Cryptocurrency: Two Key Reasons to Get Bullish on Bitcoin
In January 2018, George Soros wasn’t the biggest fan of crypto currency.
“Cryptocurrency is a misnomer and is a typical bubble, which is always based on some kind of misunderstanding,” he said, as quoted by Forbes. “Bitcoin is not a currency because a currency is supposed to be a stable store of value and the currency that can fluctuate 25% in a day can’t be used for instance to pay wages because wages drop by 25% in a day. It’s a speculation. Based on a misunderstanding.”
Shortly after those comments, Bitcoin would fall from $15,540 to less than $6,760, as others began to doubt its value, too.
In February, Berkshire Hathaway vie chairman Charlie Munger even had harsh words for bitcoin at a Berkshire annual shareholder meeting.
"It's just disgusting. Bitcoin is noxious poison," Munger said.
Even Berkshire CEO Warren Buffett once called bitcoin "a mirage."
But bubble or not folks like Soros seem to have changed their tune.
And while Soros is not likely to trade them personally, his Soros Fund Management macro investing team has already secured internal approval to trade the assets.
The best part -- he’s not the only big name moving into crypto.
Learn How to Spot Unique and Predictable Patterns in Cryptos
Venrock, a venture capital fund founded by descendants of John D. Rockefeller are diving into the space, too.
In fact, the firm just announced it was partnering with New York crypto firm Coin Fund.
Granted, interest in Bitcoin also appears to have waned in recent weeks, such newfound interest from billionaires could begin to attract bigger names for good reason.
“Despite the declines in cryptocurrency prices this year, funds that started investing in cryptocurrency at the start of 2017 have reaped huge profits. Since then, the average return is 2,908%, according to Hedge Fund Research, compared with a 9% gain for hedge funds over the same period,” notes Fortune.
In short, it only pays to go where the smart money has been earning the most returns.
Whatever the case may be it seems to have put a bottom under a very oversold Bitcoin in early April 2018, as smart investors reemerge along with billionaire investors.
Technically oversold, the coin sat at its lower Bollinger Band (2,20) with RSI at its 30-line and its Fast Stochastic under its 20-line. Each time these three indicators have aligned in oversold territory like this, the coin begins to pivot and turn higher, near-term.
For example, the last time the coin dipped under its lower Band on February 3, 2018 with oversold RSI and Fast Stochastic, we saw a rally from $6,000 to $12,000.
With such technical over-extensions and new institutional interest, upside is a possibility.
Despite fear, bitcoin has plenty of supporters on Wall Street, which could create quite an opportunity for serious, long-term buy and hold investors.