Just when you thought cryptocurrencies had bottomed out, the market was hit by yet another crash last week. Bitcoin’s value plummeted 14% in under 24 hours last week, dropping to below $5k, a new low for the cryptocurrency in over a year.
In fact, this has been one of the biggest bear market crashes in the history of Bitcoin. In a period of about 300 days, Bitcoin has slumped over 80% from $19.6k to about $3.7k. Back in 2011, the cryptocurrency nosedived almost 97% to $2.2, shedding nearly all its value.
Marius Kramer, touted as a cryptocurrency expert, highlighted that the correction could be triggered by investors who entered the market at below $5k, liquidating their investments in the cryptocurrency to avoid losing their initial investment – eventually driving its price down further.
Why is Bitcoin plummeting?
Despite critics, Kramer claims that the recent pullback was engineered by crypto whales who manipulate prices regularly. They have driven the crypto market lower, where the Bitcoin reached a 14-month low of $3.5k.
The speculative movements in the cryptocurrency market may result in significant losses for investors and could cause the market to tank. Most often, crypto whales use this move to re-enter the market at a much cheaper price.
Despite the catastrophic crypto developments of late, Kramer claims the downturn is simply the calm before the storm.
According to Kramer, Bitcoin might touch $50k by the end of the next bull run, estimated to be six months away. “I predict the bull market to start in late September, reaching a Bitcoin price of $20,000 throughout October, November and reach its peak of $50,000-$100,000 in December, January or even $150,000 with a bit of luck,” he wrote.
Bitcoin has risen by an average of 17x in every bull run. With the cryptocurrency trading at $4k per coin, a 17X return — the price might touch $68k. However, with the next bull run at least six months away, the market might well be choppy heading into the end of 2018.
Bitcoin price prediction
Crypto experts believe that the next rally will begin around Jan. 24, 2019, which is the estimated launch date of BAKKT – a trading platform for digital assets that is set to be launched by NYSE owner, Intercontinental Exchange (ICE).
Kramer expects Bitcoin’s price to rise to $10k around this time. He has also predicted a pullback to around $6k shortly after its rise.
Here’s a timeline of Kramer’s forecast for the cryptocurrency.
- November 2018: Bitcoin will move back and forth between $4k and $4.8k
- December. 2018: Price will touch $6k by Dec.10 and $8k by end of 2018.
- January 2019: Price picks up momentum with the upcoming BAKKT launch and reaches $12k by Jan. 24. It then gets dumped to $8k
- February and March 2019: Price bounces between $8k and $10k
- April 2019: Price crosses $12k again
- May-December 2019: Price may touch an all-time high and reach $50k with several blockchain and tokens showing users numerous technology applications.
Early Uber Investor: ‘I’m Happy With Uber’s Poor IPO’
Lance Armstrong may not have gotten his $3B on his $100K investment, but his $100K still got a proper HGH/steroid boost.
And despite the rough outing, early investor Mitchell Green says he’s happy with the current IPO price—despite falling WAY south of its initially rumored $120B level.
And no, it’s not the Mitch Green, the one who got into a street fight with Mike Tyson.
Uber rich Mitch Green looks like this:
Anyway. Green says he’s happy with the current pricing. Check out the video to see why.
‘Going Public’: IPO, Explained
It’s a buzzword we hear constantly—and one that’s sure to generate tons of headlines. Alibaba had the largest in history (before its billionaire founder decided he wanted to quit to be a grade school teacher.)
Lyft IPO’d recently also, beating arch rival Uber to the proverbial punch.
Other than being a buzzword and a big story, what exactly is an IPO?! Well, let’s break it down.
What is an IPO?!
In technical terms, an Initial Public Offering (IPO) is the first sale of stock issued by a company to the public. In other words, this is the moment when a private company goes “public” by offering its shares for sale to the public.
So when a company does go public, the valuation usually spikes dramatically—and the company can now use the funds from the sale of shares to feed the business. It’s a fabulous funding source for a company.
Before that, what is a company?
Prior to going public, a company is a privately-owned firm. Obviously. The company initially attracts investments or seed capital from the co-founder, friends, and families.
Business investors such as venture capitalists, private equity companies and angel investors pump in money if they are optimistic about long-term prospects and sustainability of the company.
On the flip side of things, you sometimes have companies that decide to go “private,” like Elon Musk said he wanted to do with Tesla.
Why does a company opt for an IPO?
The biggest advantage for a publicly listed company is access to capital. This capital can be used to purchase machinery, fund research and development or pay off any existing debt.
The firm will then be listed on a public exchange and provides an exit route for business investors and founders.
When Facebook went public, Mark Zuckerberg sold 30M shares worth $1.1B. An IPO is the most common way for investors and VCs to make a significant return on their investment. In fact, it’s considered the ultimate exit for founders.
How much capital do the companies get?
Let’s run down the list.
Top tech unicorns such as Uber, Slack, and Airbnb are on course to file for an IPO over the next 18 months.
The company that is looking to go public hires an investment bank to underwriting the IPO process. Investment banks can either work together or individually in this process.
What do the investment bankers do?
In other words, all the boring admin stuff. In exchange for this, they collect a nice fat fee, usually anywhere from 4-7% of gross proceeds.
Those involved hold several meetings to finalize the IPO process and determine the timing of the filing. Once this is wrapped up, they shift to performing the due diligence to ensure the company’s registration statements are accurate.
The due diligence tasks include market due diligence, legal and IP due diligence, financial and tax due diligence. At the end of this process, the companies then file for an S-1 Registration Statement.
The S-1 is usually what tips off the press and the public that a company is about to go, well, public.
And what’s the S-1?
The S-1 statement includes information about the companies’ historical financial statements, company overview, risk factors, and other critical data.
A pre-IPO analyst meeting is then held post the S-1 Registration Statement to educate analysts and bankers about the company.
A preliminary prospectus can also be drafted at this stage. The underwriting investment bank conducts pre-marketing to determine the interest of institutional investors and the price they are willing to pay per share.
Now you’re ready to go public
The price range for an IPO is set and the S-1 Registration Statement is amended with the price range. The company’s management organizes road shows and marketing activities to generate interest for the upcoming IPO.
Based on investor interest, the price range per share can be revised. The investors will apply for company shares and this application window is open for generally 2-4 days. The company shares can be oversubscribed or undersubscribed.
Once the IPO is priced, the investment banks will allocate shares to investors where the stock will now be available for trading in the secondary market.
At this point, a company is now ready to go public. Here’s how people usually look when that happens.
Congrats. You’re now an IPO expert.
[VIDEO] Penny Stocks, Explained
Penny stocks are equity investments that are traded outside major exchanges. These stocks are traded at low prices and have a small market cap. As penny stocks are illiquid and highly speculative, they carry a high risk of investment.
The US Securities and Exchange Commission (or SEC) defines penny stocks as shares with a value of less than $5. Typically, a penny stock is traded over the counter or by using pink sheets.
Despite the high risks of investment, penny stocks can be a lucrative form of investment because of its low price and higher prospects of return.
Suitable for investors with a high-risk tolerance
Investing in equity markets is risky, particularly because it’s driven by price fluctuations and volatility. Investors in penny stocks will generally have a higher threshold of risk tolerance. Penny stocks are far more volatile than blue-chip stocks.
Investors hence need to take precautions while investing in penny stocks. They need to have a stop-loss order prior to entering into a trade. This will minimize the amount of downside potential in case the markets move in the opposite direction.
Penny stocks also provide an opportunity for significant companies. These companies are generally high-growth ones but with limited cash resources.
Why are penny stocks attractive to the average retail investor?
Generally, the average retail investor associates a low price stock as a bargain. But this cannot be farther from the truth. A stock can be overvalued at $1 and can be undervalued at $250.
The average investor fails to understand this due to limited investing knowledge. Penny stocks are trading at lower values for a reason. They might experience a bull run resulting in a significant price appreciation but can also come crashing down in no time. It is far easier to manipulate penny stocks.
The “Caveat Emptor” principle should be applied when investing in penny stocks. Sure, there are success stories even for penny stock investors, but is worth the risk?