I've recently unloaded most of the cash I accumulated after selling bitcoin and alts when BTC was trading north of 12k. I always have cash on the sideline just in case my trading thesis ends being invalidated. Aside from the parallels I see between 3-4k and 7.8-8.8k levels, the macro picture for crypto is looking good IMO. I believe we could be headed into leg up for the following reasons;
1) Tentative trade with China: Anything could happen but the market is going to love this news. IP protection and 50 bil in agriculture purchases is a big win for American businesses if the deal gets papered. It will take time before it's reflected in earnings, but I'm sure it will elevate investor enthusiasm and optimism. I think we could see new stock market highs.
2) The FED is headed towards zero or perhaps the negative interest rate territory. This is very bullish for the equity market, especially if they expand the QE program. Fund managers will recognize this and it could lead to a crowded trade, sending equities higher. Once equities rally, some fund managers will sell and look for asymmetrical upside. Now that we have institutional on ramps built for Bitcoin, I believe some fund managers will allocate 1-2% towards crypto.
3) Many legacy finance platform are now enabling their users to trade crypto along side traditional assets. If we get an equity rally, I'm sure some retail investors will reduce their stocks exposure and buy a little crypto. New retail investors have started to trickle in, but the hoard still not here.
4) Fiat currencies around the world are in bad shape and we have populist movements springing up around the globe. In the current geopolitical environment, stable coins and cryptos are starting to gain a little traction. In fact , the volume on localbitcoins is hitting 2017 highs.
In sum, I think we have the right conditions for a rally, but anything could happen. I've developed a thesis and placed my bet. Good luck everyone!
1) Tentative trade with China: Anything could happen but the market is going to love this news. IP protection and 50 bil in agriculture purchases is a big win for American businesses if the deal gets papered. It will take time before it's reflected in earnings, but I'm sure it will elevate investor enthusiasm and optimism. I think we could see new stock market highs.
2) The FED is headed towards zero or perhaps the negative interest rate territory. This is very bullish for the equity market, especially if they expand the QE program. Fund managers will recognize this and it could lead to a crowded trade, sending equities higher. Once equities rally, some fund managers will sell and look for asymmetrical upside. Now that we have institutional on ramps built for Bitcoin, I believe some fund managers will allocate 1-2% towards crypto.
3) Many legacy finance platform are now enabling their users to trade crypto along side traditional assets. If we get an equity rally, I'm sure some retail investors will reduce their stocks exposure and buy a little crypto. New retail investors have started to trickle in, but the hoard still not here.
4) Fiat currencies around the world are in bad shape and we have populist movements springing up around the globe. In the current geopolitical environment, stable coins and cryptos are starting to gain a little traction. In fact , the volume on localbitcoins is hitting 2017 highs.
In sum, I think we have the right conditions for a rally, but anything could happen. I've developed a thesis and placed my bet. Good luck everyone!