From a contrarian investor’s perspective, this came as no surprise, as the masses rushed into the streets and those who scarcely could say the word “Cryptocurrency” dove in with both feet.
This is always a red-hot warning sign. Especially when compounded with the fact that the majority of those joining the party in the late hours were saying that “it can never go down”, “Lambo’s for all!”, and other statements that are frequently made near a bubble top.
Yet, as also predicted, Cryptos are now beginning to move higher –and in a significant way. This is largely due to the easing of pressure as the tax season within the United States comes to a close. Those who sold for accounting purposes are now taking renewed positions.
Bitcoin, leading the charge, is heading towards its best week in four months, up over a whopping 25% this week alone!
Still, the fear of the taxman cannot be overstated. Countless investors have skirted the law and avoided paying their taxes, a fact I pointed out in a previous article. The IRS has taken a keen interest, showcased by their recent crackdownon Coinbase users.
Perhaps the recent lows have formed a new support level, and we are destined to move higher from this point forward, as seen from the recent enthusiasm returning to the Crypto space. Or perhaps not. It is far too early to tell.
Regardless of what happens in the short term, I believe Cryptos will be stuck in a sideways trading pattern, at least for the next year to two years, eventually returning to and testing their old highs.
What is, however, starting to solidify is the second part of the prediction I made during the latter days of 2017. This is that funds diverted away from the precious metals space will begin to find their way back throughout 2018, as those who made large profits from Cryptos look for the next best opportunity.
Many early supporters of Bitcoin have already begun to state their concerns with the Cryptocurrency and have begun to sell positions. Fortunately for many of these early movers, they sold before the recent correction and made staggering profits–profits that have made them fabulously wealthy, likely setting them up for the entirety of their lives.
Jeff Berwick, a familiar name to anyone in the precious metals space, was one of the most prominent and vocal supporters of Bitcoin and other Cryptocurrencies. Without a doubt, he is still a believer in the space as a whole, as am I. Yet he too recognized the fact that the market was simply getting overheated and overpriced.
Due to this fact, he has reiterated more than once that he is diverting funds back into precious metals , as he believes they are severely underpriced and due for a massive move higher in the coming years.
Things are beginning to take shape, and the “smart money” are acting now, moving out of the Cryptocurrency markets and back into precious metals, sensing that the time is ripe and the end of this long bear market is soon to come to an end.
Golden rays lay on the horizon, and the protection of precious metals will be needed more than ever as we continue to move forward into this increased time of geopolitical turmoil and uncertainty.
Opportunity awaits you, but time is running short.
This article is brought to you courtesy of Sprott Money.