All posts by flippener

Is the Bitcoin 4-Year Market Cycle Real?

Throughout Bitcoin’s short history, its price has experienced enormous swings to new all-time highs, followed by retracements that take back most of the gains. Studying several Bitcoin (BTC) market cycles, it becomes clear that other than the first cycle, the others are relatively consistent regarding timing.

This trend is especially true of the last two cycles, which are close to four years each from peak to peak and bottom to bottom. Some have speculated that this timing results from the Bitcoin halving that occurs approximately every four years or 210,000 blocks mined. The question now is: Is the Bitcoin four-year cycle a real phenomenon or just a coincidence? And if it is real, what will it look like in 2024 and beyond?

Dissecting Bitcoin’s Market Cycles

For clarity, this article defines a market cycle from one bear market bottom to the next.

The first accurate Bitcoin price tracking occurred in July 2010. By October, Bitcoin’s price started to rise and peaked on June 8, 2011, at $31.90. The price began to fall over the next five months and bottomed at $2.01 on Nov. 19, 2011. This first cycle was the shortest of all the cycles to date.

Cycle No. 2 began at the 2011 bear market bottom on Nov. 19, after which the price bounced higher almost immediately. After the bounce, there was a six-month period of consolidation. After BTC broke out of the consolidation, it peaked at over $268 on April 10, 2013; a 76% drop followed that peak.

BTC recovered almost immediately and hit a bull market peak of $1,177 on Nov. 30, 2013. An 86% drop followed that peak; the bottom was hit on Jan. 14, 2015.

The third cycle began at the 2015 bear market bottom on January 14. For the first 9 ½ months, the price of Bitcoin accumulated in a range of about $100. After the price of Bitcoin broke out of the accumulation range, it re-tested the range once before moving higher.

The move higher culminated in the bull market peak at just under $20,000 on Dec. 17, 2017. Once again, a price drop of 84% followed the peak and the bottom was hit almost one year later, on Dec. 15, 2018.

The fourth cycle began on Dec. 10, 2018, and after about four months of accumulation, the price of Bitcoin broke out in a dramatic fashion. Over the next three months, the price of Bitcoin increased by over 200% and hit a high of $13,831 on June 26, 2019.

Over the remainder of the year, Bitcoin’s price slowly dropped but still finished up about 90% for the year. The start of 2020 saw a 45% increase in the price of Bitcoin, which peaked in mid-February. That was followed by the COVID crash, which bottomed in mid-March.

The recovery from the COVID crash was swift and eventually led to the next bull market. This bull market was reminiscent of the 2013 bull market. After pushing higher throughout much of 2020, the price of Bitcoin peaked on April 14, 2021. This peak was followed by a 55% pullback that bottomed on July 20.

Over the next month, the price of Bitcoin increased by over 134%, which led to the ultimate bull market peak on Nov. 10 at $69,000. Bitcoin’s price immediately began to drop and just over a year later, on Nov. 21, 2022, it hit what appears to be the bottom at $15,495.

By zooming out and looking at the entire price history of Bitcoin, you can calculate the timing of each market cycle. In the chart above, the green vertical lines mark the bull market peaks and the time intervals between them. The yellow dashed lines mark the bear market bottoms, with the time intervals between them.

Note the timing of the last two market cycles. They are close to a four-year cycle, from one peak to the next and from bottom to bottom. Another interesting observation is the time of year when the peaks and bottoms occur.

Other than the first peak in 2011, all the others occurred in November, December or January. Is this timing a coincidence, or is there a reason behind it?

It is also clear that with each successive cycle, the percentage increase in price for the year leading up to the halving is declining. The same pattern is evident from the halving to the following peak. Again, with Bitcoin’s short history, it is unclear whether this pattern will continue. Visually, it is easy to see the diminishing returns with each successive cycle in percentage terms.

Timing for Bitcoin Bottoms: From Halvings to Peaks
Timing for Bitcoin Bottoms: From Halvings to Peaks (Image: Benzinga.com)

Read more: Benzinga.com

Bitcoin’s Market Cycle

What is the Bitcoin Market Cycle?

The Bitcoin market cycle refers to the recurring pattern of price behaviour in the Bitcoin market, characterised by alternating periods of appreciation and depreciation. This cycle is a result of market participants’ perceptions and actions, such as buying and selling, and is influenced by a variety of factors, including market sentiment, regulatory changes, technological developments and the wider economy.

Historically, Bitcoin has followed a four-year cycle tied to Bitcoin halving events, which happen approximately every 4 years. A halving event marks a 50% cut in the Bitcoin reward miners receive for mining new blocks and verifying transactions; in effect Bitcoin supply continues to increase, but at a slower rate. The knock-on effect can be a steep increase in price, assuming the demand for Bitcoin remains the same or increases after a halving. The next halving is due April 2024, when the block reward will fall to 3.125 bitcoins.

What are the Bitcoin Market Cycle Phases?

Phase 1 – Accumulation

Occurs when prices are low, but small signs of growth appear. During this phase buyers will accumulate cheaper Bitcoin and so it represents the point of maximal financial opportunity.

Typically, there is bearish sentiment in the market so volume is low and prices are fluctuating in a tight range, near the bottom.

Phase 2 – Continuation

The price continues moving towards the all time high. A halving event has historically occurred here, coinciding with shrinking exchange reserves as buyers hoover up supply as they look to capture rising prices in anticipation of new all-time highs.

Phase 3 – Parabolic

When the price eclipses the previous all-time high, price action will start to move exponentially to the upside pushing the price to a new all-time high, which has exceeded the previous landmark by a significant factor. This phase is extremely volatile, with rapid price increases followed by large corrections

Sell volume builds as a portion of investors lock in healthy profits, while many market participants will continue buying believing the bull market has more room to run. As a result, price volatility is low given the buy and sell volumes begin to balance against a backdrop of overconfidence. At this point, many investors would see the Fear & Greed Index flashing Extreme Greed.

Phase 4 – Correction

Following the euphoria of the Parabolic phase, this is when the market will see a major correction to the downside. Previous bear market periods have resulted in approximately 80% drawdowns from the top and negative price action for approximately a year. The most recent example saw the price tumble from an all-time high of $69,000 (November 2021) to $15,476 (November 2022).

The chart below shows the cyclical nature of Bitcoin’s price and how it has played out in the past.

The Crypto Market Cycle: Bitcoin's Performance Over Time
The Crypto Market Cycle: Bitcoin’s Performance Over Time

Read more: CaleAndBrown.com

Bitcoin and the Predictability of Crypto Market Cycles

[An interesting summary of Bitcoin cycles from the end of 2023]

History shows there’s likely a bright year ahead for BTC’s price.

The crypto market may seem like a foreign world to many, with no real rhyme or reason for how it trades.

Just like traditional markets, though, crypto goes through its own cycles – and these price cycles are remarkably consistent, including their timing between peak-to-trough bottoms, price recoveries and subsequent rallies to new cycle highs.

We believe we’re in the early stages of a new cycle. Using bitcoin (BTC) as our benchmark, here’s the typical structure of a crypto market cycle:

  • BTC’s price peaks at a new all-time high.
  • BTC then suffers a painful 80% or so drawdown.
  • The price eventually bottoms almost exactly one year after the prior cycle’s high.
  • BTC starts to recover and takes about two years to reach a new all-time high.
  • BTC continues to rally for another year before topping out at its next cycle high.
  • Then the cycle repeats.

The last few cycles have followed this playbook to a T.

Crypto Market Cycles (Image: Coindesk.com)
Crypto Market Cycles (Image: Coindesk.com)

The consistency of these cycles isn’t by coincidence. It’s driven by bigger, more powerful macro trends – and one that lies at the very heart of bitcoin’s value proposition.

Bitcoin is not an inflation hedge in the way many believe it to be. Bitcoin is not a hedge on the Consumer Price Index, or CPI. It’s a hedge against currency debasement.

That distinction is important because currency debasement is driven by monetary inflation and the expansion of central bank balance sheets. In essence, BTC is of the most leveraged bets on an expansionary liquidity environment.

Bitcoin halvings aren’t the primary catalyst for BTC bull markets – liquidity cycle uptrends are. It just so happens that each halving has lined up with an expansionary liquidity environment. The next halving is expected to occur in April 2024, which once again looks to be right on cue.

That’s not to say the Halving isn’t important – it’s a strong narrative that can certainly pour fuel on a bullish uptrend, especially if we see a spot BTC ETF approved ahead of time given liquidity upcycles tend to turbocharge fund flows.

Read more: Coindesk.com

What is Bitcoin?

I was asked at the start of the year what is bitcoin, is it all virtual, and are you actually buying and selling anything real? This is the answer I gave, and I’m reposting it here as it may be useful to newcomers.

In a nutshell Bitcoin is virtual or software money, it’s a little bit like how banks used to issue their own currency in the past. The clever thing about it is that it is trustless – for hundreds of years people have wanted a universal payment system that didn’t need a third party to take their money (credit and debit cards, PayPal, Western Union, etc.) and Bitcoin was the first to solve that. A network of computers around the world hold a record of all Bitcoin transactions ever, and when a new transaction (block) takes place it is added to the list of previous transactions with a software pointer to the previous transaction (so it is impossible to add, remove or replace any transaction without breaking the chain) – hence the term Blockchain. That makes Bitcoin virtually impossible to hack. Also anyone can run one of these computers – I did for a while – so it is completely decentralised and no-one can change Bitcoin or devalue it.

What is Bitcoin? (Image: AI/BIC)
What is Bitcoin? (Image: AI/BIC)

There will only ever be 21 million BTC, that is fixed, and 19M have already been issued, following an algorithm hardcoded into it. As to whether you are buying and selling anything real, that is a complex question. Since fiat currency (pounds, dollars, etc.) are no longer connected to anything but printed at will there you are definitely not buying and selling anything real – all you know is that there will be more next year and what you’ve got will be worth less, which can’t happen with Bitcoin. I don’t want to get into the politics, suffice to say a staggering amount of new currency was created in the pandemic (https://techstartups.com/…/80-us-dollars-existence…/) and we are starting to reap the effects of that with inflation and the cost of living crisis. Suffice to say that the big investment houses and banks know all this and have been getting into BTC for the last few years. A number of applications for Bitcoin funds have also gone in, with Blackrock the biggest, and approval is hoped/expected for January. At that point tens of thousands of businesses and pensions will be able to buy into Bitcoin ETFs, which will jump up the demand for Bitcoin (since any money invested has to be backed by the same amount of Bitcoin being bought, same as a gold ETF).

In parallel, the next halving is in April when the amount of Bitcoin produced per transaction halves, so we are hitting a demand/supply perfect storm. I believe Bitcoin will continue its bull run until late next year and will definitely exceed $80k but could potentially exceed $200k. My first 2 Bitcoin I bought for £500 each in 2017, and continue to buy in whenever I can. I think people with software knowledge are able to appreciate it better than most, and in the bigger picture we are still early into Bitcoin. Some people say it will eventually replace fiat currency altogether, as the world becomes more digitised, but certainly its increasing use by banks, and as sovereign currency (El Salvador so far, other countries likely to follow), show the direction of travel is clear. I expect in the next 4 year halving cycle (from early 2027) it could hit $1M per Bitcoin.

How to Buy Your First Bitcoin on Coinbase (2024)

Before buying your first Bitcoin on Coinbase you need to open an account as described in How to Open a Coinbase Account to Buy Bitcoin (2024).

After that you will have an account page that looks like this – with 2 of 4 steps complete:

Coinbase Account page (Bitcoin-Investors.co.uk)
Coinbase Account page (Bitcoin-Investors.co.uk)

Click on the Add payment method to get to the next screen:

Coinbase Add payment method (Bitcoin-Investors.co.uk)
Coinbase Add payment method (Bitcoin-Investors.co.uk)

Here for simplicity we’ll add a debit card:

Coinbase Link card (Bitcoin-Investors.co.uk)
Coinbase Link card (Bitcoin-Investors.co.uk)

Fill in the details and press Add Card. That will add the card as a payment method and you’ll be returned to the main account page, now showing 3 of 4 steps complete:

Coinbase Payment added (Bitcoin-Investors.co.uk)
Coinbase Payment added (Bitcoin-Investors.co.uk)

Next select Buy crypto then Continue and trade crypto:

Coinbase Trade crypto (Bitcoin-Investors.co.uk)
Coinbase Trade crypto (Bitcoin-Investors.co.uk)

At this point you will be required to pass a quiz on crypto to show you understand what you’re doing – rather ‘nanny state’ but that’s where we are. It’s best to select Read our crypto guide and then learn the basics about crypto:

Coinbase Crypto quiz (Bitcoin-Investors.co.uk)
Coinbase Crypto quiz (Bitcoin-Investors.co.uk)

There are then a dozen screens like the following to read through:

Coinbase Crypto quiz 2 (Bitcoin-Investors.co.uk)
Coinbase Crypto quiz 2 (Bitcoin-Investors.co.uk)

On the last one select Take the test:

Coinbase Crypto quiz 3 (Bitcoin-Investors.co.uk)
Coinbase Crypto quiz 3 (Bitcoin-Investors.co.uk)

There are then half a dozen quiz questions like the following – in most cases you will be right if you choose the most pessimistic or negative response!

Coinbase Crypto quiz 4 (Bitcoin-Investors.co.uk)
Coinbase Crypto quiz 4 (Bitcoin-Investors.co.uk)

Once you’ve passed, select Continue and trade crypto:

Coinbase Crypto quiz 5 (Bitcoin-Investors.co.uk)
Coinbase Crypto quiz 5 (Bitcoin-Investors.co.uk)

You’ll finally get to the Buy screen – in future you can just select this from the main account page menu. Here the pound option has been selected (to spend so many pounds on Bitcoin) but you can instead select the Bitcoin (to buy so much Bitcoin, e.g. 0.1, and be told how many pounds this will cost). Enter the amount required. Note the card you entered will be shown at the bottom, with a credit limit:

Coinbase Crypto buy screen (Bitcoin-Investors.co.uk)
Coinbase Crypto buy screen (Bitcoin-Investors.co.uk)

Press Preview Buy, note here that the exchange rate changes live:

Coinbase Crypto buy screen 2 (Bitcoin-Investors.co.uk)
Coinbase Crypto buy screen 2 (Bitcoin-Investors.co.uk)

Press Buy now:

Coinbase Crypto buy screen 3 (Bitcoin-Investors.co.uk)
Coinbase Crypto buy screen 3 (Bitcoin-Investors.co.uk)

And you’ve bought your first Bitcoin! Note that the value of your Bitcoin will be shown at the bottom, and it will be less than asked for – there are always trading fees, buying and selling so you’ll get used to this. Coinbase fees are quite high (here £100 bought £95 of Bitcoin, so nearly 5%!). There are ways to reduce this – but that’s beyond the scope of this article (if you’re going to spend a lot of money, do investigate Coinbase One – but you will have to learn how to do trading). Click on View details to get taken to the Bitcoin Primary balance page (in future you can select this from your main account page):

Coinbase Primary balance (Bitcoin-Investors.co.uk)
Coinbase Primary balance (Bitcoin-Investors.co.uk)

This shows your current holdings of Bitcoin and the pound sterling equivalent. For a more general overview, return to Home:

Coinbase Account home (Bitcoin-Investors.co.uk)
Coinbase Account home (Bitcoin-Investors.co.uk)

Also note that if you buy multiple cryptocurrencies (e.g. Ethereum, USDC, etc.) you can see the balance of each coin, plus the total value of your portfolio, via the My assets menu and page:

Coinbase Assets page (Bitcoin-Investors.co.uk)
Coinbase Assets page (Bitcoin-Investors.co.uk)

Welcome to cryptocurrency and Bitcoin – you are no longer a Nocoiner!

How to Open a Coinbase Account to Buy Bitcoin (2024)

Buying Crypto

This is an introduction to buying Bitcoin for those new to cryptocurrencies in general and to Bitcoin in particular. The first step is to create an account on a website where you can buy some crypto (elsewhere we’ll look at how to hold your cryptocurrency in your own ‘wallet’).

Here I’ll show you how to create an account at Coinbase.com. It claims to be “the most trusted platform in the UK for buying, selling and trading crypto” and is certainly very well known worldwide. As well as being popular it is also easy to use. It is not the cheapest nor the most fully featured platform and so we’ll look at other platforms later (like Nexo.com) for those more experienced with cryptocurrencies. Coinbase is, however, good for newcomers.

The process has got more onerous over the years, unfortunately, probably due to the UK government’s increasing requirements for financial institutions to follow Know Your Customer (KYC) rules. If you look through the process below in advance you’ll understand what you need to do before you get on the Coinbase website.

Opening a Coinbase Account

Go to the following website: https://www.coinbase.com/en-gb/

When you follow that link you’ll see a webpage like the following:

Coinbase UK Home Page (Bitcoin-Investors.co.uk)
Coinbase UK Home Page (Bitcoin-Investors.co.uk)

Then go through the following steps.

  1. Click on the Sign up button, enter your email address and click Continue:
Coinbase Sign Up Page (Bitcoin-Investors.co.uk)
Coinbase Sign Up Page (Bitcoin-Investors.co.uk)

3. Enter your first and last name and a secure password.

A good place to get a password is PasswordsGenerator – choose a length of 16 characters and include symbols, numbers and upper and lowercase characters. Make sure at this point that you record the password somewhere, e.g. in a new document. You will need a lot of passwords when dealing with cryptocurrency and the general rule is that if you lose the password you can lose the money! Get into careful organisation now.

If your password is suitably secure you will see the green lines below the password box as shown below. Make sure the check box is ticked, and press Create free account. You may need to pass a Captcha at this point.

Coinbase Create Account Page (Bitcoin-Investors.co.uk)
Coinbase Create Account Page (Bitcoin-Investors.co.uk)

4. You’ll come to the Verify email screen:

Coinbase Verify Email Page (Bitcoin-Investors.co.uk)
Coinbase Verify Email Page (Bitcoin-Investors.co.uk)

Go to your email interface (Outlook, Gmail or whatever) to find the email and click on the Verify Email Address button:

Coinbase Verification Email (Bitcoin-Investors.co.uk)
Coinbase Verification Email (Bitcoin-Investors.co.uk)

5. You should now be able to login to Coinbase with the email and password you provided:

Coinbase Sign In (Bitcoin-Investors.co.uk)
Coinbase Sign In (Bitcoin-Investors.co.uk)

At which point you may be emailed a code to enter:

Coinbase Sign In Code (Bitcoin-Investors.co.uk)
Coinbase Sign In Code (Bitcoin-Investors.co.uk)

7. Once logged in you will have a bunch more questions to answer:

Coinbase Sign In email option (Bitcoin-Investors.co.uk)
Coinbase Sign In email option (Bitcoin-Investors.co.uk)
Coinbase Sign In phone (Bitcoin-Investors.co.uk)
Coinbase Sign In phone (Bitcoin-Investors.co.uk)
Coinbase Sign In citizenship (Bitcoin-Investors.co.uk)
Coinbase Sign In citizenship (Bitcoin-Investors.co.uk)

8. Enter your date of birth and home address and answer some questions:

Coinbase Sign In personal information (Bitcoin-Investors.co.uk)
Coinbase Sign In personal information (Bitcoin-Investors.co.uk)
Coinbase Sign In personal information (Bitcoin-Investors.co.uk)
Coinbase Sign In personal information (Bitcoin-Investors.co.uk)

9. Next we have to get through all the KYC and ‘be careful crypto is dangerous’ warnings and questions. Most people reading this will be Restricted Investors:

Coinbase Sign In KYC (Bitcoin-Investors.co.uk)
Coinbase Sign In KYC (Bitcoin-Investors.co.uk)
Coinbase Sign In KYC (Bitcoin-Investors.co.uk)
Coinbase Sign In KYC 1 (Bitcoin-Investors.co.uk)
Coinbase Sign In KYC (Bitcoin-Investors.co.uk)
Coinbase Sign In KYC 2 (Bitcoin-Investors.co.uk)
Coinbase Sign In KYC (Bitcoin-Investors.co.uk)
Coinbase Sign In KYC 3 (Bitcoin-Investors.co.uk)

10. Finally, if you have had the patience, you will have got through all the KYC requirements:

Coinbase Sign Up (Bitcoin-Investors.co.uk)
Coinbase Sign Up (Bitcoin-Investors.co.uk)

11. Next, you have to do identity verification, again most likely due to government requirements for Anti-Money Laundering (AML). For most people the simplest option is likely to be uploading a scan or photo of the back and front of their driving licence:

Coinbase Sign Up identity verification (Bitcoin-Investors.co.uk)
Coinbase Sign Up identity verification (Bitcoin-Investors.co.uk)
Coinbase Sign Up identity verification 2 (Bitcoin-Investors.co.uk)
Coinbase Sign Up identity verification 2 (Bitcoin-Investors.co.uk)
Coinbase Sign Up identity verification 3 (Bitcoin-Investors.co.uk)
Coinbase Sign Up identity verification 3 (Bitcoin-Investors.co.uk)

12. After you press the Upload button you will get an acknowledgement:

Coinbase Sign Up identity verification 4 (Bitcoin-Investors.co.uk)
Coinbase Sign Up identity verification 4 (Bitcoin-Investors.co.uk)

It’s worth keeping this window open until it completes; if you try to sign out you may have to start again. At some point it will complete (in the example shown it took less than 5 minutes) and you will be signed into your new account on Coinbase:

Coinbase Sign Up success (Bitcoin-Investors.co.uk)
Coinbase Sign Up success (Bitcoin-Investors.co.uk)

At this point let’s take a break, and we’ll continue setting up inside your account in another article. By all means now take a look around the Coinbase platform and see what features are available to you.

Five reasons Bitcoin is invincible

Is Bitcoin back from the dead? A year ago, Bitcoin — and “crypto” in general — was in a parlous state. A series of major scandals, including the FTX collapse, had investors running scared and regulators on a warpath. The Securities and Exchange Commission (SEC) launched numerous full-bore attacks on crypto companies, and even blamed crypto for a short-lived banking crisis last summer. The public perception of digital assets was also in the toilet, and politicians, fearing reputational contagion, wanted nothing to do with them (this was in stark contrast to early 2022, when a third of the US Congress took money from a certain Sam Bankman-Fried).

Critics, not unreasonably, said crypto had failed to offer compelling use-cases, beyond speculation. They said it was a cesspit of money laundering and terrorism (its involvement in the latter tends to be vastly overstated). They said it was dangerous for the environment. They said it could never become part of the financial system, because key financial players on Wall Street would never accept it. Some even dared to bid a valedictory “Sayonara”, as they have hundreds of times before now.

Bitcoin protected by shield (Image: AI/Bitcoin-investors.co.uk)

Yet today, Bitcoin is trading at around $70,000, above its previous all-time-high of about $69,000. The world’s premier cryptocurrency now has a market cap greater than silver, and many expect it to reach parity with gold within a few months. Meanwhile, the rest of the crypto market, which slumped along lifelessly for much of 2023, isn’t far behind.

So, what’s going on here? What sparked Bitcoin’s resurrection? The truth is there are five principal reasons behind its revival, the first of which may seem rather obvious…

1. You can’t kill Bitcoin

It’s awfully difficult to eradicate something like Bitcoin. Its network is peer-to-peer and decentralised, with roughly 18,000 public nodes working to validate and maintain the network daily, and they work independently. There isn’t a central point of failure or vulnerability for someone or something to stop. It’s a self-perpetuating system. And, more importantly, Bitcoin has tremendous latent support in the world: there are more than 100 million Bitcoin holders globally and, characteristically, they do not respond to political pressure. Since its emergence 13 years ago, Bitcoin has purred along efficiently, steadily growing, even in the face of massive competition and numerous hacks (particularly to exchanges and individual wallets).

This resilience isn’t directly connected to price; Bitcoin can be resistant without the price going up. But the price is based on this sense of permanence. It’s a function of everyone knowing with certainty that the Bitcoin code can’t be changed and that the issuance of new Bitcoin isn’t a political matter. Unlike fiat currencies, which are subject to central bank issuing more or less of a currency depending on the economic circumstances, the issuance of Bitcoin is predictable. That’s a unique selling point in a world where everything, even money, is increasingly politicised.

2. The arrival of ETFs

Though the Bitcoin industry takes pride in its outsider status, it has long sought mainstream support, whether from regulators or blue-blood institutions. This January, after 10 years of trying, it hit the mother lode, winning SEC approval for Bitcoin exchange-traded funds, or ETFs. These vehicles, which helped to popularise gold in the 2000s, allow everyday investors to buy into Bitcoin as if they were purchasing a conventional stock. There’s no need to own the underlying asset or to store it oneself.

Read more: Unherd.com

How To Make Money in Cryptocurrency

The Bear is dead, long live the Bull!

It is increasingly clear that the most recent Bitcoin bear market (‘crash’) is finally over and we are starting the next bull market (‘to the moon’).

Bitcoin Bull Market (Image: Bitcoin-Investors.co.uk)
Bitcoin Bull Market (Image: Bitcoin-Investors.co.uk)

It has seemed to me that we were at or close to the bottom of the market for some time. In November I was able to add to my Bitcoin portfolio with additional loans from Ledn, at a price around $17-18k per Bitcoin.

Around the New Year, appropriately enough, it looked more certain that we had turned a corner. I increased my holding of Bitcoin,  via dollar loans against Bitcoin (at around $22k), while being cautious and open to the possibility of further significant falls in the market.

However, it is obvious now that the worst is behind us and we should – mostly – be seeing increases in value from here on in. I say mostly because, of course, Bitcoin never goes up in a straight line, and we can expect spikes and troughs as its value on average goes up.

As I write this Bitcoin is at $29160 and Ether at $1969 on Coinbase. It looks like a great time to buy in as the market shakes off its ‘crypto winter’ and starts to build momentum towards a new all-time high.

It is important to be patient, however. Bitcoin’s value rises and falls in 4 year cycles because of its halving, and the rest of the market follows along in its wake. Therefore we can expect good gains leading up to the forthcoming halving, but the real breakout is likely to take place in the 6 months afterward.

The next halving is due in April 2024. In advance of it we can hope for a steady increase in the value of Bitcoin, plus a faster spike in its value in the 6 months from the halving to October 2024. That should produce the next Bitcoin All Time High (when I’ll be looking to sell) – and then, realistically, the usual fall again afterwards towards 2026 until the next halving approaches in 2028.

In terms of Bitcoin as an investment then, I see the current moment as a great time to buy in. That could be via a lump sum purchase (especially while Bitcoin is below $30k and Ether is below $2k) but Dollar Cost Averaging over the next 12 months would also be a very good strategy.

A suggested diversified portfolio would be something like 50% Bitcoin, 25% Ethereum and 25% of either a range of alternative coins or blue chip NFTs such as the Mutant Ape Yacht Club (which currently has a floor of just 11.9 Eth).

Bitcoin Rally Continues, Gaining More Than 80% This Year

The cryptocurrency extended its gains after another big jump on Tuesday, topping $30,000 for the first time since June.

Bitcoin is still the market’s runaway success story of the year. The cryptocurrency topped $30,000 on Tuesday for the first time since June.

Bitcoin Bull Market (Image: Bitcoin-Investors.co.uk)
Bitcoin Bull Market (Image: Bitcoin-Investors.co.uk)

Bitcoin has gained more than 80 percent in price this year, far outperforming many other assets. The Nasdaq 100, an index of the biggest tech stocks, has gained roughly 20 percent in that period — a strong showing but a far cry from Bitcoin’s resurgence.

The latest Bitcoin rally appears to be partly tied to the Federal Reserve’s monetary policy, which has included nine interest rate increases over the past year. Crypto asset prices sank a year ago as the central bank began to raise rates, but investors are now betting that the Fed will soon pause its rate increases, even though Fed officials have been suggesting the opposite, setting off a big rebound.

Bitcoin’s biggest gains also coincide with the turmoil in the banking sector. The cryptocurrency is up more than 45 percent since the collapse of Silicon Valley Bank last month. Industry advocates point to the recent rally as a sign that investors are converting some of their cash into digital currencies, though there is little evidence of that happening.

Read more: NY Times

2022 was a hard year for crypto — but it may have been just what the industry needed

  • 2022’s crypto collapse wiped out roughly $2 trillion worth of crypto assets.
  • As the sector enters a period of stability, good actors must come together to deliver a digital assets industry that promotes the safe, sound and compliant development of blockchain-powered tech.

Consumers, businesses and investors around the world lost nearly $2 trillion in the digital assets market last year. By any measure, the systemic failures in the digital assets market in 2022 were eye-watering — some argue they are still reverberating in 2023, with correlations in the evolving banking crisis.

Bitcoin (Image: Antana/CCBY-SA2)
Bitcoin (Image: Antana/CCBY-SA2)

Many of 2022’s crypto losses were triggered by a daisy chain of events that began with the collapse of the stable-in-name-only Terra-Luna token, and were punctuated by the collapse of FTX.

The remaining viable players in the crypto industry must take a hard look in the mirror to regain market trust, particularly among regulators and policymakers. Regulators and policymakers, meanwhile, should take heed in not overreacting to crypto risks but responsibly harness the technology.

With jurisdictions adopting policies across the spectrum, de-banking and de-risking are emerging as major threats to the industry. These trends have unintended consequences and, over time, may produce more harm to the countries (and markets) that adopt these policies than the knee-jerk corrections to last year’s financial misdeeds.

Countries that lead in the development of the third generation of the internet (what some are calling Web3), and the novel industries and business models it will produce (including in the core of finance and banking), will prevail in the digital currency race.

Read more: WEForum