As a nascent crypto investor, I’ve been eager to learn more about this (for me) novel investment vehicle. I have to confess I don’t know nearly as much as I’d like about the mechanics of the blockchain ecosystem, but I at least know enough to differentiate between, say, tier-1 and tier-2 solutions.

That being said, to some degree, a saavy investor should be able to figure out a strategy for anything. That’s the reason an MBA is considered such a universal degree — the principles being taught in a good program supposedly can apply to a broad spectrum of industries.

Of course, some investors in this space have gotten rekt — you don’t hear their stories so much as notice their absence, of course. Others seem to be doing quite well.

One guy (I’m assuming he’s a guy, as are the majority of people in the crypto space) that seems to be getting it right when it comes to predicting Bitcoin prices is Plan B.

As this article makes clear, his predictions are very popular. He’s got almost 1 million followers on Twitter and I’ve heard his predictions referred to in several articles and on YouTube channels.

The reason for his popularity is clear — he’s been very accurate, at least recently. He called the Bitcoin price of $47K in August and also $43K in September. In terms of future predictions — he’s saying Bitcoin will reach $63K in October, and then go on to $98K in November and then $135K in December.

To be fair, none of these price predictions seem unreasonable based on historic trends, technical analysis, etc. Plan B uses something interesting called the stock-to-flow model. While his flavor of analysis may be different than that of others in the space, his predictions are not outliers.

In fact, compared to some, his predictions seem conservative, making them even more believable. There are people calling for $250K or $300K Bitcoin by the end of the year.

Plan B claims to be a Dutch institutional investor with 25 years of experience in the financial markets.

Does this give him credibility?

Honestly, I have no idea. He could be some kid who made up an identity for himself, for all I know. And that’s neither here nor there. The only thing that matters is how accurate he is and so far he’s doing pretty well.

For me, the bigger question is not how high the price of Bitcoin will be by the end of the year, but rather — are we looking at a blow-off top followed by crypto-winter?

You see, up until recently, institutional investors weren’t all that interested in cryptocurrencies. That has changed. And it’s not just the big firms — countries are now adopting Bitcoin. OK, so far it’s pretty limited, but El Salvador is just the first of what may be many more. Then, we heard recent rumors and then a perhaps-confirmation of a Bitcoin ETF. The SEC is apparently going to approve it?

What does all this mean?

The Chinese character for “crisis” uses two brush strokes. One stands for danger, but the other stands for… opportunity. New technology is often a response to some perceived or real crisis situation, which propels innovators to find solutions.

There is also the real need to balance risk vs. potential reward, which drives the technology adaption lifecycle. Referring to the curve, I believe that 2021 ushered in the move from the early adopter space to the early majority space.

Will this change Bitcoin’s 4-year cycle?

I think it might.

In the past, Bitcoin would have a great run-up after its halving event followed by a crash. These crashes have been huge — in addition to the first crash of 99% (!), there have been a couple of almost 85% crashes.

Bitcoin is not an investment vehicle for the faint-hearted. Or, it hasn’t been…

But with the entry of some institutional investors into the space and the growing interest among pragmatic early majority types, the crazy volatility in the crypto space is going to be dampened, I believe, just as it was dampened for those who invested in the tech markets back in the ’90s.

What does that mean when it comes to investments in this space?

I believe we won’t see the great gains we’ve seen in the past — pretty obvious, right? The flip side of that is I don’t think we’ll see the huge losses either. As Bitcoin approaches closer to a steady-state curve, we’ll see more of a traditional growth curve that is familiar to investors. There will be ups and downs but they will be easier to ride out.

This also means that the Bitcoin 4–year cycle may be on its way out and we’ll start to either see longer cycles or a move from the cycling to a more traditional model.

My personal prediction is that we’ll probably get at least one more 4-year cycle, sort of. I don’t think the eventual blow-off top will be nearly as dramatic and I also don’t think it will happen as quickly as might be predicted based on past Bitcoin performance. I think this latest 4-year cycle is going to be extended at least by a few months.

Of course, I’m not a financial adviser and I am not giving financial advice. You have to do your own research and make your own decisions.

Therefore, the best strategy to prevent you losing your shirt if you are investing in this space — take profits on the way up.

I think it’s highly likely that Bitcoin will reach 6 figures by the end of the year. Start cashing in at that point, gradually.

This, by the way, is not the strategy I followed when I invested in tech stocks in the ’90s. But, at the time, I was working on graduate degrees in technology (optics and WDM networks) and I was intimately familiar with the space. So I was able to quickly and effectively evaluate tech stocks in that area without needing to do a lot of research or additional analysis. I had a very high (over 90%) hit rate, so I could ride the waves and cash out.

I would not do this right now, personally, since, as I’ve admitted, I’m still learning about the crypto-space. Instead, I’m following a more conservative strategy. It may not get me the higher rewards but it also reduces my risk.

If you are an expert in the crypto space, you can take more risks. You’ll get your Lambo while I’m still driving a Honda.

If you can’t sleep at night if your portfolio goes down by 2%, then do NOT invest in crypto. Even with the entry of the early majority into this space, it’s still super volatile. If you wait, you will miss out on some of the profits but you won’t ruin your health…