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Should you be aboard the Crypto-Craze train?

by , 19 October 2017
Should you be aboard the Crypto-Craze train?
It's interesting to see how interest in Bitcoin has increased. Searches on Google for the “Bitcoin price” have increased sharply since 2016.

Below is a chart of the Bitcoin price in US Dollars and the volume of searches in Google.

Source: Prodigy Asset Management, Google Trends and Coin Desk
As you will see, the higher the volume of google searches the higher the price goes. And we’ve seen a little pull back in the volume of google searches for Bitcoin.

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If you had to buy Bitcoin, what price should you pay?
When looking at the chart in US dollars of the Bitcoin price it is useful to note the following:
  • China has recently forced the shutdown of their local Cryptocurrency exchanges and placed an embargo on Initial Coin Offerings, causing the price to fall.
  • Based on the below chart, the price has seen support come in around the $3,000 level. And it’s bounced to just less than $4,000. If it breaks above $4,000, it could rally to its previous all-time high.
  • If the support level at $2,975 doesn’t hold the price may fall below $1,900. You can see the support levels in the below chart.

Source: Prodigy Asset Management, Trading View
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Individuals with a higher risk appetite and a longer investment time horizon, could allocate capital at the $3,000 level. If you are conservative and looking for a more reasonable level to enter, just above the $1,850 level is ideal.
That’s what you call a crash!
Bitcoin fell almost 40% in 14 days, that is high volatility. With the potential of high returns in the short term, Bitcoin naturally comes with much higher risk. But the cryptocurrency train has not derailed and should make a recovery like it did after MountGox collapsed in 2014. The price fell over 75% over a two-year period and took three years to rise to its previous high.
How can you get aboard?
You have three options:
  • Buy and Hold Bitcoin (Cryptocurrency) in a Wallet (local or offshore), for South Africans, the benefit of an SA Wallet is that it will accept payments from local bank accounts, we have two local Cryptocurrency Wallets:
  • Luno.com “makes it safe and easy to buy, store and learn about Bitcoin in South Africa” Web Site: www.luno.com (At present Luno only supports BitCoin.
  • BitCoin ZAR; is a multi-currency wallet for South Africans. Web Site: www.bitcoinzar.co.za
International wallet offerings include www.exodus.io and www.jaxx.io.
  • Trade the Bitcoin (Cryptocurrency) on an exchange - A Cryptocurrency Exchange allows users to exchange a cryptocurrency for another currency (Both Cryptocurrencies or hard currencies like the US Dollar of Euro). In this way, an exchange rate is created through the natural supply and demand forces. Popular exchanges include: www.bifinex.com and www.bitsquare.com
  • Trade a derivative on Bitcoin (Cryptocurrency) through a broker. Cryptocurrency Broker with an efficient and professional trading platform that meets their needs. See the comments below on how to choose a Broker. markets.com is a professional, regulated broker with access to the major cryptocurrencies. It also offers trading in forex and international stocks.
Whatever you choose… If you want to climb on the cryptocurrency train, make sure you don’t allocate capital you can’t afford to lose. The stakes are high that you could suffer capital loss in the short term.

Should you be aboard the Crypto-Craze train?
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