Returns One Can Only Dream Of

When I heard about Bitcoin for the very first time in May of 2011, it traded at eight US dollars.

As I write this, almost exactly six years later on May 20 2017, it has broken through the USD 2,000 barrier for the first time [ed. note: since then it has streaked even higher].

 

Bitcoin, daily: just four trading days after breaking through the USD 2,000 level, Bitcoin reached a peak of USD 2,760 – click to enlarge.

 

If I had invested USD 1,000 when I first became aware of it, I would have made a profit of USD 250,000 – the kind of return one can normally only dream of!

Consider though that prior to that juncture, the price had already increased by a factor of 160 within just a few months, as it stood at a mere 5 cents in July 2010.

USD 1,000 invested at that time would have become USD 40 million in less than seven years!

 

Bitcoin Exhibits a Pronounced Phase of Weakness in the Summer

In view of such staggering gains, many investors are probably wondering whether they should sell their Bitcoin.

Let us take a look at what the seasonal statistics have to say about that.

The chart below depicts the average price pattern of Bitcoin over the course of a year. The horizontal axis denotes the time of the year, the vertical axis the level of the seasonal index (i.e., the average value of Bitcoin indexed to 100 at the beginning of the year).

 

Bitcoin, seasonal price pattern over the past 7 years: From June 8 onward, a seasonal downtrend commences.

Source: Seasonax

 

As you can see, the price of Bitcoin does tend to fall prey to the summer doldrums: in the period highlighted in dark blue from June 8 to October 6, it enters a pronounced seasonal downtrend.

 

Optimal Seasonal Time Periods in Bitcoin

The average price loss between June 8 and October 6 over the past seven years was 22.18 percent. That is  equivalent to a relatively high 55.23 percent annualized.

Just how weak this phase is becomes even more obvious if one compares it to the seasonally strong time period: Bitcoin conversely rose by an average of 494.74 percent between October 6 and June 8. On an annualized basis this is equivalent to a stunning profit of 1,326.86 percent!

 

From a Seasonal Perspective, it is Time to Sell

In the weak seasonal period highlighted above, losses were recorded in three of the seven years since 2010. These losses reached up to 60.46 percent – in short, the risk is quite substantial.

Thus, from a seasonal perspective, it is now time to sell Bitcoin. Performance in the summer months was to date particularly poor relative to the rest of the year, during which Bitcoin on average delivered extremely strong performance.

PS: Charts showing the seasonality of many other financial instruments are available at my web site www.seasonalcharts.com at no cost.  Alternatively, if you have access to Bloomberg or Thomson-Reuters, you can also use the Seasonax app.

 

Charts by: CryptoWatch, Seasonax

 

Addendum: The Seasonax App Special

Dear Readers,

We are able to offer a special treat for those of you with access to either a Bloomberg Terminal or the Thomson-Reuters Eikon software. Seasonax currently has a special offer for new subscribers: in addition to a free one month trial, one currently gets a three month money back guarantee as well. In other words, there is nothing to lose, and one gets more than enough time to test the app extensively. If you realize after a few months that it is not for you, it won’t cost you anything – you just wave good-bye with a single email. Of course, chances are that most of you who try the app won’t want to do without it anymore –  not least because you will very likely find out that it pays for itself very quickly – a single trade may well be all it takes.

As you probably know, we are a bit like Hydra – our agents are everywhere, and we know everyone and everything – the “Even Deeper State”, so to speak. So it should be no surprise to you that if you place an order for the app through Acting Man, you will qualify for an additional life-time discount that is at this time only available through us. Details are available on request at info@acting-man.com  (please write “Seasonax” in the subject line).

 

Dimitri Speck specializes in pattern recognition and trading systems development. He founded Seasonax and publishes the website www.SeasonalCharts.com, which features free-of-charge seasonal charts for interested investors. In his book The Gold Cartel (published by Palgrave Macmillan, see link on the right hand side), commodities expert Dimitri Speck discusses gold price manipulation and modern-day credit excess. His commodities trading strategy Stay-C has won awards all over Europe. He is the publisher of the web site Seasonal Charts as well as of the Bloomberg app Seasonax and Head Analyst of the 90 Tage Trader Letter.

 

 
 

 
 

Dear Readers!

You may have noticed that our so-called “semiannual” funding drive, which started sometime in the summer if memory serves, has seamlessly segued into the winter. In fact, the year is almost over! We assure you this is not merely evidence of our chutzpa; rather, it is indicative of the fact that ad income still needs to be supplemented in order to support upkeep of the site. Naturally, the traditional benefits that can be spontaneously triggered by donations to this site remain operative regardless of the season - ranging from a boost to general well-being/happiness (inter alia featuring improved sleep & appetite), children including you in their songs, up to the likely allotment of privileges in the afterlife, etc., etc., but the Christmas season is probably an especially propitious time to cross our palms with silver. A special thank you to all readers who have already chipped in, your generosity is greatly appreciated. Regardless of that, we are honored by everybody's readership and hope we have managed to add a little value to your life.

   

Bitcoin address: 1DRkVzUmkGaz9xAP81us86zzxh5VMEhNke

   
 

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