As strange great swell of sea foam floods through the streets of a town in Catalonia…
As warming weather leads to “exceptional breeding conditions” for locusts, and terrible swarms ravage East Africa, threatening famine…
As cases of the coronavirus are confirmed in Germany and France, and tens of millions are locked down in quarantine…
As Boris Johnson bends over to a state perpetrating crimes against humanity, and invites Huawei to build Britain’s information infrastructure…
All the signs point in one direction: the end times.
And it all makes perfect sense. The–
Source: Bytetree
Hmmmm.
Wait a minute. It’s not meant to go like this…
Anti-fragile?
Since Friday, while the world has been going to hell in a handbasket and investors have been selling risky assets, one of the riskiest assets in the world has been surging.
Bitcoin has just been touching the £6,900 handle at the time of writing, up £500 in just a few days.
And that’s just since Friday. BTC is up some 1,300 quid since Hogmanay:
Source: Cryptowatch
Bitcoin nuts (who I have very deep sympathy for, I should add) have often made the case that bitcoin is a safe-haven asset, that investors will clamour to it in times of crisis when they recognise and appreciate its built-in scarcity and lack of counterparty risk.
However, as bitcoin wasn’t around for the credit crisis, and was barely known about during the sovereign debt crisis in the eurozone, its properties as “digital gold” has yet to have been truly put to the test. Or at least, it’s yet to truly perform as a global safe-haven asset, rather than just inside countries where socialism has run its inevitable course.
Could this recent rally finally be the big ₿ proving its “safe” status, and taking its rightful place amongst the US Treasuries and gold bullion of the investment world?
Or to bring us back to the doom-and-gloom scenario, is this a product of the coronavirus being much worse than perceived within China, and this is insiders getting their cash out of the country? Bitcoin is a tried and tested capital evacuation vehicle, used in China and elsewhere, to great success and anger from the authorities.
Or… could it be, as I’ve argued many times in previous letters, that just as last year was a market re-run of 2016… this year will be a re-run of 2017? And that the crypto boom of that year, absurd in its scale, is destined to return once more in force?
Another grand crypto boom, on the same scale as 2017, is another of my predictions for this year, which I outlined in more detail in The Fleet Street Letter Monthly Alert’s 2020 Predictions Pack. So far this year, I’ve been right about the explosion of platinum group metals, and the melt-up in stocks – only recently interrupted. If, as I said last week, the cronovirus would only delay the global asset-price melt-up, it may well be that the bitcoin market is pricing this reality in ahead of time, and ahead of safer assets.
It’s early days yet. But the crypto world moves faster than pretty much anything else in the investment world. In some ways, incomprehensibly fast: at the time of writing, the last block of bitcoin transactions took 15.4 trillion times more work to mine than the first ever on the blockchain (the “genesis” block). This is a result of how popular bitcoin mining has become; it’s also a measure of how secure the bitcoin blockchain is, as that mining difficulty would need to be overcome by anybody trying to manipulate it.
There’s a reason mining is now so popular. Bitcoin miners on aggregate earned $16 million a day last week in revenue. They certainly weren’t earning wages like that a decade ago…
Time will tell if I’m right – if I am, there’s another fortune just waiting to be made in the next 12 months. But beware. I said this in our 2020 Visions interviews over Christmas, and I’ll say it again: if you want to play in crypto, you should treat all the capital you fling into it with the same attitude you would buy lottery tickets. You need to be able to smile, let alone sleep, if you don’t win.
I’m looking forward to reading how Charlie Morris over at The Fleet Street Letter Wealth Builder courts this bitcoin rally. He shared his secrets to systematically trading BTC using some basic rules, which despite their simplicity, I haven’t encountered anybody else in the space even mentioning, let alone backtesting or implementing.
Charlie is a man you want in your corner if you want an edge in the bitcoin market. The very first evening I met him, at a book signing in Mayfair (where there weren’t any books incidentally, but that’s another story) he was brimming with insight on the space, and happily showed me a video of the boat he’d just bought with his bitcoin winnings. And that was before the massive rally…
All the best,
Boaz Shoshan
Editor, Capital & Conflict
Category: Market updates