The craze in cryptocurrencies based on sentiment analysis is dangerously close to that of past bubbles such as the dot.com bubble,housing bubble, etc. However there is a notable difference this time; we are in the era of easy money. In other words, for the untrained our eye we are in unchartered waters but for the trained eye the answer is simple and rather obvious. In the era of easy money, bubbles turn into super bubbles and therefore we can quite easily state that this bubble is not ready to pop. A strong correction, is more likely than a crash.

While the masses are quite excited, they are still not in the Euphoric as the Anxiety gauge has not moved into the calm zone; therefore this market still has room to run.

If you are investing in cryptocurrencies, consider spreading your investment across a host of cryptocurrencies. Only invest money you don’t need or can afford to lose.

If you don’t want to invest in Bitcoin directly, you can do so indirectly via the following investment vehicles

GBTC

This is quite a volatile play. If you can’t deal with volatility then consider the second option listed below. One of the advantages with this play is that it’s very liquid which means you can jump in and out of with ease.

ARKW

If you can’t stomach volatility then this option might be better for you.

Final Thoughts

We would wait for the market to pullback before committing new funds to it. Over the short to intermediate time frames Bitcoin is trading in the extremely overbought ranges. This market is begging for a reason to let out some steam.

First published on the Tactical Investor