Every day I turn on CNBC to watch what is going on. I have a passion for trading and I want to gain as much knowledge as possible to better my returns, look for those stocks that are under preforming, get insight from "alleged" experts, but most importantly to understand the market sentiment. This is the crucial key for me, market sentiment. Bubbles do NOT happen when people are pessimistic. They happen when everyone is optimistic. For 3 years now many have been calling for a bubble in the stock market and it has NOT happened yet. Why? Too much pessimism! You can say the same for bitcoin'.
So every day on CNBC I see another analysts talk about how Bitcoin' is in a bubble and it's going to be the greatest bubble of all times. (cough cough). Seriously? Cryptos combined do not have the market cap of Apple or Amazon. How can this be a bubble? IT'S NOT!!! Now those same "expert analysts" that are calling for a bitcoin' meltdown are many of the same analysts that are calling for Amazon and Netflix to go higher. HUH? Seriously Bitcoin' is in a bubble yet you increased your target level 25% on Netflix?
After a few days of consolidation we have now broke through $12,000 with some good strength and almost have hit our prior target level of $12,991 that we posted on Dec 2nd. Now I have updated the chart and the current pattern looks very familiar to the last pattern but more consolidated. What's this mean? Well you could say the last formation of a top, and that is a valid argument, but it could also be money just starting to pour in from Main street. Well doesn't this fuel a bubble? Yes and no. Money continues to flow into Amazon' Netflix' and many other "speculative" stocks. But why are these analysts are calling for a meltdown on bitcoin then? Well Walmart does not run Wall Street the banks do! So they don't care if Amazon' disrupts other retailers they buy and tell you to do the same. They do not care that Netflix' is changing the way we watch TV' at night? Netflix' has distrupted and continues to disrupt so they tell you to buy here.
But Bitcoin'? Bitcoin' and cryptos in general disrupt the Wall Street banks, and even the central banks, that have had control of OUR money for centuries! It's ok to disrupt kroger', but may the wrath of God come down on you if you disrupt the financial institutions in the world, and bitcoin' and other crytpos are doing just that.
On the chart below I have graphs of AMZN' NFLX' and Bitcoin'. How can someone tell me Bitcoin' is overbought, yet Amazon and Netflix still have room to run? All freaking 3 charts look the same to me or am I missing something! I mean parabolic? Heck Amazon is almost vertical! Ok you can say I skewed the timeline. Yes but the charts they show on CNBC are not even Log charts. DOH! I can make the chart look how I want to yes, but the underlying thesis here is bitcoin' and cryptos in general are disrupting the financial institutions and that is where I want to invest. I own no bank stocks because of this! Do not forget that Bitcoin' had no venture capital. Venture capitalists that invested in Amazon' and Netflix' made much much more than those who bought at IPO. Also do not forget there are only 21 million coins that will ever be mined. Keep in mind every share you bought of Amazon at IPO is now 12 shares. Had they never split, Amazon would be trading at $14,000 per share and there would be 38 million shares approximately.
Bottom line we do not know where or when we will get a pullback. I would "guess" somewhere in the $13-15k. The formation of this next pullback will be telling, but I'm long term so I want to add I'm not looking to sell.
In my opinion Wall Street has an agenda and are protecting the financial institutions that run the world. Bitcoin' disrupts this and is doing it very fast. Why? Because it goes to the heart of everyone on earth, YOUR MONEY & Wealth!
Komen
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Komen
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I believe we are seeing larger investors and institutions that plan on trading futures buying bitcoin to hedge their futures contracts. If you want to sell 10 contracts or buy 10 contracts it would be highly risky not to own the underlying asset. So I expect we could see us go higher as the market movers buy coins to hold the underlying asset they are trading. Very clear this is happening as the US market is trading higher than those outside the US.
Komen
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Great post from MarcPmarkets if you haven't read it.
Komen
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I have provided an alternate count as we have formed the same "V" formation that has catapulted us higher every time. Keep in mind that we could have finished the count as well and would be looking at a pullback to 6-10k. Though I feel 6k is not realistic, it is possible. It's going to really depend on how the release of bitcoin on the futures market goes on Sunday. So though 27k is possible so is 6k. We are entering uncharted waters; However, with that said the "V" formation has been highly bullish and I am staying long and may look to enter a trade higher here but it will be a short one. I know the numbers are staggering as I mentioned in a previous article.
Komen
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Very interesting chart on the US volume, which supports that futures traders in the US will want to own the underlying asset if they are selling futures. Undeniable!
Agree, lets do some other comparisons. My best guess is .com was about 6-10trillion in todays $'s. Crypto will dwarf .com. The technology is way way bigger than .com. My earliest bubble expectation is 10 Trillion cap for cryptos. and that is very conservative. This adoption is going to happen very fast. Faster than the .com because humans are on our own scale of technological adoption. So when it took 70 years for the telephone, 25 years for the internet, 5-7 years for the smart phone. 3-5 for crypto? we are in an S curve and 5 years from now these charts will be the flat section of the S. We are about to start heading up, and I mean up. So hold onto your hats and most of all your coins no matter what.
josephtse
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@jlhequities, I agree with 10 trillion. Crypto will represent 10-15% of all currency transactions in the future. Currenct global fiat money supply is 70 trillion, so 10 trillion falls in that ballpark.
jlhequities
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@josephtse, Thats just currency, thats not including transactional data. monetizing M2M transactions and all the solutions that crypto will develop in every sector there is on the planet. 10 Trillion is really a small number and very conservative IMO. Its going to be fun no matter what. Good Luck
BRRD
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@jlhequities, I have to disagree with the S-curve comparison, simply from experience.
When everyone started talking about the S-curve in 2013, it was time to sell, simple as that.
Not saying Bitcoin won't go higher, perhaps even twice as high before Christmas. I'm saying the writing's on the wall for this bull run - it's a matter of days now IMHO.
jlhequities
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@BRRD, Just to understand you correctly, in 2013 BTC was how much? It just hit 19,800 on GDAX and this is not an S curve? I understand your view as it reminds you of 2013 and maybe now is potentially another wave ending. But make no mistake, we are in an S curve. I am referring to crypto as a whole. We will be using crypto for currency within 5 years. wether we go from 19k to 2k to 500k doesn't matter. we are going up, and i mean up. I am not even in BTC because there are bigger returns for me in alts. I also don't care to own gold, or digital gold. i want utility coins that are needed in the market that solve real world problems. Crypto solves real world problems, this is the next S as the internet has topped out on its S and crypto is just starting the adoption phase. Currently if you own 1 BTC, you are in the top 500k in the world. Its coming like a tsunami wether we believe it is or not. The world view of cash is headed to 0. the crashes are going to get bigger and the recoveries even faster. So since i don't have a crystal ball to time the market, I will just hold and continue to by an crash that comes my way. Good Luck to you.
josephtse
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@jlhequities, I agree it's worth holding on to a bitcoin for the long run. HOWEVER, I have a few theories, which I may post on Twitter. The government is slowly regulating bitcoin. This is evident by getting GDAX, KRAKEN, BITTREX, etc, their COMPETITOR, to shake hands and split the mining profits. Now why would Kraken, GDAX, etc, unregulated exchanges, EVER give a regulated exchange ANY data, or feed access, or other intellectual property? Could the central governments be behind all of this? Is this all just a test excercise, a stress/resiliency test if you will for the real thing? I just read Bank of America already has their own crypto exchange. QASH, a bunch of exbankers, will link all the exchanges and basically smart route your coins to get the best exchange price, so arbitrage is out the window right there. Other things why Nasdaq, etc wanna all jump aboard - They don't like that you can arb the prices across exchanges and shield money offhshore and not pay taxes to repatriate, other than cap gain taxes. They don't like the spoofing going on in the exchanges. They don't like the front running. The pumps in the alts and the the dumps, with all the money going into bitcoin, and this happens every week. So they will regulate the coins, thus bringing the volatility and hence prices down, and also be able to less and prevent spoofing, and prosecute front runners and spoofers. That can only spell trouble for bitcoin. The theory is that the central banks are creating their own coins, and wire transfers will be a thing of the past because banking can just use ETH or DASH to transfer your USD back to Asia or whatever and get your JPY, for less than the $45 international wire fee. Bank of America is the first to do this, all other major banks will follow. Phase 1: run in parallel cryptos and fiat. Phase 2, phase out fiat and only cryptos remaining. Retire fiat and wipe the global debt slate clean.
jlhequities
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@josephtse, I agree totally with your theory, everything except the price going down part. Yes, there will be a short term crash, thats evident. but as far as regulations causing price to go down i totally disagree. Regulation is when this market goes to highs that will make these look small. the trillionaire club will not party without rules, when there are rules, they will party harder than anyone. Rules will open up 401k, pensions, ETFs, money that we can only dream about now. Nobody risks trillions with no rules. and trillions is where the volatility goes away. These cryptos are way under valued for the technology they hold. If these were marketed in the usual way by wall st getting their hands on them 1st and issuing IPO's. These things would be starting out in the multiple of 1000's vs the pennies they start out now on. Centralized blockchains for currency will never happen IMO. for simple security reasons. Hack the blockchain and you control all the money. They fakes and the scams will get weeded out and it will be ugly when that happens, however the technology that crypto holds is going into the multiple of trillions in value. no doubt
josephtse
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@jlhequities, Ok I agree the blockchain has value and that there is wealth in doing business ethically. However, I've been trying to convince my friend to buy bitcoin since $3000 and he just wont pull the trigger. He can't justify the $15,000 price tag, and truthyfully he couldn't justify it at $8000 or even $4000 either. I tried to explain to him it's economics, and scarcity law, but he still say there is no practical use for Bitcoin vs other superior coins. He can justify litecoin better, but no Bitcoin. Can you explain why Bitcoin deserves such a high premium vs litecoin or even ether? Both are superior coins to bitcoin legacy.
jlhequities
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@josephtse, I can't say I disagree. I'm all in IOTA right now. to me their technology is superior to all if it works as planned. loaded up under $1.00, to me its trillion dollar tech when implemented. but saying there is no use for Bitcoin is absurd IMO, its programmable money and they can change it to whatever the market demands. Right now the market demanded it be like it is. The market is never wrong until its wrong.
josephtse
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@jlhequities, By the way, I tweeted Charlie Lee to ask if he would like Litecoin futures to list on CBOE. If he says yes, I will pitch and write a letter to CBOE and get him involved. Would you all like to see Litecoin and ETH futures trade on regulated exchanges? I'd like a show of hands. I'm just skeptical of trading cryptos on REGULATED exchanges. The whole point is decentralization and the least amount of red tape. Regulation drives up trading costs and I don't like that. I understand they want to do that so legitimate businesses like pensions, trusts, and endowments can legally buy this and transfer money offshore and stuff without violating Bank Supremacy Act and AML laws.