Booms, Busts and Cryptocurrencies
Booms, Busts and Cryptocurrencies by James Altucher – Daily Reckoning
Bitcoin briefly topped out above $20,000 in December. Then it hit a rough patch. As I type, bitcoin is trading in the $14,500 range. Many people wonder if this is the beginning of the end for bitcoin.
Here’s my answer to that: no, it’s not. Not by a long shot.
Pullbacks like these are normal, healthy, and even necessary. Nothing goes up in a straight line forever. And I still hold firm to my prediction that bitcoin will top $1 million by the end of 2020.
Famed venture capitalist Peter Thiel just announced he’s buying up to $20 million in bitcoin. Thiel is the co-founder of PayPal and an early investor in businesses like Facebook, Airbnb, SpaceX and Lyft.
Thiel’s no fool.
Look, I’m no Johnny-come-lately to bitcoin and cryptocurrencies in general. When I introduced my book Choose Yourself in 2013, I initially sold it exclusively for bitcoin. That was almost five years ago, long before most people had even heard of bitcoin.
Here’s what you need to know today:
The boom in cryptocurrencies is following the same script that has played out over, over and over again.
You see, every boom follows a sequence of three stages. Every single boom throughout history has followed this script.
The stock market boom in the roaring ’20s… the tech boom in the 1990s… the housing boom in the 2000s.
And now the booming cryptocurrency market is following this exact same 3-step script.
First, only early enthusiasts are courageous enough to invest in the new trend. That’s stage 1.
Then, institutional investors (the so-called “smart money”) jump in. That’s stage 2.
Finally, the public joins the party, triggering a massive explosion in price. That’s stage 3.
If you know how to use this roadmap, you could make an absolute fortune. And to help you understand how this 1-2-3 sequence works, let me show you what happened during the 1990s boom in tech stocks.
In the mid-1990s, most people didn’t even know what the internet was. In 1994, the morning show NBC’s Today had a segment where one of the anchors asked, “What is the internet, anyway?”
While most people were dismissing the technology as a fad, early adopters like myself were heavily investing in it. In 1995, I correctly predicted every company would need a website. So I started my first internet company to help big corporations get online.
That’s how I ended up building the first websites for American Express, HBO, Sony and Disney, among others.
That was stage 1 of the boom.