Nick’s Note: Like many of our readers, I’ve been a bit frustrated with my crypto portfolio since the start of 2018. After last year’s stellar run, it’s been tough to sit through the current drawdown. So, I called up world-renowned crypto expert and PBRG’s very own Teeka Tiwari to see if my concerns are overblown…
Nick: T, last year I was excited about cryptos. I would check my portfolio every day and update my wife. She thought I was a genius. It was great. But now, cryptos aren’t going anywhere… What’s going on?
Teeka: Nick, I hear this complaint all the time. Right now, your biggest enemy is boredom. And it’s the biggest enemy of every crypto investor. We just need to sit tight and not try to force anything.
Some people are letting the boredom get to them. They’re trading their cryptos to try and make money on short-term price swings. But that’s not what we’re doing.
We’re holding for the long run. All long-term holdings go through cycles. And bitcoin cycles like no other.
Bitcoin goes up… and when it goes down, everyone declares it dead. And right about then, it starts to rebound to new highs.
We’ve gone through this cycle multiple times already. Just look at a chart of bitcoin and you’ll see the cycles we’ve been through.
It’s just another downturn. We’ll see bitcoin rise again soon.
Nick: What makes you so sure that bitcoin and other cryptocurrencies are going higher?
Teeka: I would compare bitcoin now to Microsoft back in the 1990s.
At that time, Microsoft CEO Bill Gates told reporters that someday everyone would have personal computers (PCs) on their desks, and that these PCs would be cheap.
Everyone thought he was nuts. No one could see his vision of the future. But fast forward 10 years, and everyone had a PC. You can get a new computer for a few hundred bucks.
Along the way, Microsoft had a couple of multi-year periods of consolidation. Just look at a chart of Microsoft in the 1980s and ’90s.
In those consolidation periods, Microsoft fell heavy. In the two boxes on the chart, Microsoft experienced 30% drops.
And Microsoft had several other large pullbacks in 1986 and 1991. But it recovered very quickly both times.
We never know how long these pullbacks are going to last. What we want to see is how many people are adopting the technology.
During Microsoft’s pullbacks and consolidations, computer use was growing. Businesses and people were adopting the technology.
Companies were moving to use spreadsheets and databases. Schools started building computer labs. And people used them at home for games and personal organization.
The right move during this time was to hang on to shares of Microsoft. If you had, you’d have turned a $2,000 investment into over $1.2 million.
I’m convinced the next Microsoft will come from the blockchain.
Nick: Yeah, but PCs were really easy to use… and almost instantly improved our lives. Cryptocurrencies still seem to have problems. They’re hard to buy and none of them seem to do anything practical yet. How can you be sure that we’ll see this mass adoption?
Teeka: This is a question a lot of people are asking me. I like to step back and talk about the problems other life-changing technologies had.
Does anyone remember what cell phones were like in the 1980s? People paid thousands of dollars for cell phones. They were so big that you had to carry them around in something resembling a suitcase.
These cell phones also had very limited reception. There weren’t as many towers built out as there are today. So you could have this $2,000 phone with a $200 monthly fee and not be able to make any calls because of limited reception.
Nobody thought that cell phones would become widely adopted. It was just a play toy for the rich.
And does anyone remember what a pain it was to connect to the internet back in the 1990s?
You had to wait while your computer connected to the internet via dial-up modem (with the annoying noises). Half the time, your America Online service didn’t have enough phone lines to make connections. You’d get a busy signal and have to call again.
Then once you connected, you had to wait a minute or two for each web page to load… even longer if there was a picture on the page.
And if some other joker in the house picked up the phone, you’d get kicked off the internet.
It was a disaster. But guess what? Technology evolved. And now both technologies are absolutely essential to our everyday lives.
Cryptocurrencies are no different. It’s tough to use bitcoin for transactions right now. Not many merchants accept it. Fees make small transactions impractical. And it fluctuates too much for a currency.
It’s the same for all the transactional coins right now. But that’s quickly changing. We are seeing more and more adoption around the world.
Nick: So I need to just relax and wait?
Teeka: Yes. My team and I are going through all our positions to make sure the technology continues to evolve. And that adoption is increasing. We’re seeing a lot of that across the board.
The strategy we’re using is to have small positions in many different cryptocurrencies, and to hold tight through times like this. If you do that, you’ll be in position to make outlandish money in the next rally.
It’s just a matter of time until the market catches on. When it does, we’re going to see another explosive move to the upside.
You don’t want to miss that move.
Nick: Thanks, T. You always have a way of putting the crypto market into perspective. I appreciate that.
Nick’s Note: We know that the crypto space is still new and confusing to many investors. That’s why Teeka has partnered with media personality Glenn Beck to create our first-ever Cryptocurrency Master Course.
This course will teach you the ABCs of cryptocurrencies and their underlying blockchain technology. It includes video lessons, instructional guides, downloadable resources, and a free electronic copy of Teeka’s new book on cryptocurrencies, New World Money.
Here’s the good news… If you’re already a Palm Beach Letter subscriber, we’re giving you a free year of access to the course. Just click here and log in with your current PBL username and password.
If you’re not a Palm Beach Letter subscriber, you can learn how to sign up for Teeka Tiwari’s Crypto Master Course—and get a free gift from Teeka and Glenn—right here…
We know there’s a small group of readers who are obsessed with learning more about trading. Maybe you’re a day-trader, or an active paper trader.
But if you’re fascinated by all the secret relationships in stock market, and interested in learning new ways to make money… this is for you.