2019 Market Update 002 - January In Review
CBOE Resubmits Bitcoin ETF
Bitwise submits for Bitcoin ETF
Fidelity’s Crypto Trading in final tests
Wyoming passes Bill to recognize and clarify the differences between digital assets, digital securities, and virtual currencies
Colorado discussing Bill to exempt crypto from securities law
Thai government digitizes voting onchain
Overstock paying taxes in Bitcoin, and Fortnite accepting Monero in their online store
BitPay announced they processed over 1 Billion USD in crypto payments in 2018
The bottomline: Crypto is not going away, and while pricing looks bleak, both governments and institutions are using this low interest period to lay the infrastructure for the next bull run. This is the period to accumulate, increase crypto count, and double down.
As we predicted in our Market Update 001, the markets have continued on their bearish to sideways path this past month. While every major coin dropped significantly, from Ethereum dropping 19%, Bitcoin Cash dropping 24%, Stellar Lumens dropping 26%, Ripple down 14%, and NEM dropping a massive 39%, our new strategy kept us save.
Our Macro Prognostic remains the same as before:
Short term (next 6 months): The markets are likely sliding lower during this period due to fund liquidations, lay-offs in the industry, and project shut downs. We target Bitcoin at around $2,500. We will use this period to day trade, with less than 5% long term allocations. This will allow us to have returns that are less correlated to market performance, meaning we are more likely to turn a market down month into a winning month for the fund.
Mid Term (6-12 months): This is the period when trading volumes will likely start going low, and many projects will have failed. This is the ideal time to start looking for the projects that are still working hard despite the financial pressure. At this time we will start strategically buying into quality projects whose prices got decimated during the market sell-off, but are still progressing fundamentally. We will also continue day trading taking advantage of side-ways market strategies, as well as keeping a lookout for breakouts.
Long Term (12-24 months): The return of the bull market. Based on past similar market cycles, from the Bitcoin bubble in 2014 to the Tech Bubble in 2000, and the recession in 2008, most of these markets return to their next bull run after 600-800 days. Since we are nearly 430 days into the bitcoin bear market now, this timeline is closer than we think. Hence we believe a year from now things are very likely to go up, and when things go up in the Crypto space, they go up dramatically.
These positions will of course adapt over time, but they are based on taking a deeper look into similar market cycles and taking a lot of predictable catalysts into account.
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