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Tom Lee of Fundstrat Global Advisors, Bitcoin vs Bubbles

Tom Lee of Fundstrat Global Advisors, Bitcoin vs Bubbles

Fun with Fractals, Part Deux 

Bitcoin vs bubbles: Nasdaq, Biotech and Topix 1972 -> 3x to 40x above all time highs 

Last year, we published a report on February 5, 2018, titled “Problem with fractals: Bitcoin similar to Nasdaq ’99 (bear) and Topix in ’72 (bullish)” where we compared Bitcoin’s price to prior market bubble tops—specifically, Nasdaq (’91-99) and Topix Japan (1970-1974).  At the time, Bitcoin was $7,200.  With an 84% drawdown in place, we thought it would make sense to revisit these fractals.
  • Each of the prior bubbles saw a parabolic rise and a subsequent 85%-90% drawdown, which took multi-years to complete (Slide 4). And arguably the bubbles of Nasdaq, Biotech and Japan had common threads.  Secular growth, seeming limitless capital inflows and lots of optimism.  This fueled the parabolic rise on all 3 bubbles and the bursting was a painful retracement.

  • This could also describe Bitcoin in 2016-2017 run-up as well. And the extended 400-plus day decline seen in 2018 was process to burst and eradicate that bubble (Slide 5 and Slide 3).  The media was celebrating the bursting of the Bitcoin bubble, not only in the Summer of 2018 but even more recently, as reflected in the included headlines from Investor Business Daily and from Marketwatch.com.

Given the fact that the research produced by Tom and his team at Fundstrat Global is so deep and detailed,  I am placing a small sample on my platform. There are many unique features about Fundtrat but my favorites are as follows 1. the big picture understanding of trends (Tom was constantly right back in 2015 and 2016 regarding the extended S&P 500 rally), 2. the attention to detail and charts in all of their research and 3. the understanding of equity and cryptocurrencies, no other firm produces quality on this scale. Engage Fundstrat and have a look at their offering – they even have an successful ETF. JMB 

 

 

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