Bitcoin - Blood in the Streets or Is This Just Noise?
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After a relatively calm week where volatility was extremely low, the market broke out, unfortunately for bulls it was to the downside. Well for some it was unfortunate, as for myself I have had an outstanding order in at 6620 for over 2 weeks now and today I was hoping it would get filled. Well it didn't unfortunately and whether it does or not is insignificant. The fact is I do not sway every time the wind changes direction, I am focused clearly on the long term, and these types of selloffs are nothing more than a buying opportunity for me. Believe me I have my list and on the first sign of a reversal, Goldie is going shopping!!
Over the past two weeks Bitcoin' has traded within a relatively narrow 10% range between 7040 and 7779, which is not the volatility we are accustomed to seeing. When a change in sentiment moves from non volatile to volatile it is normally a directional move with strength and obviously it was to the downside. This is the reason I had an open order at 6620, I was fishing for that spike down. The April & February lows of 6425 and 6000 are still key technical levels to hold with 6000 being critical. Flat out I am a buyer below 6800 on any SIGN OF A REVERSAL for the long term. As we saw back in April, the breakout was quick and decisive with a 20% swing to the upside in one day. It is very likely the 6425 level holds and I would rather be positioned, then chasing a breakout. We can always go lower, however, contrary to those that are calling for a multi year bear market, I am not buying it and this is why.
Goldman Sach’s, Susquehanna and VanEck are looking to expand into the crypto market, along with both Coinbase and Circle looking to secure brokerage status. The chart may be warning us of a further bear market but, there are no signs of bad news out of the SEC' or other government agencies that would signal strict regulation or a demise of Bitcoin. Quite the contrary, large traders and investors are wanting exposure to these markets and because institutions are bound by strict rules are unable to invest directly into the market until products are created allowing them to. Dan Moreland the CEO and founder of Pantera Capital stated recently “There’s such an institutional appetite to get exposure to this, it’s a half trillion dollar asset class that nobody owns.”
The issue at hand with large institutions and wealthy investors is custody. In the narrow view, we can say “well coinbase is the custodian of our coins and they are insured right?”. Not so simple. This is based on the the Investment Company Act of 1940 that governs investment companies use of securities depositories. In short this requires a fund to maintain its securities and other investment with certain types of custodians to protect the funds assets through a “securities depository” with banks, brokers, and other financial institutions considered “securities intermediaries”. You can see the issue here and why larger institutions and investors have not flooded into the market yet, as most large institutions, banks, and brokers must conform to holding assets in a "security depository". Eventually the custodian issue will be resolved and there will be a governing body that regulates how private keys are stored along with all the accounting that goes along.
As a stacker I am not concerned whether its this year or next, eventually these issues are resolved and I surely do not want to be chasing once the likes of institutional and wealthy investors enter the space. I am not concerned with the daily noise or a move lower as my focus is on the longer term. Once the likes of Goldman are able to offer crypto currency products to their investors and traders, I highly doubt the market falls apart, more likely the market rallies to new highs. Of course there is no guarantee that we move higher in the long term but I’m optimistic to say the least.
So while many are focused on noise I will look to add for the long term.
Over the past two weeks Bitcoin' has traded within a relatively narrow 10% range between 7040 and 7779, which is not the volatility we are accustomed to seeing. When a change in sentiment moves from non volatile to volatile it is normally a directional move with strength and obviously it was to the downside. This is the reason I had an open order at 6620, I was fishing for that spike down. The April & February lows of 6425 and 6000 are still key technical levels to hold with 6000 being critical. Flat out I am a buyer below 6800 on any SIGN OF A REVERSAL for the long term. As we saw back in April, the breakout was quick and decisive with a 20% swing to the upside in one day. It is very likely the 6425 level holds and I would rather be positioned, then chasing a breakout. We can always go lower, however, contrary to those that are calling for a multi year bear market, I am not buying it and this is why.
Goldman Sach’s, Susquehanna and VanEck are looking to expand into the crypto market, along with both Coinbase and Circle looking to secure brokerage status. The chart may be warning us of a further bear market but, there are no signs of bad news out of the SEC' or other government agencies that would signal strict regulation or a demise of Bitcoin. Quite the contrary, large traders and investors are wanting exposure to these markets and because institutions are bound by strict rules are unable to invest directly into the market until products are created allowing them to. Dan Moreland the CEO and founder of Pantera Capital stated recently “There’s such an institutional appetite to get exposure to this, it’s a half trillion dollar asset class that nobody owns.”
The issue at hand with large institutions and wealthy investors is custody. In the narrow view, we can say “well coinbase is the custodian of our coins and they are insured right?”. Not so simple. This is based on the the Investment Company Act of 1940 that governs investment companies use of securities depositories. In short this requires a fund to maintain its securities and other investment with certain types of custodians to protect the funds assets through a “securities depository” with banks, brokers, and other financial institutions considered “securities intermediaries”. You can see the issue here and why larger institutions and investors have not flooded into the market yet, as most large institutions, banks, and brokers must conform to holding assets in a "security depository". Eventually the custodian issue will be resolved and there will be a governing body that regulates how private keys are stored along with all the accounting that goes along.
As a stacker I am not concerned whether its this year or next, eventually these issues are resolved and I surely do not want to be chasing once the likes of institutional and wealthy investors enter the space. I am not concerned with the daily noise or a move lower as my focus is on the longer term. Once the likes of Goldman are able to offer crypto currency products to their investors and traders, I highly doubt the market falls apart, more likely the market rallies to new highs. Of course there is no guarantee that we move higher in the long term but I’m optimistic to say the least.
So while many are focused on noise I will look to add for the long term.
Note
For those of you that do not understand why I have long in the title. I am LONG IN THE LONGTERM!!! Yes I understand this is a bear market right now, but I am a buyer in bear markets not a seller and I sure am not selling here.
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