BITCOIN BTC SLIPS TO $65K AMID STRONGER DOLLAR

BITCOIN BTC SLIPS TO $65K AMID STRONGER DOLLAR

Bitcoin Slips to $65K Amid Stronger Dollar, But Analyst Says the ‘Pullback Is Over’

Bitcoin slipped 5% below $65,000 Thursday, with the U.S. dollar resurging amid the Swiss central bank’s interest rate cut.

XRP, FIL and ICP defied the slump, while SOL and AVAX declined.

Bitcoin completed its correction by rebounding from $60,000 Wednesday and targeting “much higher levels” in the next phase of the uptrend, Swissblock analyst said.

Bitcoin {{BTC}} slid lower Thursday amid a stronger U.S. dollar, giving up some of the advances from Wednesday’s spectacular bounce spurred by a dovish tone from the Federal Reserve.

BTC dropped some 5% to as low as $64,600 by late afternoon UTC hours from above $68,000 at the start of the day. The broad-market CoinDesk 20 Index (CD20) declined 3.5% from its daily high, as altcoins generally outperformed bitcoin during the day.

Payment network Ripple’s native asset {{XRP}}, decentralized data storage platform Filecoin’s crypto {{FIL}} and the Internet Computer’s token {{ICP}} advanced 6%-7% over the past 24 hours.

 

CoinDesk 20 Index leaders on March 21 (CoinDesk)
Native tokens of layer 1 networks Solana {{SOL}}, Avalanche {{AVAX}} and Aptos {{APT}} lost 2%-3% during the same period.

 

CoinDesk 20 Index laggards on March 21 (CoinDesk)
Bitcoin’s weak price action was perhaps due to the resurging U.S. dollar after the Swiss central bank, in a surprise move, cut interest rates by 25 basis points, erasing all of Wednesday’s steep drop when Fed Chair Jerome Powell hit a dovish tone despite higher-than-expected inflation readings

The U.S. dollar index (DXY), which measures the U.S. dollar’s strength against other major currencies and a stronger dollar usually weighs on asset prices.

The move was perhaps due to market participants expecting that some other key central banks could start lowering interest rates before the Federal Reserve, macro analyst Michael Kao noted on a social media post.

 

 

 

 

Musings of the Day, 3/21/24:

Despite JPOW’s Rhetorical Pivot, the data in coming weeks/months present a good likelihood that he punts again in June.

Perhaps USD resurgence today following surprise SNB cut is a hint that RoW will still Out-Dove the Fed.
https://t.co/uREhsB2jhL

Market analytics firm Swissblock said that bitcoin completed its pullback before Wednesday’s bounce, reaching almost their target price of $58,000-$59,000 when they called for an imminent cool-off phase last week.

“Now much higher levels (are) coming,” Swissblock analyst Henrik Zeberg said in a Thursday market update. He added that altcoins and bitcoin miners will perform “tremendously well” in the next phase of the uptrend.

Crypto trader Jelle noted that the bottom for the correction is in until BTC holds the $65,000 level. He added that it could consolidate for a while in the current price range and needs to break above the $69,000 price level – the market cycle peak in 2021 – to reignite its rally to higher prices.

 

 

 

 

 

 

 

 

 

Forget the Magnificent Seven Stocks: 1 Magnificent Cryptocurrency Could Soar 635% in 5 Years, According to a Wall Street Analyst

The so-called Magnificent Seven have been fantastic investments during the past five years, with all seven stocks outperforming the broader market. In fact, while the S&P 500 (SNPINDEX: ^GSPC) returned 97% during that period, every member of the Magnificent Seven at least doubled in value, and four more than tripled, as detailed below.

1Alphabet: 137%
2Amazon: 104%
3Apple: 285%
4Meta Platforms: 192%
5Microsoft: 278%
6Nvidia: 1,980%
7Tesla: 791%

 

The Magnificent Seven could continue to beat the market during the next five years. However, investors should still explore opportunities beyond those megacap companies. Diversification can reduce risk by spreading money across a greater number of assets and asset classes.

In particular, investors comfortable with volatility should consider Bitcoin (CRYPTO: BTC). The cryptocurrency returned 1,520% during the past five years, outperforming virtually every other asset class on the planet, including gold, commodities, real estate, bonds, equities, and emerging market equities, according to Ark Invest. Bitcoin also outperformed every member of the Magnificent Seven except Nvidia during that time.

More importantly, a reputable Wall Street analyst with a winning track record believes the best-known cryptocurrency could soar 635% in the next five years.

Tom Lee believes Bitcoin could hit $500,000 in five years

Tom Lee is currently a managing partner and the head of research at Fundstrat Global Advisors, but he previously served as chief equity strategist at JPMorgan Chase between 2007 and 2014. Lee’s stock-picking product (Granny Shots) has more than doubled the performance of the S&P 500 since its inception in January 2019, which lends credit to his opinions.

With that in mind, Lee believes Bitcoin could reach $150,000 before the end of 2024 and $500,000 within five years. He explained his predictions in February during a CNBC interview, “You’ve got demand improving with the [spot Bitcoin] ETF, you have the supply shrinking with the halving, and if monetary policy eases, which we expect, you know that’s supportive of risk assets.”

Lee’s five-year target echoes a prediction from MicroStrategy former Chief Executive Officer Michael Saylor, who said in 2022 that Bitcoin could reach $500,000 if its market capitalization comes to match that of gold. Saylor posited a timeline of a decade, but he made that prediction before the approval of spot Bitcoin exchange-traded funds (ETFs), which could be a game changer for the cryptocurrency.

In either case, a Bitcoin price of $500,000 implies 635% upside from its current price of about $68,000.

Two tailwinds could take Bitcoin higher during the next five years

The price of any asset is ultimately determined by supply and demand. Bitcoin is no different, though it does present a somewhat specialized case because its supply is fixed at 21 million coins, of which about 19.7 million already circulate. That quality has drawn comparisons to gold, another asset that derives value from scarcity.

So, demand is the most consequential variable where Bitcoin is concerned, and several indicators suggest demand is trending higher. For instance, monthly active addresses, new addresses, and transaction counts are rising, meaning more investors are engaging with Bitcoin and doing so more frequently. Additionally, the number of accounts with at least 0.1 bitcoin reached a new all-time high in December 2023, according to Fidelity.

Building on that, Lee mentioned two catalysts that could take Bitcoin demand to new highs in the future: spot Bitcoin ETFs and the halving of Bitcoin mining rewards in April. Investors should understand exactly how each catalyst could impact the cryptocurrency.

Spot Bitcoin ETFs: In January, the Securities and Exchange Commission approved a wave of spot Bitcoin ETFs, funds that offer direct exposure to Bitcoin without the hassle of cryptocurrency exchanges and blockchain wallets. By reducing friction, those products could bring more retail and institutional investors to the market. That is especially true because some of the world’s largest asset managers are ETF issuers, including BlackRock and Fidelity. In fact, the spot Bitcoin ETFs issued by those institutions saw more inflows during their first month on the market than any ETF that launched in the past 30 years, according to Bloomberg Intelligence.

Bitcoin halving: The Bitcoin supply limit of 21 million coins is enforced by periodic halving. To elaborate, miners are rewarded with Bitcoin when they validate a block of transactions and add it to the blockchain. But the reward is cut in half every 210,000 blocks, which is about once every four years. The next halving event will take place next month, and it should boost demand in a roundabout way by reducing selling pressure. Specifically, miners will only have half as much Bitcoin to sell over the next four years. To that end, Saylor estimates that selling pressure will fall from $12 billion per year to $6 billion per year.

Investors should never take price targets for granted. No one can predict the future, and even the most intelligent analysts are wrong sometimes. That said, spot ETFs and the halving of mining rewards could certainly drive Bitcoin higher in the coming months and year, perhaps substantially so. Its price may even hit $500,000 at some point in the future.

However, investors should be aware of the risks. Bitcoin is much more volatile than most asset classes. It lost 76% of its value between November 2021 and November 2022, and a similar implosion is possible (if not probable) in the future. Investors comfortable with that type of volatility should consider diversifying their portfolios with a small position in Bitcoin.

Should you invest $1,000 in Bitcoin right now?

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Trevor Jennewine has positions in Amazon, Nvidia, and Tesla. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Bitcoin, JPMorgan Chase, Meta Platforms, Microsoft, Nvidia, and Tesla. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

 

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