Bitcoin, College Savings, etc

I’m going to apologize in advance because this week’s commentary is going to be a hodge-podge grab bag of an article.  First, let’s talk about Bitcoin…

Cryptocurrencies have gone pretty quiet since the huge crash that took place between December and the beginning of February.  The Bitcoin Investment Trust (GBTC) fell more than -73% over this short time period.  Here was a tweet from my Twitter account back on February 3rd

Bitcoin-Tweet Bitcoin, College Savings, etc

Then another Twitter user replied, asking if we’d see another -3-5% before it bottomed, and I replied…

Tweet-Reply Bitcoin, College Savings, etc

Here’s what GBTC looks like today:

  • You can see the old, completed Head & Shoulders pattern, which was obviously a hugely negative sign for the cryptocurrency.
  • Then we can observe price bouncing off the one-year moving average, which is bullish/positive.
  • The long-term trend is still up (as defined by the positively sloping 252EMA), but
    • There is some confusion in the shorter-term trend, and
    • Notice how volume has been falling, which could indicate lack of interest, indecision, or investors waiting for price to breakout or breakdown.

BItcoin-Chart-1024x615 Bitcoin, College Savings, etc

One other thing I’ll point out is the bottom pane in the chart above.  An investment is traditionally considered to be bullish if RSI(14) crosses above 70, which Bitcoin has done several times in the past.  Conversely, an investment is considered to be in bearish territory if RSI(14) crosses below 30.  What I find most interesting about the chart above is that it did NOT cross below 30 during the crash, which keeps Bitcoin in the bullish camp…at least for now.

With that all being said, I wouldn’t want to be a buyer of Bitcoin here.  Aside from the fact that GBTC is merely an investment that tracks a cryptocurrency, which has no backing whatsoever, I would want to see confirmation of higher prices and a stronger uptrend before dipping my toes back into the water here.

Moving onto college savings, this is a quick and simple note.  As part of the state of Ohio’s biennial budget, which was passed thru the Ohio General Assembly last year, the new state tax deduction for College Advantage 529 savings plans just doubled on January 1st – from $2,000 to $4,000 per year, per account holder.

So in the past, we would generally recommend parents contribute $2,000 per year, per child into 529 plans.  In addition, we also shared a strategy that included opening 529 accounts for the parents as well.  For a family of four, this would mean opening a College Advantage account for each of the two kids, and both parents.  Doing so gave the family the ability to contribute ($2,000 X 4) for $8,000 in savings AND tax deductions.  But with the passage of the new state budget, that amount would be doubled to $16,000.

Remember, 529 plans can be transferred to anyone in the family.  So when it’s time for college to start, you would simply transfer your (parents’) accounts into the name(s) of the children.  This new, increased deduction is a huge benefit for parents with college-bound children, especially since it’s so painstakingly difficult to avoid (careful… not “evade!”) state taxes.

Lastly, I’d like to close out by sharing a couple extremely interesting quotes from my long-time mentor Mark Zinder’s Talking Points:

“The percentage of families with more debt than money in the bank is 30.4% – higher now than at any point since 1962.”  ~ ZeroHedge (January 9, 2018)

“About one-third of Americans immediately claim Social Security (income) at 62 and 10% of men retire in the month they turn 62.”  ~ The Wall Street Journal (February 11, 2018)

“Visa processes 150 million transactions per day, averaging roughly 1,700 transactions per second.  On the other hand, Bitcoin can process seven transactions per second.”  ~ (January 14, 2018)

“Cryptocurrencies are a bit like the Kardashians:  You’ve probably heard of them, but you may not really be sure why.”  ~ MarketWatch (January 31, 2018)

That’s all for this week!  We’ve reached the beginning of March, so I’ll be writing more about the market itself, including some commentary on the recent uptick in volatility in the coming days.  Stay tuned!

If you’re interested in getting a 2nd opinion on your retirement plan, please call or email us so that we can confidentially discuss you and/or your company’s situation further.

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Warmest regards,



Categories: Adam Koos, CFP®, CMT®, CEPA, Market Commentary

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