A good investing tip – and arguably the best investing tip – is to always follow the smart money.
Lots of folks characterize the so-called smart money as hedge funds and institutional investors. That is certainly one form of smart money. But it is far from the smartest money.
Rather, the smartest money in the world is venture capital money.
Hedge funds are smart. VCs are smarter. All you need to do is to look at the average annualized returns of hedge funds (~10%) and compare it to the average annualized returns of VCs (~20%) to know which one is better at investing.
Case closed. VCs are the smartest money in the room.
So… what are all those VCs doing right now? They’re piling into cryptos.
Just last week, Katie Haun – who co-heads the world’s second largest crypto fund, a16z – split from the firm to launch her own crypto fund. You don’t do that, as the manager of a $2.2 billion fund, unless you’re insanely bullish on the crypto markets.
Meanwhile, just weeks before that in late November, a newly-launched crypto fund by the name of Paradigm raised a record-breaking $2.5 billion to invest in cryptos. Again, you don’t raise that much money from investors unless folks are insanely bullish on the crypto markets.
And, just months prior to that, in the third quarter of 2021, Coinbase’s venture capital arm (Coinbase Ventures) made more deals than any other VC firm of any shape, size, or focus. Yet again, you don’t make more deals than everyone else in the VC world unless you’re insanely bullish on the crypto markets.
All told, VCs have invested a record-shattering $27 BILLION globally into crypto startups so far in 2021 – more than the previous 10 years combined.
Actions speak louder than words – and of all actions, money moves speak the loudest. Those $27 billion belong to the world’s smartest investor screaming one thing loud and clear: We’re bullish on cryptos.
That may seem at odds with the current trading action…
After all, Bitcoin (CCC:BTC-USD) has dropped below its 50-, 100-, and 200-day moving averages for the first time since May 2021 – a bearish breakdown in the technical chart implying that a drop toward $42,000 is imminent.
At the same time, the Federal Reserve has spooked the crypto markets – and indeed, all financial markets – by signaling three rate hikes in 2022…
And omicron is spreading like wildfire across the globe, prompting event cancellations and some lockdown orders…
And Democratic Senator Joe Manchin rejected the Build Back Better plan, which means less fiscal spending in 2022 and less reason to hedge against tons of money printing next year…
Ostensibly, the near-term outlook for cryptos is quite bleak.
But VC investors don’t care – because the key to their success is ignoring near-term noise and hyper-focusing on the long-term picture.
And, folks, the long-term outlook for cryptos has never been brighter.
Fundamental adoption trends remain robust. The legal backdrop continues to improve. Technological improvements remain impressive. Long-term, everything looks great.
The investment implication? Now isn’t the time to run away from the crypto markets because of the Fed, or omicron, or the technicals.
Now is the time to run toward cryptos because they’re still in the early innings of changing the world.
That’s what the venture capitalists are doing. That’s what the smartest money in the world is doing. They’re all running toward cryptos right now.
You should join them.
To do that, I highly suggest you tune in to our flagship cryptocurrency investment research platform, Crypto Investor Network, where we tell you how to invest in the crypto markets for the biggest long-term gains.
So far, we’ve netted folks an average return of 100% per crypto pick – and we think this party is just getting started.
It’s not too late to get in. Find out more here.
On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.
