URGENT NOTICE: A prep-guide for the next market panic
You know crashes that slice 50% off markets happen.
You know this bull market has gone on longer than any other.
You know, unlike previous bubbles, that valuations are beyond high in not just one but multiple assets.
And you know that the policies of central banks have been driving most of these prices.
Here’s what we don’t know yet…
When will it end? When will money printing stop working?
When will the collective mindset switch from rampant speculation to cautious restraint…and then to panic?
And what should you do before this all happens?
Tomorrow, we’ll be releasing a report from our friends at The Rum Rebellion. It seeks to answer all of the above.
It won’t suit all Money Morning readers. But if any of the above questions have been gnawing away at the back of your mind recently…you should take some time to read it tomorrow. It’s called Four Code Red Investments to Sell Now. Make sure you keep an eye out for it tomorrow morning…
***
In today’s Money Morning…where it heads from here is the real question…reform or revolution?…making the most of opportunities and threats…and more…
Dear {% if user.firstname == blank %}Reader{% else %}{{user.firstname}}{% endif %},
It’s been another momentous 24 hours for Bitcoin [BTC]…
The premier cryptocurrency peaked at just over US$66,000 briefly early this morning. A new all-time high for the enigmatic digital asset. Sparking plenty of talk as to whether we could be about to see the next big move higher for bitcoin.
After all, it was around this time last year that the last big run-up occurred. Back when bitcoin jumped from around US$11,500 to US$40,000 between October to January.
So perhaps we could be in for a repeat performance.
I certainly wouldn’t count it out, particularly with the launch of the new NYSE bitcoin futures ETF. A new, fully-regulated financial instrument that makes it easier than ever to profit from bitcoin price movements. Which, of course, is likely the reason for this decent jump in price overnight.
Where it all heads from here, though, is the real question.
Because as Lachy has discussed in Money Morning this week, there are two very different ways to interpret what may be in store for bitcoin. One of which is far more optimistic than the other.
And if recent government moves are any indication, we may get an answer far sooner than we thought…
How to Limit Your Risks While Trading Volatile Stocks. Learn more.
Reform or revolution?
Australia isn’t exactly known for being a world leader when it comes to crypto. In fact, we’re usually pretty slow at adopting and incorporating new technology in general — with a few notable exceptions.
So it was somewhat surprising to hear about a special Senate committee report on taking charge in the ‘global digital economy’. Aiming to seemingly approach bitcoin, cryptos, and blockchain with a more welcoming agenda.
Well, somewhat welcoming, I should say.
Take a look at the 12 key proposals for yourself:
|
|
| Source: Australian Financial Review |
Many of these recommendations would likely be beneficial for crypto. Opening up a pathway for more innovation and experimentation with these new financial tools, and the technology underlying them.
Something that really could put Australia at the forefront of this global money revolution.
But the cynic in me is also concerned that it could be a pretence to try and control it while the government still can. After all, many of these proposals revolve around reforms like ‘licensing’, ‘AML regulations’, and ‘policy review’.
Without definitively knowing what these kinds of legal ramifications may be, it is hard to know how welcoming our politicians truly are of crypto. I imagine their top priority is to ensure that they’re not missing out on their cut from this trend, whether that be via taxation or otherwise.
Only time will tell how all of this plays out.
At the very least, though, this shows that our government can no longer ignore bitcoin and crypto.
Making the most of opportunities and threats
All of this then begs the question, what are investors like yourself to do in a time like this?
With the price of bitcoin now hitting fresh highs, no doubt plenty of people are getting that FOMO feeling. Something that could incentivise the kind of big breakout that I mentioned earlier.
Either way, though, whether you’ve already got some bitcoin or not: it is still relatively early. Because while the US$1.24 trillion market cap may seem intimidating — it is still practically a drop in the ocean compared to more established markets.
After all, the ultimate goal of bitcoin and crypto as a whole is to displace our current monetary systems. Creating a mechanism for a purely market-driven currency. One that is free from central bank tampering or political interference.
Whether we will ever reach this goal is hard to say.
Right now, though, there are immediate ramifications that can be seen coming — with payment processors (like Visa or Mastercard) and certain banks already fighting to stave off the crypto threat.
And that is the key takeaway I would be considering as an investor right now.
Because it is the teardown of the middlemen of finance that will be bitcoin and crypto’s first big achievement. Ridding ourselves of the complexity and costs of those that ‘facilitate’ global transactions.
Granted, I don’t expect many of these middlemen will go quietly either. That is precisely why some of the bigger names, like Visa and Mastercard, are trying to embrace crypto and the blockchain themselves.
That may work for a while, but I can’t see it lasting forever.
They will either have to pivot completely to the decentralised future, or likely fall by the wayside. Which is going to have some massive ramifications for the global financial sector as a whole.
Again, though, that is precisely why it is still early.
Bitcoin and crypto are still being driven heavily by speculation of what may come. It is only once the changes begin to happen that it may actually be too late to get involved.
The fact that our government is trying to get involved now, though, is telling. Because while many may think the crypto revolution is decades away, they may be in for a shock.
Bitcoin’s non-stop rise to global prominence is proof that change is likely coming far quicker than even I thought…
Regards,
 |
Ryan Clarkson-Ledward,
Editor, Money Morning
PS: Our publication Money Morning is a fantastic place to start on your investment journey. We talk about the big trends driving the most innovative stocks on the ASX. Learn all about it here
