Is Now a Good Time to Buy Bitcoin?
There are signs of growing acceptance of the cryprocurrency among more conservative Wall Street players, which is reflected in an improving chart.
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The market action is choppy on Wednesday, with big-cap technology leading again but some bounce in smaller stocks as well. There has been growing concern about the narrowness of the market, but as we have seen previously, this can continue for quite a while.
According to Charles Bilello, the ratio of U.S. small-caps to U.S. large-caps has been at its lowest since November 2000, a rather auspicious date. Bielello also notes that Microsoft MSFT, Nvidia NVDA, and Apple AAPL now make up 19.7% of the S&P 500 market capitalization. That is the most concentrated since 1980.
It is easy to find stats like this to worry about, but so far, the indexes are holding up well, and the business press is mostly ignoring the narrowness of the action. It does create an interesting setup for the jobs news on Friday.
I have not been a big fan of Bitcoin or altcoins in general, but I’m intrigued by the way the Bitcoin chart is developing.
My biggest problem with Bitcoin is that there is no way to value it. There is no cash flow, balance sheet, or earnings. There doesn’t even seem to be any utility for it either.
Bitcoin's value lies in the belief that it will be widely embraced as an alternative currency. Its privacy appeals to many people, and it is now seeing greater institutional support since it can be easily traded with various ETFs. Many financial planners believe that a balanced portfolio should have some exposure to the Bitcoin asset class.
There are predictions from people like Cathie Wood of ARK, who has said that Bitcoin could go as high as $3.8 million if institutions allocated 5% of assets to the alternative currency. That sounds wildly optimistic, but there are signs of growing acceptance among more conservative Wall Street players, which is reflected in an improving chart.
What I like about Bitcoin right now is the chart — and I’m allocating a small amount to the trade. I am definitely not a HODLer and will cut the position quickly if it breaches key support.
I’m using the iShares Bitcoin Trust ETF IBIT for my trade. Here is the chart:
At the time of publictaion, Rev Shark was long IBIT.
