Through the first four months of 2020, cryptocurrencies – led by Bitcoin – were unstoppable.
Bitcoin came into 2020 priced for less than $30,000 a coin. By mid-April, Bitcoin prices had already more than doubled, touching a high of $64,863.
Then Tesla CEO Elon Musk sent a tweet… and it all came crashing down.
Yep. A tweet killed the Bitcoin bull market.
And that’s not really surprising, because this is a sentiment-driven market. For months, it had been propped up by outspoken support from some of the tech sector’s biggest companies and brightest minds.
Elon Musk was one of them. Then, he went cold on cryptos, saying Tesla would stop accepting Bitcoin as payment for cars on concerns that Bitcoin mining was bad for the environment.
Ever since then, a combination of worries surrounding enterprise adoption, environmental (un)friendliness, and legal crackdowns over in China have caused Bitcoin – and the entire crypto market – to fall flat.
This is all just near-term noise.
As many of you know, cryptocurrencies represent the future of our economy.
Blockchain technology – the tech underlying cryptocurrencies – is arguably the most disruptive technology since the internet, with the core of this disruption being blockchain’s centralized and immutable ledger.
This thoughtfully constructed ledger enables innately untrustworthy individuals and entities to collectively create trustworthy systems, without the need for any central authority – hence the term “disintermediation.” Blockchain enables humans to remove the middleman from legacy systems, and replace them with a collective ledger.
In so doing, cryptocurrencies enable us to create a series of economic and societal processes that are freer, faster, and fairer.
Long-term, cryptocurrency prices are going to go higher – way higher.
So, when investing in the crypto market, it’s not a question of whether you should buy – you should… this is an asset class that will appreciate meaningfully.
Rather, the question is when you should buy, because the near-term price swings in Bitcoin and cryptos can be large, and because your stomach drop, as evidenced by the May sell-off.
Fortunately, we now have an answer to that question…
The time to buy cryptos is right now.
Here’s the thing: Elon’s tweet sent the crypto market spiraling and caused Bitcoin to – for a month – trade in a tightly defined range between $30,000 and $40,000. Now, a new Elon tweet – in which he basically “undoes” the first tweet and says that Tesla will start accepting Bitcoin as payment once green energy is used – is causing Bitcoin to breakout from this trading range.
This breakout has legs.
There’s simply too much positive fundamental news here for the bulls to ignore this breakout.
Famed hedge fund manager Paul Tudor Jones recently came on CNBC and sounded the bull horn on Bitcoin…
El Salvador adopted Bitcoin as legal tender…
401k plan provider ForUsAll is planning to allow for diversification into cryptocurrencies for 401k funds…
Invesco is launching two crypto-based ETFs…
MicroStrategy raised $500 million to buy Bitcoin.
There is a lot of good news here – so much good news that bulls will see this breakout in Bitcoin and use that a signal to hop on the bandwagon.
In other words, we are in the first few innings of a massive “Bitcoin Breakout.”
One way you could play this breakout is by buying Bitcoin. That’s a straightforward enough way.
But, if you’re looking for bigger returns, then you may want to consider skipping on Bitcoin and instead buy smaller cryptos.
Why? Because Bitcoin is the poster-child of the crypto market. As goes Bitcoin, so goes the rest of the crypto market – and, oftentimes, the crypto market tends to stage bigger moves than Bitcoin.
For example, when Bitcoin collapsed 50% in May, many smaller cryptos actually fell 70% or more. On the flip-side, when Bitcoin doubled through the first four months of 2021, many smaller cryptos actually rose 200%, 300%, or more.
In other words, small cryptocurrencies are really just a levered play on Bitcoin.
So… if Bitcoin is the early-stages of a big breakout… then small cryptos are in the early-stages of an even bigger breakout.
Which small cryptos should you be buying?
Right now, at this very moment, my team and I are researching the best cryptocurrencies to bring to our premiere investing newsletter and portfolio, Innovation Investor.
Our picks in the crypto space will represent the cream-of-the-crop when it comes to disruptive innovation in blockchain technology. All of which have massive long-term potential.
We’ll introduce our cryptocurrency portfolio soon, but you don’t have to wait to join. Already, Innovation Investor features the best of the best stocks in a variety of world-changing megatrends, from next-generation mobility to the intelligence economy to digital advertising … and each stock could post early-Tesla-like returns, including a secret startup that’s spearheading the self-driving revolution and a company I consider my EV “sleeper” stock of the decade.
To see my entire lineup of innovative next-generation stocks, subscribe to Innovation Investor today.
On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.
By uncovering early investments in hypergrowth industries, Luke Lango puts you on the ground-floor of world-changing megatrends. It’s the theme of his premiere technology-focused service, Innovation Investor. To see Luke’s entire lineup of innovative cutting-edge stocks, become a subscriber of Innovation Investor today.
