Home Stock Market Commentary Is Bitcoin A Buy After Its November Crash? (And Why It Matters...

Is Bitcoin A Buy After Its November Crash? (And Why It Matters To The Stock Market) – Mike Swanson (11/27/2018)

I don’t know if you have noticed, but there has been a crash in Bitcoin prices this month.

I was talking to someone Sunday who believes in crypto and says that they are just charts and you have to trade the charts.

He is right as that is the only basis one can buy a crypto – and one could, in theory, apply the single best trading pattern I have ever used with it – my Two Fold Formula.

I say in theory – because the cryptos aren’t lined up for this pattern.  Other things are developing inside the US stock market, but I believe cryptos are actually in a helpless situation.

Look at the chart of Bitcoin.

Bitcoin broke $6000 this month and crashed again.

I don’t believe in buying crashes in something like this after it made a major bull market top less than a year ago.

That’s not what the Two Fold Formula is about.

It’s about buying sectors starting NEW bear markets, not ones that made major tops recently.

There is simply no evidence of a Bitcoin bottom here.

Now I believe Bitcoin has no value to it as it doesn’t function as money.  The transaction fees are so high that it can’t and no real legitimate business person wants Bitcoins as they aren’t a stable store of value.

That said a year ago my stance was you can play and go long Bitcoin as long as you don’t believe in it as an investment and are willing to eventually get out.

Then right after it topped I issued warnings to crypto players to get out and tried to explain to them what was happening.

It was all a vicious manipulation and scam by crypto insiders as I explained back in January:


Now Bitcoin represents something that stock market investors aren’t seeing because most of them just don’t even want to think about Bitcoin as it’s silly.

Bitcoin is to the global financial markets what internet stocks were to the US stock market back in 2000.

Since 2009 there was a GLOBAL bull market in stocks and bonds.  Such giant bull markets that go on for years often end in a speculative mania in something.

It happened in Bitcoin.  Crypto was something that people all over the world could buy together and play together.

And so they did and like the internet stocks back in 2000 it was a speculative fad that went straight up and then went bust.

Most of those hot internet stocks of 1999 no longer exist.

The Bitcoin run of last year and top and crash matter, because it was the high point of global financial speculation in this past bull market.

Since then we have seen the global yield curve invert in June and the global markets go into a bear market.

The US stock market bucked that trend and went higher into the end of September, but since then has turned down too.

These are the trends now in the market even if the masses want to ignore them.

There are Bitcoin and crypto people out there that believe their coins are real.

And there are stock market people every day on CNBC who say Apple and these other fad tech stocks are buys now too.

None of these people present any real strategy on how to buy any of these things in a market environment like this and actually expect to make money.

And really I don’t know of a way to buy a crypto now and expect to do anything but lose.

At least stocks represent ownership in a company and will pay dividends – and since you own a share of a company if the company gets bought out you participate in that.

With crypto all you own is virtual paper someone created out of thin air on a computer.  You have no ownership or right to anything.

They are like H&S food stamps.  How much are they worth now?

I stick with what works for me and that includes diversification, reducing risks in times like this, and stick with my Two Fold Formula.

Grab it by going here:

The Two Fold Formula