Portfolios: Traders' Comments and Reviews

At this stage, for Bitcoin, the ideal scenario would be to break the correlation with the traditional market and move in the opposite direction. The sluggish decline in the US stock market highlights the benefits of cryptocurrencies, fueling their rally. Investors are looking for assets that could yield returns in the face of extreme geopolitical and economic turbulence, and Bitcoin could be an excellent destination, at least for portfolio diversification.

The decline in exchange-traded deposits, despite the risk aversion in the stock markets, is a bullish signal. Bitcoin will continue to show strength over the coming weeks. Blockchain-level metrics and observing community sentiment on social media are now more cause for concern and may indicate an overheated market. The risks for Bitcoin still exist. The main one is the potential deleveraging in the financial markets. If the slide in stock indices turns into a crash, Bitcoin could repeat its fall in March, when its price more than doubled. If this extremely unfavorable scenario can be avoided (with the help of a government aid package or Fed support measures), the BTC rate may not meet significant resistance up to highs above $ 20,000 and reach them in the coming months.

The index of greed and fear for Bitcoin and the largest cryptocurrencies grew by 9 points in a day, returning to the “greed” mode, but so far there is room for growth. The RSI has entered the overbought area, approaching the 80 mark, but a sell signal should only be considered a decrease to the area below 70, and before that we can observe a very sharp rally. At this stage, for Bitcoin, the ideal scenario would be to break the correlation with the traditional market and move in the opposite direction. The sluggish decline in the US stock market highlights the benefits of cryptocurrencies, fueling their rally. Investors are looking for assets that could yield returns in the face of extreme geopolitical and economic turbulence, and Bitcoin could be an excellent destination, at least for portfolio diversification.

Most investors expect Bitcoin to continue to rise within a month. At the end of November, the increase in the value of the cryptocurrency will be 5%, according to a survey by the Real Vision website. Another survey found that 80% of Real Vision users currently believe in Bitcoin's long-term prospects. Recently, Abra CEO Bill Bargidt said he has increased his Bitcoin portfolio as he sees the asset's investment appeal continuing to grow. Bitcoin's more robust growth is being constrained by the lack of cryptocurrency regulation in the US, said Gina Sanchez, CEO of Chantico Global. But the demand for alternative instruments will continue to grow in the near future. This trend is the result of fears associated with the coming weakening of the dollar. According to the expert, those who buy BTC now should immediately tune in to long-term storage of cryptocurrency.

Bitcoin capitalization increased by $ 30 billion over the week, pushing the total crypto market capitalization to $ 400 billion.The last time this indicator was above $ 400 billion in the spring of 2018. At the end of 2017, when Bitcoin reached its historical price maximum, the total capitalization of the crypto market was approaching a trillion dollars. The hype was so huge and the volume of purchases was so massive. In these times, the crypto market may take significantly longer to achieve such indicators, however, the strength of these levels can be much higher.

Bitcoin outperforms gold as an alternative currency and has a significantly better chance of continued growth. It is chosen mainly by young investors, while the older generation prefers to keep their assets in gold. The physical gold market, including secured ETFs, is worth $ 2.6 trillion. In order for bitcoin to equal it, it must grow 10 times from the current levels. Even modestly crowding out gold as an "alternative" currency in the longer term suggests a double or triple rise in Bitcoin.

Despite the transition to Bitcoin of a number of large companies, most of the transactions with the largest digital currency are still speculative. The number of active participants in the Bitcoin network has reached levels last seen in December 2017, when the cryptocurrency was trading at all-time highs of around $ 20,000.

The physical gold market, including secured ETFs, is worth $ 2.6 trillion. In order for bitcoin to equal it, it must grow 10 times from the current levels. “Even modestly crowding out gold as an 'alternative' currency over the longer term suggests a double or triple rise in Bitcoin.

Bitcoin surpassed year highs after payment company PayPal confirmed the upcoming launch of a feature to buy, sell and store Bitcoin and other cryptocurrencies. Its mobile payment service Venmo will add this capability in 2021. PayPal expects the new feature to spur global use of cryptocurrencies and prepare the network for central bank digital currencies. Supported cryptocurrencies include Bitcoin, Bitcoin Cash, Ethereum, and Litecoin. The service will become available to customers in the United States within a few weeks, and globally in the first half of 2021. PayPal customers will be able to use BTC to pay for goods at 26 million merchants. Cryptocurrency transactions will be automatically converted to fiat. This means that merchants will not have to go beyond the traditional system they are used to, PayPal noted.

LSE-listed fintech group Mode Global Holdings became the first UK public company to purchase BTC as part of its investment strategy. For these purposes, it has allocated up to 10% of its capital. The company said in a statement that its confidence in bitcoin increased amid the coronavirus crisis and the lowest interest rates in the Bank of England's 326-year history. Previously, two other large companies invested in bitcoin: MicroStrategy and Square. Bullish momentum is clearly picking up steam with support from large corporations. Option market participants are also betting on the growth of the rate. This can be seen by the significant lagging of the price of put options or bearish rates from the call options.

Investors still view gold as a reliable instrument, but they are deterred by the need to pay value added tax. In this situation, cryptocurrencies are more attractive assets. At the same time, people are not afraid of the risks associated with fraud and the volatility of the digital market.

The current rollback of the bitcoin price occurs against the backdrop of news about the suspension of withdrawal of funds in one of the largest crypto-exchanges - OKEx in connection with the alleged detention of one of the private key holders. Although the management of the exchange claims that the claims of law enforcement agencies are not related to the activities of the exchange, a few hours before the announcement, significant volumes of BTC and other large cryptocurrencies were still withdrawn from the site. The news around OKEx appeared literally a few weeks after a similar situation with BitMEX, where the authorities were claiming the exchange itself.

Traditional investment destinations like the US dollar or bonds are rapidly losing their appeal, so cryptocurrencies, the most recognizable of which is Bitcoin, are entering the scene as part of a reserve strategy. In addition, the construction of investment infrastructure over the past few years is bearing fruit.

The rapid rise in the popularity of stablecoins suggests that this type of cryptocurrency has become the very add-on between the banking system and end users. Stablecoins have made it possible to take advantage of digital currencies without the risks associated with the extreme price volatility of the crypto. The question now is how long will the monetary authorities prepare their answer to stablecoins. As soon as this answer appears, it is highly likely that regulators will have complaints about the current major stable cryptocurrencies.

While it is generally accepted that big institutions or “big money” can push Bitcoin's capitalization to new highs, you need to think about it with a caveat for 2017, when the emergence of professional investors burst the Bitcoin bubble. A third halving occurred in May and has the potential to create conditions for a new bullish cycle. Investors are waiting for a growth impulse 12-15 months after the halving, and everything can really turn out in favor of growth, but you need to understand that a lot of opposing forces have appeared on the market, which will act as a balancing force at extremes.

It is very likely that in the near future this huge sector in terms of turnover will become the target of regulatory investigations, since the 5 largest sites have huge volumes of cryptocurrencies. The peculiarity of the work of this sector is that until the moment of withdrawal from the crypto-exchange, digital currencies do not belong to their owners. The fact that Bitcoin is finding the strength to recover against this background indicates the existence of a very strong demand from buyers, which increases even with small price pullbacks.

A price rise above $ 12K would be the best way to support the positive sentiment in the market and direct new investments towards Bitcoin. In the meantime, we can observe the process of BTC consolidation near the occupied levels.

The current decline is a short-term correction, after which the upward movement of the cryptocurrency rate will continue. Bitcoin is likely to surpass the $ 11,700 mark in the near future. In this case, it can start moving towards $ 13,000. However, for this, the asset value must remain above $ 11,300. Otherwise, it may sharply fall to $ 10,500.

In the short term, bitcoin needs to gain a foothold above $ 11,500 in order to target $ 12K directly. Since the end of last week, the first cryptocurrency has received positive impulses due to the news about investments in BTC from the institutional side.

Bitcoin's market capitalization is well positioned for further growth. Investing one percent of the $ 50 trillion bond market in bitcoin could push the market capitalization of the first cryptocurrency to $ 500 billion. A scenario is also considered in which the capitalization of bitcoin rises to $ 1.3 trillion.

Since the end of last week, the first cryptocurrency has received positive impulses due to the news about investments in Bitcoin from the institutional side. First it was MicroStrategy with the purchase of bitcoins for $ 425 million, then Square with an investment of $ 50 million, yesterday it became known that a large asset management company Stone Ridge is investing $ 115 million in Bitcoin. We cannot say that these investments are of such a volume , which can change the course of events on the crypto market, but the very fact of interest from such companies significantly increases the credibility of Bitcoin as a means of portfolio diversification.

Experts cite regulatory uncertainty as an obstacle preventing large institutional investors from investing in cryptocurrency. Another reason may be the high volatility of the bitcoin and cryptocurrency rates. Nevertheless, the process of entry of "institutions" into the cryptoindustry has already begun, although in the first five years they will act extremely cautiously and buy coins only for hundredths of the portfolio.

We are on the cusp of a new Bitcoin price rally. Several large companies have already invested in bitcoin. For example, on October 8, BTC was bought for $ 50 million by payment firm Square, founded by Twitter creator Jack Dorsey. In September, MicroStrategy, a maker of analytical software, acquired BTC for $ 425 million. Institutional adoption of BTC continues. Cryptocurrency attracts large investors with its independence and higher profitability compared to securities and other instruments.

By the end of November 2020, Bitcoin will be worth over $ 12,000 with a 90% probability. Some analysts point to a higher level of "holering" compared to past bull cycles. I estimate the propensity of investors to keep bitcoins in their wallets as the price rises. In this case, these sentiments can be reinforced by the expectation of a rally associated with halving. Historically, Bitcoin has gone up for 12-15 months after each halving, rewriting all-time highs. While the current environment around Bitcoin is different, crypto market participants are still betting on the leap based on this event. The crypto market is also looking to the future with enthusiasm due to the confidence of miners who continue to keep hash rates at historic highs.

Several factors may be behind the Bitcoin recovery. An indirect reason for the rise of the first cryptocurrency could be the decline in the dollar over the past few weeks, which could have contributed to the growth of gold and the first digital currency. In addition, Bitcoin has demonstrated long-term ability to hold above critical psychological and technical levels by $ 10K. The bears tried unsuccessfully to test the level for several times, but ran into buyers' help.

Bitcoin gained 6% last week on the back of rising gold and stocks. On Saturday, Bitcoin broke through to the $ 11,500 level, but could not take it. Not long before this, Square announced its investment in bitcoin $ 50 million. Here, rather, we can talk about a psychological effect rather than the size of purchases. The crypto community is overwhelmingly positive about the events that are associated with the investments of companies from the traditional sector in cryptocurrencies.

The Ethereum blockchain is incredibly popular with the entire DeFi sector, stablecoins and smart contracts running on it. Due to the high network load, transaction fees are growing. On October 6, the hash rate on the network reached an all-time high of 250 Th / s. According to F2Pool, mining ETH is now 3x more profitable than mining BTC. In September, ETH miners earned $ 166 million in commissions, against just $ 26 million earned by Bitcoin miners.

The current period of recovery in the market will not be very long, as the overall situation remains unstable. Problems with the coronavirus and measures to support the affected economies remain the focus of investors' attention. So far, these issues are still very far from any positive resolution. In the event of the next transition to a decrease in quotations, Bitcoin risks falling to the level of $ 10,800.

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