A Bitcoin outbreak could come “any day now”

The Weekend Edition comes from the daily Stansberry Digest.

Bitcoin price has risen above $ 50,000 again …

And surprisingly, the owners of the world’s first and most popular cryptocurrency have the government to thank.

Securities and Exchange Commission (SEC) chairman Gary Gensler testified before the House of Representatives last Tuesday that the regulator had no plans to ban the use of Bitcoin.

This follows a similar recent comment from the Federal Reserve. Last week, Fed chief Jerome Powell said the central bank would not ban cryptocurrencies in the US

These comments – from two of the most notable figures in the U.S. financial system – take away some uncertainty about the regulatory landscape for Bitcoin and other cryptocurrencies.

The worst-case scenario for many U.S. crypto bulls was a complete ban, as we saw recently in China – news that partially led to a 50% drop in Bitcoin price earlier this year.

In the past few months, China has taken an extremely tough stance on cryptocurrencies. First, it banned crypto mining within the country’s borders. Then, last month, the People’s Bank of China banned all crypto-related activity.

But only a few days apart, Gensler and Powell ruled out this possibility in the US … at least for now. However, Gensler pointed out that if a U.S. government agency had the power to ban Bitcoin, it would be Congress.

Despite some worries, Bitcoin jumped to over $ 50,000, according to Gensler – its highest level since May. The cryptocurrency has nearly doubled since its July lows and is trading at around $ 55,000 as of the writing.

It’s up around 30% since September 29th. That was a little over a week ago.

And as I and others will explain today, the price of Bitcoin – signaled by the craze for the crypto space in general – could soar much higher in the near future …

In general, we hear a softer tone from the US government when it comes to cryptocurrencies …

The Fed, the SEC, and some members of Congress who oversee the bank and the regulator have been critical of digital assets in the past.

In the September 15th Digest, we found that the SEC was considering regulating crypto … And our colleague and editor at Crypto Capital, Eric Wade, explained some of the SEC’s criticisms to his subscribers in a weekly update last month. ..

This week, US Securities and Exchange Commission chairman Gary Gensler testified that he believes most cryptos are illegal, unregistered securities that the SEC could track.

That stance made it look like a huge crackdown on crypto was imminent. But recent discussions on Capitol Hill have moved away from any talk of a blanket ban.

The clearer but still broad regulatory stance of Gensler and Powell, two key figures in the “system,” is currently a relief for crypto investors.

We can see an upward trend in crypto fund flows lately …

According to a weekly report from digital asset manager CoinShares, $ 90 million went into digital asset products in the week ending October 1. This was the seventh straight week of inflows for crypto investment products, the company said.

That brings them Total inflows into crypto products in 2021 to exceed $ 6 billion.

CoinShares said the trend in inflows shows that investor confidence in the cryptocurrency is gaining traction. Specifically, she cited these “accommodating statements” by the SEC and the Fed.

With current Fed and SEC leaders saying they won’t ban cryptos, earlier reluctant companies and investors can start wading into the room without fear of a massive crackdown.

That means the growing adoption we’ve seen – with giant companies like Amazon (AMZN), Apple (AAPL), and Walmart (WMT) all joining the battle – should continue to grow.

More and more banks and payment companies are also giving cryptos the “green light” …

On Tuesday morning, US Bancorp (USB) announced it would offer Bitcoin custody services to its customers in the United States and announced that it would roll out additional cryptocurrency services in the near future.

Essentially, “depot” services mean that USB customers can buy bitcoins and then keep them safe with the bank.

Also on Tuesday, Bank of America (BAC) – the country’s second largest bank – announced the launch of a digital asset research arm with the release of the report “Digital Assets Primer: Only the First Inning”.

The sector is now “too big to ignore,” a group of Bank of America analysts wrote in a research note.

Yes yes it is.

Bitcoin’s market cap is now more than $ 1 trillion …

That’s bigger than any but four publicly traded companies – Apple, Amazon, Microsoft (MSFT), and Alphabet (Demokratie).

And Bitcoin’s market capitalization is larger than the combined market capitalization of traditional banks like JPMorgan Chase (JPM), Bank of America and US Bancorp … and the combined market capitalization of credit card companies Visa (V), Mastercard (MA), and American Express (AXP) ).

We hesitate to make such market capitalization comparisons as valuations can change quickly due to daily market movements. But right now it’s true … and it shows us how fast the crypto space has grown over the past few years.

At the same time, if you believe that you missed the opportunity to get into cryptos and the world of digital assets, this is not the case.

First things first: where is Bitcoin going next?

If you believe in a mix of fundamentals, technical indicators, and circumstantial evidence that play a powerful role in any market, there are compelling arguments in favor of a big spike in the price of bitcoin …

According to Eric, the stars could align for “breathtaking” movement.

In his weekly Crypto Capital update to subscribers last Friday, Eric mentioned that one of the distinctive features of Bitcoin is the limited supply (21 million coins) and inflation security built into its computer code.

Approximately every four years – the time until 210,000 “blocks” in the Bitcoin blockchain are created by a network of computer users – the number of Bitcoins that a “miner” receives halves.

Let me break this down …

In 2009, the reward for each “block” created by a miner was 50 Bitcoins. Today – after three halving, by May 2020 at the latest – the reward is 6.25 Bitcoins per block.

You might think that this lower reward would drive miners to stop bothering to mine Bitcoin … and for some, it might. But the bottom line is that the exit from the Bitcoin game was not worth it.

Bitcoin miners make $ 40 million a day, according to blockchain analytics firm Glassnode. That’s a 488% increase since the Bitcoin network was halved in May 2020.

In theory, a lower Bitcoin supply for every coin created, combined with a higher demand, should result in a higher Bitcoin price – and that’s exactly what happened. The supply-demand theory has fulfilled reality.

Bitcoin’s price has risen so high that miners still think it’s worth creating … so the cycle continues.

Before the halving in May 2020, the previous one took place in 2016 …

Here we tie in with Eric’s analysis.

In his weekly update video last Friday, he brought up a Forbes article from 2016 where the headlines were similar to today – focused on the nation’s massive debt and the US debt ceiling. Eric shared it with his subscribers …

National debt will exceed $ 20 trillion by the end of 2016. The budget deficit wasn’t that big, but the government took out extra credit to catch up on the debt ceiling after the last showdown … Is that a broken record?

As Eric said in his update … yes it is. Recently, the “debate” about the debt ceiling came back to the point, which was being overwhelmed by political pose.

But the point and timing might be too similar to ignore, says Eric. It could indicate something to “patient” Bitcoin investors who have viewed cryptocurrency as an alternative to the “system” for years – and what they have seen during that time.

If you look at the price history of Bitcoin in the 336 days after the Bitcoin halving on July 9, 2016, you will find that it increased by 300% ….

From start to finish, this resulted in a rally of nearly 3,000% in the 525 days following the 2016 Bitcoin halving.

Eric says today’s Bitcoin chart looks “remarkably similar” …

After Bitcoin’s most recent halving on May 11, 2020, its price soared 550% over the next 336 days to its most recent high of over $ 60,000 in April.

We are now 516 days from the last Bitcoin halving. If this pattern persists, 525 days after the halving would happen in about two weeks … And we are nowhere near the thousands of percent gains that occurred after the last halving cycle. As Eric points out …

If cryptos, especially Bitcoin, repeat themselves as it happened in 2016 and 2017, we should see a stunning rally every day … it would be almost straight out with some bumps in it.

Of course, a 550% rally in 2020 and 2021 is steeper than a 300% rally in 2016 and 2017, so it might take longer to digest the enthusiasm of the early cycle gains before it takes off again.

As I said, it’s a convincing case …

As we wrote, Bitcoin is up nearly 30% in just over a week.

And Eric says profits from the next Bitcoin rally could reach 4 to 10 times the current Bitcoin price – although those rewards aren’t without their risks. There is no guarantee that this rally will take place.

If you currently have cryptos in your portfolio – especially bitcoin – it is likely a good idea to hold on and be rewarded for your patience. But if you’re a new investor considering going “all-in” with Bitcoin today, hold your horses and think a moment.

As Eric puts it …

You don’t have to risk all of your money to participate in the uptrend when cryptos triple, quadruple, or tenfold in value from here. The answer is not to invest everything. The answer is to manage your risk.

In other words, don’t put in new money that you can’t do without. And follow a trusted guide who can give you verified advice on Bitcoin and the various cryptos.

Sales happen just like rallies. And bitcoin’s price decline has been shown to come just as quickly as the rallies. In the former case, no matter how persuasive a bullish argument for Bitcoin – or any other asset – might sound, you don’t want to be completely wiped out.

At the same time, if your finance house is fine, you may want to take more risks and take advantage of great opportunities.

All the best,

Corey McLaughlin with Nick Koziol

publisher’s Note: Bitcoin is bouncing back … after rising above $ 55,000 for the first time since May 2020. Since well-known banks and companies are supporting digital assets like never before, people have gone “all-in” with cryptos. But don’t rush without hearing what crypto expert Eric Wade has to say … click here to find out more.

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