Bitcoin and select altcoins have been on a tear in 2020. But over the last few days, they’ve been pulling back — why this is a buying opportunity
You might have missed this headline from Forbes this past Saturday …
The word “crash” is strong. So, how bad did bitcoin get it? Down 10%? Maybe 20%?
The crypto has a history of volatility, so perhaps more? Say, 35%?
It turns out, this “crash” represented a drop of a mere 4%.
Plus, if we pull back, the crash comes after bitcoin rallied over 40% here in 2020.
As you can see below, earlier this month, the crypto posted 42%+ gains since January 1, before pulling back beginning last weekend. Of course, over the last two days, it has resumed its climb.
We brought this trade to your attention here in the Digest back on January 16, noting how bitcoin had broken out of its descending channel trendlines.
From that Digest:
Notice what’s happened in the last week — namely, bitcoin has broken out of its channel.
If bitcoin can consolidate above the $8,000 mark, then it’s poised to shoot higher — most likely to the top of its previous range at $9,500. That’s about a 9% move from current prices.
It turns out as you can see below, if you jumped on that trade, you’d have enjoyed 17% gains before bitcoin’s recent breather (as of today, the trade is still up 15%).
***But the real story has been the smaller altcoins that have been on a tear
Around the time bitcoin was pushing 42% higher, some of the leading altcoins were making bitcoin’s gains seem downright pathetic.
At February highs, Bitcoin SV had popped 209% since the turn of the year. Bitcoin cash tacked on 113%, and dash added 195%.
Meanwhile, crypto-favorites Ethereum, Ripple, and Litecoin tacked on 60%, 47%, and 78% respectively, as of earlier this month.
If you’re new to all this, you’re probably looking at these returns wondering “what in the world is going on here?”
Well, as our crypto specialist, Matt McCall predicted, we’re seeing crypto prices running up as we approach a key event taking place in three months.
Today, let’s revisit what’s happening. You see, while it’s hard to make that case that bitcoin (and various altcoins) “crashed” as the Forbes article put it, over the past weekend and into the early part of this week, they did settle back.
Yet as I write Wednesday morning, they’re climbing again. And if Matt is correct, then this is merely an opportunity to buy at better prices — most notably in the altcoin space, where Matt’s recommendations have soared out of the gate.
So, in today’s Digest, let’s get an update on what’s happening in the world of crypto, and get into position for the spring event.
***The big event taking place in May that’s driving crypto prices
To understand what’s behind much of the higher prices in crypto here in 2020, you need to understand what’s taking place in just a few months.
For these details, let’s turn to Matt and his update to subscribers last week:
It’s rare to know about a huge investment catalyst with such certainty that you can point to when it will happen on the calendar. But with cryptocurrencies we have that luxury right now.
We can point to May — just three short months from now …
Savvy crypto investors have been buzzing about the upcoming halvening event for a while now — as they should. Historically, the price action surrounding these events has generated the kinds of profits that most investors can only dream of.
To refresh your memory, bitcoins are created by “miners” who solve complex computer puzzles and are rewarded for doing so with a specific amount of the cryptocurrency.
Today, a miner receives 12.5 bitcoins for mining one block. At current prices, that’s worth about $125,000. But in May, this reward will be cut in half. Miners will receive 6.25 bitcoins as a reward for mining one block.
This is significant because bitcoin has a set maximum supply. It’s hard coded in there and cannot be changed. Only 21 million bitcoins will ever be created. That’s it. A little over 18 million are now in circulation, which is 86% of the ultimate total.
The halvening — or “halving” as it’s also called — means a reduced supply of new coins coming on the market. All the while, demand will only continue to increase as cryptocurrencies go mainstream. This “supply shock” will ignite the cryptocurrency market.
We’ve seen this happen twice before, and each time we saw explosive profits.
In his update, Matt goes on to highlight historical gains from bitcoin surrounding the first two halvings — in both cases, the crypto tacked on, quite literally, thousands of percent.
***But bitcoin’s gains could pale in comparison to those of elite altcoins
To make sure we’re all on the same page, altcoins are simply “alternative” cryptocurrencies beyond bitcoin.
They can be gimmicky “me too” products which are just trying to attract capital, or they can provide a unique twist on the crypto/ blockchain/ financial world that makes them truly unique and valuable.
There are hundreds of different altcoins with various degrees of individualization. Frankly, it can be a complex world to navigate. But when you find those select altcoins that offer real benefits and time it right, the gains can be enormous. Case in point, Matt’s new altcoin service, Ultimate Crypto.
As of last Friday, in just five weeks since Matt launched his altcoin newsletter, all six of his recommended altcoins had surged 40% or more. The average gain was an astonishing 70.96%.
Even now as I write on Wednesday while factoring in the multi-day pullback, every position remains up double-digits — with no position having gained less than 30%.
I’m seeing gains of 126%, 68%, 60% … It’s truly remarkable for an investment period of only weeks. But again, that’s what can happen when elite altcoins catch fire.
Now, frankly, the most exciting thing is that if history is any guide, these gains are just the beginning.
Back to Matt:
Looking back over the last two halvenings, investing in specific altcoins would have made significantly more money.
During the same period in which bitcoin climbed 4,500% surrounding the second halving, an altcoin called Einsteinium shot up over 580,000%. That’s 129 times the gains bitcoin made investors during its massive run. For perspective, that would have turned $5,000 into $29 million. Talk about a life-changing investment.
If that doesn’t excite you, try this: Another altcoin called verge shot up over 63,000%. That’s more than 630 times your investment!
***The buying opportunity today
Stocks don’t go up in a straight line. Neither does bitcoin nor altcoins.
Below, you can see bitcoin’s recent “crash” (thanks, Forbes), followed by its rally. I’m using an hourly scale. You can see we’re nearly back to recent highs.
Given the more volatile nature of altcoins, many of them gave up double-digit numbers … though they’re now rallying double-digits as well.
In the bigger picture, viewed through Matt’s predictions, any pullbacks such as this are likely just “breathers” on the way toward more gains. But crypto investors must be prepared for them. That’s why expecting volatility and investing no more than a “sleep-well-at-night” amount is required when stepping into the crypto universe. Fortunately, history shows that even small position sizes can still produce life-changing wealth.
If you’d like Matt’s help understanding the altcoin world, as well has his specific picks, click here.
I’ll give him the final word:
… this is just the beginning.
Right now, there’s a fuse being lit under the altcoin market.
This fuse will set off one of the largest explosions of wealth in modern history. People who invest modest stakes in altcoins stand to make millions of dollars.
I’ve said it before and I’ll say it again: altcoins are the fastest legal way to get rich in America. Blockchain is about to unleash a trillion-dollar tsunami of wealth, and you don’t want to miss it.
Have a good evening,