Today will be the 4th 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 15.627 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
Total global dept is higher than ever
The global dept rose with 70 trillion in the last ten year and is now on a staggering 237 trillion. The dept has never been this high in the entire history. This brings the global dept on 317.8% of the global GDP. Got Bitcoin?
https://www.bloomberg.com/news/articles/2018-04-10/global-debt-at-record-level
Coinbase blocks Wikileaks payments
The censorship resistance of Bitcoin was proven for the first time when Wikileaks started to accept Bitcoin for donations when they got cut off from legacy payment systems like Paypal and creditcard (governments have something to hide?). Last year Wikileaks announced that they made a return of 50.000% on the first received Bitcoins and thanked the US government for this LOL.
Now the censorship is raging on, Coinbase blocked payments to Wikilieaks without any notice or reasoning. Of course this is not more than an inconvenience, Wikileaks will ALWAYS be able to receive Bitcoin when they take the proces in their own hands. Is the 2nd lesson from Wikileaks that we should not use 3rd parties and have to manage our own wallets and store our own private keys? YES!
https://www.newsbtc.com/2018/04/21/largest-bitcoin-brokerage-coinbase-blocks-wikileaks-purchases/
Pantera Capital CEO thinks 6500 was the bottom
The CEO of Pantera Capital said in an interview that he sees a rare buy signal. He said that the price of a fast growing asset like Bitcoin almost never comes below the 200 day moving average, and if it does it is a huge buy signal. I fully agree on this analyse!
Bitcoin is not often used by criminals
An investigation team in Quebec found that only 0.61 percent of the Bitcoin transactions is related to criminal activities. This makes perfect sense since the Bitcoin ledger is public and traceable all the way back to the first transaction.
This figure will probably go down over time, because this investigation was done from 2013 until 2016 when Bitcoin was far from mainstream yet, and criminals are often early adopters of new technologies. Furthermore, more people start to understand that Bitcoin is not fully anonymously especially in the recent years.
When a government claims to regulate Bitcoin because it is used by criminals they are lying, they just want to control you through your money!
Buy orders at highest point since march 2017
The buy demand for Bitcoin is at 90% of all orders at the moment. This is very bullish, it means that 9 out of 10 traders is buying now! The last time it was that high was in march 2017, just a month before Bitcoin broke the all time high of 1300 USD and started a huge bull market of 17X.
http://bitcoinist.com/bitcoin-buy-demand-highest-march-2017/
The Bitcoin price rose a nice 10%
The Bitcoin price rose from 8078 to 8869 this week. There was not so much news, but overall the sentiment was turning more bullish, among investors and technical analysts as well. I love to see the slow rise, are institutional investors positioning themselves for the run to come?
We have seen a nice slow steady rise this week
Fundamentals and valuation
In the history of Bitcoin the multiple was lower than today only 20% of the time. Since the multiple today is 0.9 while the moderate is 1.57, there is 42% 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 has ended 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.
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