|
|
By Gregory Mannarino, TradersChoice.net
Yes, everybody is talking about it, but this is nothing new.
For anyone who has followed my work since I recommended to buy Bitcoin at just under 3K, I have nailed the crypto space to the wall. I then recommended again to buy Bitcoin at 5K, and at 10K, and yet again at 15K. I have also recommended publicly to buy every single dip moving forward from there including the most recent dip.
Every single time, without exception, that I recommended to buy after the crypto dips, I have been correct. Moreover, I will be proven to be again correct with this recent drop.
Bitcoin, the Granddaddy of cryptos, made a recent low of 30K, and, since that time, it has made a substantial rebound, pulling the other cryptos with it. Cryptos are going higher.
China’s recent crackdown on cryptos, along with the distorted and mixed messages from none other than Elon Musk, has indeed sent cryptocurrencies on a wild ride, but to me, this is all just noise. And, more importantly, opportunity.
Margin Calls
Much of the downward momentum in cryptos was due to the raising of margin requirements for those who are trading them on margin/borrowed money. This raising of margin requirements resulted in margin calls for a great many crypto investors who were forced to liquidate their positions as they were unable to cover the margin calls. This kind of mechanism causes the price action to fall rapidly.
Scared Money
Along with the issue of margin calls, there are those playing in the crypto space with scared money. I believe the issues with China, margin calls, and scared money means only one thing: opportunity. There is blood in the water.
China putting restrictions on cryptocurrencies will not stop crypto traders/investors in the long run from putting cash to work in this space. These traders/investors will simply seek other markets to trade/acquire cryptocurrencies outside of the Chinese markets.
Crypto markets are extremely volatile. Tremendous moves in the price action of cryptocurrencies IS THE NORM, not the exception! Wild swings in the price of cryptos must be anticipated and expected. Therefore, trading and investing in cryptocurrencies is not for everyone, nor should it be. Investors/traders have varying levels of risk tolerance, and they must work that issue out for themselves.
Cryptocurrencies are being held and bought by institutional investors, like Wall Street hedge funds, and, thus far, these institutions have stepped in and bought every single dip.
I believe hedge-fund buying of cryptocurrencies will continue to grow moving forward.
I remain a major bull in the crypto space, and I have my own cash invested in it. I have also been buying the dips going back several years.
My perspective on the crypto space will not change unless there is real and significant regulation in the U.S. Personally, I do not believe that cryptocurrencies will be heavily regulated in the U.S. I do expect crypto transactions will be taxed, but not heavily regulated.
Regarding regulation, what would the optics be? How would it look if the USA were to follow in the footsteps of Communist China and shut down investment? This is still America, where people can invest in those things that support a free market, right?
Well, yes, for now, that remains the case.