Crypto: Should Gold Bugs Get Involved?
Contributed Opinion

1. Stewart Thomson: I, or members of my immediate household or family, own securities of: Bitcoin. I determined which companies would be included in this article based on my research and understanding of the sector.
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Stewart Thomson Disclosures

Stewart Thomson is no longer an investment advisor. The information provided by Stewart and Graceland Updates is for general information purposes only. Before taking any action on any investment, it is imperative that you consult with multiple properly licensed, experienced and qualified investment advisors and get numerous opinions before taking any action. Your minimum risk on any investment in the world is: 100% loss of all your money. You may be taking or preparing to take leveraged positions in investments and not know it, exposing yourself to unlimited risks. This is highly concerning if you are an investor in any derivatives products. There is an approx $700 trillion OTC Derivatives Iceberg with a tiny portion written off officially. The bottom line:  

Are You Prepared?

America's new buzzwords are "Trump 2.0" and "crypto." That's a lot of adrenaline, and the big question is. . . 

Should investors be involved with Bitcoin and other crypto projects, or is it just another fad that's destined to fade?

The good news is that whether it's a fad (unlikely) or here to stay for thousands of years like gold (also unlikely), there are key tactics investors can use to create sustained wealth in this market  . . .  and do it without getting married to the items in play.

If the Dow rises or falls, most of the entire U.S. stock market follows, albeit with varying degrees of intensity. If gold rises or falls, most mining stocks follow gold. Likewise, most crypto coins and companies tend to follow the action of Bitcoin, aka  . . . "The Prince of Coin."

What follows should be very helpful for crypto "noobs" (new crypto investors), but the basic rules of investing are the same for all types of investors.

A key short-term Bitcoin chart is below.

After staging a breakout above $75,000, institutional money managers quickly bid the price up to the important round number of $100,000 where a pause in the action was likely to occur.

The price is up 100%, just since the August low!

For a closer look at the action see the chart below.

On the one hand, the round number $100,000 is formidable resistance. There's also now a non-confirmation in play of the RSI oscillator with the price. On the other hand (the more interesting hand?), no price is too high to buy if the asset is a major one and the investor owns none.

A "grub stake" position in a quality asset can be bought at any price, but larger buys should be done on significant price weakness into significant support on a chart.

Small buys could also be executed on a pullback to the $90,000 zone, which has begun to act as a modest zone of support.

The long-term chart is here:

Here, the Bitcoin price action looks like it was carved out of crypto market marble by Michelangelo! Note the stunning C&H (cup and handle) and inverse H&S (head and shoulders) action in play. 

The price target of both patterns is about $125,000.

Gamblers can use any tactic on any stock, commodity, fund, or coin, but moderate and conservative investors don't have that kind of tactical freedom.

Crypto noobs should buy only Bitcoin to start their foray into this exciting sector, and it's probably best to start with an ETF.

Most ETFs are a type of fund, holding many different items, and there are some of these in the crypto market too . . .  but ETFs like FBTC hold only one single coin, which is Bitcoin in this particular case.

New investors could buy a small amount of FBTC now, more at $80, and if there is a decline to the huge $65 support zone, much larger buys should be a significant consideration.

What about the crypto miners… is there any action there? There is.

A solid breakout from a massive base pattern is evident on this Hut 8 Mining Corp.'s (HUT:NASDAQ; HUT:TSX) chart.

Investors could buy the $21 area if there's a pullback into it.

Now, look at the daily chart.

The $21 area is clear support. Gold stock enthusiasts who are interested in crypto are likely to gravitate more towards miners than coins.

There are thousands of publicly traded gold and silver miners, but the number of crypto miners is quite small. Over the next 12-24 months, if the Trump administration continues to endorse and promote crypto, there could be an institutional charge into the crypto miners, creating a surge like the one that occurred in 2010 for the metal miners. 

Gold stock investors considering crypto haven't missed out on the entire bull run by any means. The first stage (2008-2023) was for investing "cowboys and cowgirls." It was a wild time; coins were lost in hard drives, exchanges operated like part of the dark web, government tyrants and banks tried to wipe it out . . . and some fortunes were made! Now, the market is more mature, and major money managers are entering it.

There's still enormous upside and Bitcoin could hit $200,000 in 2025. The key for investors is to start small. Then wait for the inevitable big sales in the price to add bigger positions and enjoy what is likely to be a multi-decade ride!

Special Offer For Streetwise Readers: Please send me an email to [email protected] and I'll send you my free "Crypto Coin Cannons!" report. I highlight key coins that look like they've been loaded into technical analysis cannons, reading for a shot up to much higher prices! Key investor tactics are included in this report. 

Stewart publishes his Crypto Palace newsletter about twice a week. At $299/yr, the value is solid, and he has a special $159/14mths special offer this week. To get the offer, please send Stewart an Email at [email protected] or click this link.