Becky Called Him Crazy 3 Times, Then It Rose 10x
It’s that time in the cycle when bitcoin is back. Having eclipsed $70,000 per coin, the long-term bulls seem to have called this right once again. But the journey sure is painful and a dry desert needs to be walked for years before the green pastures and oasis can be enjoyed. Yet here we are in the oasis, with potentially more upside to come.
Back when bitcoin was just $5,000 per coin, Fundstrat Global’s Tom Lee advised that everyone put just 1% of their portfolio into bitcoin. In this clip, Becky Quick essentially labeled the idea crazy on three separate occasions. Since then, bitcoin is up more than 10x, so what comes next?
She called him “crazy” 3 times for saying buy bitcoin at $5,000 #bitcoin pic.twitter.com/5voRcgtGNU
— Tommy ₿oy⚡️21m (@CooliganFields) April 9, 2024
Key Points
- Bitcoin is on the cusp of a halving event, which typically has been a precursor to a serious run-up in price.
- Often post-halving Bitcoin price drops sharply before it gallops higher for some time.
- According to Tom Lee, a 1% portfolio exposure to Bitcoin is an appropriate allocation.
The Future of Bitcoin
The interesting thing about the bitcoin halving cycle is that it tends to precede a rapid increase in prices. But often not before a correction forms.
In recent cycles, a material correction occurs before bitcoin surges higher. So the danger for investors now is to buy the $70,000 level only for a sharp correction to be experienced.
Moreover, there are concerns that this time will be different and the massive run-up won’t actually occur. With so much uncertainty, how do you trade bitcoin?
Credit: thomas_fahrer
Tom Lee perhaps said it best. Rather than trade bitcoin, it’s best to HODL it, meaning simply buy and hold a small amount.
He recommends a 1% portfolio allocation to bitcoin and perhaps the best approach given that the downside risk to an overall portfolio is limited if the whole project goes belly up but the upside, if history repeats, does appear to be substantial.
It’s been reported that only 1.7 million bitcoin actually exist on exchanges now so the supply shock from a halving event could indeed be material. For those who are skeptical of bitcoin, the bulls have some strong counterarguments now, including the fact that the supply on exchanges is at a 6 year low, Hong Kong is planning to approve bitcoin ETFs, and London Stock Exchange is listing bitcoin ETNs, plus South Korea is allowing Bitcoin ETFs.
The Takeaway
Regardless of whether bitcoin pumps or dumps heading into and post this upcoming halving event in the next 8 days, history appears to show that it’s not going away anytime soon. And if a repeat of past halving events occurs, expect a serious run-up over the coming year that could leave a lot of investors on the sidelines with serious FOMO.
