Oct. 5, 2022
As wars drag on… markets continue to rise and fall… and hurricanes storm the coasts, I decided it might be time to look further afield and check in on the crypto markets. Are they doing any better since the start of the so-called “Crypto Winter?” Has the broad selloff of the DOW and NASDAQ made cryptos look more favorable? Are there any altcoins with buying potential? I hopped on a call with our own crypto guru Chris Curl, editor of Crypto Cycle, to find the answers that matter most.
John Carl: So crypto has been down for a good while now. Does this mean crypto is dead?
Chris Curl: I know that's what everyone is saying... ‘crypto is dead.’ It's funny to me because I've heard this before multiple times. The truth is that crypto might be the most cyclical asset class out there. I've written about it more in-depth, but Bitcoin is programmed in such a way that we see these huge pumps in price every 4 years followed by a crash.
We've already witnessed the crash seeing Bitcoin falling to sub-$20k from almost $70k. It crashed similarly in 2014, and 2018 as well. Every time this happens people say ‘crypto is dead.’ The truth is that if you had been purchasing Bitcoin during these ‘crypto winters’ you'd be very wealthy right now.
John Carl: It’s true! Many people seem to forget that, especially when times get tough. And speaking of... we’re obviously facing some tough markets right now. Does that affect your outlook for crypto?
Chris Curl: Bitcoin is highly correlated with the stock market and, as you said, that obviously is looking rough right now. So, short-term, holding cash is the way to go. But I think generally speaking we're entering into a tremendous buying opportunity for crypto assets. The space is still very much in its infancy, and in the next couple of years I think we're going to see some incredible gains.
John Carl: We recently saw the crypto coin Luna Classic — the reinvention of Terra’s Luna coin — making sudden moves upward, even as everything else has been sinking. What is Luna Classic, and does this mean Luna will be making a comeback?
Chris Curl: Well, I think crypto traders are really desperate for something bullish right now. And the hot speculation at the moment is Luna Classic (LUNC). This is the original Terra Luna token that we witnessed collapse in price back in May. The founder initiated a hard-fork of the blockchain and started a new project, leaving the old token behind. And it just hung around for a while at a fraction of a cent.
Then some developers got together, calling themselves the ‘Terra Rebels.’ They sort of revived the project last August with a new governance protocol. And the part that got investors really excited was them implementing a burn tax on all LUNC transactions. This will put deflationary pressure on the token as currently there are trillions in existence. So traders are piling in, buying up millions of tokens now in the hopes that it will be worth a cent or maybe even a dollar someday.
The reality is that most small market-cap altcoins are little more than vehicles for speculation. And LUNC is no different. But these are the projects that can result in 100x or more in gains. That's why I recommended LUNC back in May as a fun crypto gamble.
And since then it has skyrocketed several times in price even in the midst of a brutal bear market. And when we get another bull market again, we could see tokens like LUNC explode even higher. But it's important to understand that this is the very definition of high-risk investing. Highly speculative.
John Carl: Last question — when should we start buying Bitcoin and Ethereum again?
Chris Curl: It's impossible to time the exact bottom. Especially in such an uncertain macro environment. But I've been recommending buying Bitcoin at under $20k and would definitely pick up Ethereum at under $1,000 with a two-to-three-year time horizon. Those are good conservative plays at least as far as can be had in the crypto space. While I’m holding off on most altcoins for now, I’m keeping a close eye on when it’s time to start buying again.
With so much pain in the regular markets, it's time to take another look at what's up next for crypto. I encourage you to check out Chris Curl’s Crypto Cycle, which will show you when and how to make the most of the next crypto boom.
Editor, Daily Profit Cycle