If you know anything about me by now, I hope it’s that I take a “measured and balanced” approach to investing.
And that’s generally how I’ve handled bitcoin and the broader cryptocurrency space.
I’m simply not the kind of perma-bull that recommends buying anything and everything.
But you won’t find me trashing crypto, either. Because the space is packed with tremendous opportunity … for those who know what they’re doing.
In addition to staying measured and balanced, I also attribute my investment success to knowing exactly where my expertise and edge are … and knowing when to reach out to one of the experts in my “Rolodex” for assistance.
That certainly applies to the broader crypto space, where I’ve long leaned on my “crypto guy,” Ian King.
Ian’s knowledge of all things crypto is unlike anyone else I’ve known. He’s always up to date on the latest research and developments, and his finger is firmly on the pulse of the massive waves — “bull” and “bear” — that have and will continue to dominate the space.
A few months back, Ian and I chatted on a video call about rumors of what were then “likely upcoming” approvals for spot bitcoin exchange-traded funds (ETFs).
Now, as Matt walked you through yesterday, those approvals are signed and sealed!
Of course, if you’ve been reading Stock Power Daily, you might’ve beat the SEC to the punch…
Crypto’s Critical Inflection Point
With last Wednesday’s approval of not one but 11 spot bitcoin ETFs, the gold-standard crypto has crossed one of the last remaining milestones on the road to mass adoption.
For the first time ever, you can now effectively own bitcoin through your stock brokerage account, hold it in your 401(k) and invest in funds with direct exposure to bitcoin’s spot price.
That’s a radical contrast to the old days of owning hardware wallets, memorizing crucial passphrases and navigating shady online exchanges like FTX or Mt. Gox.
In its early years, you needed a substantial amount of technical knowledge just to own bitcoin, let alone to trade or mine it.
Now, all you need is a RobinHood account.
But this is more than just another chapter in crypto’s fast-moving success story…
Especially for bitcoin, this is a critical inflection point.
Because in addition to being the first and largest crypto, the total supply of bitcoins is finite. The entire premise of the coin’s value lies in this scarcity factor. There are only 21 million bitcoins that can ever exist. Millions have already been lost or forgotten over the years, so the current supply is even lower than that figure.
That scarcity in the currency arena means bitcoin can’t get devalued the same way fiat currency, like the dollar or yen, can. It’s simply impossible to “print” more bitcoins the same way the Federal Reserve and the U.S. Treasury love to print dollars, which has the effect of making each of your hard-earned dollars worth less and less.
As a result of bitcoin’s finite supply, when a tidal wave of demand hits, unlocked by the approval of investor-friendly ETFs, the price of bitcoin is very likely to go one direction: up!
This, of course, also has a powerfully bullish effect on publicly traded stocks that operate in the bitcoin market segment…
Big Crypto Profits “Beyond the Green Zone”
In November 2023, I mentioned that crypto miners were a great investment ahead of the spot bitcoin ETF’s approval — even though these stocks didn’t have the greatest Green Zone Power Ratings.
As I explained at the time, most publicly traded bitcoin miners are still very young. As a result, they have a far shorter operating history than established companies like Microsoft or Amazon.
Since Green Zone Power Ratings is built to prioritize stability, it considers data as far back as 10 years — and it “penalizes” newer companies simply for being young.
Top crypto miners were also aggressively reinvesting their gross profits into additional infrastructure, rapidly increasing production capacity and paving the way for future growth. That meant many miners looked unprofitable to my system, which led to lower ratings.
In a way, that’s just how innovation works — you have to forego current profits in pursuit of your longer-term goal and future profits.
That’s why new and disruptive business models can be hard for Green Zone Power Ratings to quantify. And once investors and my system finally catch on, it’s can be too late to cash in on the biggest early profits.
Back in November, I told Stock Power Daily readers it’s likely that 80% of the sector’s profits will be doled out before 80% of bitcoin miners rate 80 or higher on my model.
In short, I was saying that investors have to occasionally go “beyond the Green Zone,” where an investment in this still-young yet potentially very lucrative space was worthwhile … particularly as we were approaching this huge unlock of demand that both Ian King and I expected to come with the spot bitcoin ETF approvals.
And sure enough, the Valkyrie Bitcoin Miners ETF (Nasdaq: WGMI) that I mentioned in November has already gained over 50%.
Now, I fully realize that bitcoin isn’t for everyone.
So I’m particularly curious to hear your thoughts on it.
Drop me a note at Feedback@MoneyandMarkets.com and tell me what you think. Did you buy any shares of WGMI after I wrote about it last November? Are you a member of my 10X Stocks service, where we have exposure to a top bitcoin miner?
And if you haven’t invested in crypto just yet, or if you’re like me and you just haven’t invested enough in cryptos, then you absolutely MUST watch Ian King’s exclusive presentation HERE.
Again, Ian is my “crypto guy.” I may not follow every single recommendation he makes, but I have most certainly learned something new and valuable each and every time I’ve listened to him.
You’ll see what I mean once you give him a listen…
To good profits,
Adam O’Dell
Chief Investment Strategist