The Sell-Off Shows Why You Need Cryptos in Your Portfolio

I just sent my Ultimate Crypto readers their new issue, and I want to share some of it with you today for a couple of important reasons.

Source: Shutterstock

The first is what’s going on in the stock market right now. The second is what’s going on with cryptocurrencies.

The market got off to a strong start here in 2020, but the year’s gains were wiped out in the selling Monday and Tuesday as investors panicked over coronavirus fears. Stocks ended up down for the year yesterday, which makes the huge outperformance of cryptocurrencies even more impressive.

For example, the CIX100, which is a basket of the 100 largest coins that was created by Cryptoindex, is up 16.4% in the last 30 days. The six altcoins in our Ultimate Crypto portfolio are all part of the index, and they are flying as well. All six have taken off since we bought them, averaging a 32.8% gain in just seven weeks.

The current environment highlights important reasons why cryptos are now a must in a well-diversified portfolio.

The first and primary reason to own cryptos is the potential to make a lot of money … and I mean a lot of money. Cryptos are following their historical pattern and set for a big move in the coming months with bitcoin’s halvening catalyst now just three months away.

The halvening — or “halving” as it’s also called — means fewer new coins coming on the market. All the while, demand will continue to increase as cryptocurrencies go mainstream. This “supply shock” will ignite the cryptocurrency market.

Bitcoin has gone through two halvenings before, and each time resulted in explosive profits.

Things really started to take off in the three months leading up to the first halvening in 2012. Prices shot up more than 10,000% in just over a year. And beginning three months prior to bitcoin’s second halvening in July of 2016, the cryptocurrency surged 4,500% in just over 18 months’ time.

Guess where we are right now? Three months away from the third halvening … and we’re already seeing prices move.

I like bitcoin and expect it to move higher, but most investors don’t know that there is a whole other class of cryptos out there called “altcoins.” Looking back over the last two halvenings, investing in specific altcoins made significantly more money.

We’re seeing that now. The altcoins I recommend in Ultimate Crypto are all outperforming bitcoin since we started on January 7. Here’s a look at our portfolio page. I can’t give you the names, so we’ve blurred them out, but you can definitely see how well they’ve done:

The second big reason to own cryptocurrencies is that they trade largely on their own. They are not correlated to the stock market. That’s especially important right now.

Even the most diversified portfolio of all stocks will get hit when the market pulls back 10%. A “sell everything” mentality takes over during a correction, and not even the strongest companies are spared.

To be clear, I am not calling for a market correction right now. (Although we know we will have one at some point in the future.) I expect stocks will do very well in 2020. Still, you need to know that history clearly tells us that cryptos can move higher even as stocks fall. They can also move higher even as stocks rally.

Investors who own stock ETFs or mutual funds are at the mercy of the market to a large degree – more than you may realize. Most funds are composed of the largest stocks, which are also the most liquid. That makes them easy to buy and sell. So, when a wave of selling overtakes the market, those large, liquid stocks get sold first. That means funds get hit the hardest. Most investors don’t get the diversification they think they’re getting when they invest in funds.

Cryptos are not subject to this type of selling, so they offer extra diversification and extra opportunity for a portfolio.

The Best Is Yet to Come

All signs continue to point to higher crypto prices in the coming weeks and months, no matter what stocks do.

I was very interested to see that the founder and CEO of the world’s largest cryptocurrency exchange, Binance, recently made a rare prediction that he feels bitcoin will increase in value. Changpeng Zhao, better known as CZ, believes bitcoin’s upcoming halvening is not yet priced into the market.

I could not agree more.

People in the know are getting ready for the halvening that will occur in mid-May, but most investors are still in the dark. As the buzz picks up over the next couple of months, there is a great chance that bitcoin will rally through its all-time high set in 2017. That would be a 100%+ gain from today’s prices.

As goes bitcoin, so go a lot of the altcoins. Bitcoin is up about 30% this year, when most altcoins are up more … and some up well into the triple digits.

The last couple of months are just a glimpse of what’s to come, and there’s still time to get in early in the move. In fact, I just raised buy limits on my recommended altcoins to make sure my readers are ready. I hope you will be, too.

Matthew McCall left Wall Street to actually help investors — by getting them into the world’s biggest, most revolutionary trends BEFORE anyone else. The power of being “first” gave Matt’s readers the chance to bank +2,438% in (STMP), +1,523% in Ulta Beauty (ULTA) and +1,044% in Tesla (TSLA), just to name a few. Click here to see what Matt has up his sleeve now. Matt does not directly own the aforementioned securities

Article printed from InvestorPlace Media,

©2020 InvestorPlace Media, LLC