Bitcoin Reachs 200 day moving average, bull case for BTC strengthened

January 29, 2020

One of the biggest asset class surprises last year was the 92% gain in Bitcoin (BTC). Twelve months ago, few besides our shop would have credited such an outcome.  So far in 2020 the cryptocurrency is continuing to roar ahead.

Though it’s early in the year, BTC is up 26% YTD, already the best showing of any major asset class, and building on that big 2019 move. The case for owning Bitcoin has strengthened even since the start of the year, as two additional tailwinds recently emerged (see below), bringing to five the positive convergences I envision for BTC this year.

The list of positives for Bitcoin are rising in 2020.

1 The coronavirus outbreak, and the associated uncertainty both in terms of disease spread and of economic impact is increasing demand for “safe haven” assets. Thus, gold and Bitcoin are both up sharply since then. In fact, Bitcoin’s correlation to the S&P 500 has flipped in the last 3 months from +13% to -10%—a pretty meaningful swing.

2 On 1/27/2020, BTC traded above its 200-day moving average for the first time since October 2019. I believe that moving above the 200-day is validating that Bitcoin is back in a “bull market.” The data supports this. Since 2010, when Bitcoin is above its 200 dma, the six-mont...