I should have seen the signs…
First, one of our tech analysts – Sam Volkering – wrote to me late one night, a couple of months ago. “You need to start taking cryptocurrencies seriously. They’re reaching the boiling point. Get the message out to your readers.”
Then, just a couple of weeks ago at our first ever Tech Investor’s Symposium, virtually all of the experts I’d assembled to talk technology (including Sam) said the same thing: “We need to talk about bitcoin and other cryptos.”
Hot on the heels of that… bitcoin exploded higher once again. It’s up more than 100% this year alone. As I was telling my friends over a few beers last night, £100 invested in bitcoin in 2010 would be worth more than £2 MILLION now.
That’s the kind of speculation I like: where a tiny stake (which limits your risk massively) can become a fortune in a rapid period of time.
Long story short – on Wednesday, Sam and I finally managed to publish his full research on the booming cryptocurrency market. It’s been a labour of love. Sam and my research team have been working away behind the scenes to get his work out to the biggest audience possible. And it couldn’t come at a better time. In fact, Sam’s pinpointed the three cryptocurrencies he expects to make a fortune in the coming years.
Perhaps even more importantly, he’s named the ten cryptos you absolutely need to stay away from. That’s what you need in a market like this: an experienced guide to help show you where the opportunity is and where it isn’t.
They called him an idiot live on TV… but who’s laughing now?
By the way, when I say Sam’s an experienced cryptocurrency guide, I’m not exaggerating. Sam’s been researching the market for years. He’s on record as far back as 2013 backing cryptocurrencies. Here’s what he said, four years ago, when bitcoin made the news following a controversy with the online drug marketplace Silk Road:
You may have seen in the press recently that the US Federal Bureau of Investigation (FBI) has shut down drug website Silk Road.
With this news many commentators have tied in the fact that many customers of Silk Road use bitcoins to make transactions. Some have even suggested that now the FBI potentially has a grasp on bitcoin it will mean the end for bitcoin and all other private digital currencies.
But from what I can see, the Feds shutting down Silk Road is evidence bitcoin will survive and be a permanent fixture in the global economy, whatever shape or form it might take in the future.
The biggest issue with bitcoin is the insane price volatility and people using it in a way not suited for its intended design. Most people see bitcoin as an investment.
Because bitcoin is so new, people are confused about what it is and how to use it.
And that’s half the issue, people are trying to pigeon-hole it into a definition, “Oh it’s like gold. Oh it’s like cash. Oh it’s like a stock.” In fact, it’s all of the above and more.
It’s a whole new medium of economic exchange.
It’s most similar comparison is to gold. But it’s as flexible and liquid as cash… with the potential to appreciate in value like a stock. You can’t define it as anything other than bitcoins.
You need to also remember its history to appreciate its actual current resistance to turmoil.
If you think $30 to $230 was good, try 60,000% in a year
Let me take you back to October 2010. At that point bitcoins traded at 5 cents. But just four months later on 9 February 2011, bitcoin (BTC) hit parity with the USD: $1 = 1 BTC.
From there it steadily grew, and then climbed substantially around April/May to touch around the $6-7 mark. Then the price of BTC exploded.
On 1 June 2011, blogger/reporter Adrian Chen wrote a piece on Gawker called “The Underground Website Where You Can Buy Any Drug Imaginable”.
His piece was solely based on the website Silk Road. Of course in writing about this, he made reference to bitcoin, the anonymous digital currency. Until then bitcoin was really only known to those in the know (so to speak). But following Chen’s article it hit the mainstream.
Ecommerce had gone to a whole new level with this “drugs, guns and anything illegal” website and the mysterious bitcoin was all a part of it.
The mystery of how bitcoin worked and who created it added to the digital intrigue. Within days of Chen’s article the price of bitcoin peaked at US$31.91. Within the space of four months bitcoin had increased by 3,000%.
And compared to the 5 cents it had been not that long before, gains were off the chart – a 60,000% gain. Mass hysteria ensued.
But as you’d expect with the volatile bitcoin price, a week or so later after claims that some bitcoins were stolen, issues with the security of the BTC exchanges, and with the security of bitcoin wallets, the price plummeted back down to around US$3 by the end of the year.
Bitcoin is not a fad.
Bitcoin is not a fad. That was Sam in 2013. Back then one bitcoin cost you less than $100. Yesterday, it traded north of $2,500. Maybe that convinces you that bitcoin is here to stay. Or maybe you still think it’s a fad. Either way… it’s been insanely profitable, just as Sam predicted.
In fact, Sam went live on US television in 2014 to talk bitcoin. He was called an “idiot” for daring to anticipate that an entirely new asset class like cryptocurrencies could become a significant and profitable part of the financial system. Who’s the idiot now?
“When cryptos surpass Apple and Aramco, then perhaps the world will take them seriously”
That’s what Sam said in a private email to me earlier in the week. He’s been writing in all week with more analysis on what’s happening in the crypto market – which is moving on a daily basis. Every morning I check my email and find another nugget of insight on the markets.
As Sam put it:
This is how fast and intense crypto markets are. I’m sitting by the computer on a Sunday night – that’s right, a Sunday night because crypto markets trade every day non-stop.
On one crypto exchange there are ten cryptos up more than 50% in the last 24 hours. Four of those are up over 100%. The biggest gainer up 250%.
On another exchange (as not every exchange trades every crypto) ten are up more than 25% in the last 24 hours. The largest is up 75%. And in terms of volume… those ten cryptos total around 130,000 worth of bitcoin – that’s US$263 million in volume in just ten cryptos in 24 hours and all of them I’d say most people have never heard of.
So anyone that says this is a bubble and not worth anything is kidding themselves. There’s serious money flowing into cryptos – and we haven’t even mentioned the “big three” – bitcoin, Ethereum and Ripple. Bitcoin went from US$1,714 at 11am on Monday to US$2,086 by 11am Sunday and its daily volume is well over US$1.1 billion. It’s now over $2500.
Ethereum went from US$94.43 to $142.25 over the same timeframe. Quite simply this is the most exciting, new and risky area of investment I’ve ever seen. There’s big money flowing in. Big money to make. And the way I see it (and I’ve been researching this opportunity for over six years now) there will be big money to be made in the future.
But here’s the thing. Sam isn’t just an analyst. He’s also willing to put his neck on the line and provide specific “buy advice” on cryptos.
Not only that, he’s produced a series of “how to” videos and reports explaining how you can buy and sell cryptos. So if you’re just getting started and you want in…
Have a great weekend,
Nick O’Connor
Associate Publisher, Exponential Investor
Category: Investing in Bitcoin