Currencies / cryptocurrency
Feb 07, 2023 – 08:23 AM GMT
Firstly, one does not invest in coruptos, one gambles on coruptos that one day a greater fool will come along to pay more than what one paid because as far as I can tell crypto’s do not have any intrinsic value. Still the one thing that could lift some is limited supply and low inflation rates, especially those that tend to undergo halving’s in miner rewards such as Bitcoin, though most coruptos (99%) are SCAM COINS! As many have found out during the corrupt0 blood bath of 2022 when several so called pegged to the US dollar stable coins disappeared in a puff of smoke with the rest teetering on the brink, so a case of having ones eyes wide open. Again Crypto’s are SCAM CENTRAL! Especially during the bull mania phase as the scam artist celebs all try to cash in at the expense of their followers, the likes of the Kim Kardashian who settled out of the court with the SEC for pumping EthereumMax scam coin, and mega youtubers such as Logan Paul with his scam Zoo token game that disappeared in a puff of smoke taking millions of dollars of his fans money with it, though the scammers ended up stabbing each other in the back to such an extent that most of the scammers also lost money, rug pull on the rug pullers as the Dev did a runner with $6 million leaving Logan Paul and his inner circle down collectively about $1 million. Anyway crypto’s are a case of having ones EYES WIDE OPEN, if ones eyelids are droopy then steer clear!
Whilst the crypto markets are at a time of extreme FEAR with centralised exchanges blowing up left, right and centre, disappearing with client funds and crypto holdings. Miners throwing in the towel, cutting their losses under the burden of exploding costs, One only needs to trundle along to youtube to see how many have lost all, abounded their mining dreams to literally be back to limited mining from their parents garage desperately clinging on to their crypto dreams by mining with a mere handful of machines as this once wannabe crypto multi millionaire who lost $200k on crypto mining illustrates, is back to working at his local gas station, of how the crypto mining bust is playing out as costs soar whilst mining revenues collapse.
Sp crypto markets are in EXTREME distress which is the time one tends to pick up the greatest opportunities though crypto’s will always be a gamble given that they have no intrinsic value, unlike gold and silver which DO have intrinsic value! I.e. an ounce of Gold will always be an ounce of Gold compared to crypto’s that are just 1’s and 0’s on a blockchain, and don’t get me started on NFT’s, thankfully I have always considered NFT’s to be an even bigger SCAM than what most crypto tokens are and so steered clear of the NFT opportunities to LOSE MONEY!
My existing trend forecast for the Bitcoin price as of 28th November is target a trend to $100k during 2024. So every time I look at the bitcoin price I do the mental math of dividing 100k by current price $17k = 5.9.
Usually the best times to accumulate into a ‘market’ is when it is at it’s most distressed state when DOOM and GLOOM and FEAR REIGN supreme, one such market that fits the bill right now is the crypto casino! The evidence of which I have covered in recent articles such as the huge 46% discount to NAV in the Grayscale Bitcoin Trust that currently trades at $8.33 vs the Bitcoin price of $16,800. The problem with GBTC is that if it never coverts to an ETF then it is basically worthless and thus the NAV will continue to worsen as the management collect their annual 2% fee paid in bitcoins held by the trust! So investors are buying the promise of conversion to BTC someday in the future whilst Grayscale management siphon off their 2% annual management fee in Bitcoin! what a SCAM!
So which of the major crypto’s could have the most potential upside during the next mania when all those who would not touch crypto’s with a barge pole today will once more be piling in for a piece of the action?
The answer probably lies in what performed the best during the previous mania. Of course the starting point matters, so I am not taking the start as when the crypto’s were last dead, say when the pandemic first hit, but rather when the crypto’s had already entered into a bull run and starting to perk the interests of many including myself during December 2020, as shortly afterwards I started mining as soon as my RTX 3080 GPU’s were delivered.
The crypto that stands out as having the most potential upside during a mania gold rush is ADA which had a huge 2000% bull run.
Next is Ravencoin, though this bull market died very early. at +1550%, which fooled many including myself that it would follow the bitcoin bull trend to new highs, which it never did! So ravencoin would be one crypto to exit EARLY! The beauty of rear view mirrors!
POKADOT comes next, +1000%.The price trend was pretty close to that of Bitcoin, so offered leverage to BTC.
ETHERUM – No2 to Bitcoin, Trend closely matched Bitcoin for +830%.
Bitcoin +295%, the safest of the lot, if one can consider any crypto as safe. However this relatively safety carries a cost in terms of lower potential return.
LInk and XLM saw earlier first peaks as Bitcoin with subsequent peaks coming nowhere near to that of Bitcoins November 2021 peak. this fooled many including myself in assuming there would be a rotation out of Bitcoin into the alt coins which NEVER HAPPENED.
And lastly one of my favourite crypto’s Litecoin proved to be a damp squib in terms of returns, early peak of +438%, secondary peak of +278%, the only reason I liked this crypto is because the price was very volatile i,.e. limit orders on NiceHash could be triggered at deep discounts to where the price was trading such as LTC $170, gets triggered entry at $120 etc.
So if one is seeking to gamble on crypto’s , and yes it is gambling rather than investing, the the two safest to accumulate into are probably Bitcoin and Ethereum. Then Pokadot for some leverage to the next mania. Next ADA for a X10 to X20 gamble.
Whilst crypto’s to be wary of are Link, LTC, XLM and yes Ravencoin, though which may deliver an early X10 spike.
So I will mainly be placing my bets on Bitcoin, Ethereum, and to a lesser extent Pokadot.
I may also add a little more to ADA Whilst scrapping plans to add to Ravencoin, XLM, Litecoin, and aim to exit my Ravencoin early.
Another crypto that’s perking my interest not on this list is Solana which has collapsed as a direct consequences of Sam Bankman-Fraud due to forced selling of holdings,with the price falling from a high of $260 down to $11 today..
So may main fantasy plan is to profit from BTC, Ethereum and Pokadot during the next mania. where my best guess is the main bull run will be in the aftermath of the next BTC halving during early 2024 as halving’s put upwards pressure on BTC, which then perks the interest of the investing crowd that soon flow into the Alt Coins. Anyway we shall see a couple of years from now if what I accumulate today pays off several fold or not. Patrons can keep track of my crypto holdings right at the bottom of the AI stocks portfolio table which currently totals 1.07% value where I am looking to double this to just over 2%, which compares to near 6% holding in Google alone, so pinprick exposure.
The bottom line is that crypto markets have been crushed like a bug in the rug to an extent that most would not touch them with a barge pole, whilst I do not know where they will bottom,i.e. Bitcoin could bottom anywhere between $13k to $9k, we just don’t know what the next crypto exchange blow up forced selling will deliver in terms of price drops, nevertheless I am accumulating now for potential payoffs a couple of years down the road with my expectation to see the likes of Bitcoin to at least X5 from current levels by which time everyone will be FOMO-ing into the peak.
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By Nadeem Walayat
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Nadeem Walayat has over 30 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem’s forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of five ebook’s in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.
Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 1000 experienced analysts on a range of views of the probable direction of the financial markets, thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk
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