Entering text into the input field will update the search result below

Bitcoin Outlook 2022: Crypto Bulls Should Be Thankful For Any Selloff

Summary

  • Bitcoin and other cryptocurrencies have pulled back from highs.
  • We recap recent developments which continue to support positive long-term fundamentals for the sector.
  • Our views on the current trading action and our outlook for 2022.
  • Looking for more investing ideas like this one? Get them exclusively at Conviction Dossier. Learn More »

Bitcoin bull market

24K-Production/iStock Editorial via Getty Images

Bitcoin (BTC-USD) is trading under $60k, selling off since hitting an all-time high of $69k last week. There's not much in terms of headlines to explain the current weakness although it comes in the context of what

Add some conviction to your trading! We sort through +4,000 ETFs/CEFs along with +16,000 U.S. stocks/ADRs to find the best trade ideas. Click here for a two-week free trial and explore our content at the Conviction Dossier.

This article was written by

Dan Victor, CFA profile picture
18.28K Followers

Dan Victor, CFA is a market professional with more than 15 years of investment management experience across major financial institutions in research, strategy, and trading roles. Dan is the president of Posto Asset Management - a startup investment advisory firm based in Miami Beach, Florida.

Dan leads the investing group Learn more

Analyst’s Disclosure: I/we have a beneficial long position in the shares of BTC-USD, MARA either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

Comments (75)

Dan Victor, CFA profile picture
Just did an outlook article for Ethereum.. check it out! seekingalpha.com/...
Truth_AndMovement profile picture
Great write up boox
T
@BOOX Research why don't anyone ever mention CLSK. They are saving energy for miners. Actually even Riot purchased mines with their energy saving technology
Dan Victor, CFA profile picture
@Thanos7719 I'm gonna do a big crypto miners article and CLSK will be in there
b
@BOOX Research

Talen Energy - they are investing heavily in Bitcoin mining.

Its not publicly traded, but their bonds are. Due to the fact that most bond traders are conservative, giving them no credit for the Bitcoin operations, the bonds are trading at large discounts to par value.
c4dancer profile picture
@bondsmoker With Talen bonds, I would essentially be invested in bitcoin even if I sold all of my crypros.
F
And there is a good competitor, even without any investments as it's green mined - Crypton from Utopia p2p u.is/... It's also a privacy coin that gained x8 in a week after the latest listing. Another great advantage is that it has its own decentralized no KYC exchange. I think it will be one of the leaders soon.
gohabsgo70 profile picture
bitcoin is simply a massive bubble. Pumped by the whales in a very sophisticated way, via social media. It will go down to its true worth eventually which is zero...but for now remains a great trading vehicle. Personally I bought and sold it many times and have done very well, but now remain short VIA MSTR at 998 till bitcoin hit about 22k. That should happen early 2022. GL. Trade it, dont love it.
Dan Victor, CFA profile picture
@gohabsgo70 I need to see where MSTR is trading at in terms of its premium to BTC.. but have never been a fan of the stock vs other crypto plays..its inefficient compared to just buying BTC
gohabsgo70 profile picture
@BOOX Research big premium to bitcoin
Clearly you still haven't read Rothbard profile picture
@gohabsgo70 How could bitcoin's true worth be zero, when its desirable properties are superior to all other monies humans have ever used? Certainly it will be worth more than these inferior alternatives, at the very least, as more and more people realize this.

Hoping for $22k in early 2022 will get you destroyed. More like $122k.
S
Looks like the bulls are turning bearish and heading for the safety of the US$, bonds and gold. 😂
c4dancer profile picture
@StaryStaryNights The speculators are turning bearish and heading for safety. The bulls are HODLing, and trying to scrape up some funds to buy some more.
S
@c4dancer it is entirely speculative, whether you hold or sell. But my point is that it is touted as a substitute to gold etc. The fact that it behaves like a stock when it has no earnings whatsoever is yet another hole in the narrative. Not that this will effect the majority of the members of the cult. That awakening will take longer, and will probably be born of boredom and low/no returns.
c4dancer profile picture
@StaryStaryNights Certainly the bloom is off the rose now that PlanB's forecast appears to be wrong for the first time. His track record was so phenomenal that many bitcoin followers were almost certain that bitcoin was going to $80K by November and $135 by the end of the year. Glassnode, a crypto analytics firm, has been bullish but now has issued a warning.

dailyhodl.com/...

Not all the on-chain gurus are bullish. While this could be a bear trap which catches many people selling right before a major surge in price, it could also be a serious issue.

It's possible that many people who were so sure that we were going to have a year-end rally may head for the exits at once. This would be devastating to the price of bitcoin if the staunch bulls didn't match the selling with fresh money to buy.

MACD, a momentum-based technical indicator, currently has all eight of the cryptos I track in a downtrend - Bitcoin, Ethereum, Ethereum Classic, Cardano, Litecoin, Solana, Polygon, and Chainlink. While I am keeping some of my funds in crypto catering to the bear trap scenario, I have significantly lightened my crypto allocation in the past week as the different coins went into a downtrend. I have cut my position by more than half, and if it keeps going down, I'll sell some more as the bear trap scenario will become less likely. I don't like holding falling knives anymore than trying to catch them.

None of the technical analysts are calling for bitcoin to break below 40K, but it's clearly possible if a whole bunch of people who were certain of a windfall by year's end realize at once that it's not happening.

Based on my last post, I guess you could say I'm a speculator and not a HODLer.
S
“Fundamentals”

You keep using that word. I don’t think it means what you think it means.

In other news, BTC about to be shut down in China AND India now. US senate looking into Tether and other “stable coin” fraud.

I’d get the popcorn but the store doesn’t accept my Bitcoin.
M
@SomeGuy14 It does in El Salvador, but that's not "big" enough for you...
astute pathways profile picture
I got into GBYTE...only about 800,000 coins in circulation,at $29... It shoots up real easy with this low float....Been in and of this several times
astute pathways profile picture
@astute pathways BTC bounced back up after China and India Ban...Tough as steel
b
@astute pathways

Steel is worthless. What can you do with steel? Construct buildings LOL?!?!

Bitcoin is money. Money is valuable. Very valuable. Bitcoin is valuable. Very valuable.

Its in the White Paper. Read it, or be relegated to a life of subservience to the Bitcoin visionaries.
d
Do you agree that 6.55% is the optimal allocation?
astute pathways profile picture
@denoverenes7 maybe 6.54%
Dan Victor, CFA profile picture
@denoverenes7 if we were 100% sure BTC would climb "to the moon".. then you couldn't have enough.. point of diversification is that uncertainty with a timeline over years and decades... so I'd say something around 6% makes sense in the context of a well built portfolio, maybe a bit higher tactically depending on market conditions also could begin to replace gold /PM exposure.. but within that it becomes another question if it's all BTC or you also add some alts / and crypto stocks.. even ARK Invest they don't address that point.. my takeaway is that there is room for crypto in all investor portfolios.. even 1% is a good start when majority of institutions are still at zero
c4dancer profile picture
@BOOX Research Agree. 1% would have done wonders to anyone's return in the past. If you had 1% for a few years and rebalance annually, bitcoin could go to zero and you'd still be way ahead. The only losers will be those who chose the year of the great crypto decline (if there is one) for their first year in cryptos.

Even that might not hurt. I first allocated near the top in 2017 and was underwater during the 80% decline of 2018. Picked up some more on the cheap when rebalancing. Needless to say, that worked well, so I guess the only way to get hurt is to have bitcoin fade into obscurity the year you buy in. That seems so unlikely that a 1% allocation should be safer than many recommended allocations that have the illusion of safety (Did I hear anyone mention bonds? Gold? FAANG's?)

Edit: spelling.
Invstock profile picture
I wish I had the guts to buy a few bitcoins during this time of the wild wild west of crypto. Eventually the feds will regulate crypto, it is just a matter of time and the crazy speculation with be over.
astute pathways profile picture
@Invstock It was already announced last month that their would be no ban , but it would be regulated to some extent.....Thats why it hit all time highs last month
S
Bitcoin.. the only true completley decentralized, leaderless, non pre-mined, immutable and totally secure crypto... and I hate the word "crypto"....
Dan Victor, CFA profile picture
Thanks for reading. If you enjoyed the article consider following to hear about out next Seeking Alpha idea. - BOOX
c4dancer profile picture
@BOOX Research I thought I was already following you but I was mistaken so I fixed that.
Disagree with this article? Submit your own. To report a factual error in this article, . Your feedback matters to us!
To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.