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Seizing the Current Bitcoin Surge Opportunities

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Understanding Past Bitcoin Cycles and their Implications for Today

Reflecting on December 2022, a time of great uncertainty in the crypto sector, our expert Luke Lango dared to forecast a significant surge in Bitcoin value for 2023. At the time, Bitcoin was trading below $17,000, having recently plummeted by 75% from its peak, amid tumult at FTX with Sam Bankman-Fried facing fraud charges.

While mainstream sentiment remained pessimistic, savvy investors, familiar with crypto cycles, saw a beacon of opportunity.

Delving into the Rollercoaster Ride of a Crypto Investor

To gain insights into crypto cycles and their potential significance today, Luke delves into the intricacies:

Cycles in the crypto market showcase periodic booms and busts, often tied to halving events.

Approximately every four years, Bitcoin experiences a halving event, halving the rate of Bitcoin production per transaction. With its limited supply at the core, Bitcoin enters a boom cycle nearing these halvings and a subsequent bust cycle in the intervening years.

What astounds is the consistency with which Bitcoin adheres to these halving-induced fluctuations.

Luke illustrates how Bitcoin has faithfully replicated this pattern since 2011, with the crypto surge typically commencing a year before a halving and prevailing until about a year after. Subsequently, a crash of approximately 80% follows over the subsequent two years, reaching a nadir about a year before the subsequent halving, spawning a new cycle.

Returning to Luke’s analysis:

This pattern has recurred not once, twice, or thrice, but four times. We currently navigate the Fourth Crypto Boom Cycle.

Chart illustrating Bitcoin's performance during its preceding 4 Halving cycles

Source: Bloomberg

Our ability to forecast the tumult’s conclusion in late 2022, a time when Bitcoin was deemed untouchable by many, underscores the prudence of maintaining our bullish stance on cryptos.

Hence, we resolutely endorse cryptos at the present juncture.

Analyzing the Current Phase of the Fourth Crypto Boom Cycle and Prospects for Latecomers

The crux of Bitcoin’s boom/bust cycle centers on its halving events.

With the upcoming halving expected in April, any potential gains leading up to this juncture might dwindle. Does this imply that late entrants have missed the prime opportunity in this cycle?

Fortunately, no. Luke’s analysis indicates that the most substantial cycle returns materialize after the halving events:

In the inaugural Boom Cycle, Bitcoin surged 500% initially and catapulted over 9,000% thereafter.

During the Second Cycle, Bitcoin first climbed around 100% and then surged almost 3,000% in the latter half.

Amid the Third Cycle, Bitcoin ascended by 35% initially, then skyrocketed almost 500% in the latter phase.

The latter parts of a boom cycle typically yield returns on a magnitude significantly higher than those in the early phase.

Given Bitcoin’s approximately 100% ascent thus far in the ongoing Crypto Boom cycle, there exists a potential upside of over 1,000% over the upcoming 12 months as it advances towards its peak in the cycle.

Further Indicators Pointing to an Impending Surge

An essential distinction in the ongoing crypto uptrend lies in institutional backing.

In a historic move, the SEC sanctioned the maiden US-listed exchange-traded funds (ETFs) for tracking Bitcoin back in January, setting a precedent for significant institutional involvement in the crypto domain.

This decision facilitated Bitcoin ETFs from major players like BlackRock, Ark Investments/21Shares, Fidelity, Invesco, and VanEck, heralding a surge in monumental capital influx unprecedented in prior cycles.

As per Bloomberg:

In contributing to crypto’s ongoing boom cycle, consider this staggering statistic: BlackRock Inc. witnessed a record influx of $520 million into its Bitcoin ETF in a single day.

The iShares Bitcoin Trust (ticker IBIT) logged its most substantial single-day inflow on Tuesday, marking the most extensive daily inflow among new US-based ETFs investing directly in the paramount cryptocurrency. It also emerged as the second-largest daily intake for any US ETF across all asset categories.

Yet, the most exhilarating aspect remains…

The current Bitcoin price surge ostensibly reflects merely a fraction of institutional investors positioning themselves. As 2024 unfolds, anticipate a broader cohort of professionals stepping into the arena, hinting at the potential for even greater gains within this boom.

Stephane Ouellette, CEO of FRNT Financial, specializing in digital assets, shares:

The surge evidently owes much to the BTC ETFs.

Estimates propose that fewer than 20% of investment advisors have secured approval from their firms to integrate this product for their clients. This evolution is likely to unfold over the coming year.

Addressing Concerns about Bitcoin’s “Rat Poison Squared” Moniker

As discussed earlier in the week within the Digest, Warren Buffett endearingly dubbed Bitcoin as such during a shareholder gathering in 2022.

So, does allocating funds to crypto seem imprudent at present?

If your premise entails Bitcoin supplanting fiat currencies and establishing itself as a stable repository of value henceforth, perhaps investing could be deemed unwise.

Conversely, if viewing Bitcoin as a tool for wealth accumulation capable of transforming your portfolio at a pace eclipsing 95% of existing stocks in the market, then capitalizing on this surge – “rat poison” moniker notwithstanding – seems judicious.

As an added precaution, adhere to the protocols outlined in prior Digests: Maintain modest position sizes that won’t disrupt your financial objectives in the event of mistimed entries, and employ a trailing stop to delineate potential losses.

Each investment necessitates an evaluation: What level of risk/loss are you willing to accept in exchange for a commensurate reward/profit?

Historical data on Bitcoin’s “reward/profit” during boom cycles, akin to our present one, often scales to four-digit percentages. Hence, the pivotal query revolves around your risk threshold vis-a-vis prospective rewards.

Concluding, Luke advises:

No, it’s not late to engage with cryptos.

The prevailing environment offers ample scope to potentially amass wealth within this crypto boom cycle. This affirms our recent issuance of Buy Alerts on select cryptos poised to soar in the latter half of the Fourth Crypto Boom Cycle.

You haven’t missed the opportunity yet; there’s still room to capitalize.

To join Luke in Ultimate Crypto for his latest research and premium altcoin recommendations, access this link. Regardless, the crypto domain propels with vigor, presenting further upside potential in this boom.

Such windows of hyper-growth are scarce. Utilize them as you deem fit.

Wishing you a pleasant evening,

Jeff Remsburg

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