Note: This is a personal opinion piece of our editorial team that has been covering the Web3 and crypto market since 2018. Nothing in this article is meant as financial advice in any form or manner.
Our NewsFirstLine editorial team digressed the current state of the crypto bull market back in early November (read here). In that article, our team mentioned that the probability of a real bull run is very high.
One month on, it seems that the prediction holds and the entire crypto community is getting excited again. Or, maybe at least 15% to 20% of the pandemic crypto community. Back then, when interest rates were near 0% in a bid to starve off economic armageddon, “free money” was flowing into crypto. Speculation reached fever-pitch and this irrational euphoria propelled the crypto market to all time highs in November 2021, right when the world is turning a corner on its pandemic fight.
The crypto gloom and doom stretching from Dec 2021 to October 2023, catalysed by systemic events like the fall of Luna, Three Arrows Capital and FTX, pushed out many crypto “punters” and even so called “believers”. Who and what remains are the true believers of crypto. Or maybe just a seasoned investor with too much cash that the thought of liquidating that already downtrodden crypto assets would prove to be foolhardy.
Like all financial markets, the real “movers” are those with massive amount of cash. And often times, some of these “movers” may act in unison in order to maximise the alpha. They position themselves months and maybe even years ahead of the retail market, buying up assets when they are low and selling them at a much higher price to the late-to-the-game retail market.
The NewsFirstLine team guessed that the nail that created a crack line in the dam blocking the regulated financial market and the “Wild West” crypto market is the filing of BlackRock Bitcoin ETF. A gigantic money management firm, an application from BlackRock is not the same as an application from a low or even mid level asset management firm. So, when the news of BlackRock filing its Bitcoin ETF emerged few months back, the motion has been set to destroy the dividing dam of two financial worlds.
So far, all signs seem to point to the U.S. SEC paving its process to allow the lodgement and listing of a regulated Bitcoin ETF and maybe even an Ethereum ETF.
If you are a smart money manager like BlackRock, what would you do? The answer is obvious and simple. Well, simple enough if you have clarity and the confidence of what is going to happen. Simple enough if this is what you always do for a living.
It would not be surprising to see the rapid rise of Bitcoin in November was due in large part to the institutional purchases. We would think that the retail market does not have such prowess to propel Bitcoin from its US$20K price to where it stands now at US$44K (as of this writing).
Yes, buy up as many Bitcoins as you can in anticipation for the launch of the ETF. Because, when the ETF is launched, you can bet that the floodgate to Bitcoin investment would be opened to the multi-trillion dollar financial markets.
The early bird catches the worm.
We are also seeing many alt coins rising at a much faster pace, percentage wise. Well that is only natural considering many of those same alt coins got their values erased by as much as 95% from their 2021 market highs.
We believe the smart money managers will liquidate some of their Bitcoin positions along the way after the ETFs are launched and re-enter into the alt coin markets. Billions are going to flow into the alt coins market next year. And those irrational exuberance of “100x” or even “50x” for alt coins may ultimately become true. After all, Bitcoin was trading at less than $1 when it was released. Remember the pizza guy who earned 10,000 Bitcoins for two pizzas back in 2010?
So, is this the real bull run? The probability has definitely moved up to near certainty. When and if Bitcoin ETFs are approved, we will see more ETFs for other quality crypto like Ethereum.
We believe 2024 will be THE year for crypto.
In the next issue, we will delve into some of the quality alt coin projects and hopefully be right in identifying those that can yield 100x in value. We will try to turn this guesswork into an intelligent fundamental analysis. Ha!
Look out for Part 3 coming in the new year.
Have a wonderful Christmas and a Happy New Year in advance!
Disclaimer
Any information provided in this article is not intended to be a substitute for professional advice from a financial advisor, accountant, or attorney. You should always seek the advice of a professional before making any financial decisions. You should evaluate your investment objectives, risk tolerance, and financial situation before making any investment decisions. Please be aware that investing involves risk, and you should always do your own research before making any investment decisions.
