Weekend Crypto Update – Bitcoin $13,800 195 Times and Counting!

Bitcoin and most Cryptocurrencies continued with their sideways consolidation over the weekend.  I’ve been noting how many times $13,800 has been crossed in this Triangle, that count is now up to 195 times, and it looks to go still higher since we’re currently underneath:

BTC10.png

Sideways patterns eat time and frustrate people who are looking for movement.

Two of the largest Alt-Coin exchanges, Binance and Bittrex, are both still closed to new accounts.  I think this is likely throttling back the flow of new money into the Alts, and thus by and large they are consolidating too, but we do see movement – mostly money shifting from one Alt to another without the whole pond rising at the same time.  Again, that’s what consolidation patterns do.

Humanity Rising – Bitcoin Protests in South Korea?

I think it fascinating that people in South Korea took to the streets to demand that the government stay out of their exchanges and Cryptocurrencies!  Right on… as it should be.  People should demand freedom to do with their money what they want.  They do not need or want a nanny state who has a monopoly on money for the sole purpose of controlling the population.  Governments, lest we forget, are supposed to work for the people, not the other way around.

South Korea has fortunately backed off their exchange controlling remarks.

How Will Bitcoin and other Cryptos Perform During the Next Financial Crisis?

I’ve been giving this a lot of thought lately.  I actually think we’re in a financial crisis now!  However, this time instead of a melt-down, we’re experiencing a melt-up.  I think this is a wave of Dollars flooding all markets that has its roots in Quantitative Easing.

All those trillions of Dollars have been sitting on balance sheets, but now that the FED has begun rising interest rates, reducing their balance sheet, and tax incentives have been created to repatriate Dollars, they are now coming home to roost in a giant wave.

Also contributing to that wave is the diminishing role of the Dollar as a Petro and Trade currency.

Remember that waves are energy movement.  Differentials are required to create motion.

This wave will eventually crest as all waves do.  When it does, asset prices of all types will begin to fall.  Falling asset prices create a “flight to safety” initially.  What usually benefits during the first phase of a flight to safety?  The Dollar!

People rushing to get out of now deflating assets must first sell them for Dollars.  They later then convert them to assets they think are then cheap.

Assets like gold, and I’m thinking Bitcoin and other Cryptos, are likely to enjoy the flood of money during the melt-up, but once the wave crests could be sold to meet other obligations – usually debt obligations.

So I don’t necessarily agree with those who “Hodl” Bitcoin (Hodl is Crypto slang for hold).  I think it’s entirely possible to watch key exit and entry points, and to swing in and out of cash and/or Cryptos going down the least, during times of market turmoil.

It’s wise to think about how you’re going to react once this melt-up wave crests!  Personally, I don’t get emotionally married to any asset – I thus swing in to seek growth, and will just as easily swing out to protect the gains I have.  Hodl is a valid strategy, however, it’s all in what you’re personally comfortable with.

Nate



Categories: Uncategorized

3 replies

  1. Nathan,

    Thank you for the articles and your perspective on crypto currencies and banking. What are your viewpoints on Litecoin? Also, you discuss overall global adoption of crypto currencies, but also mention the possibility of them being sold to pay for debt obligations during a crises. How do you see the next (or current) crises playing out? From what I’m reading you see an inflationary phase as dollars come home, followed by a deflationary phase? Maybe do an article on how you think crypto currencies perform under each scenario. One last comment, I appreciate your view of cryptos as investments, but if we are truly pushing for global adoption I think using them as currency whenever possible helps the cause, moving back and forth and trading back to dollars sort of defeats the purpose. I saw question someone posted about purchasing something in litecoin asking about should they use the litecoin or hodl it as an investment- the reply I thought was great advice “ purchase in litecoin then repurchase the litecoin with the dollars you would have spent, helps the cause”.

  2. Hi Mike,

    Yes, Litecoin is one of the good ones. A true coin with more modern features than Bitcoin, and limited in quantity to just 84,000 or exactly 4 times as many as Bitcoin.

    I’ve said from Litecoin day one that its ratio to Bitcoin was way out of whack at 100+ to 1. So I knew, and wrote on my economic edge site that the ratio would work its way eventually closer to that 4 to 1. The range has been about 50 to 1 to about 110 to 1, with only momentary excursions.

    Right now the ratio is close to 60 to 1. I would buy Litecoin anytime the ratio is above that – and I expect it to outperform Bitcoin in the medium term in terms of percentage gain. I was not pleased with Litecoin CEO Charlie Lee’s latest maneuver, nor am I pleased with Coinbase and his relationship therein. If any other company had a CEO divest themselves of 100% of their stock, it would be a warning – and I think there’s that element here. I would much rather he held them with a supposed “conflict of interest,” I actually view his divesting of it a bad thing that lessons the value to me. But I know Litecoin will do great with or without his ownership, but it is helpful to have someone very motivated to make it go – my assumption is that’s why he teamed with Coinbase in the first place.

    Regarding your comment about selling hurting the cause… NOT TRUE. A free market is made up of all sorts of people, all sorts of investment styles and techniques – that’s what a free market is. For me – missing huge down swings means that I ratchet my money up with each wave. My goal is not just to perform at the rate of BTC or LTC, instead my aim is to outperform. There’s another advantage to my method – it reduces risk.

    But it’s certainly not for everybody, few people have my technical analysis skills and can move in and out unemotionally. So for the average person, I say buy and hold, then dollar cost average in. The goal should be to trade in Dollars for Crypto along the way and most will be fine (not all eggs in any basket).

    But then there are the guys who think they know what they are doing, but they don’t. They get emotionally excited by the Alts. MOST OF THE ALTS are going to fail, it’s just reality. A few are going to be dramatic winners and game changers.

    Clearly we are in a high asset inflationary period. Measured .gov inflation is low because their “basket” doesn’t contain them, and also because it is highly manipulated with techniques like the phony “hedonistic adjustments.”

    But because our money is DEBT money, it will naturally deflate in waves. QE was a new trick to prevent that, and the result was the trillions of Dollars flooding the world today.

    In my upcoming Crypto White paper I’m going to write about the Crypto adoption curve and how long I think the tidal wave will last.

    Thanks for reading, and thanks for your comments.

    Nate

  3. That should have read 84,000,000 Litecoin compared to 21m BTC

Leave a Reply

%d bloggers like this: