China has its Year of the Dog (this year, 2018), while the cryptocurrency market has its Year of the Bear.
That’s if this year’s bear market in cryptocurrencies lasts until December, which is just a guess since it might already have ended.
If not, that would mean the crypto bear will have lasted a year.
The bull market that preceded this bear ran three years, from January 2015 to December 2017. It’s typical for bear markets to run out of steam quicker than bull markets, so a one-year bear market would be about right.
Looking on the bright side — and I’m a natural, and eternal, optimist — this has been a great year to accumulate cryptocurrencies.
While I’m more than anxious to see the start of the next bull market, I do like the fact that we have had a great opportunity to build a larger portfolio at discounted prices. These unmanipulated swings also strengthen the overall cryptocurrency marketplace.
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If prices continue lower we’ll be able to buy more with the same monthly contributions to our accounts.
That in turn is lowering our average price for purchased coins, which will provide us with even greater percentage returns in the next bull market.
For the past four months the price for Bitcoin (BTC) has been chopping sideways.
We’ve had a lot of people, bulls and bears alike, waiting for the next big move, patiently or not. BTC has been trading back and forth in a narrowing range as both sides lack conviction.
The sideways consolidation looks bearish. A move down followed by consolidation typically leads to another leg down, so don’t be surprised or scared if it happens in the coming weeks.
Narrowing price action creates lower price volatility, which is a measure of price swings and how quickly they occur.
This usually leads to a big and fast price move and higher volatility. It’s why I’m expecting to see a large price move in the next few weeks.
If the next big price move is to the downside, I believe it will be the final move to complete this year’s bear market.
I have a good idea where the bottom likely will be, but at this point I can’t rule out the possibility that a bottom has been forming over the past couple of months.
In other words, we might not get lower prices. That’s why I continue to recommend a disciplined approach to investing in this market without regard to price. Stick to your investment plan and know your time in the sun is coming.
There are plenty of reasons to be bullish on the crypto market now versus waiting for the next shoe to drop.
I’ve discussed in-depth in prior issues of Crypto Wealth Protocol some of the reasons highlighted below, but to summarize we have the 12 reasons to be bullish on cryptocurrencies now:
- The Intercontinental Exchange’s (ICE) planned launch of Bakkt in November. This will be a platform to buy and sell Bitcoin futures which will settle the same day in Bitcoin, not fiat currencies. It will be a place to trade and store BTC, and with Microsoft and Starbucks supporting the platform there is an expectation that both will be entering the world of BTC transactions through the Bakkt exchange. This would help crypto go mainstream.
- TD Ameritrade, one of the largest online trading companies (I especially like its ThinkorSwim trading platform), has invested in ErisX, an exchange that will enable TD to offer crypto trading in early 2019. ErisX is backed by large trading firms which will make a market for cryptocurrencies and open up the ability for investors to buy cryptocurrencies through their platform. Anticipation of this could push crypto demand higher in Q4 in expectation of increased demand for cryptos, especially if Bakkt is trading before the end of the year and things are looking positive for cryptocurrency exchange-traded funds (ETFs).
- The first of those ETFs, from the Chicago Board Options Exchange’s (CBOE) VanEck and SolidX, could be close to approval by the Securities Exchange Commission (SEC). While several other ETF requests have been shot down, there’s a greater likelihood for success due to the CBOE’s connections. ICE’s Bakkt will likely meet all regulatory requirements, for similar reasons. The next decision deadline for the SEC is Dec. 29, 2018, although they could delay into February 2019.
- Fidelity Investments, which has $2.4 trillion in assets under management, says it will offer crypto products to its 27 million customers by the end of this year. That’s huge exposure and a much simpler way for new investors to get involved.
- Large investment houses, such as Goldman Sachs, JPMorgan, and CitiGroup, soon will be offering their accredited (i.e. wealthy) clients custodial services and crypto investment vehicles. Big money is coming and very soon.
- As Google and other social media sites lift their bans on crypto ads we could see greater interest from new investors.
- The largest crypto companies have joined forces to form a new Blockchain Association as a way to lobby Congress to pass favorable and supportive laws.
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- NASDAQ announced they are building crypto data sets into its analytics tool. Again, this adds legitimacy to the cryptocurrency market.
- Coinbase will expand its offerings, as well as custodial services, as it revamps its listing application process. The platform promises to list many more coins than it currently offers and once a major exchange like Coinbase lists a coin it generally sees a price rally since the coin becomes much easier to purchase.
- We’ve just started the fourth quarter of the year, which is typically a bullish time for cryptos. This time could be different, like the 2014 bear market, but Q4 still has a bullish reputation.
- Stellar (XLM) continues to drive positive advancements. Its recently introduced StellarX Decentralized Exchange (DEX) has experienced growth. It offers zero fees and the exchange lets investors convert fiat to cryptocurrencies. Decentralized exchanges have struggled with many shortcomings, but StellarX appears to be doing the right things. Binance will be launching its own DEX in 2019.
- Yale University’s crypto investments are getting publicity. David Swenson, who manages the hugely successful Yale endowment, is the epitome of “smart” money, someone who has consistently beat market returns for 28 years. He has been very successful at finding alternative investment ideas. Many other university endowment fund managers tend to follow Swenson’s lead. He recently invested $300 million in two crypto hedge funds. Yale’s crypto investment is just more evidence that cryptocurrencies are coming out of the world of cypherpunks and retail interest and going deeper into institutional investors. I cannot overstate the significance of Swenson’s investments in crypto and the technology behind crypto, especially in this year’s bear market.
Small-cap winners galoreThe big stock market winners share one common attribute: Near the beginning of the ascent of their shares, the companies offer revolutionary products or services, are market leaders in their respective industries, or both. Some big stock market winners that possessed the attributes outlined above are Netflix (NFLX), which we recommended to investors in October 2002; Intuitive Surgical (ISRG), which we bought and recommended in July 2004; Baidu.com (BIDU), which we bought and recommended in August 2006; and MercadoLibre (MELI), which we recommended to investors in October 2010. Get up-to-date small-cap stock picks from David Frazier, editor of Small-Cap Profit Confidential.
Smarter cryptocurrency investmentsThe stock market crash of 2008 was the catalyst for his journey into alternatives. And interestingly, it was the impetus behind the creation of Bitcoin and the blockchain technology behind it. Keene Little wasn’t ready to risk his money yet but he was very curious, so he began charting Bitcoin’s technical patterns. What finally convinced him to dip a toe into digital currencies was seeing that they followed familiar price patterns that could be analyzed and successfully acted on. Now he shares those insights with subscribers to the Crypto Wealth Protocol.