It’s a long term chart of the S&P 500 which is either painting a double top or a cup and handle. If you’ve been paying any attention at all to stocks, you’ll know that it’s starting to look like a cup and handle. This gives the S&P a target of anywhere between 5200 and 5600 depending on your TA.
This begs the question of what the catalyst for this kind of blow off top would be. The most obvious answer is something related to interest rates, such as the Fed announcing that it’s going to start cutting. The thing is that the markets seem to have priced in most of these cuts already. In other words, the market is already pricing in lower interest rates.
Assuming this is the case (which is up for debate), then it means there needs to be some other catalyst that would take the S&P into a mania phase. As with crypto, stocks are also driven heavily by narrative, and the biggest narrative over the last year has been AI. You could say that the AI craze is analogous to the spot Bitcoin ETF hype in crypto.
Of course, it’s possible that the catalyst that takes the S&P into a mania phase is another AI related development, but I reckon this has likewise been mostly priced in by the markets. As such, it needs a similar kind of catalyst – a powerful narrative that’s tech focused, implies exponential growth, etc. I think that narrative is quantum computing.
To be clear, I have no concrete evidence of this, but I have come across A LOT of circumstantial evidence to suggest this is the case during my research. For example, Microsoft CEO Satya Nadella mentioned at the World Economic Forum that the company is starting to become obsessed with quantum computing and wants to expand there.
I’ve also seen lots of articles about quantum computing in my daily review of crypto and non-crypto news. One article that comes to mind was recently published by CoinTelegraph. It was about report which found that quantum computing investment was down in 2023 due to AI distracting VCs, but that this is expected to change in 2024.
Notably, the report also found that there have been significant advancements despite this ‘quantum winter’. It sounds eerily similar to the narrative in the AI industry prior to the release of ChatGPT. Like quantum computing, AI has been around for a long time, and lots of developments had been made in the years leading up to the release of ChatGPT.
It’s possible that quantum computing is going to have it’s ChatGPT moment over the next year or two. That’s why I’ve decided to sprinkle just a little bit of dry powder into a series of low cap quantum computing related cryptos. To be clear, I haven’t done any in-depth research into any of these projects. It’s purely a narrative play, kind of like memecoins.
The four I’ve picked up are Quantum Resistant Ledger, Cellframe, Amechain, and Project Quantum, which is apparently a crypto game, but it’s a micro cap that has the ticker ‘QBIT’. I’ll reiterate that I haven’t done any in-depth research into these projects, and the allocations are incredible small (less than 100 dollars each). So, why take the gamble?
Well, some of you will recall that any crypto that was even tangentially related to AI exploded in value during the AI craze last year. I suspect we’ll see the same thing with quantum computing, if it becomes the next big narrative. It goes without saying that I can’t predict the future, so I don’t know if it will be, but it’s a very viable candidate.