Bitcoin has been consolidating over the last month.
Actually it dipped below $9k last month.
If you follow many of the traders in the space they’ll have you feeling FOMO (fear of missing out) in no time.
“This is the last time bitcoin will ever dip below $10k”
“This is your last chance.”
Silly statements like that.
You really have to check yourself.
Personally, I view bitcoin as a long-term play. The more the central banks keep printing there is only one direction for hard assets like gold and bitcoin to go (up).
My time horizon is 10+ years.
With that said there are a couple of Youtube channels I pay attention to to block out the the day to day noise of phony traders.
This is his most recent video.
In it he discusses where here believe bitcoin is in the proposed four year cycle.
A short summary:
- Bitcoin is right on track if we are measuring relative to prior four year cycles.
- A dip in the coming summer months would be healthy/bullish (dip to $7-8k)
- Investing in alt coins is similar to playing the lottery, sure….some of them will outperform bitcoin, but BTC is the strongest horse. Why wouldn’t you want to bet on the strongest horse?
- Stock to flow ratio….Bob does not go into a great deal of detail on this as he has not researched the topic.
- Bob does not try to speculate the top of the next cycle….he offers figures ranging from $30k all way up to $250k as possibilities. “It is not our job to guess tops.”
- Correlation to the stock market will likely not last.
Bob offers a solid longer term perspective.
Rather than focusing on the day to day….focus on allocating to a pre-determined position and perhaps taking profits when greed and mania return to the space.
For me personally, I will continue to accumulate bitcoin throughout 2020. I have my allocation targets….and should BTC rocket upwards I will consider taking my original investment off the table to minimize risk.
That being said, I am still extremely bullish on Bitcoin in the long-term. I would also recommend you check out “Plan B”‘s medium articles on stock to flow ratio….(see Bitcoin….Not if But When).
The second channel I pay attention to from time to time…
Mr. Cowen offers his expertise on bitcoin from the perspective of statistical data science models.
Here is his most recent video:
According to his most recent video….he suggest we are in a reaccumulation phase.
- Bitcoin is currently moving in a sideways channel (between $10k and $8.7k)
- Prior to the start of the 2017 bull run bitcoin moved sideways for approximately 84 days.
- Typically these sideways movements (non exciting price movement)…are the best times to accumulate.
- Could take until October until we oscillate out of the band mentioned above.
- Stick to your plan, day trading bitcoin can have large opportunity costs.
Personally, I would love to see bitcoin take a large dump as it will present the opportunity to accumulate cheaper.
All I know is that no one actually knows what is going to happen with bitcoin.
My current strategy it to dollar cost average a set amount of USD into BTC every month.
For those of you who don’t know….dollar cost averaging is just investing the same amount of money (usually a smaller amount) into an asset over a duration of time (regardless of price).
Don’t forget….that some of the best times to accumulate an asset is in a down market or when no one is talking about.
That is usually the times institutions will be accumulating large positions at the expense of retail investors selling out of fear.
My personal prediction:
- Bitcoin will consolidate/range between $6-$10.5k throughout the summer
- Price will increase slowly into 2021 ($11-$14k)
- New all time highs won’t be reached until end of 2021 early 2022
- Blow off top late 2022/early 2023
Of course I could be wrong and bitcoin could dump on us all.
That’s just the nature of bitcoin though.
I am also using an app called blockfi to earn interest on a certain portion of my bitcoin.
https://blockfi.com/?ref=13270718 (referral link)
Blockfi is a platform that allows you to deposit your bitcoin on the blockfi app and earn up to 6% interest annually in bitcoin.
I have had no issues with the platform and have already received two payments.
One thing you should know is they allow only one withdrawal per month.
They also allow deposits on ethereum and litecoin (although the interest payments are not as large).
The reason I don’t hold all of my bitcoin on blockfi and try to max out my interest earnings is because of the systemic risk of governments getting involved or risks posed by it being just one company.
https://blockfi.com/faq/ (here is their FAQ)…discussed is security, interest payouts, etc.
In the mean time I don’t see large scale government intervention in the cards.
Want to see just how small bitcoin currently is……
Scroll to the bottom of the link below….and you will understand just how early we are in bitcoin’s adoption.
Do not underestimate the future of this asset class.
I do believe 2020 will be a great year to start or keep accumulating bitcoin.
There are two camps in this crypto space….
- Bitcoin is going to zero.
- Bitcoin will one day achieve its destiny as a world reserve currency.
I am in camp number 2.
Anyways, hope you guys enjoy those channels. Good luck my friends.