required
What’s happening now is hardly a bear market, Visser said, but instead a distribution of ownership.
In the long term, this is a bullish event, but the process can take 6 to 18 months, at least in traditional markets. Cryptocurrencies often experience accelerated cycles, but Visser suspects that Bitcoin’s frustrating price fluctuations could continue for several more months.
“Sentiment will only improve once distribution is substantially complete,” he wrote. “People are depressed because they don’t understand what stage we are in. They are waiting for Bitcoin to ‘catch up’ to equities. They are worried about the four-year cycle. Be patient. Once the selling pressure is gone and patient accumulation by institutions absorbs the OG supply, the path will become clearer.”
