Weekly Update Diversification Protocol Week 17 - Multiple 0.95 - Undervalued - Long Term Extremely Bullish - 100% In BTC - Living Off Gold
Today is the 5th 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
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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 15.885 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
The civil war worsened
The tension between BTC and BCH proponents increased when the site bitcoin/.com listed BCH as Bitcoin and BTC as Bitcoin Core in the middle of the BCH pump (and probably dump). Since bitcoin/.com is a high ranking site and many newbies come here first, BTC supporters are very angry because this will cause people to buy BCH while they intend to buy BTC. This led to emotional discussions on social media and even crowd funding for a lawsuit.
http://ccbeast.com/lawsuit-from-over-6000-bitcoin-users-against-bitcoin-com-and-ceo-roger-ver/
Mt. Gox coins are moving
This week 16k bitcoins moved from the wallet of the Mt. Gox trustee. The wallets of the trustee are watched very closely by the Bitcoin community, because the recent bear market is (partly) blamed on the recent sale of big amounts of bitcoins to pay the Mt. Gox victims. When the trustee decides to dump more, this could increase the sell pressure and cause new FUD about future dumps.
https://www.coindesk.com/140-million-bitcoin-moved-mt-gox-wallets/
Market dump of 9k Bitcoin
Yesterday 9k Bitcoins were market sold and it hardly effected the market, the sell orders were immediately countered by buy orders. This shows an amazing strength of the currently bullish market and could suggest that the effect will not be too relevant when the Mt. Gox trustee dumps more coins. However, as a secondary effect FUD could appear and this could reverse the bullish sentiment.
The dumped coin were immediately swallowed by the market
Speculation that Bitcoin could overtake gold
This week there was a lot of speculation that Bitcoin could overtake gold after hedge fund manager John Paper said that Bitcoin is better on every front. He also gave a bearish target of 90.000 and a bullish target of 700.000 dollar per Bitcoin.
https://oracletimes.com/bitcoin-is-better-than-gold/
Profit Binance is higher than profit Deutsche Bank
Binance made with 200 million more profit over the first quarter of 2018 than Deutche Bank with 146 million. Since Binance only exist less than one year and Deutche Bank is a well established company with a history of almost one and a half century this is at least remarkable. Also 97.000 employers are working for Deutche, while only 200 people are working for Binance. This shows how explosive the crypto industry is growing!
https://cryptoslate.com/binance-outpacing-deutsche-bank-in-overall-profit-yield/
The Bitcoin price is up again this week
The Bitcoin price rose from 8878 to 9453 dollar this week. Beside Bitcoin also many alts made great returns, EOS even broke the recent all time high and is still rising. The bulls were slowly pushing forward without really important news.
Like last week we have seen slow and steady gains this week
Fundamentals and valuation
In the history of Bitcoin the multiple was lower than today only 23,7% of the time. Since the multiple today is 0.95 while the moderate is 1.57, there is 39,5% 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 could remain 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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Your weekly update information is very important all steem worker
Your post is always different i follow your blog everytime , your post is so helpful . I always inspire of your post on my steem work . Thank you for sharing @michiel
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Very useful if the cryptocurrency of this kind of news which always update by @michael maybe michael is a successful person in my own cryptocurrency happy to see about the graph of cryptocurrency that selale move
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U think bitcoin will overtake gold and I agree that the medium term prospects look very solid. I expect a bullish trend for the next couple of months
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People do not understand the power of blockchain technology and simply choose to ignore it. Those who are interested are often turned away at the complexity of investing in cryptocurrencies. Lots of the exchanges are unheard of, and therefore not trusted, especially seen as many have been hacked before.
I believe one the barriers of entry and general knowledge of blockchain technology increases, then we will see the mass public rushing in. This is likely going to be in 2018, especially seen as global regulators such as the Financial Conduct Authority (FCA) are looking into regulation of this market. Regulation of the market creates a level of trust between cryptocurrencies that is very much needed for public adoption.
Again, I never get tired to say that BTC will be over $39K in the end of this year, and if you want to have predictions in consideration, I think the $1M mark is a good point to start aiming for BTC in some years. It is just too strong, too good and revolutionary, to not reach those values.
Everytime Mt. Gox makes a small move all the market gets very confused, and it is normal considering the amount of BTC they have, compared to the total of BTC available in the market.
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