Bitcoin mania continues to grow. It’s all over the place now. Earlier today, I was looking at CNBC’s website and I saw was one headline with a prediction that Bitcoin would hit $1 million by 2020 – that’s after it just crossed $11,000 today – and another headline saying that the cryptocurrency’s parabolic move means it can’t last. An hour later, one of the top stories was how Bitcoin had plunged 18%
Try trading that with confidence.
Still, this is something every investor needs to be aware of. It was reported just today that the NASDAQ, the second largest stock exchange in the world, will launch futures contracts for Bitcoin next year. CME Group announced the same thing earlier this month. And this whole cryptocurrency mania has sparked a surge in ICOs – initial coin offerings. Most of the money for these currencies was coming from venture capitalists, but that is now shifting to the marketplace.
The truth is I’m not all that interested in the cryptocurrencies themselves. I wouldn’t rule out the possibility of short-term trades at some point, but they’re just too dangerous right now. The smarter and safer way to make money off of this undeniable mega-trend is through the breakthrough technology behind it all. This technology has blockbuster potential to reshape industries like IT, healthcare, banking, cybersecurity and just about everything else.
It’s called blockchain, and it will be the biggest technological advancement in the last decade-plus. Here’s a quick run-down of how it works: Most people use a middleman for transactions. The bank is a perfect example. If you want to buy something, you need to get money from the bank or use a payment processor to run the transaction. Blockchain technology allows consumers and suppliers to conduct these transactions directly, removing the need for a third party.
It does that through a decentralized database (or “digital ledger”) of transactions that can be seen by every computer on a network – basically a bunch of computers chained together. Every computer must approve an exchange before it can be completed, so there is no central database that can be hacked. We all know how important that is. The whole process may sound complicated, but it’s actually faster than wire transfers or any other banking transactions.
In fact, investing itself may be among the first industries impacted by blockchain transactions. Goldman Sachs and JPMorgan Chase both recently finished a six-month test of blockchain in the equity-swaps market. The program that was used was developed by a startup company called Axoni, and it achieved a 100% success rate.
Wall Street is embracing blockchain because it would speed up the settlement of trades, which would in turn lower expenses and free up capital for other uses. But it doesn’t stop there. Blockchain technology can work for almost every type of transaction involving value, including money, goods and property. That means the opportunities are about as limitless as they can be.
That’s why the market for blockchain is already booming, and is expected to continue to rise to $2.3 billion by 2021, so there’s plenty of time to profit from the huge potential still ahead – through stronger and safer investments than just Bitcoin alone.
One to Start With
The broadest and generally safest way to make money in blockchain right now is through one of my favorite exchange-traded funds, ARK Innovation ETF (ARKK), which I recommend in my NexGen Profit Multiplier service. Don’t think ETFs are boring, slow-moving investments. Some are, but not the ones I invest in. ARKK has gained over 80% in the past 12 months.
There is quite a bit going on with this ETF. It gives us instant exposure to several NexGen themes. From the hard-to-access Bitcoin to the likes of online retailing giant Amazon (AMZN) to electric/self-driving cars and battery storage with Tesla (TSLA). It’s almost like one-stop shopping for NexGen investing!
ARKK holds 53 stocks as of today, and guess what its biggest holding is. Yep, Bitcoin Investment Trust (GBTC). ARKK gives you a safer, easier way to play Bitcoin while also investing in many other interesting and successful names that stand out on their own.
ARKK has done very well this year, so it’s probably due for a pullback, and we did see a dip today as a lot of tech companies were hit with selling. Still, I view any weakness as healthy and see this ETF continuing to move higher.
With as much buzz as there is around Bitcoin and blockchain, more ETFs are on the way. Three companies have filed recently to create investments that will hold securities in blockchain companies and more are also lining up to get a piece of Bitcoin’s secret sauce. That makes this one of the most interesting mega-trends we’re following today. You have to be careful, but there are smart and safer ways to invest in this trend, and the profit potential is huge.