Kris’ note: Did anyone say making money in bitcoin was easy?
We don’t think so.
It’s surely the most nerve-wracking, helter-skelter ride of an investment you can own.
But as colleague Teeka Tiwari says, “Volatility is the price of entry” into the potential for gains in the crypto market.
If you’re not willing to accept volatility, bitcoin and crypto aren’t the right investments for you. The wild price moves will likely force you out before you can benefit from the gains.
Or rather, your emotional reaction to the wild price moves will force you out.
We can see that potentially happening right now. The bitcoin price has climbed from $26,000 in October to $41,000 today. Just over a week ago, it was $45,000.
Where will it be tomorrow? That’s anyone’s guess. The key is to not allow your emotions or the market to force you out of the market before it’s time.
In today’s Daily Cut, we hand over the reins to Sam Volkering. Sam is one of Teeka’s senior analysts. He helps keep him up to date with all the latest crypto projects and helps him to identify new trends.
In this guest essay, Sam explains why, despite the recent run, we’re still in the early stages of the new crypto bull market cycle. Read on below, following our quick look at today’s market action…
Market Data
The S&P 500 closed up 0.6% to end the day at 4,748.36… the Nasdaq added 0.8% to close at 14,931.31.
In commodities, West Texas Intermediate crude oil trades at $72.15, up 50 cents…
Gold is $2,040.50 per troy ounce, up $6.80…
And bitcoin is $41,956, down $278 from Friday.
Now, we hand over to Sam Volkering, as he takes us back to Christmas 2017, and how that period has relevance for bitcoin investors today…
It’s Christmas Week 2017…
But instead of gift shopping at the crowded mall and going home to a glass of mulled wine, you’re obsessively hitting “refresh” on the CoinMarketCap website.
“CoinMarketCap thumb” feels like a real condition for crypto investors.
It’s like repetitive stress injury for your smartphone thumb – users are constantly bashing the refresh button to see if they’re richer or poorer that very moment.
Over the 2017 holiday season, there was a lot of “CoinMarketCap thumb” going around.
It wasn’t the season of jingling sleigh bells and falling snow. It was a time for the crypto markets.
The wild volatility of the crypto markets in December 2017 was at all-time highs.
As bitcoin touched $19,000 in early December – its all-time high at the time – by Christmas it had crashed to around $14,000.
I can tell you firsthand… For many, it felt like the sky was falling.
But compared to the $900 bitcoin had been at on Christmas 2016… Any price in five figures was a dream come true – if you invested early.
Of course, the mainstream media was shaking their finger at crypto believers – as if we’re in some kind of cult – saying that the bubble would burst… That it was tulip mania all over again… And like all good Ponzi schemes, bitcoin would collapse and go to zero.
But it never did.
By December 2018, the world’s largest cryptocurrency by market cap had fallen from the lofty height of $19,000 down to around $3,800.
As reported by CNBC at the time:
Bitcoin is now down 73% since the beginning of January. Twenty-four-hour trading volumes are down 56% since January 1, while the entire cryptocurrency market capitalization has fallen 80%.
The same article noted these price drops were due to, “crackdowns by U.S. regulators and a breakdown in key technical levels.”
Forbes summed up the mainstream media’s attitude toward bitcoin and crypto by the time Christmas 2018 rolled around with the headline: “Why Bitcoin Crashed, and Why It Will Crash Again.”
By the end of 2018, the atmosphere surrounding bitcoin was horrific.
The mainstream media was loaded with news articles about the “crypto bubble bursting” and bitcoin going to zero. Warren Buffett called bitcoin “rat poison squared” at the Berkshire Hathaway annual shareholder meeting.
Everything was moving against bitcoin and crypto… until you looked at the data.
The chart below shows the number of bitcoin wallets holding more than 0.1 BTC. It’s overlayed against the price of bitcoin.
As bitcoin’s price rises, so does the number of wallets holding more than 0.1 BTC. Shortly after the price begins to fall, so does the number of wallets with more than 0.1 BTC.
But then the “HODLers” – those holding on for dear life – pick up in numbers again.
By the end of 2018, even though bitcoin was cratering in price, the wallets continued to rise and were near the levels at the peak of the late 2017 market mania.
This helps to understand that what you hear and read about in the mainstream media is often wildly different from what’s really happening in the crypto industry.
The perceived atmosphere in a moment of panic selling doesn’t paint the real picture of what’s happening beneath the surface.
It’s in these periods of collapsing prices – the proverbial Crypto Winters – that real crypto people are made.
Forging Diamond Hands for 2024
When you’re under the most extreme pressure – from the media, family, friends, your portfolio’s value – that’s when you forge diamond hands.
(By the way, “diamond hands” is a popular phrase among crypto traders. It means to be unwilling to sell in a heavy bear market, holding one’s nerve until the next bull cycle when the market takes off.)
If you’ve been with us since the lofty heights of 2017, then you’ve experienced not one but two Crypto Winters.
You have fists of diamond – even if you’ve only withstood this past Crypto Winter.
Not only were 2018, 2019, and early 2020 lean times… They were downright nasty.
However, that’s exactly when the projects primed for the 2021 bull cycle were established, developed, and locked in for the mania to unfold again.
Not only did bitcoin demolish its previous all-time highs in 2021, but other cryptos exploded even more in value.
It was in this 2021 boom that we locked in some of the most historic gains ever seen.
For example, our worst-performing profit sell in our flagship crypto newsletter, Palm Beach Confidential, that year was Status Network (SNT) – which only delivered a 1,052% gain.
The best-performing was Neo (NEO) – 37,573% higher than our original entry.
This is why it’s so important to set yourself up during the periods before the bull market kicks off. It’s why forging diamond hands in a Crypto Winter makes you one of crypto’s elite.
And if you’re only just starting your crypto journey with us now, the good news is the next bull market cycle is only just beginning.
You’re still early… And that means you’re in a prime position as you build your crypto portfolio and we step into 2024.
The Bull Market Case for 2024
In 2024, we expect bitcoin to soar past $69,000 and reach new all-time highs. We expect Ethereum will be hot on its heels.
We expect this thanks to several crypto events on the horizon, such as:
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The approval of a spot bitcoin exchange-traded fund
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The bitcoin halving, which is scheduled for April 2024
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The eventual approval of a spot Ethereum ETF
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The adoption of bitcoin as a reserve asset by governments, central banks, and institutional investors
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Tokenization of equity, real estate, and other real-world assets on blockchains – a $16 trillion opportunity, according to Boston Consulting Group
These are just some of the big catalysts we see on the horizon for 2024. And as they play out, the market will soar higher.
What does that look like in practice?
Well, in the chart below, you can see how small the 2017–2018 peaks are compared to the 2021 peaks.
Now, picture those 2021 peaks looking equally as tiny as the entire crypto market booms to new all-time highs.
Not only will 2021 look like a small event… But the 2017 peaks will barely even register on the charts.
Right now, we’re starting to see signs of crypto moving into a full-blown bull market mania.
When it does, expect FOMO (fear of missing out) to kick in for those who haven’t yet added crypto to their portfolios or who were unable to forge their diamond hands in the last Crypto Winter.
Expect that inflection point to come thick and fast, and for this market to enter hyperdrive.
Let me be perfectly clear: The time to move isn’t as the market is rocketing up. The time to add to your portfolio is now.
Teeka’s #1 AI Coin for 2024
Daily editor Teeka Tiwari believes the next stop for bitcoin is new all-time highs. And as bitcoin goes, so go the altcoins.
And according to Teeka, who picked the #1 crypto six years in a row…
This AI coin that’s trading for less than a quarter could be the #1 AI trade of 2024.
Teeka has already given his readers 27 chances to make at least 1,000% gains in the crypto market…
Including multiple chances to turn $1,000 into massive six- and even seven-figure payouts.
And now he’s released the details on his #1 coin for the AI boom.
Just like in 2018, the media is clueless about what’s happening with crypto. So most people will be left in the dark.
But those of you with diamond hands – who seize the opportunity to buy when others are scared – have the chance to see life-changing gains.
Until next time,
Sam Volkering
Analyst, Palm Beach Daily
Unconnected Dots
Our main task at the Daily Cut is to try to “connect the dots.” That is, we help you figure out what events are about, what makes them important, what their consequences are, and what it all means for you.
But sometimes, we see the individual “dots,” but can’t yet figure out how they connect to anything. Maybe they never will connect to anything.
Regardless, if those unconnected dots feel as though they could be important, we’ll mention them here. And we’ll let you draw your own conclusions.
Today’s unconnected dots…
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We noticed another fuss kicking up on X. Not surprisingly, the major owner of X, Elon Musk, is behind it with this tweet:
Source: X
The inference is that Microsoft Word will prompt you to change words if it feels you aren’t being “inclusive” or sensitive enough.
In the case highlighted by Musk, he notes Word’s suggestion that he change the word from “insane” to something else… because “insane” may be insensitive to folks with mental health issues.
Now, some people may argue this is another non-issue… that Word makes suggestions for alternative words, phrases, or sentence structure all the time. Others will note that Word has included this “inclusiveness” feature since 2020… and that you have to manually “switch on” this function.
All of that may be true. However, that doesn’t mean you should ignore the insidious trend towards “big tech” mandating speech. We can give you an example… an example that directly affected our business.
You may not realize it, but the whole reason why this Daily Cut e-letter exists is due to an attempt by “big tech” to censor Legacy Research in 2018.
Following the election of Trump, the explosion of “fake news,” and other issues, “big tech” took it upon themselves to attempt to “clean up” the internet.
Legacy Research became involved in that clean-up. We were told by “big tech” that they didn’t like our content… specifically, they had an issue with content that warned about market crashes and content involving bitcoin.
Extraordinarily, it wasn’t just about requiring us to make changes to ad content posted on various networks… it required us to take down editorial content on our websites… removing essays, commentaries, and ideas that we may have published three or four years previously.
We thought about it and decided that, no, we wouldn’t do that. Instead, we made a few changes to our business, and one of those was to introduce another point of contact with our readers. That was the Daily Cut.
But now you have to look at what Microsoft has implemented with its Word product and wonder how much further this – as Musk puts it – “scolding” can go.
Could it ever get to a stage where Word just wouldn’t allow you to type certain words? Could it get to a stage where Gmail or Yahoo! or Outlook would stop all emails containing certain words…
Or what about if they developed the technology so their software could change the words right there in your inbox? We’re sure AI could do that, without too much effort.
We could send an email containing one particular word, but when it hits your inbox, “big tech” AI has changed it to a more “acceptable” word.
Sound crazy… or implausible? Maybe. But maybe it isn’t.
More Markets
Today’s top gaining ETFs…
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VanEck Steel ETF (SLX) +2.8%
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Amplify Transformational Data Sharing ETF (BLOK) +1.8%
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First Trust Materials AlphaDEX Fund (FXZ) +1.7%
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Global X MSCI China Energy ETF (CHIE) +1.7%
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ProShares Ultra QQQ (QLD) +1.5%
Today’s biggest-losing ETFs…
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iShares MSCI South Africa ETF (EZA) -2.9%
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iShares MSCI Chile ETF (ECH) -2.7%
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SPDR Kensho Clean Power ETF (CNRG) -2.5%
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KraneShares MSCI China Clean Technology ETF (KGRN) -2.3%
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iShares MSCI Turkey ETF (TUR) -2%
Mailbag
If you have any questions or comments for our experts here at Legacy Research, we’d love to hear from you.
Write to us at feedback@legacyresearch.com and just type “Daily Cut mailbag” in the subject line.
Cheers,
Kris Sayce
Editor, The Daily Cut