The crypto universe is on the verge of an event that, historically, has sent prices skyrocketing. How it could radically transform your portfolio in just months
The potential for more than 1,000% gains in just 17 months …
That was the takeaway from our Digest last week that highlighted a unique event taking place with bitcoin this coming May.
In preparation for his 2020 Crypto Millionaire Summit, happening tonight at 7:00, our crypto specialist and editor of Investment Opportunities, Matt McCall, recently explained the details:
Whatever your take on bitcoin (BTC), the last two times this event took place, the world’s largest crypto by market cap — worth more than $137 billion as of this writing — soared into the stratosphere.
I’m talking about what’s called “the halvening.” You’ll also see it referred to as “the halving.”
The halvening is an event that happens once every few years with bitcoin. It’s written into its code.
Matt went on to explain how bitcoins are created by “bitcoin miners” who try to solve complex computer puzzles and are rewarded for doing so with an amount of bitcoin that’s already baked into the system.
Right now, a miner receives 12.5 bitcoins for mining one block. At current prices, that’s worth about $98,000. But this May, this figure will be cut in half — miners will receive only 6.25 bitcoins as a reward for mining one block.
Back to Matt:
Now, going from 12 to 6 bitcoins as a reward for miners might not sound like a big deal …
But just consider what happened to the price of bitcoin after the first halvening in November 2012, when the reward went from 50 bitcoins to 25 …
Prices once again soared after the second halvening took place in 2016, when the reward went from 25 bitcoins to 12.5 …
This next event will remove the number of new bitcoins in circulation by even more: $63 million every single week. When you consider how more than 80% of all the bitcoins that will ever be created have already been mined … and less than 20% of all bitcoins will ever be created in the future … this $63 million figure is astounding.
That’s why I’m predicting the biggest supply shock in cryptocurrency history.
Now, we covered bitcoin and the halvening in more detail last week, so today, let’s cover a different angle.
Specifically, let’s dig into an even more explosive way to make money with the halvening.
***Bitcoin’s gains could look like nothing compared to those of quality altcoins
Altcoins are simply “alternative” cryptocurrencies beyond bitcoin.
They can be gimmicky “me too” products which are just trying to capitalize on investor interest in the space, or they can provide a unique twist on the crypto/blockchain/financial world that makes them truly unique and valuable.
Take the altcoin “Litecoin” as an example.
This crypto was initially thought of as “silver” to bitcoin’s “gold.” Though Litecoin shared similarities with bitcoin in its code and functionality, it was different in its speed of mining transaction approvals, its allowance for the ultimate number of coins created, and its alternative “proof of work” algorithm (supposedly making it more difficult to generate coins).
Overall, there are hundreds of different altcoins with various degrees of individualization — it’s truly a fascinating ecosystem.
Now, as you might guess, not all altcoins are created equal. There are a handful that have risen to the top in terms of uniqueness, and therefore value, and by extension, popularity with investors.
And when a specific altcoin finds favor with investors, the sky is the limit on the ensuing gains.
***Why small sizes can mean huge gains
Before we look at examples of how high altcoin prices can go, think about why these gains can happen. It boils down to size.
You see, altcoins are much smaller in market cap than bitcoin.
For context, as I write, bitcoin’s market cap is about $137 billion. To put that into perspective, Amazon’s market cap is about $939 billion. Looking broader, the market cap of the S&P 500 is nearly $29 trillion (yes, with a “T”).
In other words, relative to stocks, bitcoin is barely a blip on the radar. Yet in the crypto world, bitcoin is massive compared to altcoins.
Below you can see how Ethereum, the largest altcoin, is only about 1/9th the size of bitcoin. The ensuing market caps trail off from there.
So, with such miniscule market caps, when a specific altcoin becomes “hot,” it doesn’t take too many investor dollars to drive its price stratospheric.
Here’s Matt on just how high these prices can go:
… over the same timeframe it took bitcoin to rise 2,000% after the first halvening, a cryptocurrency called litecoin (LTC) rose 7,483%. Another altcoin called dash shot up 2,658% during the first half of 2014 while bitcoin rose 53% over the same period.
The bottom line is that while the halvening pushed bitcoin to new heights, it made small altcoins grow exponentially higher.
The sort of returns I’m anticipating for the coming event could make all of this look like child’s play.
In fact, there’s a pattern I’ve noticed in the data. As past halvenings pushed bitcoin to new highs, they made small altcoins grow exponentially higher.
***Join us tonight for Matt’s 2020 Crypto Millionaire Summit to learn more
Matt is going to be covering lots of ground tonight — bitcoin, the halvening, the case for even more gains to come, altcoins, navigating between the quality ones and the not-so-quality …
Stepping back a moment, a question to you — are you a bit hesitant to dip a toe into the crypto world?
If so, you’re like me.
As primarily a fundamental investor, I’m suspicious of any investment that doesn’t generate a cash flow, or pay a dividend (basically, offer me a way to value the investment based on numbers).
That said, I have to admit that traditional stocks simply aren’t able to generate the lifechanging wealth that cryptocurrencies have proven they can generate — and often in just a matter of months.
So, while I’ve felt skeptical, and you might be feeling that way too, we should at least be intellectually honest about what these cryptos are capable of doing for our portfolios — even with just a few dollars.
Join us tonight simply to learn more. There’s no cost and no obligation. Just click here to reserve your seat.
Here’s Matt with the final word:
Smart investors need to know about cryptocurrencies, altcoins, and the like … it could be the most important investment decision you’ll make this year … and possibly one of the most important of the new decade.
Have a good evening,