Bitcoin is up 108% year-to-date. Are you paying attention yet?

I’ve been trading Bitcoin since October 2017 and despite the volatility, I currently have 25% of my total investable capital in Bitcoin and select altcoins. 

Why am I allocating more funds to crypto investments now?

Improving Market Trends

Markets are beginning to price in future rate cuts as Bitcoin’s value against the U.S. Dollar has more than doubled from its November 2022 lows. The 24 & 50-week moving averages crossed bullishly in April of this year and price recently broke the $30k psychological resistance, both indicating bullish momentum. All this as we approach the next Bitcoin halving which reduces mined Bitcoin supply going forward and typically sets off bull markets. Lastly, several on-chain metrics suggest we may be at the end of the bear market.

Monetary Policy Shifts

With inflation coming under control in recent months, the Federal Reserve has paused its interest rate hikes and 94% of economists estimate the Fed will begin cutting interest rates in 2024. With a Debt-to-GDP ratio of 120%, the U.S. govt. may soon need the Fed to implement these cuts to be able to afford the sky-rocketing interest payments on our $33T of national debt. As we saw in the post-covid world, however, lowering interest rates causes a surge in asset values including home prices, stocks, and cryptocurrencies.

Rising Adoption

Bitcoin’s hash rate just surpassed 500 Tera-hashes/second, indicating the highest level ever of computational power used by miners to process transactions on the blockchain. Additionally, a potential U.S. spot-Bitcoin ETF following an application filed by BlackRock could bring in fresh institutional capital and improve the perception of Bitcoin as a viable asset. Although price has risen sharply this year, the move has gone largely unnoticed by retail investors. Google Trends shows public interest is lagging, with ‘Bitcoin’ search interest showing a value of just 18 compared to the last bubble peak of 100.

My Approach

Learning from previous market cycles’ rollercoaster of price and emotions, I plan to invest in Bitcoin with a longer time horizon, eyeing the post-April 2024 halving period to really set off the next ‘leg up’. I’ll be buying any price dips that don’t affect the market structure; a weekly close below the recent lows at $25k would invalidate my thesis. In addition to the larger Bitcoin position, I’m opportunistically buying altcoins that meet my criteria (more on this on my Twitter @Bright_Trades)

Interested but Uncertain?

For those considering adding crypto to their portfolios, my favorite platforms with the lowest fees and best user interface are Gemini, Coinbase, and KuCoin (Use a VPN for KuCoin). For beginners, I recommend a simple 75% Bitcoin & 25% Ethereum portfolio. This allocation maximizes the Sharpe Ratio (risk-adjusted returns) between the pair and gives you exposure to the #1 cryptocurrency and its closest competitor. Advanced crypto enthusiasts can monitor Twitter, YouTube, Discord, and other platforms to find altcoins that produce higher short-term returns at the expense of higher risk and volatility.

If you’re still on the fence about crypto investing – feel free to ask questions in the comments or DM me. I’m not here to sell you anything, I’m just passionate about helping people understand and take advantage of this new asset class since it has minimal barriers to entry and the highest returns vs. traditional assets. For well-read investors who are willing to stomach the volatility, this is an unbeatable opportunity to build generational wealth.

Please note: as this is a nascent industry, crypto investing is inherently higher risk than traditional assets, do your own due diligence and invest responsibly.