Bitcoin at 40k - Last week's Stock Picks are working out
On January 28th, I published a Stock Picks update that predicted the Bitcoin pump. Bitcoin was at about $31,000 then and it’s now above $40,000.
The catalysts were simple: the GME broker fiasco breaking trust with institutions, GME profits moving over to crypto, and the Dogecoin pump on Thursday (1/28) that signalled an upcoming bullish Bitcoin move.
I will be publishing a free newsletter article and another premium Stock Picks update tomorrow (2/6, Sunday).
Quick thoughts on the market
The GME madness last week proved itself to be a pump and dump, rather than an effective protest against the 1%. Only a few hedge funds, the most prominent of which being Melvin Capital, were caught flat-footed while news is coming out of many more hedge funds raking in big profits from the pump. This event goes into the annals of history as yet another prime example of the dangers of group think. I have also never been more disappointed by several opportunist celebrities and politicians that chose to stoke the populist fires instead of warning their constituents / followers about the dangers of buying at the top.
I’m truly sorry for anyone caught at the top, especially those who can’t afford the loss, and hope this was a valuable lesson for us all.
What does this GME pump and dump mean for the markets moving forward? I think this was an extremely bullish event for the US equities market. Seemingly everyone was talking about GME and stocks in general last week and I’m sure this event has created millions of new retail traders. I expect these new traders to pour into small- and mid- caps and create the perfect environment for momentum traders. I’m excited.
However, that’s not to say that there won’t be bearish speed bumps in this incredibly bullish climate. I’m closely watching what happens as we near the end of Q1 (end of March). The combination of target date funds rebalancing from equities to bonds due to the incredible performance of equities as of late, and people selling to pay taxes (remember, there were tens of millions of new traders in 2020), will surely bring down the euphoria by a few notches.
Stay safe out there, and don’t let the group do your thinking for you. Watch out for the new article and Stock Picks update tomorrow.