Booms, Busts and Cryptocurrencies

Bitcoin briefly topped out above $20,000 in December. Then it hit a rough patch. As I type, bitcoin is trading in the $14,500 range. Many people wonder if this is the beginning of the end for bitcoin.

Heres my answer to that: no, its not. Not by a long shot.

Pullbacks like these are normal, healthy, and even necessary. Nothing goes up in a straight line forever. And I still hold firm to my prediction that bitcoin will top $1 million by the end of 2020.

Famed venture capitalist Peter Thiel just announced hes buying up to $20 million in bitcoin. Thiel is the co-founder of PayPal and an early investor in businesses like Facebook, Airbnb, SpaceX and Lyft.

Thiels no fool.

Look, Im no Johnny-come-lately to bitcoin and cryptocurrencies in general. When I introduced my book Choose Yourself in 2013, I initially sold it exclusively for bitcoin. That was almost five years ago, long before most people had even heard of bitcoin.

Heres what you need to know today:

The boom in cryptocurrencies is following the same script that has played out over, over and over again.

You see, every boom follows a sequence of three stages. Every single boom throughout history has followed this script.

The stock market boom in the roaring 20s the tech boom in the 1990s the housing boom in the 2000s.

And now the booming cryptocurrency market is following this exact same 3-step script.

First, only early enthusiasts are courageous enough to invest in the new trend. Thats stage 1.

Then, institutional investors (the so-called smart money) jump in. Thats stage 2.

Finally, the public joins the party, triggering a massive explosion in price. Thats stage 3.

If you know how to use this roadmap, you could make an absolute fortune. And to help you understand how this 1-2-3 sequence works, let me show you what happened during the 1990s boom in tech stocks.

In the mid-1990s, most people didnt even know what the internet was. In 1994, the morning show NBCs Today had a segment where one of the anchors asked, What is the internet, anyway?

While most people were dismissing the technology as a fad, early adopters like myself were heavily investing in it. In 1995, I correctly predicted every company would need a website. So I started my first internet company to help big corporations get online.

Thats how I ended up building the first websites for American Express, HBO, Sony and Disney, among others.

That was stage 1 of the boom.

Only when Netscape went public in late 1995 did people outside Silicon Valley start taking the internet seriously. Thats when institutional investors started joining the party, with pension funds and venture capitalists making a fortune when companies like Yahoo and Amazon went public.

The additional flow of money from the smart money helped pushed tech stocks even higher.

That was stage 2 of the boom.

But the public was still not participating. In June 1998, for example, mainstream economist Paul Krugman predicted the internets impact on the economy would be no greater than the fax machine. It wasnt until 1999 that the masses finally started to invest heavily in tech stocks.

With more people jumping into the market, tech stocks jumped even higher, attracting more and more people wanting to get a piece of the action.

And that was the third and most explosive stage of the boom, with the Nasdaq soaring more than 85% in 1999 alone.

Im telling you this because my research shows that cryptocurrencies are following this exact same script

First, early enthusiasts, then, institutional investors, and finally the public. Where are cryptocurrencies right now?

In stage two of the boom.

The public is still not invested. Thats why right now is so special. If you get in before the masses, you could see astronomical gains.

Getting back to the tech boom, I compare the current crypto boom to the dot com boom of the late 90s. Yes, most of the dot coms went bust and you never heard from them again. But some of the survivors went on to great things.

Think of Amazon. Amazon was trading for $10 in early 2001. Now its trading for over $1,200.

If you miss out on the crypto boom, Im convinced you could be denying yourself the only chance youll ever have to turn a small $100 initial investment into an absolute fortune.

The total value of cryptocurrency markets recently surpassed the half-trillion-dollar mark. While this may seem like a lot, its important to put things into perspective

The worlds gold supply is currently estimated to be more than $7.5 trillion. The global supply of paper money is estimated to be another $7.6 trillion. The total supply of money is even greater.

That should give you some idea of the potential growth in cryptocurrencies. I think were just getting started.

Are you still intimidated or unsure about cryptocurrencies?

Well, if you dont have experience with digital currencies, you are not alone. Despite the massive investments from the smart money, despite all the newly minted millionaires, and despite this exploding market

Most people dont even know what a cryptocurrency is.

To this date, fewer than one in 10,000 people have invested in bitcoin. Just ask your friends, spouse and neighbors what they think of ethereum, litecoin and monero. I bet theyll have no clue what youre talking about.

Thats because the masses are not participating in this boom. Not yet!

Remember, the biggest gains in any bull market throughout history only happen when the public joins the trend. Its the masses that will push cryptocurrencies to the moon.

I remain bullish on the long-term potential of cryptocurrency and continue to advise my readers to buy the dips.

Im serious when I say that bitcoin could go to $1 million by the end of 2020, and that investors can turn even a small amount of money into a small fortune over the next few years.

But heres the thing

There are more than 1,300 cryptocurrencies out there right now. And new ones are coming out all the time. Imagine trying to trade all of them. Thatd be like having 1,300 stocks in your brokerage account. It boggles the mind.

So even for those among us who do know a little bit about cryptocurrencies, they still may feel lost in the shuffle. I estimate 95% of cryptos will go bust at some point. Thats why I created Crypto Trader, to offer radical simplicity and the chance to actually make money by harnessing the power of the cryptos that will survive.

I want to provide anyone interested in cryptocurrencies with as much legitimate support as I possibly can, based on my own experiences and those of the network of professionals I work with.

Its my job to ensure none of my readers get scammed by unscrupulous people, and its a job I take very seriously.

Again, Im convinced investors will make fortunes in cryptos even starting with a small amount of money. But only if they avoid the scammers.

So I urge you to ride the crypto boom for all its worth. But please heed my advice, commit it to memory and take these security efforts very seriously

Watch out for scammers online.

My goal is to help my readers maximize the potential of this once-in-a-lifetime opportunity. You can, and will, generate great wealth from cryptocurrencies in a safe manner by playing it smart. This is the boom of a lifetime. I doubt youll ever see anything like it ever again.

I invite you to join me on this fascinating journey. And Im here to be your guide.

Regards,

James Altucher
for The Daily Reckoning

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