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People often say that history repeats itself…
And yet when it does the masses usually say, “This time it’s different”.
That last bit is a quote from Sir John Templeton, arguably one of the greatest stock pickers of the 20th century.
So with 2020 being a new year and a new decade...
What does history tell us about Bitcoin and the Crypto markets...and what’s
in store?
Well, the first thing that history tells us is that new markets like Bitcoin can
be volatile.
Think about previous decades-long market cycles for a minute...
In the 1920’s it was the boom in the relatively new automobile industry, mixed with cheap credit...
Along with the new idea of buying stocks on margin...
That created the roaring 20’s... the subsequent 1929 market crash... and ultimately, the Great Depression.
In the 1950’s and 1960’s market growth and volatility were fueled by a new kind of war. It was a Cold War as well as an arms and space race.
The 1950's and 1960's also saw a new kind of American family be born. One of consumption rather than savings.
In the 1970’s... it was the end of the gold standard, and the beginning of a new monetary system, the credit fiat system.
This caused gold prices to more than triple in the free market overnight.
In the 1970’s it was also a newly formed Oil organization named “OPEC” that created extreme volatility in oil prices.
The stock market crash of 1987, a.k.a. Black Monday, was another instance where something new caused great volatility in the markets…
Computer Trading.
The rise in new highs following this crash was another form of new shadowy manipulation by the U.S. Government and the Federal Reserve.
In the1990s it was the new tech and internet that caused the fabled “Dot-Com Boom” and subsequent bust.
And it was the new instrument of credit derivatives and credit default swaps that became popular in the early 2000’s and led to the Great Recession of 2008..
Bottom line…
New things... whether they are new technology, new financial instruments, or even entirely new financial systems come with volatility.
It is during this volatility that fortunes can be made or lost...
And so it goes with Bitcoin and Cryptocurrencies.
Remember... Bitcoin is only a decade old.
The first boom of Bitcoin millionaires and even some billionaires have
been created.
Over the next 10 years we will see what kind of lasting impact this new technology has on the world.
In a new report by Deutsche Bank, Jim Reid predicts that the fiat money
system will come under immense pressure from newly minted digital currencies like Bitcoin.
For starters, he predicts the endless money-printing spree that the FED and Central Banks around the world have been on will continue.
Why?
So they can continue to buy securities, pumping values and the economy higher and ultimately hit their target of 2% inflation.
I predict this insertion of money into the economy is going to be good for
stock markets worldwide over the next decade... just like it has been over
the last decade.
However, there's likely to be much more volatility as well.
We’re already seeing this take place right now as the Fed will likely start lowering interest rates again through 2020.
However, this has created and will continue to create a massive debt problem around the world.
Debt is already at record levels and much higher than it was
in 2008.
As I predicted in 2007… this debt cycle can only continue in the current system for so long.
At some point inflation has to rise beyond the 2% target Central Banks world-wide have aimed at for more than 30 years.
Here’s what Reid says in the Deutsche report titled, “Imagine: 2030”
“Eventually, it is possible that inflation will become more and more embedded in our system and doubts will rise about the sustainability of fiat money. The demand for alternative currencies will therefore likely be significantly higher by the time 2030 rolls around.”
He goes on to say...
“Will fiat currencies survive the policy dilemma that authorities will experience as they try to balance higher yields with record levels of debt? That’s the multi-trillion dollar (or bitcoin) question for the decade ahead.”
So while Crypto’s like Bitcoin have experienced tremendous volatility over the past few years...
As an investor, you have to keep your eye on the long-term prize.
That’s why my plan has always been to use a small portion of what I make and invest in Cryptos… over the long-term.
I take income and gains from other more stable investments and buy cryptos at the right time. I then sell at the right time either into cash or move into other investments that are moving.
Then, when the time is right and the value is there I buy Bitcoin and other cryptos again.
It’s a simple plan of what I call “value investing” and it’s an approach that has worked since markets began.
The key to this whole thing working for your portfolio is to follow what is known as the 80/20 rule.
We focus 80% of our time on 20% of the opportunities that can have a real impact on our portfolio.
We focus 20% of our time on passive investments that can yield us 20-30% or more year after year. Things like stocks and real estate.
We also focus 60-80% of our savings on things with the longest and most stable history of performance.
Again… things like simply buying stocks and real estate.
We put 20-40% of our savings on the things that could potentially boost our portfolio by millions of dollars over the coming years but can be perceived as more risky.
These investments are called alternative investments...
And this includes Cryptos, Commodities, Options, Short-Selling, Futures, arbitrage, private equity, foreign equity, and into new emerging markets like Tokenized Assets.
This is the 80/20 principle at work in your portfolio of investments.
So what’s my prediction for Bitcoin, the Stock market and other alternative investments in 2020 and this new decade?
Stay tuned for my next email to find out.
Best regards,
Cecil Robles
P.S. One more thing… I’m going to show you how you can put my 2020 investment strategy into play, in just an hour a month. Keep an eye on your inbox for the next email. The wraps are coming off...
Cecil Robles
CEO and Founder
Bitcoin Mentor Club
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