Crypto Mini-Crash & Your Bitcoin Holdings
On September 7, bitcoin became legal tender in El Salvador.
This is truly awesome news — and makes one of Paul’s 2021 predictions a reality!
However, we saw a temporary crypto mini-crash as a result.
But don’t be discouraged! This was a classic “buy on the rumor, sell on the news” situation.
That’s when you need to remember to keep Strong Hands. Other countries are already looking to bitcoin as a new world currency.
And as you know, I’m holding Strong Hands on my $350K by next June bitcoin prediction.
There’s massive growth ahead — even beyond bitcoin in the whole crypto world. It has massive appeal for forward-looking investors.
Bottom line: Stay #BOP and see how you can invest in America 2.0’s “parabolic move” in crypto:
Paul Mampilly: Hey Ian. It’s time for the IanCast.
Ian Dyer: Absolutely. How’s it going?
Paul: It’s going good. How are you?
Ian: Doing well.
Paul: We’re a little under the gun because both of us have to leave soon. This will be a snappy 20-minute IanCast. Let’s get going. Bitcoin (BTC) crashed again. Crypto had a mini crash again. We went through it. You get started and lay it out.
Where Will Bitcoin Become Legal Next?
Ian: If anyone wasn’t aware, September 7 was the day BTC officially became legal tender in El Salvador. It’s actually great news, but there’s all kinds of ways BTC can be manipulated. The whole “buy the rumor, sell the news” thing comes into effect. That played a big part of that.
I don’t think a bunch of people said, “Oh no, BTC is now legal tender. Let’s get rid of it.” Although, some people probably panic sold. The big thing these institutions and hedge funds can do is take big short positions in futures that are relatively illiquid compared to buying BTC through Coinbase or Grayscale.
It’s way easier to move the price. You do that and you can also take out a bunch of people who bought BTC on leverage. You can wipe all of them out on a very short time period. That’s what we saw. BTC went from $49,000 to below $43,000 in 45 minutes or less.
When you see that kind of action I don’t think it’s worth selling. I think a lot of people just got knocked out.
Paul: Actually, the price range was a little higher. I think it had gotten to about $52,000 and got down to $43,000. Not quite a 20% move. Of course it took down the cryptoverse with it. There was also a story going around that the mini crash was because the SEC sent a notice to Coinbase because Coinbase is planning to put out a lending platform.
The SEC is claiming the lending platform would be a security issue. I don’t know what that means, but it was another FUD story put out there in addition to buy the rumor, sell the news. We talked about the other FUD right before September 7 I guess to try to jam El Salvador.
The polls suddenly came up that said 70% of El Salvador hates it. It hasn’t even begun. How can you know?
Ian: It blows my mind the amount of negative press that can come out about something in such a short period of time and can contribute to this panicked state. Over time, fewer people are going to fall for that thing. The market action in BTC we saw a couple days ago I don’t think will last long.
I think it will be a fast rebound. All the selling that happened after that initial drop, the volume has been super low. It’s not that many people selling at this point. And we continue to see more BTC coming off exchanges. The fundamentals haven’t changed. In fact, they’ve gotten better.
I don’t think this poses any threat to BTC outside of anything very short term.
Paul: One of the stories we talked about is Panama considering it.
Ian: Panama and Cuba. I saw something about Uruguay also trying to push legislation about BTC. So there’s a lot of good things happening behind the scenes that’s not getting the press that this so-called news about El Salvador hating BTC is getting.
Paul: What is also equally apparent if you are monitoring the new is that the banks are organizing to oppose this. I am on email lists from various newsletters and they are aware of what El Salvador is doing. While they are powerless to do anything, they are writing articles and telling folks about it.
There is definitely a lobby pushing to try to nip this in the bud.
Ian: I think with everything going on in crypto, just the growth these platforms are seeing and the growth adoption is getting, I don’t think this fear will last too long at all.
Paul: The choice is clear. You can choose one of the currencies that El Salvador or Argentina have chosen over the last 50 or 70 years which are shown to be worthless. They all live on the dollar and are subject to our interest rate cycles. People can complain about BTC, but you know what’s going to happen.
The Halving happens every four years, we know how many there are and it does provide certainty.
Ian: As we talk about, most of the currencies in the world are slowly and then suddenly going to zero. BTC and crypto in general has mass appeal to people. This is just the tip of the iceberg. We are going to see way more adoption going forward.
Paul: I was also thinking within the context of this conversation that when I first said last year as part of my predictions that one country was going to adopt BTC as their currency I got trolled. “You are an alien. Go back to the planet you came from.”
And now we just talk about it. Who’s next? It’s completely normal. In all likelihood, Panama will be next and then another three or four will join in.
Ian: I remember us specifically talking about Cuba to be the first. I know they are another one that’s not just considering it, they are trying to pass legislation. Even back then we saw this happening. It’s cool to see it happen so soon.
Paul: It puts the structure up for what we are also mocked for: your prediction for BTC. Go ahead, give your outrageous prediction for BTC.
Ian: My outrageous prediction is $350,000 per coin by the end of next June.
Paul: Paul’s famous gutless prediction is for $250,000 in the same timeframe. You can see if El Salvador already has accumulated at last count — we’ll actually just put that chart up.
They have one of the biggest treasure troves of BTC, along with Ukraine. Others are gong to be coming.
You are talking about a currency that has limited quantity. On an absolute level there are 18.5 million mined. Then there are all the ones lost. Then there are all the ones that are in permanent treasury — the ones in El Salvador, Tesla, MicroStrategy, Square.
You have explosive potential. If Panama comes on or a country the size of Argentina? Whoa. What’s going to happen? Our price targets might be modest.
Ian: There’s data out there that shows the people in Argentina love BTC. It’s one of the most heavily traded in the world in peer-to-peer markets. They are buying BTC like crazy. I think it’s just a matter of time before we see a lot of countries adopt it.
Paul: I think there are multiple pure BTC markets already. Venezuela, Nigeria, I hear Zimbabwe. There are a number of countries that are on a BTC standard. People may think Ian and I just make up these price targets based on wishful thinking.
We can be accused of that. If you listen to the IanCast enough you can tell we read a great deal. If you could ever read Ian and my chats, it’s just endless. We should measure and see how many messages we sent since we implemented Slack.
Ian: Too many to count.
What Do You Think The Top Cryptos Are?
Paul: Since you run Crypto Flash Trader, which is our crypto service
Tell people about the action that’s been going on while BTC has essentially been in a range. It’s a volatile range. The high of $64,000 in May and a low of about $28,000. There’s been a lot of action though in the crypto market while BTC has stood still.
Ian: We are starting to see another wave of speculation, but it’s different from the one that we saw from January through April. I think it’s way healthier because in the first wave this year there were a lot of coins that were pointless.
You could argue Doge is in there, but I think Doge is actually potentially going to end up being something legitimate. There are a lot of Doge knockoffs like Shiba and weird random coins that didn’t actually do anything or have a platform. Those were the ones that got the attention.
Now we are seeing money flow into less speculative, although still speculative things. Mostly alternative blockchains to Ethereum (ETH). Things like Cardano, Solana. This time around there is a point to these coins and projects, but it’s still speculative. I think it’s still a healthier market.
I think people are still sleeping on DeFi and what we talk about. Things like Compound, Aave, Uniswap and these types of platforms that have real adoption and are seeing more interest and use now than ever. I saw Aave and Compound already this month have more borrowing volume than they’ve ever had.
We’re just barely a week into September and these platforms are seeing real use. Yet, they are still 40% or 50% below their highs. I think money will flow into this area, but for now it’s going into alternatives to ETH while ETH fees are high and people are seemingly bearish on it.
Paul: You know my stance on Doge. I was initially skeptical and then really seeing the fact that there is worldwide support to own a coin. People may hate it or think it’s ridiculous because it’s based on a meme. However, the basis for me liking it is seeing my kids’ friends own Doge.
They are never selling. It would be seen as a betrayal. If they aren’t selling, imagine a day they announce a deflationary burn. That’s going to shock the market. Everyone thinks they are just going to print this forever. However, people thought that about ETH.
Suddenly one day they said they were going to deflationary burn and it totally changed the market.
Ian: People love to give Elon hate but the guy was the inventor or PayPal. He understands payment systems. He likes Dogecoin. The founder of ETH sees potential in Doge and might want to integrate it with ETH. There are real use cases bubbling up under Doge on top of it being the buy and hold for Gen Z
I agree a lot of younger people love it and don’t want to sell. I know people who have bought in and it’s crazy how attached they got to it even beforehand.
Paul: I would say after BTC, ETH, Doge is number three in terms of conviction and belief they own part of the cryptoconomy. I have to also confess I have been watching the extraordinary moves in Cardano and now Solana. It is just going like wildfire through every alt blockchain.
Phantom, Luna, pretty much just go down the list. It is reminiscent of a bit of a bubble. Many of those blockchains have very little activity. There may be projects but they are often copycats. It was fine the first time around, but if you are the fourth blockchain using that to generate activity…
Ian: Most of them are taking what ETH has done and just copying it. Maybe they are putting some unique spin. Or Binancechain who literally just took their code and put it on Binancechain. It’s crazy how fast some of these are going up when they barely have any real use.
Time will tell if those users are even going to stay around. I don’t think all these chains will survive. It will be a few. For me, it’s too early to tell at this point.
Paul: Something like Solana, we were talking about it in January when it was $1. It’s not more than $200.
Ian: I remember last year back when we were allowed to have a regular Binance account. I had one. Solana was getting hyped up. It went from $1 to $6 and then fell back to $2. This year it was insane. It was recently more than $200. That’s 100x this year. I don’t know how long that can continue.
Paul: Just go to the moon, Ian. Let’s close out the crypto discussion. Tell folks where you’re thinking — just general thinking, don’t give the trades away. We have to earn some money some way. Where are you seeing opportunity?
Ian: DeFi is still the main thing I am looking at. A lot of people seem to be either bored or worn out with BTC and ETH. Everybody is seeing all these other things going up like crazy and they are chasing them. They think BTC and ETH are never going to go up.
Typically, that’s a good time to buy. That’s what I am seeing in these DeFi coins now. I am still bullish on some of these alt chains that haven’t gone parabolic yet. I recently just added one of those into Crypto Flash Trader.
Paul: If you want to participate in one of these potentially parabolic or maybe some outrageous gain, we are once again pitching Crypto Flash Trader.
How Is Everything Playing Out In The Stock Market?
Alright, Ian, let’s move on from crypto to the stock market. There are more and more signs that money is coming back in. However, it’s a different market than what we had earlier this year.
Ian: Right. We’re still seeing overall sideways movement for America 2.0 stocks. They’re not making lows, which is obviously bullish. A lot of them actually are slowly making their way up. I’m starting to see some of these cloud stocks make new highs and semiconductors making new highs.
Tesla, which is the backbone of the America 2.0 sector, is starting to move up too. At last look it was at $755. That’s less than 15% from its high. Once it breaks past its previous high I think it will be off to the races for Tesla. That’s a bullish signal for America 2.0 stock in general.
The way we track that is through ARKK, which is ARK Invest’s innovation ETF. Tesla is the biggest holding in that. Tesla doing well will have a good impact on this market of America 2.0 stocks.
Paul: The other ones I go to look at are three that have been struggling in the Profits Unlimited portfolio: Zoom, Zillow and Wayfair. They all somehow magically peaked around the same day at the same time. There is also some curious syncing between BTC and these stocks.
It’s the same audience, which is our audience for sure in terms of Profits Unlimited and our services.
Ian: I agree. Another stock in that group is Teladoc. Zoom, Zillow and Teladoc are all still way below their highs. Wayfair is a decent amount below its high too. I do believe we will start to see activity pick up in these. They are lower than I thought they would be at this point.
These stocks topped out in February. It’s been almost 7 months. I think Tesla making a new high would be a bullish sign. I think some of the other struggling sectors like 3D printing and marijuana going up would be a good sign too. I think we will start to see these America 2.0 blue chips start to move up.
Paul: The 3D printing sector and stocks, every day when I go through my email there is so much going on in this sector. These stocks have sat there since that hype moment in 2014 to now. They have gone up a little. Our standards are high. We have gains of a couple hundred percent in 3D Systems and I still get trolled for it.
Nonetheless, these are still tiny companies. They can go up.
Ian: I agree. Pot stocks, we’re still waiting on those. When they get going, they are so illiquid and it won’t take much buying. Even if a hedge fund wants to take a relatively small position in these it will push them way up.
Paul: I was having a sleepless night and I was going through pot stocks. They just look perfect for something. Maybe it will be an acquisition or a big merger. We had a few and it kind of coincided with the pot stocks being high. That activity has leveled off.
I think one more merger will take out even more stock inventory. Now when people come to cover or start positions, there are fewer stocks. Their money goes a long way in terms of what you’re buying. These companies are still growing huge.
Ian: These companies are valued so low that I don’t think it will be long before we see something. You have companies like Canopy and Cronos that have billions of dollars in cash. I think it’s just a matter of time before we see some big move happen in the cannabis sector.
Paul: One last detail on growth before we bring this to an end. There’s also a lot of activity going on in biotech. Sanofi, which is a very large European pharmaceutical went and bought a company and paid more than $1 billion for it. That was a 70% premium.
So other parts of the growth sector are really starting to warm up. I think it’s just a matter of time. I feel like a lot of these have sat while continuing to grow. They are just building value. Now the reopening trade is really — we’re past that point where you are going to see big growth in value stocks.
I believe the move is going to be to come in and buy these growth stocks.
Ian: I agree. Some of these are at prices that are hard to pass up at this point.
Paul: We will close this IanCast off by saying we are BOP on BTC, ETH, Crypto in general, Tesla, pot and our America 2.0 stocks. You say goodbye to everyone first and I will say goodbye second.
Ian: Everybody, thanks for watching. Have a great weekend. Happy Friday. We’ll see you next week.
Paul: Come back next week. This is Paul saying bye.
Crypto Opportunities Beyond Bitcoin $350K
I’m not sweating the bitcoin dip.
I mean, people called us crazy when we said bitcoin would hit $50,000. It was trading for $10,000 then. And it made it to $50K six months later.
They trolled Paul when he predicted bitcoin would become a legal tender for a country. And now El Salvador has forged the path.
People will always be skeptical when it comes to change.
But if you can look past all that stuff … that’s what makes you a speculator. The cryptoverse opportunity is going to be huge.
It goes far beyond bitcoin…
Double-digit moves are happening every day in the crypto market. And triple-digit moves are happening every week.
We gave you a preview of what’s coming in today’s IanCast. For the full story, click here.
Editor, Crypto Flash Trader
I’ve been investing for more than 25 years. I started my career on Wall Street in 1991 as an assistant portfolio manager at Bankers Trust. I quickly advanced to prominent positions at Deutsche Bank and ING, managing multimillion-dollar accounts. In 2006, the owners of a $6 billion firm named Kinetics Asset Management recruited me to manage their hedge fund.