The Biggest Difference Between Crypto And Stocks

0
The Biggest Difference Between Crypto And Stocks

$66,383.

That’s how much one bitcoin will set you back as I write on October 21.

Get The Full Series in PDF

Get the entire 10-part series on Charlie Munger in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues.

Q3 2021 hedge fund letters, conferences and more

Mohnish Pabrai On Value Investing, Missed Opportunities and Autobiographies

Mohnish PabraiIn August, Mohnish Pabrai took part in Brown University's Value Investing Speaker Series, answering a series of questions from students. Q3 2021 hedge fund letters, conferences and more One of the topics he covered was the issue of finding cheap equities, a process the value investor has plenty of experience with. Cheap Stocks In the Read More

Bitcoin Is Up 127%

It’s by far the world’s best-performing major asset in 2021… up 127%...

And now bitcoin is trading at its highest price EVER:

Bitcoin Crypto And Stocks

But here’s the most surprising part…

Bitcoin’s only the 37th best performing crypto this year!

In other words, dozens of other little-known cryptos are outpacing bitcoin. Like Helium (HNT), up 1,578%... Quant (QNT), up 2,561%... Terra (LUNA), up 6,045%... and Axie Infinity (AXS), up a whopping 20,915%.

Most folks can’t name a single crypto beyond bitcoin and Ethereum. But my research shows that select smaller, lesser-known cryptos are the best high-upside investment opportunity available today.

  • Today, I want to tell you about the most important thing in crypto nobody mentions.

It’s no secret that traditional investing is tilted in favor of Wall Street insiders and venture capitalists.

For example, former Shark Tank judge Chris Sacca invested in Uber (NYSE:UBER) in 2009 when it was private and worth less than $4 million. By the time ordinary folks got the chance to buy Uber at its IPO in 2019, Sacca had already made 3,600X.

It’s the same for Airbnb (NASDAQ:ABNB)Facebook (NASDAQ:FB), and most other fast-growing startups. Professional investors can access them when they’re tiny, private, and bursting with 100x upside.

Meanwhile, the average investor must wait until they debut on the stock market… at which point a lot of the upside is gone.

Crypto flips this on its head.

Bitcoin Millionaires

It’s one of the only markets in the world where the average investor can get in on the ground floor.

Take Eddy Zillan, for example. His parents gifted him $5,000 for his bar mitzvah in 2012.

They thought he would start dabbling in stocks. Instead, he bought some new weird online currency called bitcoin.

His initial $5k stake is now worth well over half a million bucks.

CBS News reports there are as many as 100,000 bitcoin millionaires. The vast majority of whom are normal investors who bet on bitcoin early.

Like John Ratcliff. According to the New York Post, the video game developer invested $15,000 in bitcoin in 2013. Now he’s building a $1.4 million dream house.

I could rattle off ten more stories just like these—ordinary folks making extraordinary profits in crypto.

  • But do you notice you almost never hear about the rich getting richer in crypto?

Have you seen any headlines about Wall Street pros making millions in crypto?

I haven’t.

In fact, most big-name investors HATE bitcoin. For years, they dismissed it as a worthless digital asset for criminals.

BlackRock is the world’s largest asset manager, overseeing $9.5 trillion. A few years back, CEO Larry Fink said bitcoin was “an index of money laundering.”

JPMorgan CEO Jamie Dimon called bitcoin a “fraud” in 2017.

Superinvestor Warren Buffett said crypto was “rat poison squared.”

Most big-name investors have totally missed out on bitcoin. Coinbase (COIN) data shows institutions accounted for less than 20% of trading volume in 2018. Compare that to over 90% for the stock market.

  • Regular investors used to be locked out of all the best deals.

All kinds of barriers restrict the average guy from investing in small, private companies.

For example, you have to be accredited to invest in most private companies. And you often have to invest a minimum of $50,000 or $100,000.

But in crypto, it’s the Wall Street pros who have their hands tied behind their back.

For one thing, most famous investors refused to risk their reputation buying an unproven asset—bitcoin.

Why take that chance when you have access to other lucrative private deals?

Bitcoin was also difficult to store safely. When money managers buy stocks, they usually store them with a custodian. In other words, a bank that prevents them from being stolen or lost.

Professional custody services didn’t exist in crypto until recently, which prevented many big-name investors from touching it.

Big Money Is Flowing Into Bitcoin

Remember, institutions made up less than 20% of Coinbase’s trading volume three years ago.

That’s surged to 70% today. Roughly $320 billion of Wall Street’s money flowed through Coinbase in just the past three months.

Venture capitalists were also late to the crypto party. But get this… they invested $17 billion in crypto startups so far this year. That’s more than the past ten years combined!

Even BlackRock CEO Larry Fink is changing his tune. Just last week, he told CNBC, “We are investing in it. Crypto may become a great asset class.”

  • Fink is right. Crypto is a great new asset class…

It took 5,000,000% gains in bitcoin for the big Wall Street money to get involved.

As you saw, bitcoin crushed stocks, bonds, and every other old-world asset this year.

But remember, bitcoin is only the 37th best-performing crypto in 2021. Smaller, lesser-known cryptos are running laps around it.

The Great Disruptors: 3 Breakthrough Stocks Set to Double Your Money"

Get my latest report where I reveal my three favorite stocks that will hand you 100% gains as they disrupt whole industries. Get your free copy here.

Article By Stephen McBride, Mauldin Economics

Updated on

No posts to display