Maria’s Note: Maria Bonaventura here, managing editor of the Diary, with a special evening edition. Longtime readers know Bill is a self-described “fuddy duddy” when it comes to technology. But he and Bonner-Denning Letter coauthor Dan Denning agree that cryptocurrencies… a new kind of tech that’s outside the traditional system… can make for a good speculation.
Bill and Dan recommend a 1% portfolio allocation to cryptos. But which cryptos, and why now? For that, we turn to crypto expert Teeka Tiwari…
Friends… Here and now, let me tell you: 2020 is going to be an insane year for cryptocurrencies.
We’ll see price appreciation that’ll eclipse anything we’ve ever seen before.
And unlike four years ago – when I was the lone voice predicting the rise of crypto – I’m now joined by some of the smartest moneymen in the world.
In 2016, these people would’ve called me crazy.
But after four years of trying to push this market down (while quietly investing hundreds of millions into the space), they’re about to pull off their masterstroke.
I’m talking about the mainstreaming of crypto assets.
You see, the big banks weren’t yet primed to profit from crypto. So they had to bash it.
That was just the first step. Their job was to show everyone how risky crypto was… so they could step in and “help” the world navigate this “dangerous” market.
And, of course, collect billions in fees along the way.
Now, after two years of heavy investment by some of the biggest names in banking – including UBS, Bank of New York Mellon, Credit Suisse, Barclays, and HSBC – it appears they’re about to make their move…
Cryptos Are Inevitable
“Cryptocurrencies are inevitable.”
That’s the key message from a recent, 86-page report released by global giant Deutsche Bank.
The bank forecasts crypto adoption will explode in the 2020s – just like internet adoption skyrocketed in the early 2000s.
This is something I’ve been predicting since 2016. And now, Wall Street is catching up – because it can finally make money off of it.
Deutsche Bank says the main drivers behind this increase will be a move to a cashless economy… faster crypto payment methods… and the gradual erosion of value of paper (fiat) money.
This is an amazingly bullish stance coming from a financial giant with $1.5 trillion in assets tied to the non-crypto economy.
Think about that…
Deutsche Bank is basically telling its clients that a new asset class it isn’t profiting from yet will dominate tomorrow’s financial system.
Did it write this report out of a love of crypto assets? Heck no.
My belief is, it’s getting ready (as are many other firms) to launch a suite of products geared towards traditional stock investors looking to get into crypto.
And this makes perfect sense… Late last year, Germany’s parliament made it legal for banks to buy, sell, trade, and hold crypto assets.
Can you see the pieces starting to line up?
I hope you can… Because if history is any guide, Deutsche Bank won’t be sitting on the sidelines much longer.
Laying the Groundwork
Over the past year, we’ve witnessed Wall Street spend hundreds of millions of dollars building out infrastructure needed for a crypto economy.
It includes new exchanges, custody solutions, and trading platforms. They’ll serve as the backbone for hundreds of new crypto financial product launches.
Some examples include:
- Futures: These contracts allow you to buy or sell a commodity or asset at a predetermined price at a specified time in the future. We’ve already seen several major bitcoin futures exchanges roll out – including Bakkt, a subsidiary of the same company that owns the New York Stock Exchange. Other big players include TD Ameritrade-backed ErisX, Cboe Global Markets, and CME Group.
- Options: These contracts give you the ability to predefine the amount of money you’re willing to risk on a trade. And that’s incredibly important for a volatile asset like bitcoin. In addition to futures, Bakkt also offers monthly bitcoin options. Previously, LedgerX was the only viable crypto options platform for institutions, until CME launched its platform on January 13.
- Custody: By law, asset managers have a fiduciary responsibility to safeguard their clients’ assets. That’s why custodianship is necessary for crypto. And today, there are a large number of well-established firms offering crypto custody – like Coinbase Custody, Fidelity Digital Assets, and Bakkt Warehouse.
This infrastructure will pave the way for retail products like exchange-traded funds (ETFs), crypto savings accounts, and borrowing services.
Look, I’ve witnessed what happens when Wall Street builds out infrastructure for a new asset class…
I saw it in 1993 with the launch of the SPDR S&P 500 Trust ETF (SPY). It’s gone from a $6 million ETF to an over $225 billion ETF.
And I saw it again in 2004, with SPDR Gold Shares (GLD) – the first-ever gold ETF to trade in the U.S.
GLD made it easier for people to buy the metal. They no longer had to own physical bars. Instead, they could just buy the ETF, which represents a portion of physical gold. Today, it has over $45 billion in net asset value and has been as high as $70 billion.
So just like with the S&P 500 and gold, Wall Street will create products to make it easier for investors to buy crypto assets. And it makes a lot of sense, since there’s a lot of money to be made.
If crypto assets just mimic the size of the gold market… that would explode its market cap to $7 trillion. That’s over 43 times higher than where the value of all crypto is today.
And a handful of billionaire investors – such as former Goldman Sachs partner, Mike Novogratz – thinks crypto will be worth as much as $20 trillion. That’s over 122 times higher than where we are today.
The point is: Crypto is on the verge of explosive growth. That growth will generate tens of billions of dollars in fees. And that honey pot of fees will attract a swarm of hungry Wall Street firms…
The Gateway to Profits
The financial products coming online today will act as a gateway for investor money to enter crypto assets. It’s the same way ETFs acted as a gateway for investor money to enter stock indexes, precious metals, and energy products.
That’s why Deutsche Bank joined JPMorgan’s blockchain-based payments network last year. (Blockchain is the underlying technology of cryptos.) Nearly 400 global banks are part of the consortium.
As you can see, Wall Street is laying the groundwork for the biggest financial shift in history. The smartest money in the world is getting involved in cryptos.
The evidence is overwhelming. And that’s why I’m writing to you today.
I implore you to buy a small amount of bitcoin. If I’m right (and I believe I am), you won’t need much to make life-changing gains.
The bigger risk is waiting until it’s too late. Once the Wall Street machine is up and running, the biggest gains will be gone.
Let the Game Come to You!
Editor, Palm Beach Daily
P.S. If you want to make the biggest crypto profits in 2020, buying bitcoin is just the first step. You’ll also want to know the names of “The Final Five.” These are the last five tiny cryptos that a rare phenomenon will send soaring so high… $500 stakes in each could mint new crypto millionaires.
To prove it, I did something never done before in the history of our industry. I chartered a private jet and took strict precautions to keep its destination secret. And last night, I took over 30,000 viewers along to the hidden epicenter of this millionaire-making phenomenon during a special event from inside my private jet. If you missed it, you still have time to watch the replay…
You’ll see with your own eyes why this phenomenon is guaranteed to transform the crypto market… and make you a fortune in the process. Watch the replay here.