CRYPTOCURRENCIES
FX crash looked very profitable indeed.
Of course employing the same logic, Chart 6 shows that the Nasdaq looks like a bubble itself, approaching the dreaded vertical end game of the classic bubble chart, followed so many times by stocks, and more recently by Bitcoin.
Crypto investors rail about how correlated altcoins are with Bitcoin, pointing out how different many are from the original. Sadly for
them, Chart 3: NASDAQ COMPOSITE / USD
there is no escape from this correlation and what is good for Bitcoin is great for all crypto.
Te idea that Bitcoin will rise and rise along a path similar to the Nasdaq has solid fundamentals behind it.
Te obvious ones are: 1. Bitcoin is still a small asset class but one with a massive brand 2. Bitcoin is great money and as demand for its use in real transaction goes up so will the price 3. Supply is dwindling with a halving of issuance due in a couple of years 4. Bitcoin is replacing gold as emergency and flight capital and eating into the $7 trillion market cap of gold 5. Crypto
is Chart 4: BITCOIN/USD
could go a lot lower perhaps, but that would be the final fall. An optimist could see the bottom right here, right now or a pessimist could see a final capitulation down as $1500 depending how they want to guess the bottom. However, the key is when it turns the chances are this
will be the long-term bottom of Bitcoin for the foreseeable future.
Why?
Even with Mark Twain rhyming away, the track of the Nasdaq aſter its dotcom
nowhere near the
mainstream yet but will get there and multiplying demand for a finite resource where the monetary base will start to shrink from losses, like gold. Luckily there are plenty of useful fractions to facilitate its use, which by simple math drives up the value of each unit.
6. Last month’s news that ether – the world’s second largest cryptocurrency-
FX TRADER MAGAZINE July - September 2018 11
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