Okay so if you can’t beat them, join them right? You can’t call yourself a financial blogger without posting about Bitcoin at least once per ̶w̶e̶e̶k̶ day. So for those of you who have heard rumblings about this “Bitcoin thing” but haven’t looked into it, there are a hand full of articles below that explain in plain language what this craze is, the technology behind it, and some forecasts about the future of alt currency.
Explain Bitcoin Like I’m Five (Start here)
CNN Money Infographic On Bitcoin
I am not an expert in the technology behind Bitcoin or any other Alt Coins or the Blockchain. I do however have the internet machine and can do a Google search! If you are interested in how the Blockchain works, this is the first and only article I have read on it:
Blockgeeks – What Is Blockchain Technology?
What I am an expert in is technical analysis of price trends, human investor sentiment, and forecasting probabilities of price using quantitative methods. At this stage, we can go ahead and throw out quantitative methods of forecasting where Bitcoin may trade. Yes I know you can throw around some Fibonacci Extensions of past pullbacks. Relax. Fibonacci retracements have proven to work very well in forecasting sell offs as well. I’ve posted some charts from previous tweets and posts below and you can see how the Fib Levels have been respected. But no one can forecast mania, euphoria and crowd madness with any level of usable accuracy.
As for price trend analysis, well that’s easy. Up.
What is left is human investor sentiment. In other words the overall attitude of investors towards an asset class. For illustrative purposes let’s say that we rank sentiment on a scale from -1.0 to +1.0. Negative 1.0 meaning sell it all, I don’t want any of my money tied up in that to positive 1.0 please take my money and get me in this at any price.
On that scale, Bitcoin is about a +3.0.
In 11 years in this business I have never seen the type of buzz around anything finance related. From text messages from friends outside of our industry, to questions from our customer base about how to get exposure to Bitcoin, I haven’t personally seen anything like this. I wasn’t around in the .COM days and Tulip Mania so I have to rely on historical price charts and articles like this that teach us what “bubbles” look like when they burst.
I bought some Bitcoins back in the Spring and planned to hold them “forever” or until the money was truly needed. I got into BTC under $1700 and also own LiteCoin and Etherum from lower. That is still my plan. Strangely enough, I feel almost no euphoria even though my investment has gone from under $1700 to as I write this over 17k per coin. I am not sure if that means I am a true seasoned market veteran with ice in his veins or dead inside. Probably a little of both. One thing is for certain: No one knows what is going to happen, how high these cryptocurrency prices can trade and in most cases what it is they are even throwing money at. The marketing and self promotion side of this craze is becoming a frenzy. Everyone is suddenly an expert and you will see for pay courses being sold on how to trade them. Proceed with caution. That is all I ever ask before throwing your money at a “guru.”
There is but one guru, the aforementioned Nostradamus of Bitcoin, who did his very best to get you in front of this seemingly unstoppable money train. During Janet Yellen’s testimony to the HFSC back in early July, he tried to tell you. The question is, did you listen?
OC