We Were Right on Bitcoin... Now What?

We’re off to the races!

Bitcoin has more than doubled in value since November. And the world’s largest cryptocurrency rallied 44% last month!

But none of this should come as a surprise.

Exactly one year ago, during the panic of the FTX fallout and the regional banking crisis, I penned the essay, If You Hate Bitcoin, You’ll Hate This Article!

At the time, digital gold was trading under $25,000. And it had just recovered from its lows of $15,500 in late 2022 and early 2023.

But this wasn’t a time to be shy. It was a time to be bold.

I told investors that it was best to prepare now for what’s coming in 2024.

And this was a mantra I repeated every time Bitcoin slipped below $25,000 last year.

My chant: We know what’s coming…. We know what’s on the horizon.

And here it is.

This is one of the most predictable cycles on the planet. It is actually designed into Bitcoin. It is hard-wired into how it functions.

These rallies – and the subsequent busts - occur like clockwork.

And this week, Bitcoin rocketed to new all-time highs above $72,000.

Right on time. Precisely as expected.

A gain of 200% over the past year.

The question I’m now being asked is, “What’s next?”

Well, this is merely the beginning…

2024’s Most Predictable Moonshot… On Steroids

On April 22, Bitcoin will undergo its next reward halving. Obviously, I spent a lot of time preparing investors for this throughout 2023. And by now we all know what this means.

But in 2024 the sector has just been given the largest shot in the arm… possibly ever!

You see, on January 11, 2023, the U.S. Securities and Exchange Commission (SEC) approved the creation of 11 spot Bitcoin exchange-traded funds (ETFs). Previously, these have been banned and weren’t allowed to trade on major U.S. exchanges.

So, this move opened the door for institutional investors to plow into the market.

For a decade, they’ve essentially been locked out of cryptocurrency. That’s tens of billions of dollars in pent-up demand waiting to snag their piece of the action.

And already, these spot Bitcoin ETFs now own more than 800,000 coins. That’s 4% of all Bitcoin currently in existence!

The total net asset value of these ETFs has soared above $54 billion!

These didn’t exist a year ago… let alone the last reward-halving cycle.

Meanwhile, the old dog in the industry – and one of my favorite ways to trade Bitcoin - Canada’s Grayscale Bitcoin Trust (GBTC) is sitting on nearly $29 billion in Bitcoin. It controls 2% of all BTC available and just uplisted to the NYSE.

But keep in mind, there are nearly 300,000 Bitcoin owned by publicly traded companies, like Tesla (TSLA), CleanSpark (CLSK), and Mercado Libre (MELI). Though, the largest holder is MicroStrategy (MSTR), which is sitting on a war chest of 205,000 coins. And it just added 15,000 BTC over the last few weeks.

Private companies own another 516,000 Bitcoin. And countries – like the U.S., China, Germany, and El Salvador - have stockpiled more than 560,000 Bitcoin.

Individual investors have largely powered this market. But now Wall Street is playing catch up. And it’s adding fuel to crypto’s run this year.

The $128,500 Worth of Opportunities

The great thing with modern Bitcoin investing and trading is you don’t actually have to buy and sell the crypto itself.

In fact, the tax implications to do so are pretty hefty.

There are now ETFs, like the GBTC, which is up 76% year-to-date. Meanwhile, newly minted ones, like the iShares Bitcoin Trust (IBIT), are up 55% in 2024.

There are crypto miners, like Marathon Digital (MARA) and Riot Blockchain (RIOT).

Now, these are currently negative year-to-date. But that’s in large part due to pullbacks in January and in March. Those are normal though.

In fact, Marathon shares are averaging a 13.3% loss in March over the past 10 years. And they are one pace to end the month lower eight times in the last 12 years.

So, you want to look for an opportunity on these dips if you didn’t buy in late 2023. In 2020, Marathon shares shed 50% of their value leading up to the reward halving. They then gained 15,000% over the next year!

And of course, we have options such as Coinbase (COIN). Shares of the crypto exchange have rallied 244% since November. Yet, they are still more than $100 below the all-time highs set in 2021.

Meanwhile, crypto bulls, like MicroStrategy, have seen their shares more than double year-to-date!

Most of these opportunities have bounced higher in 2024. But the moves are larger in line with what we’ve been expecting… maybe a little bit goosed.

For instance, Bitcoin gained 44% in February. Well, the cryptocurrency has ended February lower only once since 2015. And is averaging a 15.5% return in the month.

In March, Bitcoin is up 18%. That’s its fifth gain in the month in the last six years.

But this is the beginning of the bull run. Bitcoin hitting $72,000 isn’t the peak. There are new all-time highs in the months ahead. If Bitcoin’s reward-halving trend holds true, we should see $128,500 by the end of 2024. Then the rally will continue in 2025 to around $165,000 or more.

So, if you still haven’t acted, you’re not early… but you’re far from late.

Don’t Hate the Game

People that hate crypto, hate crypto.

I mean, think vegans walking into a McDonald’s (MCD) or lifelong boxing fans forced to sit through a Jake Paul fight.

The hatred is palpable. It vibrates the air. And they can’t wait to uncork their opinions for anyone in earshot.

In a recent interview I was conducting, I asked a crypto bear and skeptic I know to share their views on Bitcoin. For a full, uninterrupted 20 minutes they vented about how loathsome they found cryptocurrency... How sad and pathetic they found its investors… How vile and predatory the whole thing is.

I had apparently nudged the tap open and there was no way to shut off the deluge. I had to let them go until they exhausted themselves.

Now, I’m not going to refute all their claims. Because I can’t.

And I do tend to agree with their sentiment that “cryptocurrency is a solution in search of a problem.”

Let’s be honest… Cryptocurrency has yet to solve any of the issues the devotees and religious zealots claim it eventually will. That they contend it was designed to free us from.

But I don’t care about any of that.

And neither should you.

Because there’s only one thing that investors should focus on when it comes to crypto…

It is the best-performing asset for a decade and a half.

And by astronomical sums.

That means every investor’s portfolio MUST have some exposure to crypto.

You’d be a fool not to.

Hate it. Love it. Be apathetic to it. Curse its existence. Carve an anarchy symbol into your forehead. Rub your genitalia on Bitcoin ATMs. It doesn’t matter. Just dedicate some portion of your portfolio to it.

That’s all I ask.

Your future self will thank you.

HODL-ing for more new highs,

Matthew