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Bitcoin – The Inflation Hedge That Only Institutional Investors Are Smart Enough to Take


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Hello everyone! I recently caught wind of this forum and have been really impressed with the content. I noticed that bitcoin has been a recurring topic on here and thought id kick off my forum presence with a post about my favourite asset. Bitcoin maximalist I think yes 😉.

Money printing, low inflation, coupled with rock bottom interest rates and largely speculative asset prices, what could possibly go wrong?

Retail investors flocking to their smart phones to day-trade, or even options trade, the latest IPO or Growth stock because they have a hunch? Because they have read an article in the wall street journal? Or because they have seen the time 11:11 on their watch just one too many times?

What a great time to be alive, just count the zeros, sign and recline. Climb aboard the rocket ship because everyday is payday.

Well…

Any savvy economist or experienced finance expert knows exactly what is coming…

How do you reduce the 20 trillion dollars worth of debt due to money printing? You increase inflation. What happens when you increase inflation? Those gorgeous earnings reports slip into the minus, even for the biggest of swingers in the NASDAQ.

As inflation increases so does the difficulty in turning a profit, so these tech companies that have a P/E ratio well above 100 have not got a hope in hell of sustaining their market cap, well lets face it there are not many companies that will not be hurt by an increase of inflation of 1% let alone 10%.

People have short memories. Inflation has been as high as 13% in the last 50 years and we are currently not far from 0%. Well how is this possible you may ask with all the debt we currently have? Well it’s not possible, it is not sustainable and when the Fed finally pull the trigger, well…. we will see the first depression since the 1930s.

So back to my point, what is the best asset to hold to counter inflation? SPX? Gold? Silver? Oil? Property? Forget it.

Bitcoin.

The first to market, proof of work consensus, powerhouse that is Bitcoin.

Why bitcoin you may say? Well its digital, can be accessed and transacted by anyone globally, it has a finite supply, and it is not controlled by a central authority.

Above all else, those that are into technical analysis, it is probably the best-looking price chart that has ever existed. Multiple cycles of exponential gains? I think yes.

Let us have a quick look at the chart and if you see what I see you will be logging onto Coinbase and putting the house on it.

Let us take a look at the weekly chart…

chart-2.png

Trend Analysis - We have a higher high based on the mid 2019 rally, so we are indeed in an uptrend.

Moving Average - The 200 moving average (MA) has perfectly held support for the entirety of the bitcoin chart, this means that technically we have always been in a weekly uptrend since inception. Even better we now have a breakout trade that is supported by the 20 MA.

Elliott Wave Analysis - We have completed a perfect correction, with a nice deep wave 2, perfectly positioned for take-off in everybody’s favourite, the wave 3.

Now let us zoom out again and have a peek at the monthly chart…

chart.png

Trend Analysis – If the month closes out anything above 14k we have reversed the trend and are in a Monthly Uptrend! A monthly uptrend is no slouch, this would indicate consecutive months of gains.

Moving Averages – The 50 MA has help support perfectly and we also in a breakout trade supported by the 20 MA.

Elliott Waves – If we take the 2018 high as a wave 1 and consider we have now completed an extremely deep wave 2. Next target is a minimum of 35k. A minimum.

There is actually zero to dislike. You may think that these numbers I am quoting are impossible, but you probably think an 80% correction in the SPX is impossible, my god your in for a surprise.

It is written on the walls, the market will collapse when the rug is pulled and the best hedge is Bitcoin.

Further to this, institutions already know this and are loading the bags, volume is low as retail investors still have a bad taste in their mouth from 2018. But as per usual when the moon rocket emojis return the price of bitcoin will fly into the stratosphere as the weak hands return!

So… do not be a weak hand, join the sharks and HODL!!!

 

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  • 439 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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