Not a day goes by where I don’t receive an email from readers asking me about my thoughts on the cryptocurrency market. Our wheelhouse has always been stock market investing, and even with the release of our bestselling Bitcoin book last year, that hasn’t quenched the market’s thirst for well reasoned, rational information about cryptocurrency.

For good reason, new asset classes don’t come around often. If you think of the 4 most common asset classes that individual investors own (stocks, bonds, gold and real estate), all of these have existed for more than 100 years, with gold and real estate going back thousands of years. Sure, we’ve seen derivatives of these like ETFs, options and REITs, but never a brand new asset class like cryptocurrency. At least not in my lifetime.

What has existed in my lifetime is financial fads. We had the dotcom boom in the late 90s, followed by the global financial crisis in 2008, and more recently, the rise of cryptocurrency.

Which leads us to the question, where does crypto fall on the spectrum? Is it a life changing asset class or a financial fad? The correct answer is, both. More people than ever before will become millionaires because of cryptocurrency, but many ordinary investors will get burned and lose their shirts. My aim with this book is to ensure that you’re in the first category.

Let’s ground ourselves with some numbers. The total cryptocurrency market value has ballooned from $145 billion in 2017 to over $2.5 trillion by the middle of 2021 (Kharpal, 2021). This means around a 15-fold increase in just over 4 years.

Meaning that if you had invested $10,000 in Bitcoin and Ethereum in 2017, your investment value as of October 2021 would have increased to more than $270,000. Mind you, I mentioned only the two largest cryptocurrencies and not some obscure ones. Our own recommendation to buy Bitcoin in July 2020 has returned over 500% for those readers who took action.

In our earlier book Bear Market Investing Strategies, our broad advice regarding Bitcoin was to add 5-10% in your portfolio as a hedge against a broad global collapse while benefiting from the price increases in the meantime. We suggested this when Bitcoin was around $9,300, and that advice remains unchanged.

What has changed in just the past 12 months is a huge rise in the number of legitimate cryptocurrency projects with solid long-term potential and a working business model (as well as a whole host of memes and scams, but we’ll get to those later)

THE CHANGING PERCEPTIONS

What was once strictly the domain of cyberpunks and fiscal anarchists has now been well and truly legitimized. You will find many billionaires and financial institutions are now putting money in crypto. Let’s look at these statistics from the past 12 months alone:

• In 2021,venture capitalists deployed a record $19 billion into global crypto startups, which is 3.5 times the previous record set in 2018 (Clark, 2021). Andreesen Horowitz alone announced a brand new $2.2 billion crypto fund in July 2021.
• Cryptos are even making their mark in the ETF market. The first-ever Bitcoin ETF reached $1 billion in assets under management within two days of its launch. It reached this milestone faster than any other ETF in history. (Greifeld, 2021).
• Hollywood movie star Matt Damon is advertising for crypto.com. (Bhasin, 2021)
• Vitalik Buterin was the first of the Crypto Generation to make it to Time’s 100 Most Influential People of 2021.
• Sam Bankman-Fried, founder of cryptocurrency derivatives exchange FTX became the world’s richest person under 30 (only Mark Zuckerberg was worth more at a younger age).
• Fintech company Stripe, which is the largest private company in Silicon Valley valued at $95 billion, just added the co-founder of crypto firm Paradigm to its board to help build out its crypto team (Clark, 2021).
• New York’s newly elected mayor Eric Adams tweeted that he would spend his first three paychecks to invest in Bitcoin as a competition with Miami’s mayor Francis Suarez, who tweeted that he’s going to take his next salary payment in the cryptocurrency.

FREEMAN PUBLICATIONS CRYPTO HISTORY

The world is finally in a place to take cryptocurrencies seriously. We have been involved with crypto since 2013, and we have seen pretty much everything that Bitcoin and the cryptocurrency market can throw at us. There were dark days when Bitcoin was primarily used to purchase illegal drugs on the dark web.

We remember the hysteria when Bitcoin first rose to $1,000 only to fall 90% in the subsequent months. Then there was the Mt. Gox incident when the website handling 70% of all Bitcoin transactions worldwide was hacked and around 850,000 Bitcoin was stolen.

In 2017 we saw a bull run when cryptocurrency made the mainstream news and Coinbase became the #1 downloaded app in the app store. Obscure coins were gaining 1,000% in a matter of days. Subsequently, in 2018, there was a crash when the entire market lost approximately 80% of its value in just 10 months. All these lead us to today. When we talk about investing in crypto, we know what we are doing because we have seen the highest highs and the lowest lows of the market. We are not approaching it from a point of irrational exuberance or blind optimism.

IT’S NOT TOO LATE

You might be thinking that you have missed out on the best run of crypto. But let me tell you, we are only in the third inning of cryptocurrency right now. Which means there is still a long ways to go yet. There’s a great quote from Crypto pioneer, Chris Campbell, which I love that goes “However bullish you are on crypto, you’re wrong. You’re not bullish enough”.

The only adjustment I’d make to that quote is “However bullish you are on crypto… in the long run, you’re wrong. You’re not bullish enough”.

People often accuse me of being a “permabull” – and to them I say, they’re right. That doesn’t mean I throw money at every company that exists, far from it. Instead, my philosophy revolves around being able to ignore the day-to-day minutia of any financial market (be it stocks, options or crypto) and instead focus on the long game.

I have zero doubt that in 10 years time, cryptocurrency as an asset class will be at least 10x bigger than it is today. I also have zero doubt that we’ll experience a 50% pullback in the next 3 years (hell, we may even get one in the next 3 months). But during that pullback, I’ll just be accumulating more and playing the long game. Because that’s how you win. As for which coins I’ll be buying, I’ll discuss that more in later chapters.

Unfortunately, the mainstream media makes it difficult for you to understand crypto because they are simply focused on showcasing the blatant extremes of this market. I’m talking about the cryptocurrencies created as jokes about dogs, cats, or Elon Musk that can sometimes skyrocket to being worth billions of dollars. We’re more focused on the impact it will have an asset class. Both on societal level, and when it comes to your individual wealth.

Here is the straight truth, more individuals will become millionaires due to cryptocurrency than any other asset class in the next decade. A lot of people still think investing in crypto is all about getting lucky or investing in the next joke coin, but hopefully after reading this book, you will see the true potential of cryptocurrency as an asset class.

The golden rule of crypto: Never invest more than you can afford to lose. But for reasons we’ll lay out in this book, it’s also risky to have zero exposure to Bitcoin or any other cryptocurrencies. Relatively speaking, compared with all fiat currencies, Bitcoin is digital beachfront property which is only going to appreciate over time. What most don’t understand is the broader crypto market is designed to reward those with conviction, vision and patience. And remember, it’s never too late to start thinking in the right direction, which is why we won’t be wasting another second.

So if you fear you’ve missed the crypto boom, don’t worry – this trend is just getting started. But you must first do your due diligence in understanding this space inside out. That’s how me and my team can help.

Oliver El-Gorr

CEO and Founder, Freeman Publications

London, January 2022