May 15th 2021, Cryptoassets Update

PLEASE NOTE: This update was written over the weekend on May 15th and 16th. Since then, cryptos went through a blood bath Tuesday night. Our models use closing price data so I did not re-run the numbers because the spreadsheets would not be able to reflect the big drop until tonight’s close. While I don’t have closing data for today yet, it’s obviously going to be pretty bad for cryptos. May 15th 2021, Cryptoassets Update by Van Tharp.

Market Summary

Bitcoin hit a new all-time high of US$64,863.10 on April 13th but it has been going down since then in a nice channel between US$49,000 and US$56,000. At 9:30 EDT on May 19th, bitcoin was selling for US$32,788 – a 50% drop from its recent high.

In late 2017, I said that cryptoassets were the biggest institutional revolution since the Industrial Revolution and that they represented the investment of a lifetime. Institutions were not ready or capable of participating in that revolution so they “pooh-poohed” cryptos. Let me put what has been happening in the last few years into perspective:

  • In 2013, Michael Saylor, the President of MicroStrategy, said that BTC’s days were numbered.
  • In 2018, the SEC decided that most altcoins were securities and that precipitated a huge bear market. Cryptos underwent an 85% decline into the last month of 2018 and BTC hit a low price of $3,236.76 on Dec. 15, 2018.
  • But then look what has happened since the beginning of 2019 –
    • BTC was up 92.71% in 2019.
    • BTC was up 305.94% in 2020.
    • And now it’s up 64.33% in the 4.5 months of 2020. (Update: On the morning of May 19th, BTC is now up only 32% on the year.)
  • Michael Saylor is now one of the top 100 personal holders of BTC saying on Oct. 28, 2020, that he owned 17,772 BTC purchased at an average price of $9,882. At one point he said that he was purchasing $1,000 worth of BTC every second. His company MicroStrategy, knowing about his personal purchases, purchased most of its Bitcoin – about $3 billion worth – after Saylor had already acquired a large BTC stake.
  • In July 2020, VTI decided to put tuition money from new Super Traders into GBTC. We took all the risk but would credit them with 79% of any gains. Those who paid $10,000 for their tuition were able to cover all of their ST Foundation costs without paying any additional tuition money because of the credit they earned from the gains in just six months. Those who paid $25,000 were able to use their gains to pay for ST Foundation and in most cases, also pay for ST Awakening. The crypto price gains were impressive – there was even a period from October through November last year when our crypto positions gained over $3 million in seven weeks.
  • The Super Trader crypto system BTC position was finally stopped out when it closed below $49,081 on May 15th. Even though the system signaled an exit, being up 64% in 4.5 months hardly qualifies as a bear market. BTC’s Market SQN® score (Yahoo price data) is currently 0.69 which just moved it to neutral territory. Last week, on May 11th however, it was still in strong bull mode.

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