Today will be the 3rd weekly update of the Diversification Protocol. This protocol is designed to allocate a weekly income or funds to be invested mostly to BTC when it is undervalued and mostly to gold and optional stable coins when BTC is overvalued. It also tells you to spend gold for living when BTC is undervalued and BTC for living when it is overvalued. This will create higher returns on your investment through a full cycle and reduce stress in a bear market. HERE you can read the protocol in dept.
The valuation is done by using the Mayer Multiple and compare it to historical values. The Mayer Multiple is the current BTC price divided by the 200 day moving average. We use data from mayermultiple.com. When you want to be updated on the multiple several times a day you can follow THIS twitter account.
Because I just started the protocol, I didn't accumulate gold and stable coins yet. In this update I will exactly follow the protocol, but since I only start saving gold and stable coins from a multiple of 1.6, I will only be able to execute it 100% according the rules after that point is broken. Funds invested in BTC today will eventually at least partly be converted to gold, since the BTC accumulates in the same wallet and a percentage of the total BTC in this wallet will be allocated to gold at higher valuations.
The current multiple
Weekly allocations of funds
The protocol will be slightly boring till we get to a multiple of 1.6, till then we allocate 100% in BTC because it is undervalued. With the current 200 day moving average we need a BTC price of over 15.399 USD to start allocating to gold and Stable coins. This can take days or months, but it is good to be prepared already.
Important news of the week
Price went up through a beautiful short squeeze
The Bitcoin price rose from 6980 to 8069 this week. Most of the gains were made at thursday when a short squeeze caused a gain of more than thousand dollars within an hour. The news this week was positive overall, there were many calls for an upcoming bull market and the technical picture improved a lot.
It looks like the market has chosen for the upside!
Last week I wrote in the weekly update that the market almost had to choose a direction. Here a screenshot of that post:
One week later it really looks like the downtrend is broken. This in combination with the failure of the dead cross to push the Bitcoin price down (in the past this resulted in a huge bull run) looks very bullish to me.
It looks like the downtrend is finally broken!
Bittrex re-opens for new users
During the bull run many exchanges closed the door for new sign ups because they could not handle the huge demand. Multiple exchanges re-opened for new users over the last weeks and Bittrex was the last one to re-open this week. This means that people who are waiting to invest in crypto are now able to do so.
Bitcoin permissioned under Sharia law
Muslims can now buy Bitcoin without the need to worry because it is now allowed under the Sharia law. This can potentially bring in 1.6 billion new users to Bitcoin. There is a lot of wealth in some strict Islamic countries like the Saudi Arabia and the Emirates, so this is really bullish news.
Tim Draper predicts 250k Bitcoin for 2022
Tim Draper said that he expect the Bitcoin price to hit 250K in 2022 in THIS article and that crypto will fully replace fiat because it is better money here:
War in Syria will cause a lot of uncertainty
The war in Syria could trigger more geopolitical tension especially between the US and Russia. Governments have proven themselves the biggest violators of human rights and the biggest risk for our world again and more people will wake up and realize how bad the current system is. The decreasing trust in government in combination with the increasing uncertainty will be bullish for Bitcoin and gold.
Fundamentals and valuation
In the history of Bitcoin the multiple was lower than today only 16% of the time. Since the multiple today is 0.84 while the moderate is 1.57, there is 46% discount on BTC according to this valuation method!
Long term the prospects are still extremely bullish. Lightning Network can boost adoption for day to day payments and Wallstreet, governments and central banks could inject huge amounts of money. Now the technical picture has improved a lot, the American tax season is ending in two days and Q2 is historically always good for Bitcoin the short term is turning bullish too!
Disclaimer
This is no financial advice, just my view on the market.
Never stress in a bear market anymore: Follow my diversification protocol
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a big bullish year for bitcoin is awaiting
i agree.... May will be even phatter. Thank you for this post
indeed very interesting information that you describe, this something we can make as a motivation to invest in bitcoin.
really very interesting notification and motivate us to be patient in saving in bitcoin, I am sure with the profit prensentase in bitcoib can be easy to look for future wife. success is always for you @michiel
all of your post is so helpful about btc. i know many new things from your post
lets hope it will
the information that is very nice and interesting to be used as a view, so we can join or invest in bitcoin .. *** thank you very much *** ..
@ana07
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yeah all these reason will make some huge effects on crypto
hope market will remain bullish
very analytic post about bitcoin. Thanks sir @michiel for always sharing crypto post thats enhance our crypto knowledge.
I am saving to buy cryptocurrency and invest in this market. I am from Venezuela, anybody knows platforms to earn dollars or BTC diarily?
Yes a very useful information for us all about bitcoin, just successful greeting for you @michiel
a very useful post, thanks for the information
good post, I really hope that the bitcoin in the future will increase so that everyone will be enthusiastic in investing
Great post as always @michiel , good overview.
The coming week will be huge for the market, either we sustain the rise or I think we will see lows below 6.5k in BTC.
thanks for this helpful post
all of your' post is so helpful ;about .btc💗😇😊
bitcoin is motivation to invest make can we something this., I am sure with the profit prensentase in bitcoin can be easy to look for future growth
In fact, very interesting information that you describe, we can work as an inspiration to invest in bitcoin.
Bitcoin inspired to be really very noticeable and patient to save....
Good numbers. I the trends still looks beautiful on that graph. I hope it stays that way or even better.
War in Syria will and is already causing a lot of uncertainty, but I think it will affect especially the stock prices of the USA, and probably France and England, because they were directly involved in the recent attack.
With this uncertainty I can see an upside for crypto, but after this raise to $8K it will be hard to go up again soon, we need to stabilize first or we will be risking to go back all over again.
Is the best post
@michiel
Such information is very useful for everyone @michiel thank for sharing
This is a very interesting way of investing. typically people buy and hold buy you method allows you to take profit. I need to implement this!
The recent price fluctuations associated with bitcoin have investors seeking price predictions for the coming year. Investors are understandably concerned about whether bitcoin will experience a crippling course correction, or continue rapid growth. It might accomplish both
This is all fantastic news for the short term. A lot of smaller investors I know still think this could be a bull trap but I re-assure them that the outlook for the rest of the year is extremely bright and this is just an accumulation period. Cost averaging and laddering your entry points is of utmost importance!
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