Unless you are new to investing and trading you are likely to be having a bit of vertigo at prices for assets in equities and crypto. So let’s look at them and work out what to do.
Crypto is now at about the levels I have been writing about for some time as the very extreme of what the current bull market can carry. I felt it was unlikely to get here, but here it is.
This is a chart from a few weeks ago (it was included in my January 27 post):
Now the crypto believers think bitcoin will keep going to 1c a satoshi or $1 million a bitcoin. This is only possible in the near term if hyperinflation shows up and makes dollars much cheaper. This is not impossible, but I feel 100%-200% inflation over the next 5 to 10 years is more likely than 100,000%. High inflation to bring debts back into line with GDP is what I expect, not the implosion of fiat currency. This is not what a lot of my fellow doom-scrollers expect. They see the rapture coming and mountains falling into the sea. I do not expect this. That said, the dollar is on the skids, but that is hardly surprising with a full suite of monetary Gutenbergs at the helm of the U.S.
Here is a dollar chart to show devaluation via liquidity (money printing) at work:
Dollar down, bitcoin up! If $60,000 isn’t the top for bitcoin then the next stop is $100,000, which I do not believe in either, but like the current top $5,000 level my disbelief doesn’t mean it won’t happen.
This chart looks totally credible to me, but I just can’t get BTC $100,000 to work in my head.
Meanwhile I’m getting the Bitcoin alpha performance with 25% of the “fiat” exposure by riding the amazing market action of DeFi, the new wave of crypto enterprises set to upend the banksters of old. This can be summed up by the apparent fact that Coinbase is currently trading at a valuation bigger than the NYSE and the Nasdaq combined.
It’s a logic that works for Tesla
As a side note, the U.K. is driving crypto players out of the United Kingdom just when Britain absolutely needs the sort of “get out of jail” technology that crypto represents. It’s suggestive of Brexit Britain’s status as a “submerging economy.”
Elsewhere crypto has generated about $2 trillion of value and like the sailing ship, crypto will be a technology that will be defining for the future bifurcation of first world nations from the rest. As so many countries have experienced, technology is the driver of societies from backwaters to great powers and vice versa. The great European power of Venice didn’t…