At a recent conference, a question was asked about whether it’s still possible to get rich from the stock market. My reply… It has never been easier to get rich from stock investing.
Now, that’s a bold statement. But it’s absolutely true.[ad#Google Adsense 336×280-IA]You see, humanity will change more in the next 20 years than in all of recorded history!
In fact, the changes coming over the next two decades will dwarf the introduction of the automobile, the airplane, the computer, and even the internet.
The average American will soon be receiving four or five packages every week by drone — everything from groceries and prescriptions to building supplies.
Americans will spend 40% of their commuting time in driverless cars, use 3D printers to “print” custom meals, and spend most of their leisure time on activities not yet invented.
We will see nearly 2 billion jobs disappear, everything from physicians and lawyers to grocery clerks. Now, the vast majority of those jobs will come back in a different form, with more than 50% of them being self-employed freelance jobs.
In the next 20 years, half of the companies that currently make up the S&P 500 index will be gone. The same is true of traditional colleges, too. We’ll also see the virtual elimination of police forces, which will be automated out of existence. Standing armies will be automated in the next two decades, too.
But let me make one more prediction…
By 2030, 15% of all global financial transactions will use Bitcoin or a Bitcoin-like crypto-currency. What this means is that anyone who still thinks Bitcoin is an interesting anomaly is dead wrong.
In fact, cryptocurrencies are the one investment class where a relatively small purchase could literally make you a millionaire in a very short time.
As you can see from the chart below, the NYSE Bitcoin Index (NYSE: NYXBT) is up more than 245% in the past 12 months. The cryptocurrency itself is up more than 170% YTD. These numbers are despite a pullback from its recent high of $3,000 on June 11.
A $10,000 investment in Bitcoin in 2010 would be worth $300 million today. This means a $100 purchase of Bitcoin in 2010 would be worth a cool $3 million today.
But consider this…
These huge gains in Bitcoin aren’t over, nor are the gains just limited to Bitcoin. There are more than 800 cryptocurrencies in existence today — and a few of them, like Ethereum, Ripple, NEM, and Litecoin, will likely see similar growth.
Put simply, prudent investors will make a fortune in the cryptocurrency market.
Bitcoin was born during the 2008-2009 financial crisis. However, its real value as a hedge against economic crises became evident when Cyprus confiscated bank accounts in an effort to stay solvent. This made everyone realize that bank deposits are fundamentally unsafe in an era of unsound central bank policies.
So, as governments institute negative interest rates (NIRP) or unadulterated confiscation, Bitcoin was destined to become the ‘anti-government’ currency. It’s a way to insulate depositors from the actions of bureaucrats. And as political and financial systems globally continue to deteriorate, Bitcoin will continue going higher.
But central bank policies aren’t the only tail-wind for Bitcoin: Bitcoin skepticism is also on the wane. More and more companies are accepting Bitcoin as payment. Companies like Cisco, Amazon, Microsoft, and Starbucks now accept Bitcoin. In fact, Japan recently recognized Bitcoin as a legitimate currency last April.
The banking sector is on board, too. Banks are spending nearly $1 billion a year on researching digital currencies. In fact, bank filings indicate they intend to move some of their trade settlements to blockchain technology, the shared electronic ledger-sheet that records all Bitcoin transactions.
Why Bitcoin Is Better Than Any Other Commodity
Why would someone looking for an alternative to government-issued currency not buy gold instead?
There are a few reasons. First, gold isn’t very fungible — that is, it isn’t easy to use as a replacement for cash in order to buy goods or services. Secondly, it isn’t very portable. Gold is heavy, even in small amounts.
But there are issues with safety and anonymity too. Gold is only truly secure when it’s locked away, preventing the owner from easily using it. On the other hand, you could easily carry millions of Bitcoin on a thumb drive with nobody the wiser.
But that doesn’t mean Bitcoin is intangible. In many ways, Bitcoin is just as tangible as gold. The cryptocurrency was created from unchangeable mathematical rules. And backing that math up is “triple entry” bookkeeping that retains debits and credits while adding simultaneous verifications for each transaction recorded by the blockchain.
This makes Bitcoin safer and easier to use than gold.
But Cryptocurrencies Are Still Speculative
While millions of profits will be generated on cryptocurrencies, investors must treat them as speculative investments. It’s important to remember that a little bit of money goes a long way here.
While I don’t agree with analysts who believe Bitcoin is going to $250,000 or the incredulous $500,000 by 2025, the odds of Bitcoin going to, say, $15,000 are very real. That makes it well worth taking on some risk in a speculative environment.
After all, if you have any hope of spending you leisure time doing things not yet invented, you’re going to need some money on a thumb drive.
Risk To Consider: Buying cryptocurrencies is speculative in nature. To mitigate risk, relegate your purchase to any of the five cryptocurrencies with the best odds of exponential growth (Bitcoin, Ethereum, Ripple, NEM, and Litecoin). This is a long term-investment, so expect to hold the currency for more than five years (buy and forget). And expect to see lots of volatility.
Action To Take: For the uninitiated, buy Bitcoin easily through Coinbase. The easy to use app lets you buy, sell, and verify transactions on your smartphone. Keep in mind, though, that Coinbase is a hosted wallet, so if you don’t want a third party to have access to your money, consider alternatives such as Blockchain or Mycelium.
— Richard Robinson
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Source: Street Authority