As some of you will remember I used to run
a tip sheet called The Big Pension. I stopped publishing it
one day when I realised that for the foreseeable future I
would be writing the same short paragraph each month. When the
price of Bitcoin
was $282 I suggested that all my
readers do at least one thing; lock up £1,000 in Bitcoin
That amount of money is not much to lose, but, as far as I
could see, Bitcoin
was going places. Back then you
would have managed to grab yourself four coins. They are now
worth about $40k. I would not be at all surprised to see four
bitcoin worth $400k some time next year.
Those of you who subscribed to The Big Pension will also no
doubt remember the time I suggested yet again that you buy
into cryptocurrencies. Bitcoin
was then trading around
the $600 mark. Finally, I gave up, and said something along
the lines of "This month's recommendation is to buy Bitcoin
at $800. Next month's recommendation will be to buy even more
bitcoin, and the month after that I will suggest you buy even
more bitcoin. Instead of doing that, I am giving you a year's
worth of advice in one issue: Just keep buying bitcoin
We all know what happened. Bitcoin
went to $20k and Ethereum
went to $1400.
We also all know what happened next. All the cryptocurrencies
If you look back over the history of cryptocurrencies you will
find that collapses of 75% are not unusual. In fact, I'll
rephrase that. Collapses of 75% are the norm. I dont know
about you, but I held. After all, I stopped buying once
burst through $2k.
I'll rephrase that as well. I have now bought some more at a
rather higher price.
The great thing about new investment vehicles is that you can
buy when the price is on the floor. That means it's very
difficult to lose. Let me give you one glaring example.
I bought Stella Lumens
when it first hit the streets
at the grand price of one cent. I reckoned it only had to rise
to two cents and I will have doubled my money. It was based on
a bank. Is the bank likely to go bust? I couldn't see that
happening, so where was the risk? There wasn't one.
I was somewhat amused to read that a rather famous investment
guru thought that bitcoin would go to zero while the coin to
buy was Stella. He recommended folks to buy at €0.70. And
people paid money to buy his tip sheet. Those who bought there
are now looking pretty silly while even though I didn't cash
out at the top, I can hardly complain at its fall from grace
because my investment is up 800% even at today's much reduced
prices. I'm holding. All this stuff is the stuff of our future
In short, buying at the bottom is low risk. The lower the
price the lower the risk, and I have to admit I dont mind
Which cryptos should you buy? I'm not running a tip
sheet so I am not going to make suggestions, but I will try
and look at what I consider to be some of the more useful
ones. For this week's issue I will just stick to the two
. So let's have
a look at what's going on.
First, there are the halvenings in Bitcoin
. Every few
years the pay-out for mining the coins halves. This usually
coincides with the price doubling, for obvious reasons. We
have a halvening coming up next May. The price of bitcoin
is likely to be higher this time next year. I can't guarantee
that, but then who can guarantee the future?
So far investing in crypto currencies has not been like other
new technologies. Generally it's the big boys who get first
chance of buying shares in new companies while the rest of us
come late to the party.
This time, because of regulatory problems, things are the
other way round in the crypto world. Large investment houses
have so far been prevented from investing, and they want to
get their clients in. There is pent-up demand, and that demand
equals trillions of dollars of money looking for a home. Once
the regulatory problems are ironed out (in other words in a
few months time) a deluge of money will hit the crypto coin
world. Most will go into bitcoin
. That will send the
price sky-rocketing. I have decided that if I buy a coin for
$10k, and it goes to $100k, so does my investment. That's
serious money. I have to admit that I cant think of a good
reason for not buying.
The other way to look at cryptos is to say that in order to
buy the other coins you usually need to get bitcoin
) first, so there is always going to be a
market for those two coins. I am, of course, buying eth as
There is a third issue to look at, and that is the behaviour
of banks, the behaviour of governments, and the problem of a
permanently decreasing in the value of fiat currencies.
Banks are not exactly very efficient. They have failed to
enter the digital age with any real skill. I can open a crypto
account in minutes and keep my identity without passing huge
chunks of it on to bank officials. I can use that account to
send or receive money across the planet within minutes at a
negligible cost. I can also use my accounts to create passive
income, and that income is orders of magnitude higher than
your average high street bank can manage.
At the moment, my view is: Banks? Who needs them?
Using crypto isn't exactly easy at the moment, but in a couple
of years time things will have changed drastically and I
suspect that most of the population will start to wonder why
they had been so suspicious of crypto previously.
The great plus in the digital invasion is the general removal
of middle-men. We don't need them once we fully embrace the
digital world, and they are being ousted across many
industries. I could write a whole article (even a book) on
this very subject, but for the moment let me just say that the
only reason we need banks is because we like to trust them.
With the recent change in the rules, that trust no longer has
legal backing. Your money can be sequestered to support a
failing bank. That's what happened in Greece and Cyprus a few
years ago, and if you don't think it could happen elsewhere,
then ask yourself why the legislation for it to happen exists
across most of the world.
By the way, I have said for some time, the bank to watch is Deutsche
. It's been collapsing in slow motion for years. The
collapse is getting rather serious at the moment. It will be
interesting to see how it is shored up, or whether it is
If a bank goes insolvent it can and will use your money to
support itself. It can legally do that because the money in
its vaults belongs not to you, but to the bank. You have a
claim on that money because you have passed the actual cash
over to the bank's possession. But what use is a claim on a
Get rid of the trust angle and what else is left in favour of
using a bank instead of doing the banking yourself?
In short, banks in their present form are outdated and either
must change or fade away. Cryptos, and their big sister,
blockchain, will take over.
We'll have a look at some of this next week.
And do remember I have written a book about understanding
cryptos. Most of the chapters are also in audio format and a
few chapters are respoduced in video format as well. Let
me know if you want a copy
, but here's a link to my book
I am not suggesting you follow me beyond
this point, but in next week's issue I will be looking at a
few of the other coins out there that I think are worth