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Cryptocurrencies - Asset Class

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Yes interesting piece. 

I think Cryptocurrencies are an asset class to stay. What I do not know is which Cryptocurrencies will make it and survive and which will not make it and fail. Will Litecoin or Bitcoin Cash make it?

For me Bitcoin is clearly on a downward trajectory but as we know with Bitcoin it is capable of reversing quickly and hitting double digit returns in the opposite direction over a matter of hours. I have seen that many times before. The key to all this will be news and no analysts can predict when this news will be released. 

Right now positive news will drive Crypto prices higher and no news or negative news will drive it lower. Also one pattern I am seeing is that when Indices are bullish and Gold and Bonds are bearish then Cryptos seem to do well and when Indices are bearish and Gold and Bonds are bullish then Cryptos seem to fare badly. This is just a trend I have been seeing which tends to be a good indicator of imminent direction for Crypto prices on a short term time period. 

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So Cryptocurrencies were one of the best performing asset class in 2019. They outperformed Equities, Bonds and Commodities which is no mean feat in the whole year. Not just a few days, weeks or months. Actually over the whole year.

I do not know which Cryptocurrency if any will actually succeed and become successful. I think the chances are higher in terms of odds and probabilities for Bitcoin. That is just my personal opinion at this moment in time. Of course that can change. It could be a totally new Crypto comes up and makes it or the current versions are all improved and developed so that one of them becomes the future. I don't know. 

The one thing I do know is that Cryptocurrencies are now accepted as an asset class. Bitcoin is accepted as an asset in a diversified portfolio.

Bitcoin has not died, nor has it crashed, failed or gone to zero. Why not in 10 years? The answer is because there are a lot of smart people working on very complex projects in relation to Bitcoin which could shape the future digital economy. That is how important Bitcoin is at this moment in time and why until those projects fail (if they fail) Bitcoin cannot go down to zero and fail itself as an asset. Some of the smartest brains along with some of the wealthiest people are involved in the Crypto and Bitcoin space. 

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Right now Cryptocurrencies are the best performing asset class in January 2020 in terms of returns and profits. I can see the asset class being strong in the first quarter of 2020 and certainty prior to the Bitcoin halving event. After that we could see the mother of profit taking, shorting and price crashes. 

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I can definitely resist. 

There is nothing like 'Following the Tape' as Jesse Livermore would put it. 

For me personally, it is all about following the price action. This will lead to identifying trends as early as possible. It will also help in identifying the strongest trending cryptos. Then look to trade in the direction of the trend and not against it. 

KISS (Keep It Simple Stupid)

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The following may be of interest to some of you. Mark Carney (Governor of the Bank of England) made the following comment at the World Economic Forum (WEF):


Mark Carney, Governor of the Bank of England, also spoke on the matter:

“Governance is the core pillar of any form of digital currency. It is critical that any framework on digital currencies ensures security, efficiency, and legitimacy of payments while ensuring fair and open competition. We welcome the WEF’s platform to help develop a robust governance framework for inclusion through digital currencies.”

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The start of 2020 belong to Cryptocurrencies in terms of returns generated. They absolutely smash any other asset class to pieces. There is no an asset class which can touch Crypto for January 2020 and the start of February 2020. 

There are some very smart people working in Crypto / Blockchain space right now. They are being supported by billionaires and very large companies.

I don't think Bitcoin is going to die anytime soon. If anything these smart people will find a way to improve it, adapt it and enhance it so that it can become an important part of the digital architecture and an integral part of the digital landscape. 

Yes certain other Cryptos may well die and crash to zero but I think the likes of Bitcoin and Ether are going to improve immensely over this next decade and get better and stronger. 

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