This is my first post and I will make it brief and to the point. My main goal here is to explore the steemit site and see if there is an audience for such information. I am a financial professional that manages money for wealthy individuals, and I am one of the few people in my circles that believe in cryptos (and I am generally against the dollar and dollar dominated assets). Yes, I am forced to work in a system that at its core I think is fundamentally flawed, however I feel that I can do a service for clients by making them aware of the rapidly changing paradigm know as cryptocurrancy and how it has affected more traditional "stores of value" such as precious metals and hard assets.
Just to go over the #'s briefly, the total market cap of $BTC recently surpassed 48 Billion when it briefly kissed $3,000, it has recently pulled back in price and at the time off this article it is approx. 43.8 Billion- depending on what site you use to price BTC (which is another large problem with BTC price discovery, as there is still a tremendous amount of arbitrage opportunity on the BTC network between trading platforms, and candidly there shouldn't be if the BTC network worked as it should- meaning that you can send BTC anywhere almost instantly and for a few cents- which we can no longer do). By comparison, the current market cap of the major gold ETF's- (GLD 34.86B & IAU 8.32B as reported on google finance), combine to total 43.18 Billion, a shade under the total market cap of BTC. Now this is but a fraction of the approximate 7.7 Trillion worth of gold that has currently been mined and is in "circulation," however it is the primary means by which anyone who wants to invest in said assets would do so using funds in a brokerage account. Most individual investors don't hold the actual metal or futures contracts on such, they use an ETF or buy the common stock of a gold miner to establish exposure to the commodities' underlying price. By this same logic, one must also include the market cap on the recently insane BTC ETF known as the GBTC, and while this trades at an absurdly stupid premium over the NAV of the actual Bitcoins it holds, it is still the primary if not only means by which one can get Bitcoin exposure through a brokerage account. Yes, you can buy stocks like TXN & AMD given that these are the chips being used in Bitmain's miners, but these are nonetheless not a pure play on BTC. The market cap of GBTC as of this article is 850 Million.
My point simply put, BTC (and other Alts, mainly Etherium), have recently provided substantial competition to traditional "safety/ store of value" investments, mainly precious metals and hard assets. I think it is very likely that if crypto in general sees a correction off of these stratospheric highs, gold ETF's and mining stocks will benefit from such a correction. The funds in the GBTC could easily be moved, other funds in BTC in theory couldn't be immediately invested in metal ETFs- however that being said, most major players who have any substantial exposure to BTC will also have the ability to invest inside of a brokerage account with another source of funds, as we all know, $ is extremely fungible in this day and age, so they could most likely sell BTC and be buying metals at the same time with a different source of funds, while still maintaining their overall desired exposure to alternative assets. Again, the actual movement of those funds into the metals ETF is not what would move the underlying commodity price, those ETF's are not the tail wagging the dog, rather the purchase of the futures contracts as it relates to the overall gold market and it's 7.7 Trillion + is what matters- what I'm saying is that if BTC pulls back 50% like I think it has the potential to do, say to $1500, that environment would not be conducive to portfolio managers buying BTC, and by default I can see those funds and that exposure immediately finding its way to precious metals (and not just gold but silver and as the title of this article suggests, platinum too). The ferver to own BTC over the last few weeks has blinded many institutions and frankly they have lost some interest in precious metals because of such. If today's 15-20% dip in BTC doesn't wake up the new owners of BTC to the risks here, I'm not sure anything will, and then the sell-off that I thought would be 50% could be closer to the measured move of BTC from its peak in 2013 ( just over $1100), to its lows of approx $175 a year later, and that would be almost an 85% decline. While I think this is fairly unlikely, mostly because BTC went from just over $100 to $1100 in a few weeks back in '13, and while this most recent move has also been fairly violent higher, it has by comparison gone from just under $900 a few months ago to kiss $3000 this morning, so a little over a triple in that time (vs. a ten bagger back in 2013)- perhaps we could at least expect to see about 1/3 of the move down that we saw back in '13, so about 28-29% down. Bitfinix quotes this morning topped out at $3003, and bottom ticked at $2284.40, for a peak to trough decline of 24%- while almost getting to our downside target of $2132 (which is 29% off of the $3003 high), the extremely important short term moving Ave (see chart below) provided substantial support at the previously mentioned $2285 level. I still think the $2132 is in play on Bitfinx, which means that Coinbase will probably try to artificially keep the price north of $2250, if looking to convert fiat into BTC and you are using the Coinbase platform to do such, I think your first bullet should be at $2250, and be prepared to buy it systematically to $1500, and should we all get lucky enough to see BTC approach $1,000 again, well that's where you back up the truck- but until then, I think you'd be very wise to move some of those newfound gains in BTC & ETH into GLD or IAU.
For what its worth, I think that 10% exposure to precious metals, alternatives, and hard assets is appropriate in a diversified portfolio, and I think up to 20% of that pie can be allocated to crypto's. Of that 20%, I'd be inclined to put at least 50% if not 75% into BTC, with the remainder being exposed to the Alt's- I absolutely would have zero exposure to Eth at $350 or Ripple at north of .30, both of those have simply gotten out of control. I'd be more inclined to hold some XMR or DASH if I was looking to hedge my BTC exposure with other Alts.
Hopefully this starts a thread or conversation, I'm curious to hear what other fans of crypto and metals think!