Updated: Dec 23, 2020
Happy New Year!
December began with BTC at $7,425 and closed the year at $7,195. Last year we wrote “We believe there is a strong case for China to sooner than later launch its own digital currency.” A year later this news is still developing and projects are being made that they will launch on the Chinese new year, which is January 25th. This is around the corner. Whether or not this new coin will have a positive effect on the price of digital assets is a wild card because we don’t yet know if the coin will allow for investing in digital assets. This month the Bahamas launched their own digital currency and it came with a lot of restrictions. But it is a start and hopefully larger countries take the best attributes of this new currency and develop their own.
State Street announced they have launched a pilot with Gemini to report digital asset holdings alongside traditional assets. We foresee that if you have digital assets with Gemini and an account with State Street you’ll be able to see your holdings on State Street’s platform. It’s unlikely you’ll be able to buy digital assets directly through State Street in the near term due to the heavy change in compliance it would require. It’s simpler to pass the risk on to Gemini. Last month we announced that we have completed a deal with Gemini and have started to put clients on this platform. If you are one of our clients and also have an account with State Street, send us an email.
Last year the coming of Bakkt and the possibility of an ETF lead to a lot of the hype about the price. Bakkt launched without fireworks and an ETF never happened. These are no longer a story. Libra popped up and ran right into a government wall and we don’t see it coming back to life in the next six months if at all.
Here’s what we think about 2020. It will be a year where the space suffers from a lack of interest. Where 2019 was boring and 2018 was a hangover. But this is not a negative. This lack of interest may suppress prices for the next few months and BTC could go down into the low 6’s. After that a climb would start to develop into the halvening, fueled by whales and speculators. Prices could get into the $12.5k area before the event. Note we do think a sell-off happens right before the event and continues for some time after (lack of interest as the news passes). We will keep you up on this.
In summary, looking to get long over the next few months should be evaluated. Let me know if you want to talk about anything.