7/25 ANDY HOFFMAN (CryptoGoldCentral.com): The Meister “Crypto-dividend”, and the “Hoffman $100 Billion Line”
Last July, when Bitcoin was plunging to $1,800 ahead of what many feared to be an ugly end to the “scaling debate,” I emailed Adam Meister – i.e., the “Bitcoin Meister” – expressing my fear that perhaps, Roger Ver’s minions might succeed in destroying Bitcoin with the looming BCash hard fork. I had been listening to his daily podcasts religiously since entering Bitcoin in January 2016, so his view was as important to me as anyone’s; as back then, I, and many Bitcoin HODLers, justifiably had doubts.
He responded by saying, “don’t worry, I just had an epiphany – that I will reveal in a special podcast tomorrow.” In which, he introduced the term “crypto-dividend” – to describe how hard forks like BCash (which again, hadn’t yet occurred) would be a POSITIVE for Bitcoin holders. The reason being, that aside from proving hard forks could NOT split the Bitcoin network, they would provide “free money” for HODLers – as likely, the “sum of the parts” of the two new cryptos (Bitcoin and the hard-forked entity) would be greater than the original.
Two weeks later, the BCash fork occurred - and what do you know, the Bitcoin AND BCash prices surged. Five months later, Bitcoin reached $20,000, whilst more than a dozen new hard forks yielded additional crypto-dividends. No, they weren’t as valuable as BCash – as diminishing returns quickly kicked in, especially when exchanges and wallets refused to support them all. However, in the big picture, Adam could not have been more correct about the long-term impact of the BCash hard fork on Bitcoin’s price, network stability, and “dividend stream.”
When the Bitcoin bear market commenced in December – and altcoins, a month later; the crypto-dividend stream, like everything crypto-related, came to a halt. However, that didn’t mean crypto-dividends were dead – but instead, on hiatus, waiting for the crypto-bull market to return.
Yes, the Bitcoin “fork” decidedly died – given the diminishing returns of dozens of useless clones. However, new innovations were created – like the “airdrop” that a new crypto-dividend called BRhodium utilized…which in my view, will be how MANY – if not, MOST new altcoins will be formed in the coming years. In other words, the crypto-dividend is alive and well…and likely to become a LOT more valuable in 2019, then it ever was in 2017. As will Adam’s legacy, in not only coining “crypto-dividend,” but predicting hard forks would be a POSITIVE for Bitcoin holders, when the entire Bitcoin community assumed they would be NEGATIVE!
Coining “crypto-dividend” was a big deal – and perhaps, what Adam will be most remembered for. In my case, hopefully, it will be my prediction last Fall that $100 billion would be the “magic number” for Bitcoin’s market cap, that would transform it from a mere curiosity to a must-own asset class. And conversely, the “magic number” that would provide MASSIVE, IMPENENETRABLE SUPPORT – when clueless “analysts” and TA FUDsters predicted otherwise.
I bring this up, because this morning, Adam defined the “Hoffman line” as the $100 billion market cap that not only catalyzed Bitcoin’s explosion from $6,000 to $20,000 between November 12th and December 17th last year, but served as MASSIVE, INPENETRABLE SUPPORT since first touching that level February 6th…which just happened to coincide with the last of the NON-FUNDAMENTAL Bitcoin sales of the Mt Gox Trustee. Who, as it turns out, finished selling, FOREVER, at around the time the market cap AGAIN fell to $100 billion last month; AGAIN, hitting MASSIVE, INPENETRABLE SUPPORT at a time of decidedly NON-FUNDAMENTAL selling - that comically, KING TA FUDster was AGAIN telling his brain-dead followers to short into.
On today’s show, Adam speaks of how my comments about $100 billion were due to the WALL STREET EXPERIENCE I bring to the decidedly 20- and 30-something Bitcoin community. To that end, anyone reading my commentary over the past year knows full well my $100 billion comments were based on the sum total of my 30 years of financial market experience. I mean, for all the publicity Brian Kelly of CNBC received for claiming a “wall of institutional money” was headed for crypto – on an Adam Meister interview, on October 25th…
https://cryptogoldcentral.com/2017/10/25/a-wall-of-institutional-money-heading-to-crypto/
…I had ALREADY made this prediction a week earlier, in my “6,000/$100,000,000,000 magic numbers” article on October 20th (at the time, a $100 billion market cap equated to a $6,000 Bitcoin price)…
https://cryptogoldcentral.com/2017/10/20/the-6000100000000-magic-numbers/
…and numerous articles both BEFORE the $100 billion breakout commenced in late October…
https://cryptogoldcentral.com/2017/10/24/bitcoins-battle-for-100-billion/
…and after the crypto crash, when $100 billion was repeatedly retested…
https://cryptogoldcentral.com/2018/06/25/does-the-crypto-wall-of-institutional-money-exist/
In fact, from the time Bitcoin first fell back to $100 billion on February 6th; to the last time it retested it last month; I have relentlessly, vehemently discussed my belief that major institutions would be there supporting the price, now that this “key resistance level” had been breached.
To that end, the eight years it took Bitcoin to reach $100 billion was the fastest ANY asset class had ever reached that level – certainly on an absolute basis, but also in inflation-adjusted terms. And now that said institutions – from hedge funds, to pension funds, insurance companies, and sovereignties – are starting to realize $100 billion was indeed the bottom, get ready for a MASSIVE inflow of capital to Bitcoin; particularly when regulated custodial products are introduced – like, say, the Bitcoin ETF that will inevitably be approved…potentially, as soon as next month.
Sure, the price COULD fall below a $100 billion market cap under a “worst-case scenario.” However, I fail to see – or even IMAGINE – what such a scenario could possibly be, given how strong Bitcoin has become…and how much stronger it is getting with each passing day. In other words, I’d put the odds of a sub-$100 billion market cap valuation at close to zero…which, if that is how things ultimately play out, may well be MY most notable, and proud, Bitcoin legacy.
I just hope the $100 billion 'Hoffman Line' is not defended by a corrupt Wall Street rather than free market supply/demand fundamentals and a desire to re-define what money really is.