Will it, won’t it?
For a Bear they will clearly see that the bitcoin (BTC) run is over and that the crypto asset is doomed now to fall back to a low number.
It could happen.
A Bull will see $9,000-11,000 as a platform for a move to $20,000.
What do I see?
I’m quantum on this; I see both cases clearly at the same time.
This is not a happy place to sit with big profits and a large chunk of capital in play.
I’m a low-risk value investor at heart. (Okay that might be delusional; I might take some big investing risks from time to time.) So crypto runs against the grain and a lot of me wants to run away.
However, that’s not my strategy.
My strategy: buy the dips and buy and hold.
This is because I believe BTC has a $1-$5 trillion market cap in it--a lot more than the current $180 billion.
If bitcoin is not going to be worth a trillion then what?
Any less than it currently is and bitcoin is an irrelevancy. However, bitcoin can’t be overtaken by another distributed, permissionless blockchain currency, and centralized ones are not really competitors because they are owned. So if you believe in crypto and a major future for all things distributed, then that future belongs to BTC. As such, you buy and hold bitcoin forever.
Argh, but that takes a lot of nerve, perhaps more than I have.
Here is the current chart and you should be able to visualize a collapse or a move to $20,000:
If you want to get more chartist on the situation this is what you should draw, the top and bottom of the flag giving a buy or sell signal as a potential breakout.
I don’t find this directly informative but what the market is saying is, the future direction is very uncertain but the move will be big.
So what to do?
Firstly, why is BTC up here not at $3,000? The simple answer is President Trump and bitcoin’s position as a go to flight capital/safe haven asset, as the president’s proclivity to put the cat among the pigeons is driving many people to fear, uncertainty and despair.
Do this thought experiment: You have a few million dollars, all legit, and your personal astrologer tells you, out of the blue, you have five days to move to New Zealand permanently because an asteroid is about to obliterate your country.
It’s only BTC that offers a way for you to end up in Auckland with a significant assets base intact. Bitcoin is a very practical way to move and protect assets. This is why the countries where ownership of assets and/or money is most tenuous love of bitcoin, and of course gold is strongest. But today, gold doesn’t get the job done because its hard, slow and expensive to secure and move.
So the actual question is: Is the trade war with China going to be settled soon? Is the Iran situation going to sort itself out and now that Greenland is not for sale and there is no chariot of fire over Israel, is President Trump going to chill on his way to reelection and beyond?
This is why I’m not a Bear. Trump is not only president 2020 but also Trump is bitcoin $20,000.
So buy and hold and buy the dip still is the strategy.
Then there is the matter of the oncoming halving.
In the middle of next May, the bitcoin reward is going to halve. Instinctively this says bitcoin should double in value, which it won’t. However, the supply will fall, so the amount of BTC coming onto the market will halve so that normal bitcoin buying pressure will in effect double.
It’s easy to forget that most BTC there will ever be is already out there (about 80%) and what’s more, a huge amount of BTC mined, is already lost. My guess is about 15%-20%. All that leaves bitcoin as a tiny asset class ready to grow through more demand and less supply.
With interest rates going to 0% or less around the developed world and governments oiling the printing presses once again, crypto will also soon be a place where people look to ride out the risk of inflation and once again there is not a lot of market cap to hide with.
In the short term, however, it’s going to be all about China and all about the trade war plus an extra factor with trouble in Hong Kong.
If BTC suddenly collapses, get into stocks quickly, because a trade deal with China is almost sure to follow in a day or two. Then of course the Dow will fly! Will it happen? It seems a low probability for now.
In 2018, Chambers won Journalist of the Year in the Business Market Commentary category in the State Street U.K. Institutional Press Awards.
For a Bear they will clearly see that the bitcoin (BTC) run is over and that the crypto asset is doomed now […]