We can expect bitcoin to begin to trade along other typical stock market patterns, like seasonality, next year, and this chart will be one I use to time any investments into it.
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Last Sunday, Bitcoin, the leading cryptocurrency, gained recognition after the Chicago Board Options Exchange (CBOE) added bitcoin futures contracts for investors to trade it under the symbol XBT and a larger futures market, the Chicago Mercantile Exchange (CME), plans to launch its own bitcoin futures this weekend.
Everyone is talking about it. The buzz around the office this week was moving well beyond typical water cooler talk…
Now that bitcoin is a tradable asset…let’s look at a key characteristic of the currency. When I pull it up in a seasonal trend, a familiar pattern stands out. Take a look:
You can see how bitcoin:
- has a strong rally from the end of January through May.
- Then, it experiences a similar “sell in May and go away” phenomenon that the broader markets exhibit, as it flatlines until November,
- and then we have an end-of-the-year rally.
The above chart will be the one that I use to time any investments into it.
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