First Stage Investor

Why I’m as Bullish on Cryptocurrencies as Ever

Why I’m as Bullish on Cryptocurrencies as Ever
By Andy Gordon
Date January 16, 2018

Bitcoin prices crept down in the early hours of morning trading today.

As I write this, bitcoin is hovering just above $12,000. Yesterday it peaked above $14,000.

Ethereum ranged between $1,300 and $1,350 for most of the day yesterday. As I write, it has dipped 18% to around $1,100.

And Litecoin has gone from $240 to $205/$210 in the past 24 hours.

Most other coins have followed suit, including our recommended holding New Economy Movement (NEM). It’s down about 20%.

In other words, the downturn is pretty much marketwide.

What you should take into account is that our positions are still comfortably in the black.

For example, as I write, our NEM holding is up 286%. Out bitcoin position is showing 250% gains. Our Ethereum holding is returning 270%. And our Litecoin gains are registering a 320% increase.

And yet perhaps you’re worried. The market is going in the wrong direction, after all.

Nope. This is a blip. There’s nothing to worry about here. I’ve said it before, but in times like these, it bears repeating…

The cryptocurrency market is volatile, susceptible to big swings up and down.

So what’s going on?

The news out of Asia hasn’t been good lately. It began late last week with an announcement from Korea’s Ministry of Justice that it was preparing legislation to close the country’s online exchanges.

Then yesterday a memo from China’s central bank discussed ending all cryptocurrency-trading-related activities and services in the country. (Back in early September 2017, Chinese regulators banned ICOs and crypto-to-fiat-currency order book trading services of domestic exchanges.)

Adding to the negative sentiment is that bitcoin futures are trading below current prices.

Of course, as the adage goes, the solution to low crypto prices is… low prices.

Let the market work. As prices drop, buyers will be increasingly tempted to dip back in to take advantage of favorable prices.

The big question right now is not whether you should sell, but whether you should buy.

Selling is out of the question. But you should consider buying at these prices. Could they go lower? Sure. It’s hard to pinpoint exactly when a market is going to bottom.

But prices today are attractive and present a buying opportunity for those who wish to increase their holdings in any of the four cryptocurrencies we’ve recommended to date.

Just note that we’re sticking with our current allocations of 50% bitcoin, 20% Ethereum, 20% Litecoin and 10% NEM.

So don’t let your allocations get too out of whack. For example, if you buy bitcoin now, at your next opportunity you should buy some Ethereum or Litecoin. And the time after that, buy some NEM.

The asset allocations are suggested guidelines. They have some give. But be careful not to veer too far from them.

And remember that one government from one country, be it China, Korea or the U.S., cannot solely kill off an otherwise healthy cryptocurrency. It would require a concerted effort among many of the bigger countries.

Let me assure you, I see nothing like that happening right now.

The cryptocurrency market is acting like any market, reacting positively or negatively to events – only with bigger swings than normal.

Keep that in mind as you track trends and prices. I’m as bullish as ever on cryptocurrencies.

As you should be too.

Good investing,

Andy Gordon
Co-Founder, First Stage Investor

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