Last week, I read one of the most bullish announcements for bitcoin and the entire crypto ecosystem… And it was completely ignored by the market.
On April 26, Fidelity said it would allow individuals to invest in bitcoin in their 401(k) investment plans.
Fidelity is the largest U.S. retirement-plan provider. No one comes close.
About 23,000 companies use its retirement plans… and it has more than $11 trillion in assets under management (AUM).
It’s also the first provider to offer this option… So this is big news for bitcoin.
Looking at new-hire demographics… most new employees are either Millennials or Gen Z. This is important because 60% of Millennials and 23 % of Gen Z hold crypto assets.
According to the U.S. Census Bureau, Millennials make up about 22% of the population, and Gen Z makes up 20%. Combined, they’ll eventually account for nearly 50% of the workforce.
So if you’re not paying attention to this demographic cohort, you’re making a mistake.
I’m the father of three Gen Z daughters. And I can tell you without a shadow of a doubt that when they start working… bitcoin will be part of their retirement plans.
When you combine the wave of young workers entering the job market with their comfort with digital assets… you can see why my $500,000 bitcoin price prediction is conservative.
$500,000 Bitcoin Is Only the Beginning
One study from deVere Group, an independent financial advisory, reported that more than two-thirds of millennials prefer bitcoin over gold as a safe-haven asset.
You also might be surprised to learn that nearly 1 in 4 Millennials has saved $100,000 or more.
That’s because the average millennial started saving for retirement at 24. Compare that to baby boomers… who didn’t start saving until 31.
Innovations like auto-enroll 401(k)s and easy-to-use smartphone apps have made saving and investing easier than ever. And unlike the baby boomers, they grew up in the computer age… with tech literally in the palms of their hands.
Digital currency makes more sense to them than physical dollar bills. They don’t even question it.
On top of that… they’ll likely inherit $68 trillion over the next decade from their grandparents’ generation, according to a report by Coldwell Banker Group.
It’s the largest transfer of wealth in history. And in my opinion, a lot of that money will find its way into digital assets like bitcoin.
If even just 10% of that $68 trillion goes into bitcoin (and I think it’ll likely be more)… BTC’s market cap would go up 10x from here. That would be more than $400,000 per bitcoin.
That’s why I consider my $500,000 BTC estimate to be conservative.
Wall Street’s “Greed” Gene
Crypto retirement products will be highly profitable for financial firms because fees on retirement accounts are very sticky.
Let’s say an employee starts saving for retirement at age 23. That person can’t tap into that money until at least age 59½ without incurring taxes and penalties.
So financial firms can charge fees on a retirement account for 36 years like clockwork.
Again and again and again.
Plus, the fees for crypto products will likely be much higher than traditional products like exchange-traded funds (ETFs) and mutual funds.
The average fee (called an expense ratio) on passive funds is about 0.25%. Bitcoin products will likely fetch a 1% fee. That’s four times higher.
Think of what this does to Wall Street’s “greed gene.” It’ll be like a hungry dog eyeing a juicy steak. They just can’t help themselves.
Once they see the money Fidelity makes from its bitcoin retirement plans, they’ll say, “We need our own bitcoin retirement accounts. This market is too valuable to ignore.”
So as I gaze in my crystal ball, I’d say that virtually every major U.S. retirement planner will offer bitcoin 401(k) investment options in about a year.
And if they don’t, I believe workers will say, “No, no, no. You’ve got to change your fund administrator. We want to put bitcoin in our retirement accounts.”
So, we’ll see a push for employers to use 401(k) providers that support bitcoin.
You don’t have to pull the camera back that far to understand how those incentives will work.
That’s why this is wildly bullish for bitcoin… and what’s wildly bullish for bitcoin is wildly bullish for the whole ecosystem.
Once financial firms have a successful bitcoin retirement product, guess what? They’ll offer Ethereum products, DeFi products, DAO products, etc.
That’s the future. Ignore it at your peril.
So for me, as a long-term holder and buyer of bitcoin, this is incredibly bullish.
And it might sound counterintuitive, but I’m actually hoping the stock market weakens further, spilling weakness over into the crypto market.
That’ll give us great prices to buy more bitcoin, Ethereum, and other coins on the cheap. We must use weak market periods to our benefit. They are here to serve us if we have the “eyes” to see it that way.
Weak markets punish weak investors. Like investors who throw money in on a whim without knowing what they’re buying. That’s not us.
We know what we’re buying… Why we’re buying it… And where it’s headed.
Make the market serve you by using this weakness to buy the best assets you can…
Because if market sentiment were positive right now, I believe the Fidelity news would’ve taken bitcoin to a new all-time high.
But because market sentiment is so poor, people can’t see what’s in front of them. In their mind, “Bitcoin’s down… Let’s find something else that’s moving.”
It’s a mistake I’ve seen investors in this space make repeatedly… When incredibly bullish news comes out, the market just yawns.
Then weeks or months later, the market collectively awakens and realizes, “Oh, holy cow, hold on a second. This is a big deal… We need to buy some bitcoin right now.”
Yet by then, it’s too late. The move up has already happened.
So my suggestion is to keep your eye on the market… stay liquid… and be prepared to take advantage of weak prices.
I would love to see $28,000 BTC and $2,000 ETH. As panicked as the world would be with those prices… I’d be dancing a jig and buying more.
Remember, down markets can be your greatest long-term wealth ally if you use them properly. Weak markets are a gift.
Buy the best assets you can when they go on sale. And when sentiment shifts (as it always does), you’ll be positioned to reap huge profits.
Let the Game Come to You!
P.S. Putting $200 each in bitcoin and Ethereum is a good crypto entry point for most investors.
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