Although bitcoin price has failed to reclaim the key $60,000 level to return to its previous 4-month trading range, Ikigai Asset Management’s Chief Investment Officer (CIO), Travis Kling, believes the current bearish phase is nothing more than a “bogeyman.” Via X, Kling listed eight reasons to be bullish on Bitcoin. He stated: “NFA. I’m often wrong. The current bearish backdrop seems easier to see through and buy into than most of the scarecrows we’ve had in these markets over the last 6 years.”
#1 Germany’s Rapid Bitcoin Liquidations
Travis Kling notes that Germany has significantly reduced its Bitcoin holdings, from 50,000 BTC to 22,000 BTC in recent weeks. According to him, “Germany is accelerating its #Bitcoin dump.” He predicts that the selling will cease soon, suggesting that “by the time they drop to ~5k, the market will have seen through it.” Kling suggests that the impact of the German Bitcoin liquidation on the market is ephemeral and coming to an end.
#2 Mt. Gox’s Market Impact Overestimated
Kling addressed the potential market effects of Mt. Gox repayments, characterizing fears of a mass sell-off as more speculative than based on likely creditor actions. He stated that “Gox seems more like FUD than an actual mass sell-off (just a guess, but that’s what it looks like).”
He believes that creditors, many of whom are sophisticated investors, will likely methodically sell their holdings, such as through TWAP, thereby reducing the impact on the market. As for retail investors, Kling asked rhetorically: “You held on for a decade when you could have sold ages ago. Now, three months after the halving, you’re just going to aggressively divest?”
#3 US Government Bitcoin Strategy
As for the US government’s Bitcoin sales, Kling emphasized the approach so far. He stated, “But they’ve been pretty measured in their sales so far, so I assume they’ll continue to be pretty measured.” While he admits that the US government sales are “the hardest to get a handle on in terms of pace/method, and their stack is huge,” he says the sales are unlikely to disrupt market stability.
#4 Rise in retail investing through ETFs
Kling noted the surge in retail investment in Bitcoin, particularly through ETFs, following recent price declines. He noted, “You have boomers taking a dippino in BTC ETFs on Friday and Monday.” This trend indicates powerful interest from retail investors in capitalizing on lower prices, suggesting a bullish bias among this segment of investors.
#5 Expectations for Ethereum ETF
In anticipation of the US Ethereum ETF spot, Kling noted that the ETH price remains only slightly below its pre-ETF rumor level, indicating that minimal speculative noise has been priced in. This observation suggests that the market may react positively to the launches.
#6 Interest rate cuts are almost here
Kling also discussed potential Fed rate cuts, noting that the market has priced in a significant probability of that happening in September. He said, “If inflation/jobs data is weak this month, Powell will likely tell the market that September is the live FOMC meeting on July 31st. Nickileaks has already suggested that.”
The fund manager is referring to the Wall Street Journal’s Nick Timiraos, aka “the Fed’s torso.” A few days ago, Timiraos wrote via X that the June jobs report will make the Fed’s July meeting “more interesting” because. “For the first time all year — a real debate on whether to cut at the *next* meeting (in September),” he noted.
#7 Potential Trump Pump
Kling speculated on the impact of the political landscape on Bitcoin, particularly in the context of a potential Trump presidency. Kling asked rhetorically, “What else would you rather own than cryptocurrencies if you ran for Trump?” in reference to the recent pro-Bitcoin and cryptocurrency comments from the leading presidential candidate in the polls.
#8 Bitcoin and Nasdaq Reconnect
Kling pointed out the discrepancy between NASDAQ’s continued modern all-time highs and Bitcoin’s relative underperformance. He noted that “NASDAQ continues to hit new ATH after new ATH. The crypto has completely disconnected from the declines.” He suggests that Bitcoin is undervalued relative to the major market index and is about to embark on a catch-up rally. “You could argue that BTC is lagging QQQ by 40% YTD,” Kling concluded.
At the time of going to press, the BTC price was $59,147.
Featured image created with DALL E, chart from TradingView.com
