I was never really bearish, but never completely bullish on bitcoin either — until now.
What made me convert?
Old Stance, Same Stance
So I had a fairly unique outlook on bitcoin and cryptocurrency in general, and I still hold these beliefs to this day. If you want the video version and you have some time to kill, you can see all about it below.
In a nutshell, I feel the blockchain is an absolute game changer and will be heavily used this decade, and beyond. I know quantum computing is a challenger to this notion, but when it comes to quantum computing, it’s no different than my thoughts on mining gold on asteroids.
Great idea I suppose, but we’re a long ways away, and probably longer than you think we are.
Problem is, the blockchain is out there for anyone to copy and use. This presents a problem for the people who think this current iteration of cryptocurrencies are going to be the face of money going forward.
There is no way governments would ever allow it. If you control the energy (oil/gas/nuclear), and you control the money, you control everything.
“Okay Bitcoin, in all fairness, you were here first. Go ahead and be the anti-government form of currency from now on” ….says no government ever.
There is no way in hell governments are going to leave quadrillions of dollars in money and control on the table like that.
Even with Bitcoin and other cryptos working with governments to become more regulated, this will not change human behavior and the desire for power.
Vladimir Putin understands all of this very well, and in my opinion no other world leader has done more to position themselves for world supremacy going forward. He has been one of the first to outlaw these current versions of cryptocurrency.
The Russia Story
I knew it was going to happen, just not this soon! Russia has gone full nuclear on crypto. To hell with formalities.
Story can be found here.
This is being brought up to Russian Parliament, and unlike the US, there’s very little debate over whether or not this ruling violates people’s liberties. If it’s brought up, I’d bet money it’s going to pass.
So buying crypto in Russia will not be allowed at all, and furthermore (the real scary part) is if you currently live there and have some, you are forced to report it and then show how you obtained it. After the fact!! Mafia/pimp shit.
I mean, why cloak your overall intentions, when you can just put them out there for all to see? Complete control of your money is not far away.
But say what you want about the other VP, it’s hard not to acknowledge a great strategist when you see one. Giving a rat’s balls about what your citizens actually want only hinders you from achieving your overall goal. And when you’re the best chess player in the room, it’s to your benefit to give yourself as clear of a path as possible.
This current bill may be on the more harsh and direct side of judgments coming down from the powers that be, but the upside for them is too great to ignore. The sooner the better, and Russia is getting ahead of it.
This current iteration of cryptocurrencies needs to be phased out eventually anyway, so governments can create their own versions, and allow their power and wealth to increase.
EDIT: As of 7/22/20, a new bill has been presented in Russia, taking what appears to be a much softer stance on crypto. However, if you read the article, it’s painfully obvious what they’re trying to do. The old version banned it altogether, making it so Russia would not be able to collect the billions of rubles which could be made by taxing the trading and holding of crypto.
But you still can’t SPEND crypto there, this would mean the government has to reliquish a bit of control over the money system — can’t have that. Russia will still be able to have its cake and eat it too, when they roll out their own version of FedCoin. It’s pretty brilliant, making it appear like you’re there for your people, while making copious amounts of taxes without having to work for it at all.
So yes, despite all of this, if anyone cares, I have gone from neutral to quite bullish on Bitcoin in particular.
I said I was overall bullish on crypto in the video, and my reasons for this still stand. The main reason was just like asteroid gold, I think there is going to be a good ten years or so before we move into a blockchain based monetary system, controlled by governments.
And a lot can happen in that time. If we can profit off of it and/or protect our wealth these next ten years while the current iterations of crypto exist, then we should do that. Many people already have.
Regardless of your own opinions about the future of crypto, the upside/downside potential is too great to ignore.
For the pessimist crowd, you’re going to ignore the insane upside potential, just because you are utterly certain your bearish predictions are correct? And people call me arrogant. You’re going to need to be a bit more fluid going forward.
For example, I’m long the US stock market right now, even though I’m a card-carrying bear in the long-term. I’m not where I’d truly love to be position-wise, but I don’t question my trading system, and I know there’s a chance (small as it may be), that I’m wrong about all of this going forward.
“I’d rather be profitable than right” was what the head of my prop firm would always say. Not sure where he got it from, but damned if it aint true.
Everything I have predicted in this blog post so far may not happen, or may not happen anywhere close to the way I expect. But the upside/downside ratio here with crypto is crazy lopsided, and I want in.
I’m already in, as most of my viewers already know. To date, I own BTC, ETH, LTC, ETC, XRP, CRO, LINK, ZIL, and USDC (updated 8/2020). Please do not tell me what else I should own, I don’t care, this is what I’m riding with for now.
I have gone out and bought more Bitcoin however, and these are my reasons why…
Better Than Ever
I think penny stocks are generally a terrible investment. This was the environment I was in for about a year, so I feel like I can speak on this.
Mining stocks however, are often a great investment, although many of them do fall into the “penny stock” category.
How can this be?
Mining stocks have something called an undercurrent — something beneath them which can often make the entire stock rise, so long as the undercurrent is rising. This is a tremendous and game-changing advantage.
Is the price of silver rising? Well, then there’s a good chance silver mining stocks are rising too. If silver goes up a lot, silver mining stocks often skyrocket.
Silver can only go up or down. On top of this, you can use technical and fundamental analysis to better figure out if and when this is happening.
So these undercurrents can take your everyday penny stock from nothing more than a sad lottery play, into something which gives you a realistic long-term advantage.
I cannot express the importance of these undercurrents enough.
Bitcoin now, in my opinion, has several undercurrents providing rising support for the overall price long-term. Let’s point them out and go over them.
The Wild West days of Bitcoin seem to be in the rear view mirror, finally.
The concern about exchanges collapsing and your money going with it have been quelled for now. Mt Gox, to my knowledge, was the only exchange out of hundreds to ever fall apart, and most people have either already forgotten about Mt Gox, or never knew about it in the first place.
The tulip madness of 2018 has also come and gone, but unlike tulips, Bitcoin recovered from the following crash, and has slowly been gaining real ground.
If a similar type of run happened in gold, you’d bet your ass the gold-bugs would be putting a very positive spin on it. It’s no different here. Just go look at a chart. For legal purposes, I don’t have any good charts I can take and post right here, but finding a BTC/USD chart takes seconds.
Secondly, and I think people don’t value the importance of this enough — the shitcoin ICO madness has passed as well. This was a huge black eye on the crypto space as the bearish old money crowd all pointed and laughed as hopeful investors got completely wiped out every single time.
But it’s 2020, and Bitcoin has endured. It survived the insane rise, the subsequent fall, and many of the opportunistic scams which plagued its reputation for years.
Every time you think it’s been beaten down, it not only gets back up — it gets stronger. I’m impressed.
As are others.
You can sit here and talk about dApps, nodes, and Mimblewimble all day. In the end, nobody really gives a fuck about any of that, except for the super crypto nerds, and most of them don’t have an influential amount of money.
But do you know who does? Hedge funds. And Main Street funds like pensions, 401Ks, mutual funds, and retirement plans. This is where the real Wall Street money sits.
With the exception of a few of the wilder hedge funds, none of these institutions were touching Bitcoin. It was seen as too risky, something which had not yet proven itself in terms of enduring all of the bugaboos something new like this would be expected to have.
Remember, most financial advisors have one objective in mind — to not get fired. They can under-perform all day, and usually do. But if they’re not losing their client’s money, they’re generally fine and can keep taking their fees and commissions.
This lifestyle could all go south in a hurry if they recommended and utilized Bitcoin in their portfolios, and Bitcoin ended up crashing. The monetary, and even more so the reputation hit, can ruin a career. It was better off just to avoid it.
So the answer to the juvenile and borderline mentally-ill question, “When moon?” is simple — when the real money gets involved, and not a second before.
And the real money is finally coming on board.
No more speculation, no more possibility, it’s officially here, and more is coming.
We are seeing real adoption of BTC in these funds. All we needed was a start, and we are finally seeing it.
But these funds needed somebody else to guinea-pig the whole thing out first, so they weren’t the ones taking on the initial risk. Grayscale Bitcoin Trust was one of the first to step up.
Now Grayscale hasn’t made any of its investors rich so far, but much more importantly what is also didn’t do was fall on its face. It endured. This pleases the other firms and funds, and this was one of the huge hurdles out there for overall acceptance.
What also helped was having a big-time investor publicly come out and say he now owns Bitcoin. The investment world often waits for a big name to come in first. Paul Tudor Jones recently came out saying how he now has 2% of his portfolio in Bitcoin.
We’ll go into the main reason why he did this in a bit, but the fact remains, big names are now in it, and a lot of people who were waiting for others to take the risk first, now have what they were looking for.
I’ve been a bit harsh on the Altcoin Daily YouTube channel (only in my head though, I never publicly trash individual channels or people) for being sensationalist and telling us how impactful all of these complete non-stories were in the past, but lately his channel has been right on top of the stories I think matter most. The stories about big names and companies coming aboard.
If you’re not on board with Altcoin Daily already, I think subscribing would be a good idea. Just know which stories you’re really looking for, because they don’t all matter.
Goldman Sachs entering the race? Significant.
Mimblewimble? Nobody cares.
I cannot find the video on their channel to save my life, but Aaron also made a great point about how most holders of BTC may sell of some of it for profit, but are likely holding a portion of it long term.
As more investors come in, this is wonderfully bullish, and a great observation. It’s invested money which aint going anywhere, and now more and more of it.
Strong hands indeed.
Did you watch the video on the Paul Tudor Jones article I linked to?
The reason he states for owning any Bitcoin in the first place is as a hedge against a collapsing USD, which we have spoken about many times before.
I have also gone on the record stating how I am short-term bullish on the USD and long term very bearish. To be more specific, I think the USD has a good 2-3 years left in it, and should rise a lot in this time. Then the slow march off of a cliff begins.
Again, I also know I could be wrong, especially about the timeline, so I’m protecting myself and my money now as opposed to later, even if it means I’m not getting in at the best price.
You can’t buy insurance after your house burns down.
Paul Tudor Jones realizes this too I think, and a 2% portfolio investment in his case (compared to the 100% portfolio investment in BTC a lot of millennials have sadly) is a prudent move.
If BTC crashes, he’s fine. If BTC explodes as a result of a crashing USD, he’s not going to be happy, but at least he’ll be okay.
There are plenty of ways to guard yourself against a crashing USD if it in fact happens. Crypto, precious metals, and other fiat currencies are my preferred instruments.
I like how I have all three, because again, I know what I don’t know (as we all should), and I don’t know if one or all three of these instruments are going to end up being the true life raft, so I’m splitting my extra money into all three.
If the price of any of these outlets falls hard, I don’t care. This is not a trade, it’s insurance. If anything, I’ll get to buy more up on the cheap.
If price rises and goes crazy, again, I don’t care. This is insurance. I’ll take some profit initially of course, but not much.
To date, I’m up on my metals holdings, up overall in crypto, and I’m down on my other fiat holdings because the USD continues to rage on. But I don’t really care about the price any of these investments at this point. I will only care if and when shit hits the proverbial fan.
But make no mistake, Bitcoin has gone from a minor player to a major player in this equation, and I have a lot more confidence behind it than I did before.
More importantly, so do a lot more people. People who actually matter.
As always, this is not investment advice, just me telling you what I’m doing and why. No different than anything else.
Take from it what you will. But I am officially bullish on Bitcoin and will be for the forseeable future.