Editor’s note: Back in March, bitcoin was on a tear ahead of its first halving event since 2020 … one of many major market events for the crypto in 2024. And Chief Research Analyst Matt Clark was spot on with his pre-halving analysis.
As we close out 2024, we’re going to sprinkle in some Money & Markets Daily highlights from the last year. Whether it was an incredible market call, strong stock analysis or just an entertaining story chock-full of investing insights, we want to celebrate it!
With bitcoin now trading north of $100,000, we thought it was the perfect time to look back at Matt’s piece from March.
Read on to see what he nailed — and how you can take advantage of the crypto rally from here…
About three years ago, my neighbor Danny approached me with an interesting question.
He heard of this new cryptocurrency and wanted to know if it was a good investment.
Now, Danny is a retired shoe store owner from New Jersey, living here in South Florida.
He’s not “high on the hog,” as my grandfather would say, but he does OK. But OK isn’t enough for Danny … he’s always looking for new ways to make a quick buck and grow his retirement income.
In this case, he thought he landed on a gold mine.
Danny asked me about dogecoin, a cryptocurrency that started as a joke in 2013 but took off in 2021, thanks to Tesla CEO Elon Musk talking it up. Danny didn’t want to miss out on dogecoin’s big run, which ended up gaining more than 15,000% in 2021.
But I told Danny that I didn’t know very much about dogecoin — or any other crypto for that matter. I really couldn’t give him an opinion about it.
Like many investors, Danny dove into the crypto world feet first … without really understanding the ins and outs.
And he’s experienced the ups and downs that go along with it (mostly the downs).
You’ve likely seen that cryptos are riding new highs, prompting many to jump in like Danny.
But the best approach is more calculated. I’ll share it with you today.
Crypto’s Big Run
Dogecoin likely wouldn’t even be a thing without the crypto that started it all: bitcoin.
It’s the most well-known and used crypto in the world.
Investors have been hot and cold on bitcoin over the years. The crypto’s value has risen and fallen like an amusement park roller coaster.
But it’s hard to ignore bitcoin’s current run:
Since March 2023, bitcoin has jumped 197% to reach an all-time high.
That rally is extending beyond bitcoin. Smaller digital assets, like dogecoin, have jumped even higher in just the last month.
The MarketVector Digital Assets 100 Small-Cap Index tracks the bottom half of the largest 100 digital currencies. It’s up 60% compared to bitcoin’s 56% jump in the last month.
Just like Danny in 2021, investors have a fear of missing out (FOMO) on the surge in crypto value.
Even with this recent run-up, many of these smaller, lesser-known coins are still way off their all-time highs.
Dogecoin is nearly 80% off its all-time high, while Solana is more than 50% down. Ethereum, the second-largest crypto by market cap, is almost 30% below its high.
Everyone is focused on bitcoin.
The recent launch of bitcoin exchange-traded funds (ETFs), along with a coming reduction in supply (more on this in a second), has led to big bets and FOMO on the largest crypto in the world.
But that's not where the real opportunity lies…
FOMO and the Bitcoin Halving
This is a big year for the biggest crypto.
When bitcoin was conceived, there was a pre-programmed limit of 21 million coins. That’s because if you keep printing money without limits, you run into hyperinflation (like in Germany in the 1920s).
That's where the bitcoin halving comes in.
Every four years, the network reduces the reward miners get for extracting bitcoin by half … thus, the halving.
This controls the supply of bitcoin hitting the market and limits inflation in the system. The idea is to keep the coin stabilized by controlling how much is mined. It also forces miners to generate profits with a smaller reward and drives out less productive miners.
For investors, this halving event has led to increased value in bitcoin:
During the previous three halvings, the price of bitcoin has gone up just before and sharply increased immediately after the event.
That doesn’t mean it will happen this time around, but investors and their FOMO are betting on it.
The Best Way to Trade the Halving (or any Crypto Event)
While I am no expert in the world of crypto, my good friend Ian King certainly is.
Ian is the one person Adam O’Dell and I turn to for insight into this corner of the market.
Ian is our crypto guy.
Whether it's the bitcoin halving or crypto's recent rally following President Donald Trump's election win, Ian is way ahead of the pack.
If you're looking for a guide into the world of crypto and bitcoin, click here to watch Ian's latest summit for information on how to access his research and recommendations.
Ian has helped his subscribers understand the crypto market and make incredible profits by trading a wide variety of coins.
And after a banner year like 2024, knowing the right moves — and when to make them — is critical as we barrel toward 2025. That's where Ian comes in.
Until next time…
Safe trading,
Matt Clark, CMSA®
Research Analyst, Money & Markets