Current State of the Market

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There is an increasing amount of concern over the current market. The news is bombarded with stories that Bitcoin has died. Some analysts are comparing the crypto currency market to the Dot Com boom and bust. Individuals on chat rooms are panicking and seeking exit strategies. Other markets appear to be experiencing the same dips.

This is all merely market manipulation to instill fear, uncertainty and doubt in the average investor. Why is this sentiment proliferating? Quite simply because there is billions of dollars in institutional money sitting on the sidelines waiting for entry. We’ve conducted hours of TA on the charts and there is a clear indicator of market manipulation. There are small buying build ups followed by massive dumps equating to hundred-of-millions of dollars. The price is clearly being suppressed so that bulls and institutional investors can get bottom dollar pricing on all crypto before the market presents its next bull run. Bitcoin wants to break out and eventually these institutional investors are going to want to turn a profit. At that time, we’ll see a huge increase in value.

Individuals who bought BTC at $19,000.00 are fleeing the market. Some of these people bought crypto on credit and even took second mortgages on their houses! They fear that they’ve lost their investments and want to stop the pain. This group of “new money” is inexperienced and emotional. The worst thing you can do right now is to sell for a loss because it is only considered a loss if you sell. If you hold, you maintain your position. Those who invest with long term projections in mind, are better off. BTC charts over a one or two-year period will indicate strong growth with +60% retracements. The current state of the market is nothing new.

We’ve seen this same cycle play out three or four times over. There is a large increase in value presenting instability in the charts which is followed by a +60% retracement(s). After everyone has thought that Cryptocurrencies have died, the market comes back to surpass its all-time high. Volatility is typical, and for our fund, welcome.

We've seen many people concerned that they were not deploying capital into the market fast enough; that they may have missed the bull-run. At Apex, we were not interested in deploying your funds into the top of a bull run, so we did not. So where do we all stand? Well, we did not deploy your funds into the market when BTC was at 19K. Our analysis showed that the market run was unsustainable and that a bear dump was coming. Since the end of December (for those who invested prior to January 15th) we have been setting buy levels for every major cryptocurrency/token as they have been declining. You never want to invest one lump sum at the then current value and especially not when it’s booming. We also hold a portion of our portfolio in USD to buy during a downward trend. USD is a fixed, fiat currency. If you trade in BTC when it’s down, it will harm your short term position. After all, BTC will be the first to bounce back because it maintains market dominance. So we have averaged down. We buy the major market caps with fiat in layers as the prices continue to decrease, which improves our dollar/cost average. Being patient is key.

We have also been investing heavily into ICO’s (Initial Coin Offerings). Similar to an IPO, you are able to purchase cryptocurrencies/tokens at bottom dollar, during their initial, pre-public offering. Our average discount on each ICO, due to syndicate relationships, has been between 50%-75% below retail pricing. Several of our ICO investments are doing quite well despite the current market. We think these ICO’s are going to yield huge profits short and long term.

In other good news, the SEC Chairman’s report on cryptocurrencies was released this morning in anticipation of the congressional meeting, scheduled for early next week, to discuss regulating the space.

The Chairman is bullish on cryptocurrencies and suggests that massive new regulation is not needed as current SEC rules both contain the proper testing to discern whether cryptocurrencies/ICO’s qualify as securities and can govern the public and institutional investment into the space. He also cautioned that increased regulation on cryptocurrencies would quell innovation in the space. Instead he suggests that the SEC should focus on standardizing current state regulations on cryptocurrencies and exchange platforms through all-encompassing federal rules which will provide guidance to private and institutional investors such that the space will be allowed to grow at its own pace without heavy US governmental intrusion.

All in all, this administration has shown itself to be quite crypto positive and the SEC’s position will provide greater certainty to those large institutional investors just entering the crypto markets. We anticipate the Republican controlled congress to defer to the Chairman’s positions.

In closing, don’t become too concerned with the short term, downward trend in the current market. Blockchain technology is not going anywhere and Cryptocurrencies/tokens are a necessity to sustain the technology. This is not the first time we’ll experience extreme volatility and it won’t be the last. We are confident that if we stick to the fundamentals, we will have huge success in this industry.

We at Apex Ridge are calm, if not happy about the current deals to be had, despite the concerns by the average investor about state of the market.