“Bitcoin will reach $200,000 in the coming months”
If you think Bitcoin has a sky-high price of over $60,000 (after this year it even surpassed $70,000), sit down and take a deep breath, because its price is very cheap not only for those in charge of the first crypto fund. assets in Spain, but very far from the $200,000 he could reach in the coming months. And all because of such an impulsive psychological effect as fomo (fear of missing out), the fear of missing out that grips investors.
“The human brain is not ready to buy Bitcoin at $70,000 when you saw it listed at $25,000 a few months ago,” says Roman Gonzalez, who runs a cryptocurrency free investment fund with Ruben Ayuso at a private banking firm A&G. “But we believe the price of Bitcoin is still much lower than its utility is reflected. Lack of knowledge about the properties of Bitcoin makes its price low. And that’s why we wouldn’t be surprised to see it trading well above $200,000. in the coming months,” he says.
Of course, those responsible for the fund, which is up more than 44% in a year thanks to growth fueled by the introduction of the first Bitcoin ETFs in the United States, warn that we must be prepared to weather a lot of volatility. an asset whose price can rise from reaching its maximum price in a few months to falling by 50% of its value.
“The price of this asset creates a lot of errors because it goes up very quickly on the elevator, but goes down on the escalator. Just the opposite of what’s happening with stocks. And this is detrimental to the human mind because you have to invest in an asset that has fallen sharply and continues to fall over a long period of time,” says Gonzalez, who recalls that crypto asset cycles typically last four years, with an average bull phase of nine. which means that during this time “you captured more than 78% of the cycle’s profitability. So be careful and don’t think that it’s very expensive and it’s better to wait,” he warns, because “if you are able to save the investment for at least these four, the chances of success are very high.
“Analyzing the peak it reached in recent cycles, we see that in 2017 it reached $20,000, and in 2021 – $70,000, that is, it multiplied its value by 3.5 times. happened with the FTX or Celsius broker, and if we apply this multiplier now, we would be talking about it being over $250,000. This is an asset that behaves in an almost perfect cycle, but we do not know whether it will repeat itself or not. No,” Ayuso explains, warning that along the way “there will be a 70% drop” and the investor must be prepared to ride it out.
In fact, the $200,000 estimate is much lower than the $1 million that renowned tech guru Cathie Wood thinks it will reach by 2030. and its nominal price is higher, it is already expensive for the human brain, as it is now, when its price is close to $70,000,” Gonzalez emphasizes.
The arrival of large institutional investors, such as the government of Wisconsin (US), will, in his opinion, support bitcoin’s growth in the coming years, as will more mass entry of retail investors into an asset that is now more scarce than gold after the recent halving.
To mitigate the enormous volatility that Bitcoin has, managers recommend not having more than 3% exposure in investors’ portfolios, which, as a hedge fund, should be considered eligible for this type of instrument, according to the regulation. Although the profitability results make up for this in the long run. According to their calculations, by just including 1% of crypto assets in a conservative portfolio, the achieved annual return could be almost doubled: from 2.86% to 5.04% and with an increase in volatility of less than one percentage point.
To manage the fund, which along with Renta 4 is one of the few options for investor access to crypto assets, its managers use listed products that function similarly to ETFs from various providers. cases have released some specific ones at your request. Bitcoin makes up 62% of the portfolio, while Ethereum represents 24%, Solana 4%, binance 2.5%, and the rest are smaller crypto assets such as Polygon, Arbitrum or Polkadot.
The managers, who are also responsible for the DIP fund – Paradigma Conservative Multi Asset, use indicators from firms such as Glassnode to modulate exposure to cryptocurrencies at a time when there are more than 13,000 assets of this type, of which more than 99% will be forced to close.