The Crypto-verse is multi-faceted, with several moving parts and just as many active participants in the current Bitcoin phenomenon. Yes, BTC is not the only token that has been rising quickly, but when you take into account that Bitcoin’s share of the market has risen from 50.5% in March to 56.1% at current prices, you would not have to be a genius to realize that BTC is regaining its dominance once more. One sector that has been quiet lately, however, has been the digital asset fund manager group. Travis Kling, CIO of crypto investment firm Ikigai Asset Management, is more bullish than most.
Travis has observed Bitcoin turn a major corner, nearly double in value over the past six weeks, and noted in a recent interview that: “Any…questions that existed in the March/April timeframe about whether or not the crypto market had bottomed and what the chances were that we were going to revisit the lows, essentially all of that is out the window now. It would take some massive risk-off shift for assets globally for us to go retest the lows.” As for his long-term outlook, he characterizes the remainder of 2018 and then 2019, as well, as “really bright”.
As for Bitcoin’s resurgence in crypto dominance, A.T. Kearney, a major global management consulting firm, takes the honor for predicting Bitcoin’s comeback in 2019. Back in December, we reported:
Our prediction that Bitcoin will regain its dominance is supported by the ever-growing complexity among altcoins, most recently demonstrated by the “hash war” that occurred in the Bitcoin Cash ecosystem. Additional “hard forks” and the continued lack of consensus among developers about a path forward will further widen the chasm between Bitcoin, as the most accessible and widely recognized cryptocurrency, and the altcoin community.
Kearney may have been right on the money, but Travis Kling has a different vantage point of the industry and has noticed something that few others have noted in their tweets or public interviews. With the benefit of “20/20” hindsight, he believes the major turning point for Bitcoin and other altcoins occurred when Fed Chairman Jerome Powell and his gang of banking buddies decided to make an abrupt U-turn and turn dovish in late January. Kling’s opinion is that Powell “put the bottom in for crypto markets.” The risk-on green light was suddenly much brighter, and the crypto market was positioned perfectly for a major bull run.
The reality of the Fed’s re-positioning became obvious in early February when Litecoin rocketed forward by 30% in a single day. Bitcoin and the greater altcoin market soon followed, and the rest is history. As for reasons why cryptos rallied with such force in those early February days, Kling remarked:
It is no coincidence that that was nine days after the Fed did their U-turn.
Further evidence of Travis Kling’s innate understanding of the crypto market is that he was once quite successful as a hedge fund manager, but one day he peered into the proverbial mirror and realized that: “The world doesn’t need another hedge fund manager. But the world does need this technology.” An admirer of the hedge fund legend, George Soros, he abides by his theory of “reflexivity” – “higher prices beget higher prices, and lower prices beget lower prices.”
Kling contends that this “reflexivity” mindset applies to cryptos much more so than anyone else has believed to date. The digital asset class is known for its volatility and wild swings and reversals. Even now, the analyst community is abuzz with the notion that a major correction is due, if only a logical response to the meteoric rise that has recently taken place. Kling does not agree. From his perspective, Bitcoin prices react to the “network effect…the more people that use crypto the more valuable it is.”
With the decided ramping up of awareness amongst the public and institutional investors and the several initiatives, i.e., Fidelity, Bakkt, TD Ameritrade, and E*Trade, that will unleash millions of new traders into the mix, it is difficult to counter Kling’s “reflexivity” thinking with a logical argument that holds water. Whatever the case may be, the months ahead will indeed be exciting to watch, as they play out in Crypto-Land.