Highlights of the Bitcoin 2021 conference… El Salvador makes a huge move… why the crypto weakness could be changing soon

Bitcoin is taking another beating.

As I write Monday morning, the most widely-owned crypto is down another 7% or so in the wake of more reports that China is cracking down (again) on its bitcoin miners.

That puts bitcoin down roughly 50% since its April high (though still up 10% on the year).

So, how are investors reacting?

Well, on one hand, you have the famous talking-head, Jim Cramer, saying he has now “sold almost all” of his bitcoin, because he fears the heavy influence of Beijing over the entire crypto sector.

On the other hand, you have the company, MicroStrategy, which reported this morning that it now owns more than 100,000 bitcoins after another round of purchases.

So, which course of action will prove to be wisest?

We have to side with MicroStrategy…by a mile.

To help explain why, let’s digress a moment…

Earlier this month, more than 50,000 people from all over the world descended upon Miami for “Bitcoin 2021,” the largest bitcoin conference ever.

Our crypto specialist, and the analyst behind Crypto Investor Network, Charlie Shrem, was a featured speaker at the event.

And if there’s one general takeaway from the conference it’s “get ready.”

So, in today’s Digest, in the wake of China’s latest crackdown, let’s bring you highlights from the conference courtesy of the latest Crypto Investor Network issue. As part of this, we’ll talk about why bitcoin and top-tier altcoins are still in the early days of an extraordinary growth curve.

It’s part of a global adoption that’s going to create one of the largest wealth explosions in modern history for investors with the foresight to see what’s coming.

This latest weakness isn’t a crash…it’s a sling-shot being pulled back.

Let’s jump in.

***Huge bullishness despite the sector pullback

For newer Digest readers, Charlie was one of bitcoin’s earliest backers and today is considered one of the most influential people in cryptocurrencies.

He’s been mentioned in Fortune… Forbes… CNN… 60 Minutes… TED Talks… Bloomberg… and The Wall Street Journal… to name a few. His story has been featured in numerous Netflix documentaries and best-selling books. And yes, he’s become a bitcoin millionaire many times over thanks to his early involvement.

Turning to the state of the market today, after enjoying a blistering run-up through the spring, bitcoin has suffered a painful drawdown for roughly two months now.

As you can see below, bitcoin is down ballpark 50% from its April high (though still up 256% over the last 12 months).

This weakness has prompted many crypto speculators to flee the sector (like Jim Cramer), unable to handle the volatility.

From Charlie:

These are the folks who react emotionally to shorter-term price swings and bail out when trading gets volatile. And yes, cryptocurrencies are volatile. We have known that from the get-go.

But the fuse being lit and the ultimate explosion in wealth are not based on prices right now. Or tomorrow. They are based on a long-term transformational trend and prices that explode over time…

The blockchain and the software that runs on it – namely altcoins – are going to change everything. You name it – credit cards, real estate, energy, e-commerce, electric vehicles, healthcare, voting, identity theft, and on and on.

Blockchain will rewrite how business is done and how personal fortunes are built in the modern age. It is the safest way to store and transfer information ever created. It’s going to make everything more transparent, more secure, and more cost effective.

The most eye-opening takeaway for me is Charlie’s assertion that everything will soon run on the blockchain. In essence, it’s going to become the new internet.

Piggybacking on that, the only way to have direct ownership of this groundbreaking technology is through altcoins.

***Takeaways from the conference

Bitcoin 2021 featured many big-name bitcoin influencers – Mike Novogratz, the Winklevoss twins, and Michael Saylor of MicroStrategy, to name a few. But one of the most interesting speakers, in my opinion, was Jack Dorsey, co-founder and CEO of Twitter and Square.

Dorsey participated in a discussion titled “Banking the Unbanked,” which focused on the hundreds of millions of people around the world who don’t have access to the banking system. Bitcoin – and altcoins – can bring these services to these unbanked citizens around the world.

Here’s what Dorsey said (underlines added for emphasis):

For me, bitcoin changes absolutely everything. What I’m drawn to most about it is the ethos, what it represents.

The conditions that created it are so rare and so special and so precious and I don’t think there’s anything more important in my lifetime to work on. I don’t think there’s anything more enabling for people around the world.

Whatever I can do, whatever my companies can do, to make it more accessible to everyone is how I want to spend the rest of my life.

If I were not at Square or Twitter I’d be working on bitcoin. If it needed more help than Square and Twitter, I would leave them for bitcoin.

Here’s Charlie’s thoughts on this:

Can you imagine someone who started and leads two of the world’s most successful companies saying he would leave them if bitcoin needed him more?

That’s an incredible endorsement for both bitcoin and cryptocurrencies in general. (It also tells us he doesn’t think bitcoin needs any help.)

***Bitcoin becomes legal tender

The biggest headline from the conference came from El Salvador’s President, Nayib Bukele.

In a video broadcast to the conference, he announced El Salvador’s partnership with digital wallet company, Strike, to build the country’s modern financial infrastructure based on bitcoin. In other words, bitcoin is going to be legal tender in El Salvador.

Charlie writes that politicians in seven other Latin American countries indicate that they are interested in doing the same, and notes how this could lead to a snowballing effect with more and more countries making bitcoin a legal currency.

Now, this is all great in the long-term, but for crypto investors laboring through this current weakness, are there any signs of relief on the horizon?

In Charlie’s issue, he points toward six such signs. We don’t have time to detail every one, so let’s highlight one that’s especially interesting.

***“Extreme fear” suggests bitcoin could be headed…higher

Here’s Charlie to set the stage:

All investing markets act emotionally, and that’s especially true with cryptos. It’s just human nature to get greedy when prices are going up, which results in FOMO, or “fear of missing out.”

Conversely, people tend to react with just plain fear in the face of falling prices, so they tend to sell.

This behavior can be quantified in the Fear and Greed Index. This is the heart of contrarian indicators, and we are big fans.

Extreme fear means investors are overly worried and willing to part with their cryptos at really low prices – which gives us a buying opportunity.

Extreme greed means a correction is due, and those of us who are long-term investors hang on rather than trying to time every price move.

To calculate fear and greed, Charlie points toward the Bybt Fear and Greed Index. It takes six measurements into account – volatility, market momentum, social media, surveys, market cap dominance and trends. A score of 0 would indicate extreme fear while 100 means extreme greed.

So, where is the reading now?

Well, in the last two months, it has fallen to a score of 10 – twice. As I write, it’s climbed slightly, up to 23, but it’s again falling fast.

Alternative.me computes its own, similar multifactorial crypto sentiment index. As you can see below, there’s a great deal of “extreme fear” showing up today…

Back to Charlie:

Over the last month, we’ve seen the lowest readings of the year, confirming what we already know – there is a lot of fear in the crypto market right now.

It won’t stay that low. It never does.

The transformation and trend are too powerful, which means these unusually low prices are a great buying opportunity in bitcoin and the strongest altcoins that we expect to surge a lot higher over time.

To drive this home, Charlie points toward analysis from Santiment showing that the “smart money,” meaning bitcoin wallet addresses holding 1000+ coins, are adding as the fear and panic rises.

Of course, the opposite is playing out too. Back to Charlie on this:

Be sure to look at the bottom of that graphic. The smallest address – those with 10 bitcoin worth $365,000 or less – are selling into that panic and fear.

Don’t be one of these panicked sellers. See the potential. See the future.

***More big-picture adoption

In the nine months since Crypto Investor Network launched, we’ve seen major corporations invest in bitcoin and cryptos… digital payment providers make cryptos easy to buy and sell… the introduction of bitcoin credit cards and debit cards… and now, we’re now even seeing cryptos coming to your 401(k)!

Coinbase, one of the biggest crypto exchanges, is teaming up with ForUsAll, a leading 401(K) investment platform. They will be offering crypto investments in those retirement accounts.

Here’s Charlie on this:

This is a big deal. It is yet another onramp for investors that will draw more money into cryptos, especially altcoins because Coinbase is opening up its options.

We’re running long, so we’ll wrap up for today.

Yes, more bitcoin weakness isn’t what any of us wants. But this is reactionary to China. And China does not own the entire bitcoin/crypto market.

This too shall pass.

If you’d like Charlie’s help in identifying the best ways to profit from this explosive sector, click here. I’ll let him to take us out:

Few people understand the opportunities before us.

And that means that you are ahead of most every other investor out there.

You are among the first in line to profit from the coming disruption and the multi-trillion-dollar tsunami of new wealth that will be created.

Have a good evening,

Jeff Remsburg