Bitcoin is up nearly 63% in about a month … where two experts see it going … why waiting to buy isn’t the best idea
63% gains in just over a month …
That’s what Digest readers who acted on our bitcoin trade recommendation on 10/12 are enjoying.
But if you missed the trade, there’s good news …
Our cryptocurrency expert, Matt McCall, believes bitcoin is headed to $40,000 — roughly 115% higher from here.
We’ll circle back to Matt in a moment …
First, let’s look at an even bigger prediction, this one from billionaire cryptocurrency-investor and former hedge-fund manager, Mike Novogratz.
Earlier this week, he called for bitcoin to hit $65,000 … next year.
That would be a gain of about 250% from today’s price.
So, you’ve missed the gains so far?
Well, whether we’re talking $40,000 or $65,000, more gains are coming.
***Novogratz’s prediction came about in an interesting way, and shows why an investment in bitcoin today is still early in the big picture
It began when “Game of Thrones” star Maisie Williams took to Twitter on Monday, polling the ethos on whether she should buy bitcoin.
Novogratz responded, pointing toward the $65,000-mark because of a “network effect” in which there are a ton of new buyers and low supply.
(Matt has highlighted this same supply/demand issue as a major catalyst for gains.)
Here’s the full Twitter-response (typos from Novogratz):
I bought more $BTC last night at 15800. It’s going to 20k and the. To 65 k. The network effect has taken over. I see tons of new buyers and there is very little supply. It’s an easier trade here that at 11k. So YES, buy it.
Now, what’s just as interesting as Novogratz’ prediction are the broader results of Williams’ poll.
With more than 902,000 people responding, a full 53.4% encouraged Williams not to go long bitcoin.
***And that’s good news for bitcoin bulls
Bubbles that pop in painful fashion — such as bitcoin’s own burst after its run in 2017 — tend to inflate upon irrational exuberance.
It’s the fear of missing out that drives people to buy at absurd, nosebleed prices that aren’t supported by fundamentals.
Real, organic growth tends to happen differently.
There are fewer fireworks. More investor doubt, more anxiety.
Yet behind this “wall of worry,” if we look purely at facts, we’d see signs of fundamental strength for the asset.
This is what’s happening with bitcoin today.
Let’s look at just the last few months …
In October, global payments giant PayPal Holdings began allowing customers to buy and sell bitcoin and other cryptocurrencies from their accounts. Bloomberg reports that a full 26 million merchants in PayPal’s network now accept cryptocurrencies.
Also last month, payments player, Square, began holding portions of its cash reserves in bitcoin. It bought 4,709 bitcoins, worth approximately $50 million. This represents about 1% of Square’s total assets as of the end of the second quarter of 2020.
And back in August, Fidelity Investments (with $3.3 trillion in assets) announced the launch of its first bitcoin mutual fund. These are just the latest adoption-dominos to fall in a long progression of similar milestones.
And all of this supports one takeaway …
Bitcoin is gaining strength.
Its cultural awareness is growing. Major investment institutions are buying it, therein further legitimizing it. And the broader macro situation of our global economy is creating the conditions for even more demand in the quarters and years ahead.
So, 53.4% of Williams’ poll respondents don’t think she should buy it?
***Look at the poll results from the other perspective
What if, say, 92% of respondents had said, “Yes! Buy, buy, buy!”
Well, that would have suggested we’re seeing the same mindless greed that fueled the 2017 run-up. While that’s fun to be a part of when you’re already invested and watching your portfolio value grow, it’s also the stuff of bubbles. It rarely accompanies real, sustainable growth.
Here’s a prediction …
When bitcoin actually does hit $40,000 or $65,000, a poll asking “buy or not?” at that point will likely result in a far higher “yes” percentage. Say, 80%+.
And that’s when it will be precisely the wrong time to be initiating an investment.
Not because bitcoin will have peaked at that point (in the long-term, it’s likely headed far higher), but because even within a bull market, moments of irrational exuberance must pop. Froth must give way to pullbacks of 20%, 30%, even 50%+.
But if you’re the “me too” investor who bought in just before such a pullback, or you’re the timid investor who is waiting for proof that bitcoin is here to stay (so you’re also buying closer to that peak instead of today), you’re likely to get shaken out by such volatility — the unfortunate “buying high and selling low.”
***Investing today, when many people are saying “don’t buy” is safer than later, when everyone is on board
It reminds me of a quote from asset manager and chairman of Research Affiliates, Rob Arnott:
In investing, what is comfortable is rarely profitable.
Let’s remind ourselves why bitcoin’s future is so bright.
Frankly, there are many tailwinds we could point toward, but let’s just focus on two — one with a defensive focus, one with an offensive focus.
For defense, all we have to do is look at the amount of debt and fiat currency creation in our nation today, and what it means for the dollar.
In a recent update from Matt to his Ultimate Crypto subscribers, he noted how the U.S. government has already spent an incredible $3 trillion in economic relief related to COVID-19.
And Congress members are currently debating whether to add another $1 trillion, possibly more, for another round of stimulus.
As to how this impacts your wealth, Matt points toward the purchasing power of the consumer dollar in the U.S., as tracked by the Bureau of Labor Statistics.
It hit an all-time low of 38.4 last month.
Here’s Matt with the takeaway:
Please don’t overlook the importance of this.
Inflation is one of the greatest dangers facing those of us saving for retirement. It can massively impair the future buying power of the money you save today …
As government spending continues to grow and the threat of inflation climbs along with it, so does the allure of today’s cryptocurrencies.
Simply put, digital currencies — like bitcoin and other select altcoins — cannot be debased through inflation.
***And what about the offensive reason to own bitcoin today?
Well, it involves the wealth transfer from the Baby Boomers to Millennials, and what that means for bitcoin and altcoins.
Back to Matt:
According to Cerulli Associates and Coldwell Banker, an estimated $68 trillion will be passed down to millennials in the next few decades.
By the end of the Roaring 2020s, millennials will have 5X more wealth than they have today.
Millennials are more inclined to invest in bitcoin, which bodes well for the entire crypto sector.
Over 67% of people between 25 and 44 said they would definitely or probably consider investing in bitcoin. Compare that to only 30% of people aged 55-64.
The future demand for bitcoin and altcoins is basically guaranteed, simply from the transfer of wealth to the younger generation.
Another study from The Tokenist last month agrees with Matt’s conclusion.
It compared attitudes toward bitcoin from 2017, during the bubble, to attitudes today.
From The Tokenist (emphasis mine):
The results are striking.
We found increased knowledge of, and growing confidence in, bitcoin among all age and gender groups surveyed.
This effect was most pronounced in millennial respondents, 45% of whom would now preferentially invest in bitcoin over stocks, real estate and gold.
So, let’s put two and two together …
Millennials are going to inherit 5X times the wealth they have today this decade …
And they prefer bitcoin to stocks, real estate, and gold.
This is basically a roadmap for how bitcoin climbs hundreds of percent, or more, from here.
We know this is coming. And we can position ourselves ahead of it today.
***But for all of bitcoin’s prospective gains, Matt remains even more bullish on elite altcoins
From Matt’s October issue of Ultimate Crypto:
… it is not too late to position yourself for big gains in the future.
As a matter of fact, after pulling back from their highs, most of our altcoins are screaming buys.
About a week and a half ago, we profiled one such altcoin, Chainlink. Matt’s subscribers have already locked gains of 552% on a 1/3rd portion of their LINK position.
Since that Digest, LINK has tacked on roughly 16% as I write. Not bad for less than two weeks.
To learn more about Matt’s Ultimate Crypto service, and which specific altcoins he believes will climb higher than bitcoin, click here.
The bottom line is the bitcoin and elite altcoins are on their way to creating a great deal of wealth for investors. You’re not too late.
Have a good evening,