Bitcoin: Greed Zone Alert at $65k!

Bitcoin has moved out of the Neutral zone and entered the Greed zone. Bitcoin crossed $65k, an increase of 5% in 1 day, 25% in 1 week, 50% in 1 month, and 180% in 1 year.

So what should you do?

I'm Sandeep Goenka, your guide through the complex world of Bitcoin investing. I have spent the last ten years not just studying Bitcoin, but living it, the best financial decision of my life. In BTC Lighthouse I reveal how you can leverage this knowledge for substantial gains.

The BTC Lighthouse temperature has increased to 3.7, entering the Greed zone.

Let me explain what this means to you. First, let us compare Bitcoin vs other assets.

Bitcoin has outperformed every other asset class. Over a 1 and 5-year period, Nvidia has performed better.

But be prepared as we enter this bull cycle. Multiple up to 30% dips can happen even as the price moves upwards. The top and the bottom of any cycle are only known in hindsight.

2020 Cycle to $19k

2021 Cycle to $69k

Current Cycle so far

While we are zooming in on Bitcoin's current price, it is always helpful to zoom out. The total addressable market for Bitcoin is $200 Trillion, arguably even more.

That would mean a price of $9.5 Million per Bitcoin ($200 Trillion / 21 Million Bitcoin).

Below is the total value locked in store-of-value assets.

Bitcoin is the tiny orange dot on the top left corner.

In a podcast episode on What Bitcoin Did, Jesse Myers presented his hypothesis for Bitcoin's market cap in the next 10-20 years.

If Bitcoin absorbs a certain percentage of the market share of other assets, Bitcoin has a potential market cap of $200 Trillion. $9.5 Million per Bitcoin sounds crazy? As crazy as I used to say, in 2015, when Bitcoin was at $200 it will cross $10k.

And in a recent video, Cathie Wood explained why the US is heading into a recession. Here are two slides she presented, which showed that commodity prices are at 1980 levels and the US's existing home sales volume is at the 2008 financial crisis levels.

As an investor, you must be cautious of your investments in traditional finance.

Here is a quick recap so far.

Bitcoin has been one of the best-performing assets over the last decade and every other period since then.

Be prepared for significant dips, even in a bull cycle. It could but does not necessarily mean that it is a trend reversal. We can know this in hindsight.

Bitcoin has a market share which most people do not appreciate, giving it a price in millions of dollars in the next 10-20 years.

The US may be heading into a recession.

Great news around Bitcoin, and not so great for the overall economy.

And now for the blockbuster mania around Bitcoin ETFs. The inflows in Bitcoin ETFs have broken all past ETF records. Bitcoin ETFs have been among the ten largest ETFs in the world in the two months since their launch.

The critical thing to note is that the inflow has just begun. Watch the first 2 minutes of this video of the CIO of Bitwise Bitcoin ETF.

Matt explains that an even more giant wave is coming as the big financial institutions have not yet listed these Bitcoin ETFs on their platforms.

So what should you do at these prices? As always, it depends on your circumstances.

Suppose you are an existing Bitcoin investor and need liquidity for an emergency fund or your living expenses. In that case, this is a good temperature to sell some of your Bitcoin to achieve this. At this temperature, the right thing to do is to create at least some liquidity for 3-6 months of your living expenses, which is your emergency fund.

While doing this, you must be mentally prepared that Bitcoin will mostly increase this year.

As Howard Marks says, in investment, the right decision cannot be judged by the right outcome.

Suppose you are an existing Bitcoin investor with enough liquidity for living expenses for the next two years and big-ticket items you have planned over the next 2-3 years. In that case, I do not recommend selling Bitcoin to book profits. I am following Warren Buffet's advice. I do not advise trying to time the market. In this situation, your best bet is to keep your Bitcoin for 10-20 years or until you need the money.

Lastly, if you are new to Bitcoin, I feel your dilemma. Ensure you are not interested in Bitcoin only because it has increased in price. Do a mental experiment of how you'd feel if Bitcoin crashed to $15k over the next 2-3 months on the news that a famous crypto exchange collapsed. If this does not impact your Bitcoin conviction, you are ready to buy Bitcoin. Bitcoin is no longer cheap. You face a high risk of short-term corrections, which may or may not happen.

As per historical data, as of today, the best strategy is to dollar-cost-average your total planned investment in Bitcoin over the next 28 days.

To recap:

The Bitcoin temperature has reached a stage where old investors can sell some Bitcoin if they need the liquidity for an emergency fund.

For new investors, Bitcoin is now at a premium. Your best strategy would be to ensure you have long-term conviction and to DCA over the next 28 days.

If you liked this report, please share it with your friends and family. Please give feedback, comments, questions and topics you want me to research.

The Bitcoin temperature is getting hot. Stay safe, and see you at the next block.

Sandeep Goenka.

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