Investing in Bitcoin may go against the grain – as it is anything but a conventional investment – but sometimes that's what it takes to maximize your returns.
And lately, those who have been investing in Bitcoin despite a string of bad publicity for the digital currency have been rewarded to the tune of a 45% gain in less than a month.
In recent months, we've seen a number of negative Bitcoin stories in the mainstream media, suggesting it was a bubble in the making.
During that period, I have remained one of the few tech analysts to say the Bitcoin market remains not only healthy, but faces a very bright future indeed…
This Showed the Move Early
Consider that on May 7, I wrote that Bitcoin prices had stabilized after a much publicized sell-off. I went on to say the Bitcoin price continued to trade in a narrow band around an average price of $450, indicating a move up was at hand.
How could I be so confident? That's easy. I just studied the charts.
I place a lot of importance on technical analysis for the Bitcoin market. So I'm happy to report that my prediction of a Bitcoin price rally has indeed proved true. Late last week, the digital currency was trading in a band with a value of roughly $650.
That means the average price has soared nearly 45% since I made that prediction. To put it all in perspective, let's take a look at this chart on the left.
You'll see that the price established a new base from late April to mid-May. Then on May 21, the currency broke out in heavy trade. Since that time, it has trended higher with bullish support.
The volume shows heavier trade on up days than on losing sessions, another positive development. And the Bitcoin price has moved above the 50-day and 200-day moving averages, considered key trend lines.
All in all, this is literally the picture of a healthy market and shows us once again why investing in Bitcoin can be a very high-reward proposition.
Then again, the digital currency has also had some help from a number of positive developments in the global Bitcoin industry over the last several weeks…
Big Names Are Lining Up Behind It
For instance, Overstock.com Inc. (Nasdaq: OSTK) Chief Executive Officer Patrick Byrne recently said his company has processed $1.6 million in purchases this year using the digital currency.
What's more, Overstock only started accepting Bitcoin as a form of payment at the beginning of 2014. Thus, if sales continue at the current pace, the company could process some $3.2 million in Bitcoin transactions by the end of the year.
Meanwhile, late last month Bitcoin got a major endorsement from none other than the world's leading central bank, our very own Federal Reserve.
Senior officials advising the Fed noted that "Bitcoin does not present a threat to economic activity by disrupting traditional channels of commerce; rather, it could serve as a boon."
About the Author
Michael A. Robinson is one of the top financial analysts working today. His book "Overdrawn: The Bailout of American Savings" was a prescient look at the anatomy of the nation's S&L crisis, long before the word "bailout" became part of our daily lexicon. He's a Pulitzer Prize-nominated writer and reporter, lauded by the Columbia Journalism Review for his aggressive style. His 30-year track record as a leading tech analyst has garnered him rave reviews, too. Today he is the editor of the monthly tech investing newsletter Nova-X Report as well as Radical Technology Profits, where he covers truly radical technologies – ones that have the power to sweep across the globe and change the very fabric of our lives – and profit opportunities they give rise to. He also explores "what's next" in the tech investing world at Strategic Tech Investor.