Time to Buy BTC?
Robert Ross|October 26, 2023
I love it when a plan comes together.
I sure hope you listened… because an even bigger opportunity is here.
Party Like It’s 2021
Crypto has been in a rut over the last 18 months.
After peaking in November 2021, Bitcoin fell into a vicious bear market.
Rising geopolitical tensions, soaring interest rates and falling liquidity pulled the rug out from under crypto investors in early 2022. But it was the collapse of FTX (the world’s second-largest crypto exchange at the time) that sent Bitcoin into its most recent bear market crash.
Since then, Bitcoin has been on an incredible run, rising 110% from the bottom it hit in November 2022.
And it’s just getting started.
Saw It Coming
Back in September, I wrote…
At this point, it’s a matter of when rather than if a Bitcoin ETF gets approved. And when it happens, it will open the floodgates for institutional investors.
And it looks like a Bitcoin ETF may get approved sooner rather than later.
Here’s what’s going on…
There’s something called the Depository Trust & Clearing Corporation (DTCC). When a financial product like an ETF is listed on the DTCC, it means the product has gone through important regulatory and compliance checks and has been marked as credible and safe for investors.
A few days ago, an iShares Bitcoin Trust ETF under the ticker IBTC popped up on the DTCC listings.
This is a significant step in the ETF listing process. While it doesn’t mean this ETF will immediately be made available to the public, it signals the ETF has met certain requirements and is on its way to becoming available for trading.
And that has major implications for Bitcoin’s price.
Bitcoin Mining Stocks Cheered the News
Back in September, I said investors should consider buying Bitcoin mining stocks Riot Platforms (RIOT) and Marathon Digital (MARA) to profit from the ETF’s approval.
That was a good call, as both stocks are up about 20% since then…
Rumors of a looming ETF approval have also been a boon for Bitcoin’s price. The crypto has surged 30% in the last month alone…
But there’s a good chance both Bitcoin and Bitcoin miners could head much higher once an ETF is live.
According to crypto analysis firm Galaxy Research, $78 billion would flow into the Bitcoin ETF in the first three years…
Considering Bitcoin has a market cap of $676 billion, that fund flow alone would add 12% to the crypto’s value. But Galaxy expects the knock-on effects to drive Bitcoin’s price 75% higher over this period.
After all… the price of gold skyrocketed after the SPDR Gold Shares ETF (GLD) was approved in the 2000s.
That sent gold prices soaring 350% over a six-year period.
If a similar run happens for Bitcoin, the crypto would soar to $139,500.
It’s certainly possible.
Does that mean it’s time to buy Bitcoin?
I’ve written about the indicators I use when determining whether it’s a good time to buy Bitcoin.
My favorite is net unrealized profit/loss (NUPL), which is a measure of the number of Bitcoin currently in profit.
In previous cycles, it peaked when 75% of recently purchased Bitcoin were in profit…
With NUPL currently at 25%, we are still well below the “cycle high” of 75%.
I also watch Google searches. When tons of people are searching for “Bitcoin” on Google, it’s usually a good sign that we’re near a market peak.
In the previous cycle, Bitcoin’s price peaked when searches for “Bitcoin” topped in mid-2021 and bottomed in November 2022.
Right now, searches for “Bitcoin” are still near cycle lows. This implies retail investors have yet to jump back into the market.
Lastly, I look closely at general sentiment. Thanks to my 500,000 social media followers, I can easily gauge how people are feeling about the market.
When I see comments like this…
I know a bottom is near. And right now, people don’t seem to care about crypto.
From an investing standpoint, we’re still early in this cycle.
For this high-risk, high-reward investment… that means it’s time to get in.
Robert Ross’s unique style of clear and direct stock research helped him build a massive following in the investment research industry, starting his career at investment research company Mauldin Economics and quickly rising through the ranks to become one of the youngest chief analysts in the industry. Today, over a million investors turn to Ross every month for his take on investing, economics, and personal finance. He now shares his unique insights in Manward Financial Digest and Manward Letter.