Hawaii Six O - Gary Wagner
Bitcoin Soars And Precious Metals Plunge
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
There might be absolutely no direct correlation between the precious metals markets and the digital cryptocurrency Bitcoin. In fact, market participants, traders, and analysts are entirely divided as to whether the current craze in Bitcoin is a bubble or the cryptocurrency will continue to gain value.
Jaime Dimon, chief executive officer of JPMorgan Chase &Co, is probably one of the highest profile skeptics. Hs is on record warning investors about the cryptocurrency saying, "I could care less what Bitcoin trades for, how it trades, why it trades, who trades it," he told a conference in Washington. "If you're stupid enough to buy it, you'll pay the price for it one day."
In the same camp with Dimon is Stephen Roach, Professor at Yale and former Morgan Stanley chief economist, who believes that “this is a toxic concept for investors. This is a dangerous speculative bubble by any shadow or stretch of the imagination.
Jack Bogle, founder of Vanguard Group Inc., said to ”avoid Bitcoin like the plague. Did I make myself clear?”
These experts in the financial markets might be absolutely correct. However, at least for now, it is the stupid people referred to who have been buying Bitcoin that have seen a dramatic rise in value.
However, according to Coinbase, in just the last day Bitcoin has gained 21.9% which amounts to $2944.99, taking the current price of Bitcoin to $16,399.99. In the last week, a single Bitcoin gained over 70% gaining almost $7000 in a single week and over 2050% since last year.
Regardless of where the cryptocurrency is going in the near term and long-term, there is one thing for certain that all technical analysts can agree on: Bitcoin is the most vertical chart most analysts have ever seen.
Precious Metals Plunge
While Bitcoin prices have been in an exponential price rise, the precious metals continue to trade under tremendous pressure. Gold pricing broke through the critical 200-day moving average earlier this week and today’s follow-through selling has taken gold futures to its current pricing of $1249.60. This is a net decline of $16.50 on the day. Similarly, silver futures have lost 1.32% today to close at $15.74.
Is Bitcoin in a bubble? It very well could be, in that markets that move exponentially higher over a short period of time typically crash with the same or more momentum than carried the price higher. Given that this type of chart formation usually results in a major correction somewhere along the way, this price rise could end at any moment.
However, it is also possible that the price for Bitcoin will continue to soar, and double in price before, as it is many that believe that this crypto currencies is here to stay.
Whether it continues to rise to $30,000 or beyond, or it gets too close to the sun, melts its wings and crashes, is something only time will tell. My take is that Bitcoin will continue to rise dramatically, and at some point have a correction, but with many more buyers than sellers it is evident that this rise is far from over.
For those who would like a deeper analysis, simply use this link.
Wishing you as always, good trading,