As Investors Bury Their Heads in the Sand, Look for the Right Cryptos to Buy

For folks who are unaware, I run a cryptocurrency-focused research advisory called Crypto Investor Network with legendary early Bitcoin (CCC:BTC) investor Charlie Shrem.

Together, we’ve created a blockbuster portfolio of cryptos to buy that, in about a year, has an average return of 100% per pick.

And just two days ago, our monthly issue detailed two new buys in that portfolio because we think now is as good a time as any there’s been in the past several years to start buying high-quality cryptos on the dip.

Mark our words. Investors who buy this dip in the right cryptos to buy today have a chance to make a lot of money over the next 12 months.

Source: Shutterstock

Here’s the macro story:

Cryptos have been crushed in 2022, along with pretty much every risk asset. Why? — because investors are playing defense against a Federal Reserve that’s going to tighten monetary policy this year via rate hikes and balance sheet reductions.

But the market is acting like the Fed hasn’t ever tightened monetary policy before. Spoiler alert: They have. And the last time they did so via eight consecutive rate hikes between late 2016 and late 2018, risk assets actually performed very well…

The S&P 500 rose 26%. Disruptive tech stocks — as measured by the ARK Innovation ETF (NYSEARCA:ARKK) — popped 126%. And Bitcoin rose 440%.

Basically, history says the market is unnecessarily overreacting here. That’s usual. Heading into the last rate hike cycle, risk assets similarly struggled. In January 2016 — when the market was all worried about the Fed tightening too fast (same story as today) — the S&P 500 dropped 5%, disruptive tech stocks shed 18% and Bitcoin dropped 14%.

In other words, this is par for the course. Investors get all scared of the Fed ahead of a rate hike cycle. That rate hike cycle comes. It ends up not being the end of the world. And investors get bullish again.

Lather. Rinse. Repeat.

Quell Your Fear

The investment implication is that while everyone else is running away from risk assets, you should actually be running toward them — and you should be especially aggressive on the high-beta assets that have been washed out, like growth stocks and cryptos.

Net-net, we’re buying this dip — pretty aggressively — because we believe the return potential in certain growth stocks and cryptos from current levels is enormous.

But here’s the catch: You have to pick the right cryptos.

The crypto market is really frothy right now. There’s a lot of unnecessary speculation in that market. You have dog coins, meme coins, penny coins trading for fractions of a penny, coins soaring thousands of percent in a matter of days.

That’s all unsustainable. Eventually, the game of trading joke coins for huge returns over the course of days will end — and we think it will end in 2022.

Find Quality Cryptos to Buy

It’s very likely that as the Fed hikes rates this year and investors become more selective with their money, less money will flow into those “joke coins,” thereby sending them way lower. We think 2022 will be a rough year for the most speculative corners of the crypto market.

But all that money coming out of joke coins has to go somewhere. Stocks? Maybe — not likely. Return potential isn’t great. Bonds? Nope — negative real yields. Cash? Nope, inflation’s too hot.

It’s going to stay in the crypto world — and it’s going to flow directly into high-quality cryptos.

That’s why we believe 2022 will be a breakout year for buying high-quality cryptos.

So unsurprisingly, we’re starting to buy the dip in high-quality cryptos in our flagship crypto research advisory, Crypto Investor Network.

Our two new buys include a burgeoning Layer-1 blockchain project with a unique technological platform that could enable it to win the Layer-1 battle in the long run and a small web3 crypto with big upside potential as a social content play.

For reference: Our most recent Buy Alert before these two cryptos happened a month ago. That crypto has basically doubled since then — in just a month — while Bitcoin has dropped over the same stretch.

Impressive, right? Well, we believe these two new cryptos could do the same thing.

And that’s why, if you’re interested in making big money in the crypto markets over the next few months, you should click here.

On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.

Article printed from InvestorPlace Media,

©2022 InvestorPlace Media, LLC