Bitcoin just smashed through resistance levels … what this means for altcoins … the tailwinds Matt McCall sees pushing cryptos higher
Bitcoin, the most important cryptocurrency on Earth, has surged 28% in the last three weeks and is now trading above $13,700 for the first time since January 2018 …
… the fact is that bitcoin’s breakout and run to its highest prices in more than two years is the story this month.
That’s how InvestorPlace’s cryptocurrency specialist, Matt McCall, began his most recent issue of Ultimate Crypto.
Simply put, this breakout is what bitcoin investors have been waiting for.
And while it’s incredibly bullish for bitcoin, it could be the beginning of an even bigger move for elite altcoins.
Matt’s latest issue of Ultimate Crypto came out yesterday, so let’s peek inside to see why.
As he writes:
The future demand for bitcoin and altcoins is basically guaranteed …
Now is the time to stake your claim. That fuse we’ve talked about being lit under the altcoin market is powerful enough to send us on a long and profitable journey.
Let’s jump in.
***The interplay between bitcoin and altcoins
For newer Digest readers, let’s make sure we’re all on the same page.
Altcoins are simply “alternative” cryptocurrencies beyond the granddaddy cryptocurrency, bitcoin. There are hundreds of different altcoins with various degrees of individualization and value … or lack thereof.
While Matt is bullish on bitcoin, his Ultimate Crypto portfolio only contains elite altcoins. That’s because he believes they have the ability to grow your money much more, and much faster, than bitcoin.
At the same time, their growth is interconnected with that of bitcoin. That’s because bitcoin is doing the hard work of paving the way toward mass crypto adoption.
So, let’s begin by getting Matt’s thoughts on bitcoin’s recent breakout.
***How an event last spring planted the seeds of today’s bitcoin growth
The “halvening” is an event specific to bitcoin wherein the reward to bitcoin miners for releasing new bitcoins is cut in half.
The prior two halvenings both led to major gains in bitcoin’s price in the months surrounding the event.
After the first halvening in 2012, bitcoin shot up 2,135%. Following the second in 2016, bitcoin rose 3,122%.
The third halvening came this past May. While bitcoin is up about 55% since May 1, that’s hardly a huge move in bitcoin terms.
But the surge in the last few weeks suggests that could be changing.
Here’s Matt for more:
Simply put, the halvening pattern that bitcoin and altcoins have followed the prior two instances is underway again.
Those two halvenings led to huge rallies in bitcoin and altcoins, and this time will be no different.
There is one big difference, though, and it’s a good one.
Bitcoin and altcoins are much more in the mainstream than they were just four years ago.
To support this, Matt points toward an annual report put out by Grayscale, a cryptocurrency asset manager.
It noted that in 2019, 36% of respondents to a survey expressed interest in bitcoin. In just one year’s time, that number jumped to 55%.
In further support of mainstream bitcoin adoption, Matt highlights PayPal.
The payment giant just announced it is launching a new service that will allow users to buy and hold cryptocurrencies directly from a PayPal account.
Then, there are also bitcoin endorsements by some of the biggest names in investing — one of the most recent being billionaire hedge fund tycoon, Paul Tudor Jones.
Matt tells us that in an interview on CNBC, Jones stated that he believes bitcoin is still in its early innings and has a long way to go.
***Long-term tailwinds behind bitcoin
Jones has said that a principal reason for his investment in bitcoin is inflation-protection.
Matt shares this concern:
Regardless of who wins the U.S. presidential election next week, trillions will be spent by the government, and the Federal Reserve will continue to do its part to boost the economy.
That is all but certain to devalue the U.S. dollar, providing yet another reason to invest in bitcoin. Its supply is fixed and cannot be manipulated.
More investors means more demand, and thus higher prices.
On this note, earlier this month we highlighted a mind-blowing quote here in the Digest from Bitcoin.com that provided context for how many dollars have been created this year, which plants the seeds of inflation:
Estimates say, in 2020 alone, the U.S. has created 22% of all the (U.S. dollars) issued since the birth of the nation.
Bitcoin is the antidote to this staggering fiat creation — but it’s not the only antidote …
***Elite altcoins stand to enjoy even greater gains than bitcoin
One of the biggest misconceptions about altcoins is that they’re simply lottery tickets. The idea being that it’s anyone’s guess as to which one will perform better than another, so you simply place your bets and hope for the best … like Las Vegas.
Investors who understand cryptocurrencies know better.
In the past, Matt has described the best altcoins as being similar to incredibly valuable software. Here he is with those details:
Some of the most lucrative software companies on the market right now are working to cut out the middleman. Many of these are altcoins.
That surprises a lot of folks, but it’s often easier to think of altcoins as just really, really, really valuable software … some of the most valuable software programs ever created …
The tsunami of wealth that’s coming with altcoins and the blockchain technology backing them up is due to their ability to make our time vastly more efficient and productive …
Investing in altcoins is just like backing Microsoft (MSFT) in the early days. Or like backing Google (GOOGL) or Uber (UBER) or Oracle (ORCL) in the early days.
To distinguish between the lottery tickets and the more intrinsically-valuable altcoins, Matt and his research team have created a selection process called the “MAG System.”
It analyzes 10 critical attributes of every altcoin (similar to how you could analyze the fundamentals of a stock), scores them on each, and then produces an overall ranking.
And the MAG system is working.
The average gain in Matt’s Ultimate Crypto portfolio since it debuted in January is nearly 80%, as I write Thursday morning.
***A major reason why altcoin and bitcoin prices are headed higher
Near the end of his issue, Matt slips in a point that I found to be highly important. It involves the wealth transfer from the Baby Boomers to Millennials, and what that means for bitcoin and altcoins.
Back to Matt:
According to Cerulli Associates and Coldwell Banker, an estimated $68 trillion will be passed down to millennials in the next few decades.
By the end of the Roaring 2020s, millennials will have 5X more wealth than they have today.
Millennials are more inclined to invest in bitcoin, which bodes well for the entire crypto sector.
Over 67% of people between 25 and 44 said they would definitely or probably consider investing in bitcoin. Compare that to only 30% of people aged 55-64.
The future demand for bitcoin and altcoins is basically guaranteed, simply from the transfer of wealth to the younger generation.
This is basically a roadmap for adoption. We know this is coming. And we can position ourselves ahead of it today.
Before signing off, I should note that bitcoin’s gains have held up remarkably well despite the heavy selling pressure in stocks.
Below, you can see bitcoin and the S&P 500 since last Friday.
While the S&P has shed nearly 4.5%, bitcoin has tacked on 3.2%.
But if Matt is right, this is just the beginning of far, far bigger gains.
For more from Matt on what he sees as the most explosive altcoins, click here.
Here he is with the final word:
The bottom line is that bitcoin and the entire cryptocurrency sector remain in a really good place for right now and for a long time to come.
And more importantly, it is not too late to position yourself for big gains in the future.
Have a good evening,