It is time to get back into cryptocurrencies.
There are many old Wall Street sayings that say you should buy when blood is in the streets. Or the time to build a position is when no one wants it. Personally, I’ve made my best investments at the bottom of markets when I have some real fear in the pit of my stomach.
And let's face it, you’d have to overcome some fear to be buying cryptocurrencies now. First of all, they have been killed over the past year. All of your top coins are down somewhere between 72% and 88%.
However, more recently they have flattened out into a stable market. It would seem that all the sellers have sold.
If you look objectively, there has been all sorts of bullish news. First of all, the Ethereum merge was a great success, but the ETH coin still fell another 21% in the aftermath.
Yet the big boys are buying.
BlackRock, the world's largest asset manager, has launched a spot Bitcoin private trust to give its customers exposure to the current price of Bitcoin. The company also said that there was substantial interest in crypto from institutional clients and it is looking into stablecoins and tokenization.
A Fine Place to Hide Your Cash
This makes sense as BlackRock is a global asset manager. Many of the world's richest people are looking to secure their money from the ravages of inflation, dictatorships, and war. Heck, even the middle class would rather park their money in ETH rather than see it evaporate in the form of Turkish lira, Argentine pesos or Russian yachts.
Google has said it will accept crypto as payment for its cloud services early next year as part of a deal with Coinbase.
On top of this, the Bank of New York Mellon launched a Bitcoin and Ethereum custody service. The bank will hold your private keys and provide accounting on your crypto portfolios.
Furthermore, Bitcoin mining difficulty and costs are going up. Core Scientific is the world's largest Bitcoin miner and it has raised its hosting rates more than 25%, to just under $0.10 a kilowatt-hour, due to the high cost of energy.
Higher costs mean that it is more difficult to break even and fewer coins will be created. This simple supply-and-demand scenario is bullish for the price of Bitcoin. Our analysts have traveled the world over, dedicated to finding the best and most profitable investments in the global energy markets. All you have to do to join our Energy and Capital investment community is sign up for the daily newsletter below.
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Bitcoin has broken its trend line:
As you can see by the chart, the coin has been building a base for the past six months. The downtrend is over and the MACD is well below the zero line with a crossover.
And last but not least, MicroStrategy Inc. (NASDAQ: MSTR) one of the biggest holders of Bitcoin, has shorts up to its chin. The company has short interest of 35.8% of the float. That’s a lot.
As a contrarian you have to think this thing will fly when these speculators are forced to buy back shares in a short squeeze. The MSTR chart has formed a pennant formation and put in a higher high. The call options have almost no contracts. A breakout seems imminent.
So there you have it. It is time to stick your toe back into the crypto space. In 12–18 months these coins will be much higher and you’ll be laughing all the way to the bank.
I’ve put together a special report of my favorite cryptos to buy now. Check it out.
All the best…