We’ve entered a new era of bitcoin adoption…
For more than a decade, investing in the world’s most popular cryptocurrency has been difficult – and sometimes even dangerous. But Stansberry’s crypto expert Eric Wade says the barriers to entry are disappearing as the bitcoin “brick wall” crumbles…
Put simply, Eric says two major factors will push bitcoin to skyrocket in value – eventually reaching $1 million per coin. And investors who ignore the short-term volatility will be rewarded with massive gains…
In today’s essay, Eric shares the story of a friend who has weathered the bitcoin booms and busts… and explains why we’re on the cusp of the mass global adoption of cryptocurrencies…
Table of Contents
The Tipping Point for Bitcoin Just Arrived
By Eric Wade, editor, Crypto Capital
Nearly every crypto trader can share stories of both success and misery…
The tales of success are always great to hear, of course. It’s nice to find out when folks make life-changing gains with just a small allocation of their overall portfolios.
But the thing is, I believe we can learn the most from the tales of misery…
After all, to become better at anything in life – including investing – we must learn from mistakes… whether they’re our own or those made by others. And as you’ll see in today’s Masters Series, it’s imperative right now to remember one of the more miserable tales I’ve heard…
This tale of bitcoin misery comes from a friend who’s a bit of a real estate mogul here in Los Angeles. For the purpose of today’s story, we’ll call him Leonard.
Eight years ago, Leonard was cleaning out an apartment that he owned so he could relist it. He discovered some tools that the previous tenant had left behind. The old tenant told Leonard that he could keep the tools, but he had no use for them… so he decided to sell them.
Leonard listed the tools for sale on Craigslist. They sat there for a few days… until a young man contacted Leonard with an interesting and unusual offer. This man didn’t have any cash to buy the tools, but he had about $600 worth of “digital money” called bitcoin.
The young man wanted to know if Leonard would take $600 in bitcoin instead of cash.
Leonard hadn’t heard of bitcoin… And truth be told, he wasn’t interested in learning more about it. But the tools were taking up space, and selling them would essentially be “free money,” so he agreed. He met the seller at the apartment to complete the deal.
That’s when Leonard learned the buyer had quit his job a year earlier to “day trade” stocks and bitcoin. Apparently, though, he wasn’t very good at it… The young man had burned through all his savings. So now, down to his final 60 bitcoin, he decided to throw in the towel and buy a set of tools so he could go back to his previous career in construction.
They loaded up the tools and Leonard never saw the guy again. But here’s the kicker…
At the time of the deal, the young man’s 60 bitcoin traded for $10 each. Within days, bitcoin’s price began to rise… And it kept rising for the next six months.
By April 2013, each of Leonard’s 60 bitcoin was worth $213.72. That meant he was now sitting on more than $12,000 in bitcoin. Take a look…
Now, Leonard was used to making slow, steady returns as a real estate investor… So he was ecstatic at these massive short-term gains. His bitcoin investment turned $600 into more than $12,000 in just six months… And remember, it wasn’t even his $600 to begin with.
Leonard became hooked on the possibilities of cryptos. He even started “mining” bitcoin… In other words, he started contributing computing power to the bitcoin network to help it operate in exchange for small payouts.
Meanwhile, somewhere across town, a construction worker was likely in the absolute depths of misery… He had sold his final stake in bitcoin just before the start of a 2,000% rally.
The rally was short-lived, though… In fact, bitcoin fell 70% in a week in late April 2013 to bottom at around $65. My friend Leonard experienced his first boom-bust cycle in bitcoin.
But Leonard is a lot like me – and truthfully, like most patient long-term investors…
He isn’t the kind of person who throws in the towel at the first sign of trouble. He had discovered something that worked… And he planned to stick with it through thick and thin.
So Leonard kept mining and accumulating more bitcoin… And bitcoin kept experiencing incredible booms and busts over the next several years.
In fact, after bottoming at around $65 in April 2013, bitcoin went on another rally later that year… Its price spiked to $1,132 that November – a gain of more than 1,600% in seven months.
Within a year, Leonard’s 60 bitcoin had gone from about $600 in value to nearly $68,000. That’s more than the annual salary for the average construction worker in Los Angeles.
Somewhere, that poor construction worker was probably beside himself. Not only had he given up on bitcoin before one rally… he had missed out on two incredible surges higher.
The most interesting part about this chart is how each new bitcoin rally makes the previous one look insignificant… Bitcoin rallies are so extreme that many crypto traders describe them as “face melting.”
To many outsiders, though, they look incomprehensible… They appear to be untethered from reality. I’ve heard them likened to the “tulip mania” of the 17th century… Some truly manic behavior led the price of tulips to soar to unthinkable heights – until the bubble burst.
Bitcoin rocketed 2,000% higher in just a few months during Rally No. 1 in 2013. But as you can see from the previous price chart, that looks tiny compared to Rally No. 2 – when it jumped another 1,600%.
And then, when the 2017 face-melting rally arrived, it made all the previous rallies look like tiny blips. Take a look…
Again, these rallies might look incomprehensible to most crypto outsiders.
But to me, they look perfectly rational… That’s because they can be traced back to two factors – bitcoin’s monetary policy and its ever-increasing adoption around the globe.
Let me show you exactly what I mean. We’ll start with how bitcoin’s monetary policy influences its price…
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Regular readers know all about the world’s central banks loosening their monetary policies over the past 12 years. However, on the flip side, bitcoin has been tightening…
As I explained yesterday, roughly every four years, bitcoin’s inflation rate – the amount of new bitcoin entering the world – is cut in half. (Its inflation rate is currently 1.78%.) The inflation rate will continue dropping every four years until 21 million bitcoin exist… At that time, the computer code running the bitcoin network will stop creating new bitcoin.
In the industry, we refer to these monetary updates as “halvings”… And they’re literally coded into bitcoin’s software. They happen automatically with no human intervention – regardless of what’s going on in the economy or at the Federal Reserve.
With bitcoin recently passing its 13th birthday, we’ve had three halvings so far – in November 2012, July 2016, and May 2020. The net effect of a halving is that bitcoin becomes much harder to acquire. And it tends to lead to a major repricing of the world’s biggest crypto.
It’s easiest to see what I mean on a logarithmic chart. Since 2013, bitcoin has had three distinct price ranges. Each is 10 times higher than the previous one. Take a look…
As the market adjusts to a new, more constricted supply, the price of bitcoin tends to rise. And I believe that’s what we’re witnessing right now… We’re in the midst of the next major repricing. If past trends hold, we could be looking at bitcoin prices of $100,000 or more within a year or two.
In fact, as I said yesterday, I believe that we’ll see bitcoin hit $1 million in the next seven years (which would be 15 times today’s price of about $63,000). Bitcoin reaching $100,000 will be just the next logical step on the long-term journey toward turning my prediction into a reality.
That might sound crazy, but as I said, two major factors cause bitcoin’s price appreciation – its monetary policy and increasing adoption. We just discussed the first part of the equation. And now, I believe we’ve entered an entirely new era for bitcoin adoption…
Bitcoin is supposed to be convenient digital cash that you can send instantly to anyone else… anywhere in the world… with no restrictions. And it is that.
But ironically, a thick brick wall between the world of traditional banking and the world of bitcoin has always existed. For the first decade of bitcoin’s life, banks and other financial-services companies wanted nothing to do with it.
In fact, back when I first became interested in bitcoin, the easiest way to acquire it was by doing exactly what my buddy Leonard did – mining it. So that’s what I did, too…
I spent a couple of days learning how to turn my laptop into a “bitcoin miner.” Then, every 10 minutes, I was rewarded with a tiny amount of bitcoin. Bitcoin was growing, however… and laptops were quickly replaced by specialized, high-powered computer processors.
At about that time, companies sprung up that let you buy and sell bitcoin, too. But it was far from easy… You almost always had to send a money order or wire funds to someone in a faraway state – or more likely, in a different country. That also meant you needed to wait several days for your bitcoin to arrive (and hope that you weren’t getting ripped off).
The only other option – one that I was never comfortable with – was meeting a stranger in a parking lot, watching him transfer some bitcoin to your digital wallet, and then handing him some cash. Yes, that was (and is) a real way to acquire bitcoin… Many people around the world still do it this way today.
It’s also the perfect setup to get mugged… or worse.
Now, more than a decade after bitcoin’s creation, we’ve evolved…
We’ve reached a point where you can buy bitcoin with a debit card or a bank transfer on digital exchanges – including the well-known Coinbase. But until recently, it still hasn’t been as easy as it should be…
In order to buy bitcoin on these digital exchanges, you had to set up an account and verify your identity. That meant scanning or photographing your government-issued ID card… and sometimes a bank account statement or utility bill as well.
We simply can’t reach mass adoption of bitcoin with that much friction involved.
That’s why the recent trend toward mainstream fintech companies allowing crypto purchases is so important. It started last year with payments giant PayPal (PYPL)…
On October 21, 2020, PayPal ended all the friction when the company announced support for bitcoin and three other cryptos – Ethereum, Litecoin, and Bitcoin Cash.
PayPal started by giving a small segment of its more than 300 million users the ability to buy and sell crypto. Then, on November 12, 2020, the company flipped the switch… Overnight, its 286 million U.S.-based users suddenly could buy and sell cryptos as easily as logging in to their PayPal accounts and clicking a handful of links.
I tested the system immediately. And it’s really easy for anyone to do… I was able to buy bitcoin in about 90 seconds, and it took exactly nine clicks of my mouse (I counted).
And with more mainstream acceptance through PayPal’s new service, bitcoin went on a tear. It climbed more than 40% within a month of the announcement.
PayPal’s adoption of crypto represented a tipping point for the industry. Since then, other fintech companies have followed suit, including Square’s (SQ) Cash App… Venmo, the popular money-transferring app owned by PayPal… and Mastercard (MA), which is working with digital-payments startup Bakkt.
Square founder Jack Dorsey is a huge proponent of bitcoin. Another company he founded, popular social media network Twitter (TWTR), recently announced that users can now receive “tips” in bitcoin payments.
These companies are finally doing what I’ve waited years to see… They’ve turned buying bitcoin from a confusing – and sometimes even dangerous – multiday process into one that’s fast, convenient, and safe.
In short, the brick wall is crumbling. We see evidence of it everywhere…
Last month, billionaire hedge-fund manager Paul Tudor Jones announced that he currently views bitcoin as a great inflation hedge – and said that it’s “winning the race” against gold.
In June 2020, the little-known Office of the Comptroller of the Currency (“OCC”), which supervises the country’s banks, quietly released a letter saying it was fine for banks to custody crypto on behalf of their clients.
Last September, business intelligence company MicroStrategy (MSTR) announced it was converting a large portion of its treasury into bitcoin as a hedge against inflation. It was the first public company in history to make that move. Payments company Square quickly followed by announcing it was converting some of its treasury to bitcoin, too.
That same month, crypto exchange Kraken announced that it had received a license to operate as a bank… making it the first digital-asset company in U.S. history to receive a federal bank charter. Kraken’s domestic banking operations should start soon, and it plans to quickly expand internationally.
Institutions and the “smart money” are as bullish on bitcoin as I’ve ever seen them.
Earlier this month, billionaire investor and CEO of Apple (AAPL) Tim Cook said he’s long bitcoin and believes it has a place in every investor’s portfolio. His willingness to disclose his holdings added fuel to the spark lit by Jones and MicroStrategy last year, encouraging hedge-fund managers, endowments, and other big funds around the world to buy in, too.
We saw a short-term sell-off in bitcoin over the summer. But the key isn’t getting spooked by bitcoin’s volatility… or even being transfixed by its higher highs. The key is watching bitcoin’s higher lows.
In other words, is bitcoin’s price floor still rising? It has been for the past 13 years… and I expect that to continue for years to come. Ultimately, we’re going to see $1 million bitcoin.
Last year’s PayPal news marked the end of bitcoin’s early years and ushered in a new era…
We’re now talking about the mass global adoption of digital currencies.
Don’t expect the pace to slow down… It will only accelerate from here. And like the face-melting rallies of the past, the next rally will push bitcoin so high, so fast, that the previous rallies will seem to disappear when we look back at the charts.
Don’t be like that poor construction worker. Be more like my friend Leonard… Buy bitcoin today and hold on for the long haul. One day, you’ll look back and be glad you did.
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Crypto Capital Event – Eric Wade Reveals 6 Tiny Cryptos
Eric says the crypto world is changing forever as mainstream fintech companies make it easier to buy digital assets. And if you’re looking for the next big opportunity beyond bitcoin, you must listen to his latest announcement…
Eric believes he has identified six other coins with much more upside potential than bitcoin… and a major catalyst that’s guaranteed to happen in January could send each of them soaring up to 10 times higher. On Wednesday, November 17, at 8 p.m. Eastern time, he’s issuing an urgent message about how to take advantage of this rare opportunity… and revealing the name of one of these coins, no strings attached.