“Growth” of $10,000

The speculative forces  that drive Stocks  and  Bitcoin roughly trend together.

The daily S&P 500 (SPX) and Bitcoin in US dollars (BTCUSD) courtesy of Trading View illustrates their relationship.

Both made tops in early 2020 and had crash bottoms March of 2020.  BTCUSD made its all-time high on 11/10/21 the SPX topped on 01/04/22.

October 18, 2021 was an  important day in the short and spectacular history of Bitcoin.

Sometimes  the debut or cancelation of a fund can  signal a major market turn.

A classic example  is  the termination of some Gold Stock mutual funds in 1999. Gold had been in a nearly 20-year bear market since its  all-time high in  January 1980 falling  70%. The public had very little interest in the stocks of Gold  mining  companies causing the closing of some Gold Stock Mutual Funds.

When a  market is  near or at a major top the public interest will be high and  the catalyst for starting  a  fund.      

On 10/18/21 ProShares  launched the Bitcoin Strategy ETF (BITO)  it  was the first U.S. bitcoin-linked ETF offering investors an opportunity to gain exposure to bitcoin returns.

BITO became one of the most heavily traded ETFs in  market history, attracting around $1 billion in assets within a few days. Thomson Reuters  has  been tracking  the performance of BITO.

The chart courtesy of Thomson Reuters illustrates what they label as  “Growth of $10,000”.

It all depends on what you mean by the word “growth”.

If Bitcoin follows the path of previous speculative manias, in one- or two-years  BITO will grow from $10,000 to $900.

BITO start only thee – weeks before the BTCUSD  high is strong evidence that a  Bitcoin  major top was probably made in  November 2021.

It’s also supplemental evidence that the SPX may have made a  major peak in January 2022.

Published by Mark Rivest

Independent investment advisor, trader, and writer. Articles have appeared on Technical Analysis of Stocks and Commodities , Traders.com Advantage, Futuresmag.com, and Finance Magnates.

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