This isn’t exactly news for frustrated Bitcoin Bulls risking assets across the planet have been posting what appear to be daily records for months, while BTC price action remains rather subdued.
“What if everyone has the wrong view,” asks longtime traditional financial asset manager Jordi Visser in a widely shared weekend essay (1.5 million views on
Although Bitcoin has never seen a traditional IPO, the factors that hold back price gains are almost exactly the same as those that lead to poor price performance in stock IPOs, Visser claims.
Tradfi’s IPOs and the months that follow, Visser points out – particularly in the technology sector – are major liquidity events for early investors.
“Early-stage investors take enormous risks,” Visser writes. “If the investment is successful, they deserve huge rewards. But ultimately, and this is crucial, they need to realize those gains. They need liquidity. They need an exit. They need to diversify.”
Examples, particularly in technology, are legion, but let’s take the Facebook (now Meta) IPO in 2012. The $38 per share offering raised $16 billion at a valuation of $104 billion – strange numbers today, but staggering amounts at the time. A year later, the stock was down 30%, with pundits questioning Mark Zuckerberg’s leadership.
More likely than Zuck’s missteps, it was the early investors — whether his Harvard friends, the Silicon Valley guys, or the carpenters who built Facebook’s first offices (who received salaries in stock rather than cash) who used the public markets to make life-changing profits.
It’s important to note, Visser says, that early investors don’t reach the offering all at once. “They methodically allocate their positions. They’re cautious. They don’t want to drive up prices. They’re patient. They’ve waited years for this moment. They can wait a few more months to get it right.”
The result, he says: “A side job that drives everyone crazy.” Sound familiar?
Economic forces do not disappear
“On-chain data tells a clear story if you know how to read it,” says Visser, turning to Bitcoin. “Old coins, coins that haven’t moved in years, some dormant since the days of single-digit prices, are suddenly active.”
The ETFs, the institutional adoption, the supportive regulatory environment… it created IPO-like conditions for Bitcoin’s early believers.
“For years, liquidity simply did not exist,” he writes. “Try selling $100 million worth of bitcoin in 2015. You’d explode the price. Try selling $1 billion worth in 2019. Same problem. The market couldn’t absorb it.”
“But now,” he continued. “ETFs are an institutional offering. Large companies hold bitcoin on their balance sheets. Sovereign wealth funds are getting involved. The market has finally matured to the point where early holders can exit large positions without causing chaos.”
Once again, Visser points out, this does not happen all at once: no one is interested in bringing prices down. But instead, consistently and methodically: hence the lateral movements and takeovers that reverse so quickly.
Patience required
What’s happening now is hardly what you’d call a bear market, Visser says, but rather a distribution of ownership.
In the long term, this is a bullish event, but the process – at least in traditional markets – can take 6 to 18 months. Even though cycles are often accelerated in crypto, Visser suspects this frustrating Bitcoin price action could last for several more months.
“The feeling will only improve once the distribution is almost complete,” he wrote. “People are demoralized because they don’t understand what phase we are in. They are waiting for Bitcoin to ‘catch up’ to stocks. They are worried about the four-year cycle. Be patient. Once the heavy selling pressure subsides, once the patient accumulation of institutions absorbs the OG supply, the path will become clearer.”
