Bull Market - A bull market is the condition of a financial market in which prices are rising or are expected to rise. — Investopedia
The end of March has come, and I’ve made several adjustments to my portfolio. I loosely covered my portfolio allocation in Bitcoin, Time, and Health. For those of you who missed it, my portfolio is roughly the following.
95% BTC
2.5% CRO + BNB
2.5% ATOM + ADA
My goals haven’t changed, but time has. New information has come to light. Some of these investments prompted me to take profit, while others I reinvested into. Lastly, as we approach August 2021, I am continually reassessing my Bitcoin position.
What Happens in August 2021?
August 11th, 2021 will be exactly 18 months after the previous Bitcoin halvening (May 11th, 2020). Historically Bitcoin has gone through a significant bull run for 12-18 months after the halvening. The one that occurred on May 11th 2020 was the 3rd halvening, bringing us into Bitcoin’s 4th epoch. While there was not enough information to say that halvening “cause” bull markets, we are definitely starting to see a broader picture and pattern emerge from looking back in time.
Caveat — Past patterns and trends are not a predictor of future prices and events
I use the Bitcoin stock to flow ratio chart as my guide to what roughly could happen in the future. Here is an image of the chart taken from today’s date.
I encourage you to visit the site directly to see how the dates line up exactly. I’ve provided two annotations on the graph (red and purple) in order to speak about them here in this letter.
Establishing a New Level
During each of Bitcoin’s Epochs, it establishes a new price level called the floor1. This is a new price wherein Bitcoin will not go below for the rest of time. It’s actually pretty fascinating to plot the yearly floors on a graph or table. This gives some perspective into where Bitcoin is going in the future.
To round it off …
2019 - $3,401
2020 - $5,197
The statement that the tweeter makes at the end is very insightful. Bitcoin’s bottom price is the level at which the real HODLers of the world won’t sell their Bitcoin. The yearly floor price indirectly describes the size of the base of HODLers. Currently, the lowest price in 2021 has been $29,928, but the year is not over, and I am totally willing to eat my words.
The point is, August 2021 signals the establishment of a new level for the next 2.5 - 3 years of Bitcoin’s existence. That is, according to this graph, Bitcoin is expected to trade in between $60k and $200k USD for the next 4 years. That is a big spread, but hey, what do you expect? It’s Bitcoin.
Around July, I will start taking smaller risks with my Bitcoin and the trading that I do with it. I intend on providing my readers with frequent updates as the situation unfolds.
Possible Price Action
At each new all time highs achieved by Bitcoin, it went far above the price you would expect if you were only looking at the Bitcoin Stock to Flow (S2F) chart. For example, the previous level was $10k, but Bitcoin went to $19,950 before retracing 80% over the course of 18 months. Now, looking into the future, it is difficult to tell just how much Bitcoin will rise above the expected $100k before retracing to as low as $40k, $50k, or $60k
My Strategy: Never Sell Bitcoin
I know this sounds crazy. If we can somewhat predict when Bitcoin will fall, and by how much it is likely to fall by, then why would we be so adamant about keeping our strategy of never selling Bitcoin? There is a lot of profit to be made if we sell Bitcoin at the right time.
Timing, is everything, and I am not entirely confident in my ability to time the market. If you’ve been reading my letters (this one in particular), then you know that I break my Never Sell Bitcoin rule when implementing a particular strategy of mine.
I am currently in a large debt position in order to increase my Bitcoin holdings. It is this Bitcoin that I intend on selling in order to attempt timing the market. Ultimately, I want to end up with more Bitcoin, and I want to retain the flexibility that Bitcoin gives me. That flexibility being the ability to access lines of credit through the collateralization of my Bitcoin. The strategy is as follows.
Use BTC to Access USDT Loan
Buy BTC with USDT
Wait for BTC to rise
Sell Enough BTC to pay off USDT Loan
Take Profit in BTC
Repeat Until July
I do expect Bitcoin to go to at least $150k USD this cycle, but again, I’m ready to eat my words. After then, we can expect 18-30 months of Bitcoin retracing. Fun.
I Sold My ATOM for CRO
IMAGES AND CONTENT REDACTED — [ May 1st 2022 ]
I’m Bullish on Crypto.com for the Next 6 Months
I am extremely bullish on Crypto.com and their coin CRO for a number of reasons. So bullish I was willing to entirely liquidate one of my positions, to increase my holdings on CRO.
CRO Mainnet Has Staking Rewards set at 20% APY - Paid Hourly
CRO Used to Have a Supply of 100 Billion, but is now 30.26 Billion (~70% Reduction)
Crypto.com Userbase is Growing at ~1-2 Million users per month
20% APY Paid Daily
IMAGES AND CONTENT REDACTED — [ May 1st 2022 ]
70 Billion Token Burn
To coincide the launch of Crypto.Org, 70 Billion tokens were burned (70% of Total Supply). Burning means that they were destroyed, never to be created ever again. What this does to the tokenomics of CRO, is make each token more scarce than it was before. This was genius on the part of the Crypto.com team because it plays into the mindset of many cryptocurrency investors. Increase the scarcity of the token, and the price will increase accordingly. I now am targeting about a $1.00 price per CRO. That would make the entire chain worth $30 billion dollars which would put it at about the size of XRP, or ADA. I believe it’ll reach here by the end of this bull market. If I am wrong, I will likely part with a chunk of my CRO in July/August as a part of my take-profits strategy.
1-2 Million New Users Per Month
The tokenomics of CRO are tied to Crypto.com. They require users to buy and lock up an amount of them in order to receive higher and higher tiers of the Crypto.com VISA Debit Card. The company is adding 1-2 million new users per month, and this number is growing all the time. If these users are buying, and locking up more of these tokens, then the available supply on the market decreases. The demand should continue to rise pushing the tokens up. It is for this reason that I am targeting a $30 billion market cap for CRO.
What Do You Want to See Next?
It is time for you to vote on what topics you’d like to see next. What has been piquing your interest in the world of cryptocurrency? Have you heard things that make you wonder if Bitcoin is going to fail? What would a worldwide ban on cryptocurrency actually do to the markets? Is there an article you’d like me to critique?
Then send me your thoughts/questions if you didn’t see a topic covered at ready@gofullcrypto.com
All The Best,
Keegan Francis
Definition of The Floor - https://www.investopedia.com/terms/f/floor.asp