Bitcoin (CCC:BTC-USD) prices have plunged over the past 24 hours after one of the cryptocurrency’s biggest and most vocal supporters — Tesla (NASDAQ:TSLA) CEO Elon Musk — went cold on the red-hot asset.
As many folks know, Elon has been a staunch supporter of Bitcoin. He has publicly claimed multiple times that Bitcoin and various other cryptocurrencies represent the future. His company, Tesla, has bought Bitcoin and held it on its balance sheet. They even started to accept Bitcoin for Tesla car payments.
But Elon changed his tune last night.
In a tweet, Elon said Tesla has suspended vehicle purchases using Bitcoin out of concern that Bitcoin mining — which uses a lot of fossil fuels, especially coal — is very bad for the environment.
He followed that tweet up by posting a chart which shows the enormous recent uptrend in Bitcoin electricity consumption.
— Elon Musk (@elonmusk) May 13, 2021
To be sure, Elon and Tesla are both holding their Bitcoin stash. They won’t be selling. But they presumably won’t be buying anytime soon either. Not until the mining gets powered by clean energy, and that’s a huge hit to a market that is largely propped up by big-name endorsements.
So, what does this mean for you? Should you follow Musk and go “cold” on Bitcoin, too? What about other cryptos?
Let’s answer those questions right now.
Bitcoin: Should You Sell?
Bitcoin bulls are calling “BS” on Elon’s sudden reversal on the cryptocurrency. Indeed, Elon has immediately became enemy number one in the Bitcoin community.
Bitcoin Magazine sarcastically said they were suspending purchases of Tesla cars. Barstool founder and staunch Bitcoin bull Dave Portnoy said Elon Musk flip-flops every second about Bitcoin. The Winklevoss twins of Facebook (NASDAQ:FB) infamy said that Elon is wrong about the environmental impact of Bitcoin mining.
But, despite the public outcry against Musk, the market is giving him some credibility. Bitcoin prices are off 10% over the past 24 hours.
So, is time to sell Bitcoin?
Perhaps. The problem we have with Bitcoin isn’t that cryptocurrencies are bad. Rather, it’s the opposite. Cryptocurrencies are so great that there are so many better altcoins to buy out there outside of Bitcoin.
Indeed, per our analysis of the underlying blockchain architectures of various cryptos, Bitcoin is actually one of the technologically most incompetent coins out there. It’s the “godfather” coin, and as the godfather coin that was invented first, it’s technologically primitive relative to other cryptos, who have been able to build upon, iterate, and improve the underlying Bitcoin architecture and create technologically superior altcoins.
To that extent, we see the value of Bitcoin as being derived mostly from its public perception. It’s the poster child for cryptos. So, once that public perception starts to fade, the value of Bitcoin could erode.
We could be at that point now. Not saying we are. It’s impossible to tell. But cracks are starting to form, and the fact that you are starting to see relative strength in other cryptos versus Bitcoin is a telling sign that investors may be ready to move on to the next thing.
Altcoins: Is It Time to Buy?
We think it’s time to get hyper-bullish on cryptocurrencies not named Bitcoin.
Many of these altcoins have been living in the shadow of Bitcoin for some time now. Some of them are just “hype” plays. But some of them are actually very promising altcoins with fundamentally strong architectures, wide-reaching value props, and a ton of long-term potential.
Those are the altcoins to buy today.
Because, if you zoom out and look at the big picture, cryptocurrencies are today where the internet was back in 1999. That is, cryptos are going to change the world over the next two decades and ultimately redefine everything about everything. But many of the cryptos in the market today — like many of the internet stocks back in 1999 — won’t live to see this enormous growth. Rather, they’ll get wiped out over the next few years, while the big gains in the Cryptocurrency Revolution will be hogged by a select few coins.
So, forget Bitcoin. Buy high-quality altcoins.
Bottom Line on Bitcoin
Cryptocurrencies represent the future of the world. More specifically, the blockchain technology upon which cryptocurrencies are built will redefine everything, and allow humans to create trusted, decentralized systems that are cheaper, faster and more secure than today’s centralized systems.
Today, there are over 4,000 cryptocurrencies in the world. Not all 4,000 will make it. Most will flop. And all the rewards of the Cryptocurrency Revolution will be horded by a dozen or so coins.
Bitcoin may be one of those coins. But the value there has already been realized, and Elon Musk throwing cold water on the crypto is not a positive development.
So, if you’re looking to make big money as a crypto investor, you should ignore Bitcoin and buy high-quality altcoins.
Unfortunately, in a sea of 4,000 altcoins, that’s a tall task. Luckily, we can do it for you.
In our exclusive research platform — The Daily 10X Stock Report, where we highlight a potential 10X stock pick every single trading day — we also highlight our favorite cryptocurrencies which we feel are the cream of the crop in this overcrowded yet very promising industry.
Click here to gain access to that service, and find out the best cryptocurrencies to buy today.
On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this video.
By uncovering early investments in hypergrowth industries, Luke Lango puts you on the ground-floor of world-changing megatrends. It’s the focus of his premiere technology-focused service, Innovation Investor. To see Luke’s entire lineup of innovative next-generation mobility stocks, become a subscriber of Innovation Investor today.