The forecast for Bitcoin | InvestorPlace

Bitcoin falls to a six-week low…but adoption continues to grow…what our experts Luke Lango and Charlie Shrem see coming…a Crypto Cash Calendar event today

Last Monday, Bitcoin slumped to a six-week low, hitting $38,423.

As I write Wednesday morning, prices are only slightly higher, trading at around $38,700.

This weakness represents an ongoing shift in how investors view Bitcoin and the broader altcoin market here in 2022.

While these assets were considered “inflation hedges” throughout 2021, they became “risk assets” this year. And like pretty much all other risky assets, they’re thrown away.

Below we look at Bitcoin (in green) versus the 10-year Treasury yield (in black) since January 1, 2021.

You will see that Bitcoin’s price in 2021 generally followed the 10-year Treasury yield, suggesting it was an inflation hedge. But when 2022 struck, there was a complete collapse.

The circled gaping divergence speaks for itself.

Source: StockCharts.com

Our crypto experts Luke Lango and Charlie Shrem talked about this relationship between Bitcoin and 10-year Treasury yields in their latest issue of Crypto Investors Network:

Bitcoin’s correlation with the 10-year Treasury yield — which has held up for much of 2021 — has completely broken down.

For the past month, the two have been almost perfectly anti-correlated, giving the market complete disregard for the “Bitcoin is digital gold” thesis.

Instead, the “bitcoin is a risky asset” thesis is what the market is currently refining on. Bitcoin’s correlation with the ARK Innovation ETF turned out to be hugely positive in 2022 and is still very strong today.

To that end, we continue to believe we need to treat Bitcoin like the Nasdaq and altcoins like hyper-growth tech stocks.

Equities are currently being hit hard by a rising 10-year Treasury yield, hawkish Fed comments and recession fears. As long as this three-headed risk monster persists, stocks and cryptos will fight side by side.

If you read yesterday’s digest, you know that Luke forecasts more pain for stocks over the next month or two. He believes we are either entering a bear market or very close to it.

On the other side of that pain, however, is a massive rally for top-tier tech stocks. And given the correlation between technology and crypto today, it suggests a similar down-then-up roadmap for crypto as well.

***Meanwhile, look beyond Bitcoin’s price to its increasing global adoption

By and large, bitcoin and altcoins are still in their infancy. And each new asset class will experience massive volatility as it struggles to go from “weird and unknown” to “familiar and popular.”

Given that, progress toward mainstream adoption is perhaps more important than Bitcoin’s daily price swings. And if we look at this progress, we see an upward movement.

Yesterday we saw the Central African Republic accept bitcoin as legal tender. The country, together with El Salvador, makes Bitcoin legal tender.

Meanwhile, the use of Bitcoin as a currency is also increasing here in the USA.

From Finding Alpha:

Will Bitcoin (BTC-USD) Become a Widespread Medium of Exchange?

Its lack of acceptance as a form of payment by merchants, as well as its high transaction costs, “are now changing,” Morgan Stanley analyst Sheena Shah wrote in a note to clients Thursday…

A number of payment companies in particular are looking to expand their reach in the growing decentralized space.

For example, payments company Strike recently partnered with point-of-sale provider NCR (NCR) and rewards-based payments company Blackhawk Network, which “could mean a large number of physical stores, restaurants and cafes across the US in will be able to accept bitcoin payments in the near future,” Shah explained.

Finally, earlier this week, Fidelity Investments announced plans to allow investors to add Bitcoin to their 401(k)s.

From Dave Gray, Head of Workplace Retirement Offerings at Fidelity:

We have seen growing and organic interest from customers.

We expect cryptocurrency to shape the way future generations think about investing in both the short and long term.

Yes, Bitcoin’s price is weak. No, this does not reflect the future of Bitcoin.

***Expect more short-term volatility, especially for smaller altcoins

In their update, Luke and Charlie reveal an interesting dynamic they are currently seeing in the crypto sector:

… We have observed that the majors – Bitcoin, Ethereum, etc. – have significantly outperformed altcoins in 2022. The smaller and “riskier” the crypto, the more it has fallen this year.

Year-to-date, Bitcoin is down 12% while Ethereum is down 17%. Not good.

But really good compared to other altcoins. Avalanche has decreased by 23%. Polkadot is down 31%. Uniswap is down 48%. Algorand is down 57%.

We believe that the crypto markets are currently consolidation around the majors as short-term risk appetite is depressed but long-term bullish sentiment persists.

Of course, the exaggerated volatility of smaller altcoins goes both ways. While fear can send any altcoin down double digits, any kind of meaningful bullish catalyst can propel them higher in the same way.

As just one example, Luke and Charlie sent out a win-sell alert earlier this month. you recommended Crypto Investors Network Subscribers lock in 50% profits on a third of their position in a premium altcoin they recommended. The more interesting detail is that they had only held the altcoin for two weeks.

Even in a bearish environment, such sudden price jumps can occur naturally. The question is: can you position yourself ahead of time?

*** With that in mind, I refer you to Luke and Charlie’s Crypto Cash Calendar

Here Luke and Charlie explain what it is:

Crypto is the future. But that doesn’t mean all cryptocurrencies are the future.

To sift through all the blockchain noise, we assembled an exclusive team of crypto engineers and programmers to research, analyze and understand the core technologies underlying the cryptocurrency revolution.

Based on this research, we are able to interpret the benefits and potential impact of these technologies.

How it works: Behind the scenes, our proprietary research system gathers information and indicates which altcoins and crypto events are of particular interest.

From there, we share with you the most exciting and promising of these coins and events on our Crypto Cash calendar.

It turns out that today Luke and Charlie are announcing news that has triggered their Crypto Cash Calendar system.

I don’t know what the news is or which altcoins it affects. But I do know that the last time this calendar marked something was on March 22nd. The associated altcoin is up 17% over the next eight days. To access the Crypto Cash calendar as a subscriber, click here.

Getting back to the broader sector and forecasts, here’s Luke and Charlie with the final say:

We expect further volatility in the crypto markets. But we believe that amidst this volatility we will continue to see consolidation around the majors and that the majors will clearly outperform…

We continue to believe that this volatile phase will prove short-lived and end with a positive resolution.

Therefore, once price action begins to improve further out on the risk curve, we will start biting smaller altcoins again.

Have a nice evening,

Jeff Remsburg

Learn Crypto Trading, Yield Farms, Income strategies and more at CrytoAnswers
https://nov.link/cryptoanswers