Who do you want to pay attention to?
As a person who reads investment newsletters, essays, and opinion pieces… this is a critical question I want you to ask yourself.
You see, it’s easy to get caught up in news headlines when everyone is pushing the same narrative. But does following the crowd really benefit you when it comes to investing?
Sure, the market may react to headlines… But my experience says following these crowds hurts your investments more than it helps.
To really make money in the markets, you need to buy when everyone else hates the very thing they’ll be raving about weeks, months, or even years later.
Here’s why I’m telling you this…
After rocketing up as much as 755% since its March 2020 lows… bitcoin has come crashing down to earth again. That’s created a lot of fear, uncertainty, and doubt around the crypto.
Now, the same people who were tooting bitcoin’s horn just a few months ago when it was the best-performing asset in the world… are now saying the bubble has burst.
Friends, we’ve seen this story before…
Wall Street will jaw down bitcoin… wait for its price to drop… and then scoop it up on the cheap. While the average investor is panic-selling, big investors are buying.
Look, volatility is the price of admission to make life-changing gains in crypto. You won’t see 100x, 1,000x, even 10,000x gains without some big crashes along the way.
Still, I want to tell you why this most recent sell-off is just another short-term bout of volatility. And why the biggest gains from bitcoin (and altcoins) are still to come…
Changing Her Tune
After hitting a record high near $42,000 on January 8, we’ve seen bitcoin drop below $30,000 this week.
Two events have been behind this drop: Treasury Secretary Janet Yellen’s criticism of crypto as “illicit”… and a false story about a bitcoin “double-spend.”
Let’s start with the Yellen first…
Last week, I warned you we’d see short-term volatility in bitcoin’s price after Yellen’s misguided words at her confirmation hearing.
At the time, Yellen said cryptocurrencies are “mainly” used for “illicit” purposes. These comments showed an extreme misunderstanding of cryptos.
Then there was the false story suggesting there was a “double spend” on the bitcoin network… A double spend is when you spend the exact same bitcoin twice. It’s like using the same $20 bill to buy two $20 items. That story was debunked within 24 hours.
Now, both stories played a role in scaring investors out of bitcoin… But Yellen’s comments were much more troublesome.
Investors feared Yellen and her gang at the Treasury would beat the drum on the “bitcoin is for criminals” narrative… and move against it.
This, of course, is nonsense.
A recent report from Chainalysis found less than a half-percent of bitcoin’s transactions were used for nefarious purposes. Let me repeat that… Less than a half-percent.
But here’s what you won’t see in the mainstream press. One day after Yellen made her critical comments about bitcoin, she softened her stance:
I think it’s important we consider the benefits of cryptocurrencies and other digital assets, and the potential they have to improve the efficiency of the financial system.
How many phone calls do you think Yellen got from her Wall Street pals before she made that about-face?
Friends, this is just the Wall Street machine protecting itself. They saw their portfolios drop 28% in less than a week. I worked with these people for decades. So I know them like I know the back of my hand. And I bet they rang Yellen’s phone off the hook.
BlackRock – the world’s largest asset manager with over $7 trillion assets under management – just approved two of their funds to trade bitcoin futures. And just last month, 169-year-old insurance giant MassMutual bought $100 million of bitcoin.
These are some of the biggest financial firms in the world. The men and women who manage them run the global economy. Now that they’re investing big-time in bitcoin… it’s a safe bet they’ll use all of their resources and influence to defend it.
Wall Street will take advantage of this pullback to buy more bitcoin. If appropriate for you, consider buying the dip as well.
The Altcoin Bull Market
I’ve spilled a lot of ink on bitcoin. But know this: What’s good for bitcoin is good for altcoins (all the cryptos other than bitcoin).
Bitcoin is the gateway currency for the entire crypto ecosystem. The same way the market prices global commodities like gold, oil, and cotton in U.S. dollars… the crypto market prices all other altcoins in bitcoin.
The difference is this: The dollar has an inverse relation to commodities.
So when the dollar strengthens, commodity prices drop. And when the dollar weakens, commodity prices rise.
But altcoins move in lockstep with bitcoin. So when bitcoin rises, altcoins explode in price.
Now, there’s a lag between the rise of bitcoin and the rise of altcoins… But every time bitcoin enters a bull market, altcoins eventually follow.
The reason I believe we’ll see the biggest altcoin bull market of our lifetime is because the entire financial system – I’m talking about players like BlackRock, Fidelity, PayPal, and Square – are bringing hundreds of millions of their customers into crypto.
As these new people come into the asset class, they first buy bitcoin, then venture into Ethereum and finally start speculating in the smaller altcoins. I saw the exact same phenomenon play out during the 2017 crypto bull market.
Except back then, it was just individuals piling into crypto. This time around its institutions. They have access to an infinite amount of money. Once they start getting their feet wet in crypto, they will dive headfirst into the altcoins.
This will spark the single-biggest crypto bull market you will ever see in your lifetime
The key to getting rich from this burgeoning boom is to stay rational and don’t panic-sell. Just sit tight and ride the institutional tide of new money higher.
If you can do that, I believe by year end you’ll be sitting on a mountain of life-changing profits.
Let the Game Come to You!
Editor, Palm Beach Daily
P.S. Regular readers know blockchain tech is my No. 1 investment of the decade. If you want to set yourself up for explosive crypto gains in 2021 and beyond, check out my presentation right here.