Chris Reilly here, standing in for Stephen McBride.
This morning, Stephen is preparing for the 20th annual Strategic Investment Conference, which kicks off next week. He’ll be hosting an important discussion with Rational Optimist author Matt Ridley about what could go right—or wrong—in our near future as the artificial intelligence (AI) and biotech revolutions accelerate.
Stephen will also moderate a crypto panel with fund manager Dan Tapiero and bestselling author Lyn Alden. That’s timely with bitcoin’s (BTC) big halving event set to occur overnight this Friday.
The online conference is put on by our friends at Mauldin Economics. If you’re interested, claim a discounted ticket here.
I can still hear the screeching sound of my old dial-up struggling to connect to the internet.
Source: Digital Trends
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 Stephen, that’s our opportunity.
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.
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.
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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.
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—with bitcoin’s halving scheduled to happen overnight this Friday—is in the smaller, lesser-known cryptos. The crypto market is still so small and so new, there’s room for exponential growth.
Crypto has come a long way.
Coinbase (COIN), the world’s largest crypto exchange, had 40 cryptos on its platform in December 2019. Today, there are 248.
If you’d like to get involved in this fast-moving market, consider joining Stephen inside RiskHedge Venture. In it, he and his team make it as easy as possible to buy lesser-known cryptos that could flourish into world-changing businesses.
He also prioritizes clear, concise risk-management guidance, so you always know exactly when to sell. For example, last month, subscribers took profits on small cryptos that were up 301%, 337%, and 650%, respectively.
We’re currently offering RiskHedge Venture for a special "pre-bitcoin halving” price. This goes away on Friday at midnight before the halving happens.
If you’re interested, go here now.
Chris Reilly
Executive Editor, RiskHedge