2019 Market Update 007 - June In Review
Major Market News:
Facebook makes waves announcing their new project Libra
Lightning Labs launch mobile app for instant BTC payments
State Farm/USAA test blockchain
Cash App adds Bitcoin deposits
Samourai Wallet releases CoinJoin for added privacy for Bitcoin users
LedgerX physically settled futures got the ok
Bitmain planning US IPO
Binance launching US operation for better compliance
Peer to peer wireless network Helium raises $15M Series C
OKCoin launches in Europe
Gemini opens Chicago office
Binance will launch stable-coins
Crypto Custodian Anchorage adds Insurance to it's assets under custody
Swiss Fintech Firm Amun launches Bitwise 10 ETP (Exchange Traded Product)
Iceland approve fiat on blockchain
Japan approves new crypto bill
Kik announces DefendCrypto Fund, to support projects being unrightfully prosecuted by the SEC
Did you know?
Tron Founder, Justin Sun, won a lunch with Warren Buffett to discuss crypto
Billionaire Mogul, Henry Kravis backs crypto fund
Premiere League soccer club SL Benfica now accepts Bitcoin
The biggest event this month was without a doubt the announcement of Facebook's Libra coin and network. This was an incredibly bullish event for Bitcoin in three ways.
1. It drew mass attention towards the crypto space and is the latest major validation of the industry by big institutions ranging from Visa, to Mastercard to Uber.
2. Facebooks new wallet Calibra, set to launch in 2020, will likely be the largest crypto on-ramp we have ever and will likely ever see. There are only a handful companies flexing the type of user numbers that facebook has access to... 2.4 billion to be exact. Yes, that is 1/3rd the global population. With Calibra, each of those 2.4 billion individuals will have access to their first crypto wallet from one day to the next. Whether Calibra will accept Bitcoin of course is yet to be seen, but several factors speak for it.
3. The case for a decentralized global currency was proven in less than 12 hours, as the US Congress, more or less, send a cease and desist to Facebook, telling them to halt the Libra project until they can take a closer look. Good luck telling Bitcoin to "take a pause". As a decentralized global currency with no team, no founder, and no legal jurisdiction, it doesn't matter if governments 'want' to shut bitcoin down, as there is no 'how' to shut it down. The global macro game theory behind shutting down bitcoin is one of the most exhilarating and I'm sure I will soon write a blog post about it. It suffices to say, Bitcoin has a lot of tailwind, and will ascend to the heights we envision in the coming years. A four figure bitcoin will soon be as wishful an opportunity as three figure bitcoin has been for two years.
Our Past Predictions
Prediction from Market Update 006 "After its powerful run to $9,000 we expect Bitcoin to consolidate in the $6,000 to $9,000 price range, with the option of a second run to the last bull market end-zone of $13,500."
Result: Bitcoin started the month with a pull back from $9,000 to $7,300, followed by a rally to $13,500 as predicted, and at last a pull back to $10,600. This entire year Bitcoin appears to be on the fast track, covering previous market structures in 2x the speed.
Technical Short Term and Fundamental Macro Economic Prognostic:
Short Term (till September):
Bitcoin has found halt 40% from the all-time high several times before (see graphic circled in green). Usually we see Bitcoin price action take a pause here for as much as 180 days. But as mentioned previously this market cycle is decidedly faster than any of the previous cycles, so a sideways move in the $8,000 to $14,000 range may be completed in little more than 60-90 days, before continuing it's rally to break the all time high. As Bitcoin's volatility fizzles, we expect a lot of money to get bored and seek faster and bigger returns in alt coins that have not yet experienced the type of rally Bitcoin has. Some of these assets stand to gain 100%+ returns simply to catch up to their November 2018 levels. We believe that should there be an altcoin "season" it is likely imminent, as they tend to coincide with post-Bitcoin rally cool-off periods. This is quite logical as investors take profits off their Bitcoin trades and cycle them into what they think might be next.
Long Term (2020-2023)
From #006: 'We expect Bitcoin to hit between $200,000-$500,000 in this coming bull market. We based this on nearly a dozen modes of analysis, from UTXO, to NVTS, to RSI, to Stock-to-Flow, to price action and market cycle analysis, which all line up with similar valuations. The global macro-economic backdrop is supportive of this as well as central banks are pushing off the next coming recession by artificially lowering interest rates to the extent that the IMF is considering negative interest rates. An economic environment where the bank charges you money to keep your savings, is one that we find extremely supportive of a crypto future. Sprinkle in Trumps plans for new Quantitative Easing (also known as printing more Dollars), and combine it with a Bitcoin halving which makes Bitcoin more scarce than Gold, we are looking at the perfect storm for digital asset appreciation'
#007 Addendum: Our Long Term Macro prognostic only got reinforced this month with the latest decisions and rhetoric of the Trump Administration. The Federal Reserve Futures show a 100% chance of at least one interest rate cut in July. Lower interest rates are not just on the horizon, they are impending. Furthermore President Trump went public in a tweet this week writing “China and Europe playing big currency manipulation game and pumping money into their system in order to compete with USA. We should MATCH, or continue being the dummies who sit back and politely watch as other countries continue to play their games - as they have for many years!” It's safe to say the President is comfortable running the printing press to achieve his foreign policy agenda. A concerning measure for anyone with USD savings, and a tweet to be celebrated by anyone who is long Bitcoin or other safe-haven assets. Bitcoin may just be the ultimate hedge during the coming economic recession.
These positions will of course adapt over time, but they are based on taking a deeper look into similar market cycles, asset classes, and macro economics.
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