As I write this, crypto is surging. Bitcoin is up 4.3% to $9,118. And ethereum is up 4%.
Our altcoin portfolio is performing well today but has continued to struggle versus bitcoin. Bitcoin currently makes up 64% of the entire cryptocurrency market. During the peak of the crypto market in early 2018, bitcoin made up just 32% of the overall market. And altcoins made up a staggering 68% overall of the market.
As I’ve been saying for years now, I expect bitcoin will continue to gain market share versus altcoins. I remain cautious on alts. If this market continues to get uglier, I expect many of them could sell off sharply.
Meanwhile, I expect the upcoming bitcoin halving on May 18 to be a huge catalyst. It should continue to provide price support for bitcoin. On top of this, bitcoin is clearly the closest thing in the crypto markets to a “flight to safety” asset.
The upward move in the crypto markets is somewhat surprising, given that the U.S. stock markets are currently selling off strongly. The S&P 500 is currently down 3.6%, and the Nasdaq is down 3%. This is encouraging and could signal stronger prospects for crypto going forward.
I expect that the stock markets may have a lot further to fall before we find a bottom. The only thing standing in the way of a sharp drop in prices is the Federal Reserve – and ongoing buybacks.
The one thing I am pretty certain of is that central banks, especially the Fed, will print a lot of money in response to these correcting markets. I think that means gold, silver and miners are in an amazing spot. I realize that this service isn’t about gold, but in my view it’s an amazing way to diversify and protect your portfolio during times like these.
Read my piece from last September, “The Bullish Case For Gold,” for more context. I don’t believe the coronavirus has changed the endgame. It just moved up the timetable. We’re still headed for very low rates for an extended period, and a whole lot of money printing around the world. That should be very good for precious metals. I intend to hold my positions in precious metals for at least three to five years.
Bitcoin may serve a similar role to gold in this ongoing crisis, but it’s less of a sure thing. There is more upside with bitcoin, but more risk as well. I continue to hold.
Here’s further relevant reading in case you missed any of these pieces.