- BITCOIN NEEDS A CLEAR MACRO TREND (Slide 3). A comparison of Bitcoin’s and S&P 500 performance bears this out. In years where S&P 500 has seen gains >15%, Bitcoin averages 1,800% annual gains. When S&P 500 flattish/up <15%, BTC ~300% and when S&P 500 is down, BTC averages declines of 9%. NOTICE A PATTERN? When there is a clear trend in risky markets, Bitcoin shines. Granted, this is only 10 years of price history. But as the chart on Slide 4 shows, it is a striking relationship.
- BITCOIN WAITING FOR S&P 500 TO MAKE A NEW HIGH. The implication, in our view, is the S&P 500 needs to break to an all-time high, to reawaken Bitcoin. The all-time high is 3,025 or so. And thus, the S&P 500 is 1% away from achieving this. We expect a 2H19 S&P 500 rally, pushing the index to >3,125
- BITCOIN MISERY INDEX CONFIRMING THIS, AS IT BROKE DOWN IN MID-JULY. On July 30th, we advised our clients “Bitcoin Misery Index (BMI) below 66…take the rest of summer off” (see Crypto Strategy reported dated 7/30/19) as a confirmed decline in BMI has been associated with weak forward returns—previous to 2019, the BMI saw same dynamic in July 7, 2016 and entered a period of consolidation for 6-8 weeks.
This is a sample of the research that Tom Lee and the Fundstrat Team produces. Have a look at Tom on Youtube/CNBC and their offering across equity and crypto products.