Bitcoin is Back, Baby!

Bitcoin soared to new highs today, hitting a high of $23,750 just after midnight on December 17, 2020. The rise has been meteoric this winter, after quite a rollercoaster ride in February and March. Bitcoin began the year at $7,174, and dropped as low as $3,858 in mid-March when the U.S. economy imploded. Since October, Bitcoin has doubled in value.
 
What Sparked the Spree?  
Square announced a $50 million Bitcoin purchase on October 8, 2020 (1% of Square’s assets). This month, the majority of Jack Dorsey’s tweets and retweets have been related to Bitcoin. On October 21, 2020, Paypal announced that the company would allow accountholders to buy, sell and hold cryptocurrency. The plan is to make cryptocurrency available as a payment to Paypal’s 26 million worldwide merchants. Square’s investment has already doubled.

​Cryptophiles swooned on the news. On October 26, 2020, JP Morgan Global Markets Strategy group noted that Bitcoin might double or triple based upon Millennial investors who view it as a hedge against a weak dollar – a replacement for the role that gold traditionally plays. At the time, Bitcoin was trading in the $13,000/coin range. In the same JP Morgan research note, analysts worried that profit-taking might make the coin vulnerable in the near-term.
 
Beware of Profit-Taking
Profit-taking spoiled the party the last time Bitcoin soared to $20,000/coin. Bitcoin hit $20,000 a coin in late December of 2017. Hedge funds and institutional investors sold en masse. By February 7, 2018, the value  had dropped to $7,575.76. Most Main Street Bitcoin traders were not able to execute a trade at the high, due to preferential treatment that is given to registered investors.

Chart by Coinbase.

What Strategy Works for Volatile Investments like Bitcoin?
In a world where Bitcoin can be worth $4000 in March and $23,000 in December, your best strategy remains using the hot slice system of our nest egg pie charts. Being on the wrong side of an all-in trade can destroy your next decade. (There were Bitcoin suicides in 2018.) Having a slice or two of cryptocurrency in your diversified investment portfolio, with a system of rebalancing 1-3 times a year, is a buy low, sell high system on auto-pilot. When your one or two hot slices become four, then you simply sell high and trim it back to one or two slices again. If you still believe in Bitcoin, then stay invested, within reason. The nest egg pie chart system suggests limiting your “hot” slices to four of ten slices.
 
Did you feel like buying more Bitcoin when it dropped to $4000/coin? The rebalancing system can prompt you to do that because when a slice gets thin, it prompts you to buy more at a lower price to fill up the slice. When you’re just watching your asset go up and down in value, wondering what to do, your emotions get jacked all over the place. If the value goes down, you don’t feel like buying because now you’re just hoping to make up losses. When the value goes up, you worry about selling too early. When you have a simple, effective strategy, then adhering to the age-old, time-proven plan of buying low and selling high becomes easy to do.
 
Click to customize your own nest egg pie chart. Learn more about the value of Rebalancing in my blog. (Click to access.)

All Cyrptocurrencies Are Not Created Equal
There have been Bitcoin Club scams and many crypto criminals. Click for a report in 2017 on popular clubs that proved to be ruses. A search on Trade Coin Club and Joff Paradise reveals ample warnings from burned believers. Investopedia has a blog listing 5 Common Bitcoin Scams. Coinbase is a reputable place for wallets and trading. Square and Paypal are also supporting Bitcoin.   
 
Coinbase has over 100 cryptocurrencies listed. JPM Coin was launched by JP Morgan. Venezuela launched the Petro Coin December 3, 2017. That coin was supposed to be backed by the country’s oil, gasoline, gold and diamonds. In August of 2018, Reuters discovered that there wasn’t an office or website for the Petro Coin. Imagine the risk of the coin that is launched by someone you’ve never heard of, or is solicited through an email blast.
 
Bottom Line
Bitcoin is a very volatile investment and all cryptocurrencies have been on a rollercoaster ride of gains and losses. Currently, cryptocurrencies are a trader’s paradise, not a viable currency. You can’t have a currency that is worth $4,000 one month and $23,000 another. If you’ve doubled or tripled your investment, now could be the perfect time to capture profits, while keeping a hot slice that can continue to increase in value. In the event that hot slice implodes and Bitcoin drops to $4000/coin again, you’ll feel more confident buying more at a lower price because you captured gains at the high. That is how annual rebalancing with proper diversification becomes a buy low, sell high plan on auto-pilot. It is also the only way you can take your emotions out of investing and rely upon a time-proven plan.  
 
The Coinbase IPO
Coinbase is planning an IPO for 2021. The valuation in a 2018 funding round was $8 billion. It is unclear if Coinbase will use a SPAC to list, or will host a traditional IPO and roadshow. More news to come as the story develops.
 

Are you interested in an easy-as-a-pie-chart nest egg strategy that earned gains in the past two recessions and has outperformed the bull markets in between? Call 310-430-2397 or email info@NataliePace.com to register for our Jan. 16-18, 2021 Online Investor Educational Retreat. ​

Natalie Pace New Year, New You Wealth Empowerment Retreat. Jan. 16-18, 2021. Call 310-430-2397 or email info@NataliePace.com to learn more.

Other Blogs of Interest
Real Estate Prices are Going Up. And Down.
Movie Theaters are in Trouble
Airbnb Should Have a Spectacular IPO Today.
​Cannabis is Decriminalized. Stocks Triple.
Airbnb's IPO. Should Hosts Invest?
Gifts Under $5 and Free.
Thanksgiving in a Pandemic. The Sustainability Silver Lining.
Secretary Mnuchin Halts Bailouts
Money Stress Killed My Friend
Real Estate and Housing 2021. Challenges & Opportunities
​Real Estate in a Pandemic. Interview with Mike Fratantoni, the Chief Economist of the Mortgage Bankers Association.
​Bonds are Illiquid & Negative-Yielding.
Annual Rebalancing is a Buy Low, Sell High Plan on Auto-Pilot.
5 Red Flags of a Financial Implosion
Will Regeneron Be Approved Before the Election?
​Tesla Will Have an Outstanding Earnings Report
Should You Wait Until After the Election to Fix Your Wealth Plan?
​The October Surprise
​Is Your Bank a Junk Bond
Do Stocks Fare Better Under Democrats or Republicans?
Put Your Money Where Your Heart Is.
Crystal Ball for the Remainder of 2020 (Including the Election). 
Microcap Gaming Company Doubles 2Q 2020 Revenue.
​Apple & Tesla Stock Splits.
Schwab's Chief Fixed Income Strategist on What's Safe.
China's Tesla (Nio). 2Q Sales Soar.
Why Are You Still Renting? (Errr. There is More Than This to Consider!)
MedMen's Turnaround Plan Attracts A-List Board Members.
​Wealth Myths That Keep You Poor. Prosperity Truths That Make You Rich. 
Protecting Your Wealth and Home in a Recession.
Technology and Silver are Golden.
The Economy Contracts 32.9% in the 2nd Quarter of 2020.
Real Estate: Feeling Equity Rich? Make Sure That Feeling Isn't Fleeting.
Airline Revenue Plunges 86%. 
10 Questions for College Success
Bank Earnings Season. Crimes. Cronyism. Speculation.
Real Estate Solutions for a Post-Pandemic World.
Copper and Chile Update.
Gold Soars. Some Gold Funds Tank. 
Will the Facebook Ad Boycott De-FANG Stocks? 
Why Did My Cannabis Stock Go Down? 
Which Countries Are Hot in a Global Pandemic? 
Is Your Financial Advisor Good at Navigating Stormy Seas?
$10 Avocados, Lies, Damn Lies, Statistics & Wall Street Secrets. 
It's Never a Crash.
Work From Home and Intergenerational Housing.
Biotech Races for a Coronavirus Cure. 
Are You Worried About Money? 
May is a Good Time for Rebalancing.
Is FDIC-Insured Cash at Risk of a Bank Bail-in Plan?
Why Did my Bonds Lose Money?
Cannabis Update. 
Recession Proof Your Life. Free Videocon Monday, May 10, 2020. 
The Recession will be Announced on July 30, 2020. 
Apple Reports Terrible Earnings. 
We Are in a Recession. 
Unemployment, Rising Stocks. What's Going On?
8 Money Myths, Money Pits, Scams and Conspiracy Theories.
21st Century Solutions for Protecting Your Home, Nest Egg & Job.
Wall Street Insiders are Selling Like There is No Tomorrow.
Why Are My Bonds Losing Money?
Tomorrow is Going to be Another Tough Day.
Price Matters. Stock Prices are Still Too High. 
Should You Ride Things Out?
7 Recession Indicators
Corona Virus Update.
The Bank Bail-in Plan on Your Dime.
NASDAQ is Up 6X. 
CoronaVirus: Which Companies and Countries Will be Most Impacted.
Is Tesla Worth GM and Ford Combined.
Artificial Intelligence is on Fire. Is it Time to Buy S'More?
Take the Retirement Challenge.
2020 Investor IQ Test.
Answers to the 2020 Investor IQ Test.
The Cannabis Capital Crunch and Stock Meltdown.
Does Your Commute Pollute More Than Planes? 
Are Health Care Costs Killing Your Budget? 
2020 Crystal Ball.
The Benefits of Living Green. Featuring H.R.H. The Prince of Wales' Twin Eco Communities. 
What Love, Time and Charity Have to do with our Commonwealth. Interview with MacArthur Genius Award Winner Kevin Murphy.
Unicorns Yesterday. Fairy Tales Today. IPO Losses Top $100 Billion. 
​
Important Disclaimers
Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly traded companies or funds mentioned by Natalie Pace are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a diversified strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.  

Information has been obtained from sources believed to be reliable. However, NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.

 About Natalie Pace
Natalie Wynne Pace is an Advocate for Sustainability, Financial Literacy & Women's Empowerment. She has been ranked as a No. 1 stock picker, above over 835 A-list pundits, by an independent tracking agency (TipsTraders). The ABCs of Money remained at or near the #1 Investing Basics e-book on Amazon for over 3 years (in its vertical), with over 120,000 downloads and a mean 5-star ranking. The 4th edition of The ABCs of Money was released on October 17, 2020. 

Natalie Pace's easy as a pie chart nest egg strategies earned gains in the last two recessions and have outperformed the bull markets in between. That is why her Investor Educational Retreats, books and private coaching are enthusiastically recommended by Nobel Prize winning economist Gary S. Becker, TD AMERITRADE chairman Joe Moglia, Kay Koplovitz and many Main Street investors who have transformed their lives using her Thrive Budget and investing strategies. Click to view a video testimonial from Nilo Bolden. ​

---