It occurs every four years. It occurs almost to a mathematical precision- The Bitcoin four-year cycle. In the last six months on this blog, we have written various articles to highlight the uniqueness of Bitcoin (and cryptocurrencies in general) as an asset class. We have written about its four-year cycle. This repetitive cycle if fully understood can be the basis for a calculated investment in this asset class that will guarantee financial freedom down the line.
It begins again…….
In Dec 2018, Bitcoin hit its lowest level of $3,100. Down from an all-time high of $19,450 it made in Dec 2017- a loss of 85% of its value from its all-time high. In fact, this is the third time it is going through this bull run and subsequent value loss. The pattern is connected to the halving event (the reduction of its block reward by half) that occurs every four years. This halving event increases Bitcoin’s stock to flow ratio. The higher an asset’s stock to flow ratio, the more desirable the asset is as a store of value asset.
From its lows of Dec 2018, after recording a loss of 85%. It seems Bitcoin as resumed its next four-year cycle. The cycle traditionally starts the year before the next halving event. The next halving of Bitcoin will occur in May 2020. The build-up to that event it seems has now begun. We expect the price which has broken a key resistance at $4,200 to break the next critical resistance at $6,000 later in the year and stay between the previous all-time high i.e $19,450 and $6,000 for the remaining part of the year. It should break its all-time high of $19,450 in Q1 of 2020 and then the mania phase of an aggressive bull market will begin!
How you should position yourself
World class investors are mainly contrarian in their approach to investing. They don’t move with the herd. If you must succeed as an investor and make great wealth in this (cryptocurrency) or any other market, then you must be contrarian in your approach to it too. At the height of the bull run of 2017, the query for Bitcoin and cryptocurrency in general on Google was at an all-time high. Fast forward one year later, at the depth of its bear market, when prices were languishing at between 80-85% loss from all-time highs. Google search for Bitcoin/cryptocurrencies was almost flat- it is at an all-time low. What this simply shows is that the herd will always miss it when it comes to investing. If you want to be rich, you must learn to bet against them. Get into the asset when no one wants to invest in it. By the time its all mania and everyone and their dog wants a piece of the asset you are already taking profits and scaling out. The best time to start your investments in Bitcoin and cryptocurrencies is now! Please read me very carefully, by this time next year, it will be all carnage in the cryptocurrency space. That is when the masses of people will be rushing in. but that should be the time that you relax and just watch your investments grow. If Bitcoin’s history is anything to go by, it usually makes 10-15 times its all-time high from the preceding bull run in the next one. So we expect between a value of $200,000- $300,000 per Bitcoin at the end of the next bull run in 2021. Sounds too good to be true? You just watch. The cryptocurrency revolution is simply a wealth transfer. All technology revolutions are. The decentralized ledger technology revolution will be no different. You should position yourself to be part of it.