After spending much of the year in a boring range frustrating the bulls in the crypto space, Bitcoin has surged past USD30,000 and is up 20% in the last five days, reaching close to USD35,000. According to CoinDesk, Bitcoin’s performance is roughly in line with the CoinDesk Market Index’s (CMI) +14% advance. Even the laggard decentralized finance (DCF) and digitization (DTZ) sectors were up over 7% this week, highlighting the breadth of the crypto rally.
Nothing has changed my long-term outlook and conviction on the crypto assets despite the boring action over the last couple of months. I know most crypto investors are too much accustomed to quick returns. Correlation between assets comes and goes and the low correlation between crypto prices and stocks is something I have been watching closely. The stocks and bitcoin correlation has been low so far this year.

With the latest rally, crypto asset are setting up for huge gains in the coming months. There has been a large inflow into larger wallets, which points to institutional investor demand. Your neighbors will join the party near the peak as usual. Institutions will start buying more, and the halving is nearing. Halvings are when the Bitcoin rewards to miners are cut in half, as determined by Bitcoin’s code, roughly every four years. These cycles have corresponded to significant price rises for Bitcoin.

If you have trouble getting your mind around crypto assets, I don’t blame you. Before you jump in, I will give you my usual warning. Nothing is easy in life and please tell this to your spoiled kids who are always obsessed with their gadgets. There is always the big volatility factor. While it is going to be a wild roller coaster ride for most other investors, we have a plan to ride on the trend at a fraction of the market volatility.