Bitcoin: Kintaro Report

Executive Summary

The price of Bitcoin (BTC) has finally started to show signs of positivity following the havoc that happened in early 2018 which saw a massive collapse of Bitcoin price, falling approximately 90% from the highs. This raises two questions to investors: 

1. Is Bitcoin still a viable asset?

2. When will the next bull run be?

We have tried to explain the thinking process in the report in detail as to why we believe a bull run is imminent and the time to enter the market is now.

This summary will give a glimpse of what you can expect in the report as we try to uncover the key aspects relating to fundamentals and price action of Bitcoin over time. Firstly, to address the issue concerning Bitcoin as a store-of-value, we believe that BTC’s Proof-of-Work will ensure that Bitcoin remains a highly secure store-of-value as it still holds more than 90% of the hash power of coins with a similar technological structure. Secondly, with respect to price action (at the time of writing this report), we expect the BTC bull run will strengthen between May 2019 at the earliest and Sep 2019 at the latest.

Finding consensus by analysing 3 major cycles of the Bitcoin/Crypto market from a fundamental, technical and business model perspective makes us believe that we are in the right direction. When analysing all previous BTC price cycles, we identified 3 major BTC market cycles, and currently we are in the 4th cycle. By comparing with the length of the bulls and bears of previous cycles, we deduced that the recent BTC bull run shall consolidate in Sep 2019. By May 2020, another BTC halving shall occur, further accelerating the BTC bulls.

We also compared in detail the BTC bubble in Dec 2017 with the bubble. The BTC bull run would take only 20% of the time it took for the bull run to reach the all-time high of the market. Thus, we estimate that BTC could recover and would surpass its ATH in late 2021. While we argue in April 2019 that the bull run is imminent with a probability of above 80%, we believe that the BTC all-time high (ATH) shall be surpassed by mid to late 2021, unfortunately with a 9-month margin of error in both directions. Having explored these criteria in detail we cautiously predict a 50k price target by 2022-2023.

An interesting observation between the BTC price movements and the halving of BTC suggests that there are more upside potential for BTC during 2020 as all previous halving has led to an acceleration in BTC price.

The technical analysis done using the most popular method in the crypto space, the Network Value to Transactions (NVT) ratio shows that BTC is overvalued at the moment. The growing popularity of fake volumes poses a major threat in understanding the dynamics of BTC prices which is also explored in the report. 

Overall, considering all the observations presented in the report and with the technical supporting the price actions we firmly believe in the value of BTC as an asset class.

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