Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Time to take the RED Pill - 28th May 24
US Economy Slowing Slipping into Recession, But Not There Yet - 28th May 24
Gold vs. Silver – Very Important Medium-term Signal - 28th May 24
Is Gold Price Heading to $2,275 - 2,280? - 28th May 24
Stocks Bull Market Smoking Gun - 25th May 24
Congress Moves against Totalitarian Central Bank Digital Currency Schemes - 25th May 24
Government Tinkering With Prices Is Like Hiding All of the Street Signs - 25th May 24
Gold Mid Tier Mining Stocks Fundamentals - 25th May 24
Why US Interest Rates are a Nothing Burger - 24th May 24
Big Banks Are Pressuring The Fed To Losen Protection For Depositors - 24th May 24
Another Bank Failure: How to Tell if Your Bank is At Risk - 24th May 24
AI Stocks Portfolio and Tesla - 23rd May 24
All That Glitters Isn't Gold: Silver Has Outperformed Gold During This Gold Bull Run - 23rd May 24
Gold and Silver Expose Stock Market’s Phony Gains - 23rd May 24
S&P 500 Cyclical Relative Performance: Stocks Nearing Fully Valued - 23rd May 24
Nvidia NVDA Stock Earnings Rumble After Hours - 22nd May 24
Stock Market Trend Forecasts for 2024 and 2025 - 21st May 24
Silver Price Forecast: Trumpeting the Jubilee | Sovereign Debt Defaults - 21st May 24
Bitcoin Bull Market Bubble MANIA Rug Pulls 2024! - 19th May 24
Important Economic And Geopolitical Questions And Their Answers! - 19th May 24
Pakistan UN Ambassador Grows Some Balls Accuses Israel of Being Like Nazi Germany - 19th May 24
Could We See $27,000 Gold? - 19th May 24
Gold Mining Stocks Fundamentals - 19th May 24
The Gold and Silver Ship Will Set Sail! - 19th May 24
Micro Strategy Bubble Mania - 10th May 24
Biden's Bureau of Labor Statistics is Cooking Jobs Reports - 10th May 24
Bitcoin Price Swings Analysis - 9th May 24
Could Chinese Gold Be the Straw That Breaks the Dollar's Back? - 9th May 24
The Federal Reserve Is Broke! - 9th May 24
The Elliott Wave Crash Course - 9th May 24
Psychologically Prepared for Bitcoin Bull Market Bubble MANIA Rug Pull Corrections 2024 - 8th May 24
Why You Should Pay Attention to This Time-Tested Stock Market Indicator Now - 8th May 24
Copper: The India Factor - 8th May 24
Gold 2008 and 2022 All Over Again? Stocks, USDX - 8th May 24
Holocaust Survivor States Israel is Like Nazi Germany, The Fourth Reich - 8th May 24
Fourth Reich Invades Rafah Concentration Camp To Kill Palestinian Children - 8th May 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Is Bitcoin Still an Asymmetric Opportunity?

Currencies / Bitcoin Apr 29, 2024 - 05:37 PM GMT

By: Submissions

Currencies

What’s that screeching sound?

  • Does this make you nostalgic?

I can still hear the screeching sound of my old dial-up struggling to connect to the internet.

Remember those days? I’d fight with my brothers and sister for a turn on our one family computer.

Slow websites. Frozen pages. Dropped connections. The early days of the internet were rough.


But if you had the foresight to invest in AOL during those days, you could’ve made good money. AOL went from a few bucks a share in 1997 to nearly $100/share (split-adjusted) by 2000, before merging with Time Warner and dropping during the dot-com bubble.



Source: Seeking Alpha

Of course, that’s not the only example.

Investors who backed new types of companies like Amazon (AMZN)Google (GOOG), and Cisco Systems (CSCO) when the web was in its infancy made life-changing money.

The lesson: It paid to make smart bets on the internet when it was still messy.

I bring this up because crypto is a lot like the early days of the internet.

Not user friendly. Messy. Takes effort to navigate.

According to RiskHedge’s resident crypto expert Stephen McBride, that’s our opportunity.
  • “All groundbreaking new technologies suck at the beginning.”

Crypto’s come a long way in the last couple years.

There are now 580 million crypto holders worldwide—a number that grew 34% in 2023.

But there’s still a long way to go. Stephen:

Today, the crypto user experience sucks.

There’s no way a billion people will use crypto in its current form. And that’s our opportunity.

Just like the internet, crypto will become much easier to use. This is going to attract hundreds of millions of new users, fueling years of rapid growth for crypto businesses.

By investing now, you can set yourself up to profit from this growth. The vast majority of investors won’t put the effort in. That’s why they’ll only ever read about the big money crypto investors can make.

The frustrating user experience means we’re still very early to crypto.

  • And keep in mind... crypto is still tiny.

Relative to real estate, the S&P 500, and gold... crypto is barely a blip:



In fact, Microsoft (MSFT)—one company—is larger than the entire crypto market. So is Apple (AAPL). And Nvidia (NVDA) isn’t far behind.

So crypto is new(ish), small, and rapidly improving.

That makes it a great source of potentially asymmetric returns. 

In investing, “asymmetric” means the potential upside of an investment is much greater than the potential downside.

Symmetric investing is when an investor risks $500 for a chance to make $500. Or $10,000 for a chance to make $10,000.

Asymmetric investing is risking $500 for the chance to make $10,000.

Of course, booking 1,000%+ gains is easier said than done, and it requires taking greater risk.

That’s why asymmetric investments should be no more than a small part of your overall portfolio. Stephen recommends putting only 1%–2% into crypto, max.

  • Is bitcoin still an asymmetric opportunity?

Depends on the timeframe.  

Bitcoin trades for about $62,000 as I write. Stephen expects it to hit at least $150,000 this cycle. That’s a little more than a double. Symmetric.

Given time, could bitcoin reach $1 million? If its adoption curve continues, absolutely. But it’s highly unlikely to shoot up 10X or more quickly, as small cryptos often do.

Stephen says the #1 asymmetric opportunity today is in the smaller, lesser-known cryptos. The crypto market is still so small and so new, there’s room for exponential growth.

Chris Reilly

Executive Editor, RiskHedge

To get more ideas like this sent straight to your inbox every Monday, Wednesday and Friday, make sure to sign up for The Jolt, a free investment letter focused on profiting from disruption.

Expect smart insights and analysis on the latest breakthrough technologies, the big stories the mainstream media isn't reporting on, and much more... including actionable recommendations.
Click here to sign up.

© 2024 Copyright Chris Reilly- All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in