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“Up like a rocket, down like a rock” so the ever-repeating story of markets goes. Now it is not a surprise that traditional investors find the idea of cryptocurrency disgusting. The internet was hard enough to swallow and then there suddenly appeared crazy magic money that made no sense and produced bazillion percent profits for – in Scooby-Doo parlance – “those pesky kids.”
Any seasoned investor has been trained on the “South Sea Bubble,” John Law’s “Mississippi Bubble,” the “Tulip Mania;” everyone knows that they come horribly unstuck. Bitcoin (BTC-USD) is just the same.
They are right.
BUT…
The South Sea Bubble was created by the emergence of the London Stock Exchange, which hasn’t looked back since, and represents a key infrastructure piece of the global economy. John Law’s Bubble was the introduction of “fiat,” which has had a checkered history since, but is still money as we know it and was about the commercialisation of a fairly large proportion of the USA, which today is obviously an economic and political powerhouse. As for the Tulip Mania, tulips in Holland are still a billion-dollar industry. I bought some last week, and they still look good in the vase in my hall. There are more examples of bubbles and crashes that lead to vast value, none more so than the Dotcom boom and crash. Meanwhile exotic securitisation derivatives march on even though they nearly sunk the global economy in 2008.
So let’s not write off bubbles as manias that turn into something huge. Crypto will be no different.
However, no one really cares about the long term, they want to know what Bitcoin is going to do tomorrow.
The answer is, it will go up and down.
Here is the chart:
Bitcoin price (ADVFN)
So, this is the easiest way to speculate on what happens next:
Bitcoin price (ADVFN)
The bullish news is that the volatility is gone. The bearish news is there is a pent-up wall of FTX contagion that has yet to break to the surface. The recent missive from Gemini about the DCG, Genesis, Grayscale “dynamic” highlights just one of the potential debacles that can only press down on the values of crypto.
The big bullish news is the upcoming “halvening,” which is when Bitcoin issuance halves. However, that isn’t until March 2024 and it might take until after that point to put upwards pressure on prices.
I still “like” $13,000, which has been my target for over a year now, but the price levels at the end of a bear market are highly uncertain.
Better still, just wait until you hear it’s all over for crypto forever, any fool could see it was all a scam, this time it really is dead-dead… Make sure it’s a mainstream, mean front pager. Then make sure prices look really very low, wait for a couple of weeks, and get buying.
I think we will get another leg down before Easter, then the call will be: is there another drop to $8,000? Until the purge of CeFi is complete the bottom won’t be in. Then it might be a simple case to buy Coinbase (COIN) at whatever price it trades at. However, in the end, loading up on Bitcoin, Ethereum (ETH-USD) or a coin like Polygon (MATIC-USD) will be the way to go for the big win.
… and then after it’s gone up like a rocket, remember it’s coming back down like a rock….again.
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This article was written by
Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Additional disclosure: I am an active crypto investor and trader, and buy, sell and hold all kinds of cryptocurrency. I will likely have positions long and short in a number of cryptos at any given moment.
