“Up like a rocket, down like a rock” goes the oft-repeated story of the markets. Now, it’s no surprise that traditional investors find the idea of cryptocurrency repulsive. The Internet was hard enough to swallow, and then suddenly, crazy magic appeared money that makes no sense and, in Scooby-Doo parlance, earns a bazillion interest for “those pesky kids.”
Any seasoned investor has been trained on the South Sea Bubble, John Lowe’s Mississippi Bubble, Tulip Mania; everyone knows they’re terribly rambunctious. Bitcoin (BTC-USD) is the same.
They are right.
The South Sea bubble was created by the creation of the London Stock Exchange, which has not 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 then, but is still money as we know it, and is associated with the commercialization of a fairly large part of the US, which is clearly the center of economic and political power today. . . As for Tulip Mania, tulips are still a billion-dollar industry in the Netherlands. I bought some last week and they still look good in a vase in my living room. There are many more examples of bubbles and crashes that caused great value, none more so than the Dotcom boom and crash. Meanwhile, exotic securitization derivatives are moving forward, despite nearly sinking the global economy in 2008.
So let’s not write off bubbles as a mania that turns into something huge. Crypto will be no different.
However, nobody really cares about the long term, they want to know what Bitcoin will do tomorrow.
The answer is that it will go up and down.
The real challenge is what it will do in 2023
Here is the diagram:
So here is the easiest way to guess what will happen next:
Bullish news is the departure of volatility. The bearish news is that there is a wall of FTX infection that has yet to surface. DCG, Genesis, Grayscale on “dynamic” Gemini’s recent mission highlights just one of the potential setbacks that could put pressure on cryptocurrency values.
The big bullish news is the upcoming “halving,” when the Bitcoin supply is halved. However, it is not until March 2024 and it may take time after that to put upward pressure on prices.
So the forecast for 2023 is low… but wait, it could go either way:
- BANG… another situation occurs as FTX is up, Bitcoin is down. Contagion rules and prices are submitted. This will be the bottom; a bottom that will see the clearing of spicy CeFi platforms. Then, after grieving for a while, it will be time to collect.
- CeFi platforms pretend that the rules don’t apply to them or simply plow on until the inevitable outcome is failure or the market turns, quietly and stealthily moving to a better place. In this case, the market will collapse until the “halving” begins in mid-2024. The trend should show where it will end, and it could be below $10,000.
I still “like” $13,000, which has been my target for over a year, but price levels are very uncertain at the end of a bear market.
What to do?
- Self control. store your cryptocurrency in your own wallet; Remember, not your keys, not your crypto. If you have to play on the CeFi platform, don’t use it as a bank and you can start at a minute’s notice.
- Keep your funds in USCoin (USDC-USD) but beware of all stablecoins as nothing is sacred in cryptocurrency.
- Make sure the DeFi providers you use are actually “Decentralized” and not playing fast and loose with deposits in parallel. This is hard work.
- If you smell any spicy behavior, save it no matter what.
- Prepare to re-enter so you can enter or exit when things start to happen, no matter what. Do not rely on a single provider for any type of service.
Better yet, wait until you hear it’s all over for crypto, any idiot could see it’s a scam, this time it’s really dead… Make sure it’s a mainstream, mid-level front pager. Then make sure that the prices really look very low, wait a few weeks and buy.
I think we’ll get another leg down before Easter, then the call will be: Is there another drop to $8,000? The bottom will not enter until the CeFi cleanup is complete. Then buying can be a simple situation. Coinbase (COIN) trades at any price. However, in the end, downloading Bitcoin, Ethereum A coin like (ETH-USD) or Polygon (MATIC-USD) will be the way to win big.
… and then remember that after taking off like a rocket it came down like a rock….again.
Editor’s note: This article covers one or more microcap stocks. Be aware of the risks associated with these stocks.