Why The Bitcoin Bottom May Come In August

gold-colored Bitcoin

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We may not have seen the last of Bitcoin's big downward moves, but we might be close. There's a kind of "storm" brewing, but I haven't seen many folks in the cryptocurrency space talking about it, and I certainly haven't seen it on mainstream media channels.

This is something I think everyone should be prepared for, because I believe it might represent the last great opportunity we're going to see in a long time to dollar-cost average into Bitcoin at rock-bottom prices. In fact, this opportunity might present itself in all kinds of cryptos we want to own.

Let me unpack the backstory so you can understand what's going on, and how you can be in position to capitalize on what might be a fantastic opportunity.


Some (Very) Old Chickens Are Coming Home to Roost

Back in 2014, in the 'Bitcoin Stone Age,' the Tokyo-based Mt. Gox exchange was the major crypto exchange. I'm oversimplifying, but Mt. Gox was kind of like the Coinbase of its day. By 2014 it was handling something like 70% of all Bitcoin transactions worldwide. That is, until it abruptly and unexpectedly folded up.

It filed in Japanese courts for a kind of bankruptcy protection because of the (likely) theft of close to 850,000 BTC from Mt. Gox's hot wallet. 750,000 of those Bitcoins belonged to customers, while 100,000 belonged to Mt. Gox.

To put that in perspective, that's around 7% of all Bitcoins that were in existence at that time, and those tokens were worth a "mere" $473 million at February 2014 prices. Today, those 850,000 BTC constitute 4.4% of the total supply, but they're worth more than $18 billion.

Later in 2014, Mt. Gox recovered nearly 200,000 BTC from an old, pre-2011 digital wallet, which brought the number of Bitcoin at issue down to 650,000.

Here's the thing: Like broke college kids checking the sofa cushions for change, professional sleuthing and white-hat computer work has recovered around 200,000 more stolen BTC from the Mt. Gox caper. Mt. Gox is preparing to return those 200,000 Bitcoins to creditors - you guessed it - next month.

We have some precedent to look at to learn what to expect - and I expect it could be interesting.


This Could Be a Big Selling Catalyst

When the first tranche of 200,000 coins was returned after 2014, a trustee sold 24,000 of them at the 2017 market top, when Bitcoin was worth around $19,000, but before it crashed 85% to $3,000. This wasn't the sole reason for the collapse, but it certainly helped accelerate it.

So, it's just as likely as not that, when this batch of 200,000 BTC are returned to their rightful owners, they'll sell - and fast. That would be $3 billion worth of selling pressure hitting a market that's already sweating.

Of course, there's a chance these creditors are playing the long game; they could be down to "HODL," but keep in mind their average price per Bitcoin is around $300, and they're up more than 6,200%.

Forget about the sleepy dog days - this August could be very exciting for Bitcoin investors. Not only will we get the chance to dollar-cost average in at some of 2022's lowest prices, but that selling - if it happens - can lead to a capitulation and an investable bottom. It makes good sense to get ready.

Bottom line is, the current crypto market downturn is an opportunity, not a crisis. This is the perfect time for investors to establish or strengthen their positions in digital assets.

But you don't have to take just my word for it. In fact, there's a Wall Street insider - famous for being a conservative investor - who's even more bullish on Bitcoin than I am. For a long time, he was a huge crypto skeptic, but now he's saying it's the best investment opportunity to come along in the past 30 years.

Skybridge Capital's Anthony Scaramucci has a bold Bitcoin price prediction that's been making headlines, and you can see it right here, along with his advice on what every American should do right now.


More By This Author:

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Take These Steps Right Now To Protect Your Crypto

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