While Bitcoin has yet to reclaim the crucial $60,000 level to re-enter its previous 4-month trading range, Ikigai Asset Management’s chief investment officer, Travis Kling, believes the current bearish phase is nothing more than “scary.” Via X, Kling amphitheater Eight Reasons to Be Bullish on Bitcoin “I’m often wrong,” he said. “The current ‘bearish’ backdrop seems easier to look at and buy than most of the bad guys we’ve had in these markets over the past six years.”
#1 Fast Bitcoin Liquidations by Germany
Travis Kling notes that Germany has significantly reduced its Bitcoin holdings, from 50,000 BTC to 22,000 BTC in recent weeks. According to him, “Germany is selling Bitcoin too fast.” He expects the selling to stop soon, noting that “by the time it drops to around 5,000, the market will ignore it.” Kling notes that the impact of Germany’s Bitcoin liquidation on the market is temporary and coming to an end.
#2 Mt. Gox’s Exaggerated Market Impact
Kling addressed the potential market implications of Mt. Gox’s loan repayments, describing the fear of a massive sell-off as more speculative than based on potential creditor actions. “Gox seems more like fear, doubt, and suspicion than an actual mass sell-off (just a guess, but it seems that way),” he said.
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He believes that creditors, many of whom are sophisticated investors, are likely to sell their holdings in a systematic manner, for example through TWAPs, thus minimizing the impact on the market. Regarding individual investors, Kling asked a rhetorical question, “You’ve held on for a decade when you could have sold years ago. Are you going to dump them aggressively now, three months after the halving?”
#3 US Government Strategy on Bitcoin
Regarding the US government’s bitcoin sales, Kling emphasized the measured approach they have taken so far. “But they’ve been very measured in their sales so far, so I assume they’ll continue to do so,” he said. While he admits that the US government’s sale is “the hardest to figure out in terms of speed/method, and the pool is huge,” he argues that the sale is unlikely to disrupt the market.
#4 Boosting Retail Investing Through ETFs
Kling highlighted the surge in Bitcoin investment by individuals, particularly through ETFs, following recent price declines. “There are baby boomers drinking Diprino in Bitcoin ETFs on Fridays and Mondays,” he said. This trend indicates strong interest from individual investors in taking advantage of lower prices, indicating bullish sentiment among this segment of investors.
#5 Ethereum ETF Predictions
With the US ETFs looking ahead to Ethereum, Kling noted that the price of Ethereum is still slightly below where it was before the ETF rumors emerged, suggesting that there has been little speculation in pricing. This observation suggests that the market may react positively to the launches.
#6 Interest Rate Cuts Are Coming
Kling also discussed the possibility of a future Fed rate cut, noting that the market has priced in a high probability of such an event in September. “If inflation/employment data is soft this month, Powell will likely tell the market that September is a live FOMC meeting on July 31. Nikileaks has already flagged this,” he said.
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The fund manager points to Nick Timeraos of the Wall Street Journal, also known as the “Fed mouthpiece.” A few days ago, Timeraos wrote on X that the June jobs report will make the Fed’s July meeting “more interesting” because “for the first time all year — a real debate about whether to cut rates at the *next* meeting (in September),” he noted.
#7 Possible Trump Pump
Kling speculated about the political landscape’s impact on Bitcoin, especially under a potential Trump presidency. Kling asked a rhetorical question, “What would you rather own other than cryptocurrencies under a Trump presidency?” in relation to the latest pro-Bitcoin and cryptocurrency comments made by the leading presidential candidate in the polls.
#8 Bitcoin and Nasdaq Reconnect
Kling points to the disparity between the Nasdaq’s continued new highs and Bitcoin’s relatively weak performance. “The Nasdaq keeps making new record high after new record high. Crypto has completely detached from the downside,” he notes. He suggests that Bitcoin is undervalued relative to the major market index and will soon start to rally. “You could say Bitcoin is lagging QQQ by 40% so far,” Kling concludes.
At the time of publishing this report, BTC was trading at $59,147.
Featured image created using DALL E, chart from TradingView.com
