How High Can Cryptos Rise?

On December 4, Bitcoin broke through the $40,000 per token level, which gave way like a hot knife goes through butter. Bitcoin was trading below $17,000 at the end of 2022. The price action was bearish after the leading cryptocurrency reached nearly $70,000 per token in November 2021.

The calls for the death of Bitcoin and the cryptocurrency asset class were greatly exaggerated, as 2023 has been a year of higher lows and higher highs. Bitcoin took out the $40,000 level in early December, with the next technical target above $48,000. Ethereum and other cryptocurrencies have gone along for the bullish ride, and the asset class’s market cap has climbed to over $1.5 trillion.

Markets reflect the economic and geopolitical landscapes, which remain highly uncertain in late 2023. As the markets head into 2024, many investors and traders are turning to alternative assets, with cryptos and gold shining brightly.

Bitcoin is back in bullish mode

• Bitcoin reached over $44,700 per token at the most recent high, the highest level since April 2022.
• Bitcoin had 51.9% of the asset class’s market cap. Bitcoin’s market cap was around $807 billion at the $41,250 level on December 12.
• Bitcoin is in a bullish trend in December 2023.

Ethereum is the second-leading crypto

• Ethereum was trading near $2,190 per token on December 12, after reaching the highest level since May 2022 at above $2,400.
• Ethereum had 17% of the asset class’s market cap. Ethereum’s market cap was around $263 billion at the $2,190 level.
• Ethereum was trending higher on December 12, 2023.

The trend is always your friend

• Trends are critical technical factors as they encourage trader and investor participation.
• The boom-and-bust price action in cryptocurrencies over the past years enhances trend-following activity.
• The cryptocurrency asset class was at the $1.55 trillion level on December 12, 2023.
• The all-time high was around the $3 trillion level.
• Cryptocurrencies remain a small asset class, considering AAPL’s market cap was over $3 trillion.

Bitcoin and Crypto-related ETF products to consider

• BITO is a regulated ETF product that tracks Bitcoin futures higher and lower.
• RIOT and MARA are cryptocurrency mining companies that rise and fall with Bitcoin and crypto prices.
• BITQ is an ETF that highly correlates with Bitcoin and cryptos as it owns related companies that trade on the stock exchanges.
• COIN is a leading cryptocurrency platform that correlates with crypto prices.

Risks rise with the prices

• The current rally can potentially take Bitcoin, Ethereum, and other cryptos to new record highs.
• Risk is always a function of the potential for rewards.
• Cryptocurrencies remain a burgeoning asset class with many regulatory and other risks.
• The boom-and-bust price action over the past years suggests periodic price explosions and implosions.
• Adjust risk-reward dynamics based on the current market prices, not the original execution prices.

Only invest capital you are willing to lose.

Thanks for reading, and stay tuned for the next edition of the Tradier Rundown!