As noted in previous articles, Bitcoin hoped to revel in a violent break after months of inactivity. At the time of writing, the highest value of $9,200 to $11,200 in a 13-day period.
The incredible increase in costs has revived several upward forecasts similar to 2017 with several high-level experts claiming their claim, adding Galaxy Digital’s Michael Novogratz, hoping that “bitcoin will succeed at $20,000 until the end of the year, driven by a global liquidity bomb and an influx of retail investors.” Novogratz is against the long-standing vision that the so-called institutional will lead the next bullish wave similar to 2017.
However, anecdotally, Novogratz’s valuation appears to be validated according to Tmendone Ross’ monetary advisor. Tyrone Ross points to a recent accumulation of calls from new retail investors and fiduciary trustees asking what “hot” virtual asset to acquire. He also points out that the investment “chain” has led to a replacement in the retail mindset, from a thorough long-term investment to fast racing, i.e. speculation of dictatorship.
In addition, the implementation of some other stimulus package is more likely to embolden those new speculators with a new $1,200 that will make them a hole in their pockets. Tyrone Ross comments that in the previous Stimulus package, he won similar calls asking about which virtual assets and speculative actions, although many other people want money to fund their living expenses.
In theory, the combination of high virtual asset costs and new stimulus controls provides the best mix of FOMO that can lead to a new inflow of retail demand.
However, this frenzy of hypotheses has no risk. For example, the entire crypto market experienced a really long sudden crash over the weekend, resulting in $1.3 billion settlements in primary inventory exchanges, to name the many investors who are underwater in their investments at $12,000.
The latest example of this sustainable dynamic was observed in early summer 2019, following Libra’s announcement on Facebook.
Nothing is certain and history doesn’t exactly repeat itself. However, moderating their irrational exuberance while distinguishing between long-term investment and the hypothesis is prudent for new retail participants.
Disclosure: owns Bitcoin and Ethereum.
No investment advice, for educational purposes only.
Chris is the founder of Valiendero Digital Assets, a leading quantitative encryption hedge fund that leverages data-driven devices and methods to make it probabilistic.
Chris is the founder of Valiendero Digital Assets, a leading quantitative encryption hedge fund that leverages device learning and knowledge-based methods to make probabilistic investments in a variety of liquid virtual assets. Chris is also the editor of Jab’s Weekly Bulletin. He graduated from Carnegie Mellon University’s Tepper School of Business, where he focused on analysis. He is the author of long articles and study reports for major blockchain media such as Forbes, CoinDesk and Brave New Coin, which have been distributed around the world. Chris analyzes virtual assets, blockchain projects and their market structures from a knowledge attitude first to provide useful knowledge-based data rather than opinions.