Sometimes it feels like we’re living in a sci-fi movie.

Governments vs. hackers. Digital currency. And now, government-issued digital currency.

Venezuela has officially launched the presale of its “petro” cryptocurrency. According to the government, more than $735 million has been raised in the presale in just 20 hours. (I wonder how that compares with the country’s last bond sale…)

Venezuela plans to issue 100 million tokens in total, each backed by a barrel of oil. The starting price for each token is $60, and the presale ends March 19.

Apparently, the coins will be used to purchase deliverable oil from state-owned companies. The country also says that citizens who use the coin to pay taxes will get a 10% discount.

I’m very curious as to who’s buying these early tokens. Is it industrials that plan to actually use them for oil purchases? Venezuelan citizens who are sick of hyperinflation wiping away their savings? Neighboring countries that trade with Venezuela?

By the way, the U.S. Treasury has issued a statement saying that Americans should not participate, as it would probably violate sanctions against Venezuela.

Hinting at Crypto’s Potential
We don’t know if the Venezuela experiment will work. It certainly could because people who have suffered through horrific inflation tend to seek out alternatives: gold, silver, real estate… and now cryptocurrencies.

A government-backed digital currency could be attractive to both companies and people, especially when compared with the old, hyperinflated, nearly worthless currency, the bolivar. So even though the government has a bad financial record, local citizens, at least, may be willing to overlook it.

However, this is the first time a centralized power has released a cryptocurrency. It could go horribly wrong, in many ways.

We don’t know if they plan to “fix” the price of the petro to the price of oil, for example. That would take some serious engineering since there may be more demand than supply, or vice versa.

What if people start using the petro for everyday things? Do they plan to let the price rise far above the price of a barrel of oil, if demand is there? If each petro is worth $120, does it buy you two barrels?

We’ll know the answers to these questions soon enough. But the interesting thing about this story is how it demonstrates what crypto can do.

In the next few years, more countries, local governments and companies will begin issuing tokens or coins.

Let’s look at a hypothetical example. A city needs to finance a new toll bridge. They could use a platform like Ethereum to issue a token for that purpose.

There would be a “smart contract” that automatically shares a predetermined percentage of toll revenue with owners (once it’s operating). The tokens would trade freely on exchanges and find price equilibrium at a yield that investors are comfortable with.

Traditionally, the city would raise this money by issuing municipal bonds. Only institutional investors participate in these deals, so locals are left out in the cold.

But if they used a token or coin instead, they would get three major benefits:

Far more liquidity
Participation from small, non-institutional investors (aka 99% of all investors)
Efficient distribution of revenue with smart contracts on the blockchain.
It’s also a lot easier to store a token than it is a bond. Anyone can do it. And you don’t have to trust a bank or money manager to hold your money for you.

The toll bridge is just one example of how blockchains have the potential to transform the financial world.

There will also be equity tokens soon. They will be very similar to cryptocurrency but will represent shares in the company.

We’re already starting to see some amazing applications of blockchain technology. But if this were the internet, I’d say we’d be in about 1993. This is the very early adopter phase.

Over the coming years, we’re going to see some amazing technologies emerge.

The best part is almost anyone can participate in this blockchain revolution.

Good investing,

Adam Sharp
Co-Founder, Early Investing

Can a $10 Bill Really Fund Your Retirement? The digital currency markets are delivering profits unlike anything we’ve ever seen. ​23 recently doubled in a single week. And some like DubaiCoin have jumped as much as 8,200X in value in 18 months. It’ unprecedented... but you won’t receive any of the rewards unless you put a little money in the game. Find out how $10 could make you rich HERE. ​

I have long believed that the biggest threat facing cryptocurrency is government.

Most countries don’t appreciate competition from private markets when it comes to currency. Nearly all governments have operated with a central bank-controlled monopoly on money for a century or longer.

And after China shut down its domestic crypto exchanges and banned initial coin offerings (ICOs) last year, the fear was that other countries around the world would follow suit.

This regulatory risk factor has been stalking cryptocurrency markets ever since. It’s the No. 1 concern I hear about from our subscribers and other crypto enthusiasts.

Fortunately, we now have more clarity on this issue. In many countries where crypto trading is popular, discussion has shifted away from rumors of bans to talk about smart regulation.

In a U.S. Senate hearing this month, Commodity Futures Trading Commission Chairman J. Christopher Giancarlo was surprisingly upbeat about the future of U.S. crypto markets. Here’s a quote from the hearing…

“Do no harm” was unquestionably the right approach to development of the internet. Similarly, I believe that “do no harm” is the right overarching approach for distributed ledger technology… With the proper balance of sound policy, regulatory oversight and private sector innovation, new technologies will allow American markets to evolve in responsible ways and continue to grow our economy and increase prosperity.

You can read Giancarlo’s full written testimony here.

However, Giancarlo and Securities and Exchange Commission Chairman Jay Clayton struck a more cautionary tone about fraud in the market. They’ve already acted to stop a few cryptocurrency operations that were allegedly operating like Ponzi schemes.

Here’s an excerpt from a joint statement by Clayton and Giancarlo…

The CFTC and SEC, along with other federal and state regulators and criminal authorities, will continue to work together to bring transparency and integrity to these markets and, importantly, to deter and prosecute fraud and abuse. These markets are new, evolving and international. As such they require us to be nimble and forward-looking; coordinated with our state, federal and international colleagues; and engaged with important stakeholders, including Congress.

Similar developments are happening around the world. South Korea, a major crypto hub, has backed off a rumored ban on crypto trading. Government policy coordinator Hong Nam-ki said the following, as reported by Reuters…

The government’s basic rule is to prevent any illegal acts or uncertainties regarding cryptocurrency trade, while eagerly nurturing blockchain technology.

This is exactly what I’ve been hoping for. We need regulators to step up and prevent bad actors from tarnishing the industry.

Regulation has the potential to legitimize the nascent cryptocurrency markets. Done correctly, it would clear the path for institutional buyers to step in and rocket the market higher.

Of course, there’s still the risk that governments could reverse their opinions. But based on what we’ve seen so far, I would argue that this is the most positive development we’ve had in years.

I cannot overstate the importance of the clarity we’ve gotten on the government/regulatory risk situation.

This prospect of widespread bans has been a looming threat hanging over the crypto world. For now, that threat has passed.

Crypto Markets Rebound Strongly

With the biggest near-term threat to crypto largely overcome, markets have reacted to this bullish news appropriately.

During the low of the sell-off on February 6, bitcoin briefly dipped below $6,000. We last saw prices that low just before Thanksgiving 2017.

That same day, I sent out a note to First Stage Investor subscribers titled “Crypto Markets: Nearing a Bottom?”

In the alert, I noted the following…

We are reaching a retracement point where, historically, a bottom forms… So if you believe in the long-term fundamentals of cryptocurrency (as I do) and have been waiting for a chance to buy the dip, now seems a fine time to do so across our recommendations.

So far, it looks like we may have called it (near) the bottom. Bitcoin is trading back above $10,000 as I write this, with most altcoins following bitcoin’s lead.

I continue to believe we’ll see new all-time highs in crypto this year.

Here’s how I think about it: 99% of the world is still on the sidelines. And other than a handful of early institutional adopters, 99.99% of the professional investing world remains on the sidelines as well (venture capital funds, hedge funds, wealth managers, family offices, etc.).

There’s no question in my mind that the potential rewards still far outweigh the risks.

The difficult part remains holding through nasty corrections and buying the dips when it seems as if the crypto world is ending. If you can discipline yourself to do that, you’re well on your way to making money in crypto.

Good investing,

Adam

Can a $10 Bill Really Fund Your Retirement? The digital currency markets are delivering profits unlike anything we’ve ever seen. ​23 recently doubled in a single week. And some like DubaiCoin have jumped as much as 8,200X in value in 18 months. It’ unprecedented... but you won’t receive any of the rewards unless you put a little money in the game. Find out how $10 could make you rich HERE. ​

Editor’s Note: In light of cryptocurrency’s recent pullback, we’re presenting an updated version of an article Adam originally wrote in November of last year. The message is simple: You should buy and hold… even though it can be hard not to panic-sell during sharp corrections like those we’re seeing today.

Dear Early Investor,

The key to making money in cryptocurrency is simple.

Buy. Hold.

That’s it.

Yes, you need good security too. But the most important thing is simply being able to hold on during volatile years.

Many are tempted to take profits after they’re up 2X or even 5X. Both would be a mistake (unless you desperately needed the cash).

Let me explain why…

Cryptocurrencies are a (potential) monetary revolution. Bitcoin could become a common investment asset and value transfer vehicle.

As I often point out, ownership today is tiny, with far less than 1% of the population owning any cryptocurrency at all.

But adoption is accelerating incredibly fast. Let’s look at some metrics.

Coinbase, the largest U.S. cryptocurrency exchange, was adding around 55,000 new accounts per day last November.

In a month, that’s 1.7 million new crypto (mostly bitcoin) users.

Let’s say half of those actually invest, and that they invest $3,000 on average (less than half a bitcoin). I suspect this may be a conservative average, but it’s hard to say.

This influx of new buyers from Coinbase would add more than $2.5 billion in buying pressure per month (if they each bought less than half a bitcoin).

The total value of all 16.6 million bitcoins in the world today is around $140 billion, with each coin being worth around $8,315 as I write this.

On the supply side, 1,800 bitcoins are currently being “mined” per day. Not all of those are sold, but let’s pretend they are for this example. That’s $15 million in selling pressure from new coins per day. In a month, that’s $449 million worth of new bitcoins mined.

So from just one exchange, we have perhaps $2.5 billion in new buying pressure. And selling pressure from new coins is just around $449 million.

Let’s also factor in the following:

• Bitcoin owners are loyal and tend to stick around.
• There are dozens of other large crypto exchanges around the world.
• There’s been an influx of 130-plus hedge funds looking into crypto.
• There will only ever be 21 million bitcoins.
• CME Group has launched crypto futures.
• Now that crypto futures are live, bitcoin ETFs are likely to follow.
• The big money players are dipping their toes in this market.

And there you have a recipe for a feeding frenzy of epic proportions.

Upside for Altcoins

Cryptocurrency owners tend to fit a pattern: They buy bitcoin first and fall in love with the idea of independent money.

Holders tend to do very well on their bitcoin, and eventually some of these profits make their way into “altcoins,” or alternative cryptocurrencies.

The lure of altcoins is simple. Many of them have borrowed from bitcoin’s code (it’s free to use), but have improved it in important ways.

They’re trying to beat bitcoin in transaction speed and cost (and a few are succeeding wildly). Competitors like Ethereum create additional functionality, such as the ability to execute “smart contracts” on the blockchain, leading to endless potential applications.

Bitcoin will always have a special place in my portfolio. I’ll always own some. But much of my time is now spent analyzing its competitors.

It’s an absolutely fascinating field. Competition keeps the technology moving very fast. Some of the most talented developers in the world are racing to make their coins the best.

To learn more about altcoins, you can check out our Crypto Asset Strategies service. We have a portfolio of four altcoins, user guides, research reports and more.

I think we’re just getting started.

Good investing,

Adam Sharp
Co-Founder, Early Investing

Can a $10 Bill Really Fund Your Retirement? The digital currency markets are delivering profits unlike anything we’ve ever seen. ​23 recently doubled in a single week. And some like DubaiCoin have jumped as much as 8,200X in value in 18 months. It’ unprecedented... but you won’t receive any of the rewards unless you put a little money in the game. Find out how $10 could make you rich HERE. ​

Last week, I was at my son’s friend’s birthday party, and one of the dads there brought up crypto.

We were discussing various coins when another parent overheard and broke into the conversation. “I hope you guys don’t own any bitcoin, because that thing is crashing hard!” he said with a grin.

I nodded politely and acknowledged that crypto is going through a rough patch, with prices correcting practically across the board.

Then I asked the other dad if he knew what a bitcoin cost a year ago. He didn’t.

So I told him that bitcoin was trading for around $948 one year ago. And that despite the recent pullback, bitcoin is still up around 9X to 10X over the last 12 months.

The entire crypto market, as tracked by Coinmarketcap, has risen from around $15 billion early last year to around $400 billion today.

I don’t know of any other asset that even comes close to these returns. And the further back you go, the more insane the returns get. When I first bought in the spring of 2013, bitcoin was trading for $84. And it had just run up to that price from around $5 only months before.

My point is that if you paid attention only to mainstream news sources, you might think bitcoin was trading at multiyear lows. It’s “crashing,” “plummeting “… it “won’t survive.”

I believe this pullback is completely natural. Here’s why…

A Natural (Yet Nasty) Correction

I look at the crypto market like this: 15 steps forward, nine steps back.

When an asset increases in value 20X, as bitcoin did last year, it’s only natural for some owners to take profits. Others who bought in at $15,000 or $19,000 are likely panic-selling.

This is simply how markets operate. Weak hands are shaken out during these times.

Yet a significant portion of the investors who bought in over the last year will hold strong. And they will continue to hold for years because historically, that’s the most proven way to make money in crypto. This is the sturdy base of crypto owners, and it continues to grow steadily.

Let’s look beyond price action for a moment and recognize that huge developments are taking place in the crypto world.

First, governments appear to be closer to regulating crypto markets. If done correctly, this will be a very positive development.

The fact that South Korea, for example, is banning anonymous cryptocurrency trading, is arguably a good thing.

We need trust to make these new markets work long term. And that will never happen if naysayers can point to crypto as a haven for hackers and criminals.

So, just as banks are required to verify accounts under “know your customer” laws, cryptocurrency exchanges around the globe are now moving in that direction as well.

We also got news this week that Robinhood, the commission-free stock trading service with millions of users, is moving into the crypto markets. Soon, users will be able to buy and sell crypto with zero commission.

Still, there’s clearly some other factor holding cryptocurrency markets back. And it’s not what you might expect…

Exchanges Are Growing Too Fast

A primary factor in the crypto pullback that most people haven’t recognized is this: Most exchanges are growing far too fast.

So many people are entering the market that many exchanges have had to shut down new user registrations. Most others can’t keep up with customer support.

Bittrex, Bitfinex, CEX. IO and Binance (four of the largest crypto exchanges in the world) have been forced to deny new customer accounts due to explosive growth.

Binance, for example, added 240,000 new accounts in a single hour on January 10. It has since stopped accepting new accounts and only recently began allowing a small number of new users per day.

Coinbase, the largest U.S.-based exchange, continues to experience major growing pains. Its customer support is flooded, and it can’t verify new accounts fast enough.

Exchanges simply can’t keep up with the massive influx of new crypto investors.

Naturally, this has put a damper on markets. When the flow of new buyers is bottlenecked by exchange capacity, it’s of course going to cause a temporary pullback in prices.

Behind the scenes, however, crypto exchanges are furiously upgrading their systems and hiring to meet demand. Due to security requirements and the fact that exchanges are now required to verify all customers, this takes time.

The point is that exponential user growth is a great problem to have. Exchanges are working diligently to accommodate new users, and I suspect that soon, most of them will reopen new account registrations and clear their customer service backlogs.

When this happens, I expect to see a sharp rebound in crypto markets. And then we can begin the next leg up. If we get more clarity on government regulation, even better. There’s also the X-factor of institutional buyers, who I still believe will start moving into the crypto market in the next few months.

By the end of the year, I’m fairly certain we’ll look back at this dip and say, “Damn, that was a great buying opportunity.” But in the midst of a nasty correction, the opportunity is hard to recognize.

It seems like the end of the world for crypto, but I assure you… it’s not.

We’re still at the very beginning.

Have a great weekend, everyone.

Adam Sharp
Co-Founder, Early Investing

Can a $10 Bill Really Fund Your Retirement? The digital currency markets are delivering profits unlike anything we’ve ever seen. ​23 recently doubled in a single week. And some like DubaiCoin have jumped as much as 8,200X in value in 18 months. It’ unprecedented... but you won’t receive any of the rewards unless you put a little money in the game. Find out how $10 could make you rich HERE. ​

Bitcoin… For the vast majority of people, this original coin has long been synonymous with cryptocurrency.

Indeed, bitcoin was basically the only game in town until recently.

As you can see from the chart below, bitcoin accounted for roughly 85% of the crypto market one year ago.

Today, bitcoin makes up only 34% of the $500 billion-plus cryptocurrency market. New competitors such as Ethereum, Ripple, Dash, NEM, Monero and IOTA have emerged to grab big chunks of the market.

And hundreds of even smaller coins combine to make up around 25% of the market.

Collectively, everything that’s not bitcoin is referred to as the “altcoin” market.

While bitcoin has lost significant market share to altcoins, its value still skyrocketed from around $1,000 a year ago to around $11,000 today.

Over the same time period, altcoins have soared even higher than bitcoin, rising from just a few billion dollars combined to around $360 billion today.

In my view, these developments don’t represent the fall of bitcoin. We still need bitcoin as a reserve cryptocurrency, a secure rock in the crypto world. Instead, what we’re seeing is the rise of crypto as a new type of investment.

Crypto: A Maturing Asset Class

This past year has been a chaotic (and wildly profitable) one for crypto investors. And we’re beginning to see the type of market I envision as being necessary for crypto to grow into one of the largest global asset classes.

I’ve known for years that we need more than just a few big coins for crypto to thrive.

We need fierce competition among hundreds of coins, all of them using the power of open-source software to innovate and create amazing technology… and growing through the power of network effects and viral organic growth.

Today we’re seeing exactly that. There are now more than 30 separate coins with market capitalizations (total value) of more than $1 billion. Each has its own community of users, developers and supporters.

Hundreds of unique cryptocurrency models are being tested in the wild today. It’s an innovation bonanza, much like we saw in the early days of the internet.

Crypto today is a global phenomenon the likes of which the world has rarely seen.

Crypto vs. Old Money

With the rise of crypto comes inevitable scrutiny from governments and central banks around the world.

For more than a century, these centralized powers have had complete control over monetary systems. They won’t give that up easily.

They claim to be looking out for the welfare of their citizens, but I believe they see crypto primarily as a threat to their monopoly on money.

China has already banned most cryptocurrency exchanges. Before it did, it made up a huge chunk of worldwide cryptocurrency trading volume.

Imagine where the crypto market would be today if China hadn’t done that. We’d probably be 2X higher than we are today.

I believe China will eventually reverse its ban once reasonable regulations are finalized. If and when it does, watch out …

But we know that the type of government pushback we saw in China is inevitable. It’s likely that it will happen in other countries.

However, we’re seeing some encouraging signs.

South Korea, one of the world’s largest cryptocurrency hubs, recently announced it was considering a crackdown and possible ban on crypto trading.

Korean citizens were outraged. More than 200,000 citizens signed a petition demanding that the government pull back on its crypto crackdown.

And its government appears to be listening. As reported by The Wall Street Journal…

Hours later on the same day, a presidential office spokesman walked that back, saying that abolishing cryptocurrency exchanges was only “one possible measure” that didn’t represent a “final” decision.

Many young Koreans see cryptocurrency as a hopeful development for the future during a time of high youth unemployment and stagnant growth. And they’re not alone.

Worldwide, a new generation of investors desire something other than the traditional investment options.

For many of us, cryptocurrency is a big part of the answer. It’s a hedge against central banks printing money. A unique new asset with the power to transform financial markets through increased efficiency and decentralization.

In short, we view cryptocurrency as a rare beam of light in an often crooked and rigged financial world. Governments and banks will try to ban or kill off crypto, but we’re not going to take it lying down.

Crypto is this generation’s contribution to true free market capitalism. It offers a chance to revitalize our stagnant monetary and financial systems.

As I often say, crypto is the future of money. Let’s encourage our elected representatives to treat it as such.

Have a great weekend, everyone.

Adam Sharp
Co-Founder, Early Investing

Can a $10 Bill Really Fund Your Retirement? The digital currency markets are delivering profits unlike anything we’ve ever seen. ​23 recently doubled in a single week. And some like DubaiCoin have jumped as much as 8,200X in value in 18 months. It’ unprecedented... but you won’t receive any of the rewards unless you put a little money in the game. Find out how $10 could make you rich HERE. ​

Stories about bitcoin dying have been written many times.

On Tuesday, there was one in The Atlantic titled, “Is This the Beginning of the End of the Bitcoin Bubble?”

This happens whenever bitcoin is down a nasty 20% in a day. The naysayers assume something very bad must be happening.

So even though bitcoin is still up 100% over the last three months and has done the entire boom-bust-boom cycle hundreds of times before, this time looks different. It looks scarier because it’s happening right now.

It’s in our nature to assume the sky is falling when something unexpected happens.

If you manage to hold crypto for long enough, that goes away.

Embrace the Dips

All the early crypto adopters were on buying sprees this week.

So when my mother-in-law texted me her condolences about bitcoin, I smiled and kept looking for bargains.

I don’t get upset when the prices of cryptos drop. That’s like yelling at the weather. Plus, only through these dips do we have the opportunity to buy cheap.

Once you really understand and appreciate what cryptocurrency is about, price shouldn’t matter that much.

It’s a bet on the future of money. That’s all I need it to be. No matter what happens to the price tomorrow, it will still be my wager – a hedge, of sorts.

Maybe if I had a larger crypto portfolio, these dramatic shifts would affect me more. But I don’t think so. I’ve talked with many crypto traders, and most of them feel the same way.

The global enthusiasm for crypto didn’t disappear overnight. It just fizzled for a moment due to a natural but significant sell-off.

You can’t kill off a movement this strong with a little negative price action and some scary headlines citing “possible government bans.”

Don’t get me wrong, governments are still the primary threat to cryptocurrency.

But cryptocurrencies present their own interesting dilemma for governments. If a government bans cryptocurrency, it is admitting that it fears for its own currency. It is telling its citizens that it decides what is best for them and their families.

So, naturally, governments will try to scare us into thinking cryptocurrencies are dangerous. The tools of criminals, hackers and worse.

We’ll have to stand up for our right to choose the currencies of our choice. It won’t be easy, but it’s a goal worth fighting for.

Good investing,

Adam Sharp
Co-Founder, Early Investing

Can a $10 Bill Really Fund Your Retirement? The digital currency markets are delivering profits unlike anything we’ve ever seen. ​23 recently doubled in a single week. And some like DubaiCoin have jumped as much as 8,200X in value in 18 months. It’ unprecedented... but you won’t receive any of the rewards unless you put a little money in the game. Find out how $10 could make you rich HERE. ​

Picture this. If you had put a small $100 stake in bitcoin in 2010, that investment would be up a whopping 8,097% today!

Bitcoin is a cryptocurrency. (Check out this write-up on cryptocurrencies from our friends at Investment U.) Essentially, bitcoin is a digital way to store and transfer value. You can easily exchange bitcoin and other cryptocurrencies with traditional currencies all over the world.

There will only ever be 21 million bitcoins. You can’t counterfeit them because everyone in the network has a copy of all transactions, and you can prove ownership using the blockchain and cryptography.

As I write this, each bitcoin is worth around $8,100. That’s up from $.008 in mid-2010.

Bitcoin is up 1,010% over the last 12 months. Competing token Ethereum is up 3,659% over the same period and now boasts a market cap of more than $35 billion.

Many people are drawn to the “decentralized” nature of bitcoin and other cryptocurrencies – that is, the fact that they can be used like currency, but aren’t controlled by governments.

Big Bold Ideas

Some believe these “coins” will become the world’s new reserve currencies. Others are convinced that tokens like Ethereum will transform the way finance and the internet work. These are ideas with such big implications that most people have laughed them off over the years.

Yet the cryptocurrency market is on fire. The entire market’s value just surpassed $232 billion. Bitcoin accounts for around $138 billion of that total.

Thousands of bitcoin competitors have launched over the past few years.

The result is that bitcoin is no longer the only serious game in town. And more coins and tokens are launching every day.

ICO

This past summer, a startup called Brave raised $33 million in 30 seconds through an initial coin offering (ICO).

Brave’s token is called the Basic Attention Token (BAT). It aims to revolutionize the way advertising works so that it’s all powered by BAT and run on its proprietary web browser.

The company sold 1 billion coins in its $35 million offering, which sold out almost immediately. Brave will hold on to 500 million tokens to pay for further development of the network. Last I checked, BAT had risen around 600% since the ICO, and it already trades on dozens of exchanges.

Read more about Brave’s ICO here.

Getting Ahead of Itself?

This is extremely exciting stuff. It’s a new way to raise money for a new type of business. But we’re going a little too fast for my liking.

Ethereum is incredibly promising. But is it really worth $35 billion? It seems a bit much. Too fast.

And now it seems like almost every day there’s a new ICO. Most of the offerings are mediocre, while some look like downright scams.

But there is the occasional offering like Brave, which seems to have real potential. Civic.com’s upcoming ICO looks promising as well.

We will be following this market closely going forward. It’s one of the most unique, profitable and potentially disruptive high-risk phenomena I’ve ever seen.

Note: The legal aspects surrounding all of this are far from clear. We don’t know how regulators will react to the boom in ICOs. But a reaction is inevitable once a few of these go horribly wrong. (There have already been a few bad events.)

Going in, you should also realize that these ICOs are not like equity crowdfunding, which is regulated and secure. Also realize that with ICOs, you’re not buying equity. You’re buying a new type of asset (a token or cryptocurrency) that powers a completely new type of business.

Do your own due diligence on all ICOs. And realize that if you’re not tech savvy, you’re going to have a tough time securing your digital assets.

Equity crowdfunding is still by far the best way to get a stake in upcoming businesses. But ICOs sure are fun to dabble in.

Here are four takeaways when it comes to ICOs…

• ICOs are one of the most unique, profitable and potentially disruptive high-risk phenomena I’ve ever seen.
• ICOs are not like equity crowdfunding where startups and investors have to comply with a series of regulations.
• You’re not buying equity. You’re buying a new type of asset (a token or cryptocurrency) that powers a completely new type of business.
• You need a system to sift through the noise. As an early adopter of cryptocurrencies, I have devised a system that avoids mediocre opportunities and scams.

Good investing,

Adam Sharp
Co-Founder, Early Investing

Can a $10 Bill Really Fund Your Retirement? The digital currency markets are delivering profits unlike anything we’ve ever seen. ​23 recently doubled in a single week. And some like DubaiCoin have jumped as much as 8,200X in value in 18 months. It’ unprecedented... but you won’t receive any of the rewards unless you put a little money in the game. Find out how $10 could make you rich HERE. ​

Dear Early Investor,

People think you should buy bitcoin because the price might go up.

But the real reason you should own bitcoin – especially in your retirement portfolio – is that it’s a bet on a monetary revolution.

Crypto assets are all about cutting out the banks, middlemen, financiers and academics who control our current monetary system.

The monetary policy of today’s world is a mess rife with conflicts of interest and bad incentives. Every country does it similarly. And government is always tempted to print money. It punishes savers and rewards borrowers.

A well-constructed cryptocurrency, on the other hand, has a hard cap on the number of “coins” in existence.

There will only ever be 21 million bitcoins. You can’t change that number. There are a little more than 15 million available today.

So if we’re looking at bitcoin as a competitor to the dollar, there’s no contest. The U.S. government, for example, borrows more than $1 million each minute… printing money like crazy all the while.

That’s why bitcoin has risen from around $0.005 in 2010 to more than $5,000 today.

Bitcoin is a call option on a future where it is mainstream money. You don’t sell for double or triple what you put in; you hold on and hope it keeps going up. Less than 1% of people own bitcoin today, and if it becomes mainstream money, today’s bitcoin owners may be tomorrow’s new 1% of earners.

But it’s not just bitcoin anymore. There are hundreds of interesting cryptocurrencies out there – all competing against each other, sharing code and breaking new ground.

Here’s what’s really revolutionary about it…

All these “coins” or “tokens” (digital assets) have their own funding mechanism – the initial coin offering, or ICO – in which well-run projects raise tens of millions of dollars each week… hundreds of millions in many weeks, actually.

So they don’t need the stock market or venture capitalists. Crypto is its own funding source.

These crypto projects are trying to do big things like overthrow large incumbent financial institutions, software companies and (in some ways) governments – or at least loosen their monopoly on money.

After all, there’s no good reason a government should have a monopoly on legal tender. Libertarians like Ron Paul have long been calling for “currency competition.” We shouldn’t be forced to use dollars that erode in value.

The stakes are high.

Crypto has the potential to be a better form of money, compared to the current (barbaric) methods employed by most governments.

So that’s why you would want to own at least a little bitcoin in your retirement account. Capital gains taxes can be major there. Because if the crazy revolution happens, you’ll do very, very well, as long as you buy before half of the country gets in.

If it becomes popular as a way to store value for even 10% of the population, that’s more than enough to take it to at least $100,000 per coin by my rough estimates. It’s hard to say exactly, but demand is high and rising fast.

Each bitcoin is divisible into 100 million pieces. Each piece is one “satoshi.”

If bitcoin continues to rise in value, we may start thinking about prices in satoshis, not bitcoins. Bitcoins will be for very large purchases, and satoshis will be for everything else.

This is already happening in the crypto community. When we buy other cryptocurrencies, we usually buy them with bitcoin. It’s easier to think about thousands of satoshis than it is to think about tiny fractions of a bitcoin.

You don’t need to buy a whole bitcoin. Start small, and it could still turn into a great deal of money one day.

If you’re looking to do it in a retirement account, the most well-known player in the space is fittingly called Bitcoin IRA. The company takes a 15% upfront fee, but the tax savings down the road could be tremendous if bitcoin goes mainstream.

If you’re intrigued by bitcoin and the idea of investing in smaller (new) cryptocurrencies, watch my new presentation and join First Stage Investor. It includes my top four coins, all of which are brimming with potential.

Good investing,

Adam Sharp
Co-Founder, Early Investing

Can a $10 Bill Really Fund Your Retirement? The digital currency markets are delivering profits unlike anything we’ve ever seen. ​23 recently doubled in a single week. And some like DubaiCoin have jumped as much as 8,200X in value in 18 months. It’ unprecedented... but you won’t receive any of the rewards unless you put a little money in the game. Find out how $10 could make you rich HERE. ​

Our dithering government may not know what to make of cryptocurrencies.

But hedge funds do. They’ve already made up their minds.

After all, they’re in the business of making money for their clients, something they haven’t done very well in recent years.

What they are good at is sniffing out new and exciting investment opportunities.

Of course, it doesn’t take a keen nose to discern the enticing aroma of “am I dreaming” gains emanating from the cryptocurrency (or crypto for short) space.

Consider these recent returns…

• 75,063% from Cryptonite
• 59,577% from Influxcoin
• 60,450% from MaxCoin
• And a massive 823,750% from DubaiCoin.

These are some of the smaller coins that have skyrocketed in the past few months. But the larger ones have also surged.

In less than a year, for example, Ethereum has shot up more than 3,000%.

So it’s not surprising that there are more than 15 newly minted cryptocurrency hedge funds. And, according to Hedge Fund Alert, 25 more are on the way.

One of the more interesting ones?

MetaStable Capital. For one thing, it represents a “who’s who” of Silicon Valley professional investors, including Andreessen Horowitz, Sequoia Capital, Union Square Ventures, Founders Fund and Bessemer Venture Partners.

This isn’t just the smart money. This is the smartest of the smart money.

Then again, it’s not that hard to put your faith and money in one of MetaStable’s founders, Naval Ravikant.

As the founder and CEO of AngelList, he’s well-known to us. Ravikant was instrumental in making AngelList the go-to startup portal for angel investors.

And, impressively, he did it in the very early years of online startup investing, before it became a thing.

Early is what Ravikant excels at. He…

• Recognizes burgeoning tech trends early
• Makes an investment
• Establishes a beachhead for others to invest
• Becomes a leader and influential insider in the space.

MetaStable currently owns about a dozen different cryptocurrencies, including bitcoin, Ethereum and Monero.

Fortune estimates that MetaStable’s returns since its inception now exceed 1,000%.

That’s pretty good.

To get into this fund, all you need to do is write a check for $1 million and be willing to pay the typical “2 and 20” fees hedge funds foist on their limited partners. So for every $10,000 profit you make, you give back $2,000 plus $200 to the fund.

Alternatively, you could choose to invest on your own.

You’d have plenty of company.

Some people are very familiar with this corner of the investing world. Perhaps they’re blockchain developers or entrepreneurs in blockchain-related companies. Others are serious investors with the background necessary to understand and follow blockchain technology developments.

But many are newcomers to crypto investing.

This is the group Adam and I worry about. They can be overly swayed by the hype ICOs try to generate when they launch. And they’re more liable to overreact to bad news.

MetaStable and this group share an interesting (some would say symbiotic) connection.

Josh Seims, who co-founded MetaStable along with Ravikant and Lucas Ryan, says the fund takes a sort of Warren Buffett approach of investing when others are fearful.

Its pitch deck points out an incident when Bitfinex, a major cryptocurrency exchange, was hacked. The price of bitcoin dropped more than 20%. MetaStable doubled its bitcoin position. Since then, bitcoin has more than quadrupled.

If MetaStable is the “smart money,” then this impressionable group of relatively inexperienced investors is the so-called “dumb money.”

More than most people, I appreciate MetaStable’s value investing approach. Heck, I began my investing career many years ago as a value investor.

And if everybody could join MetaStable’s fund, I’d tell them, “more power to you.”

But that’s not the case. Hedge funds, as you well know, are for the very wealthy.

Crypto investing is open to anybody who knows how to open an account on Coinbase.com or Bittrex.com. That can be and should be a good thing… as long as investors are smart about it and avoid knee-jerk reactions.

There are two ways you can go about crypto investing…

Educate yourself. Understand how the various crosscurrents push and pull the crypto markets. Understand use cases and the concept of scaling. Is the market or need being addressed big enough? And will the technology accommodate it?

Or join the “smart money.” The good news? That doesn’t have to mean writing out million-dollar checks to gain entry to a hedge fund.

Instead, you can join a new crypto investing service my Co-Founder Adam is taking the lead on.

Adam understands more about this sector than anybody else I know. He’s an independent thinker and outstanding investor. He jumped into cryptocurrencies extremely early. He bought bitcoin at $83.40, making a 2,400% gain to date.

He bought Ethereum at $9.70, before it rocketed up to nearly $300. He’s up 3,000% so far.

And now he’s creating a financial service dedicated to helping interested investors make smart investments in digital coins, blockchain technologies and ICOs. The service is affordable and promises to give people the inside track for the best opportunities in the crypto investing space.

Sound familiar?

Adam is following the Ravikant script: recognize the trend early, invest early and then pave the way for others to invest.

And I’m not going out on a limb when I say that Adam is an early adopter and thought leader in the growing crypto investing community.

(Full disclosure: I would never get on board with any kind of crypto investing service if it weren’t being spearheaded by someone of Adam’s caliber.)

We like MetaStable. We like Ravikant and its other founders. But it’s not for everybody.

Our crypto investing service is. It doesn’t cost an arm and a leg. And it’s coming your way soon.

Good investing,

Andy Gordon
Co-Founder, Early Investing

Can a $10 Bill Really Fund Your Retirement? The digital currency markets are delivering profits unlike anything we’ve ever seen. ​23 recently doubled in a single week. And some like DubaiCoin have jumped as much as 8,200X in value in 18 months. It’ unprecedented... but you won’t receive any of the rewards unless you put a little money in the game. Find out how $10 could make you rich HERE. ​

Most cryptocurrencies are decentralized, meaning they don’t have a corporate entity that one could invest in.

A typical cryptocurrency (what I like to call “crypto”) is, like bitcoin, governed by its users, miners and usually a nonprofit foundation.

So there’s no way to invest in bitcoin as a company. You can buy coins, but there is no stock or equity.

However, there is a dynamic and fast-growing community of private businesses being built around crypto today.

If crypto continues to take off, these companies could be the financial giants of the future.

I’ll tell you about a few of the crypto startups I’m watching, and why I’m excited about the increasing number of these companies using equity crowdfunding.

Bitwise

Bitwise aims to be the “Vanguard of cryptocurrency.” The fintech startup just revealed its first investment product, the HOLD 10 Private Index Fund. It’s a basket of the top 10 cryptocurrencies by market cap.

Co-founder Hunter Horsley told Coindesk…

We want to create a meaningful and secure way to own a portfolio of cryptocurrency. We feel that, today, it’s too hard and it’s too expensive.

The company plans to charge 2% per year, with no additional fees. That’s a bargain compared to most crypto hedge funds, which take at least 20% of profits, plus 2% annually.

Bitwise has attracted notable Silicon Valley investors, including AngelList co-founder Naval Ravikant.

For now, the HOLD 10 fund is only available for accredited investors. This is likely due to the fact that the SEC hasn’t approved any bitcoin ETFs yet, but I fully expect Bitwise to go after the broader market eventually.

Coinbase

Founded by Brian Armstrong in 2012, Coinbase has grown exponentially to become the world’s largest cryptocurrency exchange.

With 10.8 million users and 36 million wallets, Coinbase is a force in the crypto community.

Coinbase has processed more than $25 billion in transactions in 2017, according to a Fortune article published in August. It also offers crypto payment processing tools for roughly 40,000 merchant accounts.

The company just announced a $100 million round of funding at a $1.6 billion valuation. Investors in its latest round include top venture capital firms IVP, Greylock and Spark Capital.

This August fundraise made Coinbase the first crypto “unicorn” startup (one that has grown to a $1 billion-plus valuation). Its earliest investors include members of FundersClub, an online investment platform for accredited investors.

The company’s explosive growth has caused some growing pains, however, and Coinbase is struggling to keep up with customer service inquiries. U.S. laws dictate that it follow certain rules designed to prevent money laundering, and partly as a result, the company’s pipeline is clogged.

The good news is it appears to be putting the new round of capital to good use, having recently launched phone support for users. If it can overcome these issues, Coinbase is well-positioned to become a dominant financial institution in this new market.

Bittrex

Bittrex is a fast-growing and disruptive cryptocurrency exchange.

The biggest difference between Bittrex and Coinbase is the number of digital currencies they offer.

Coinbase offers three: bitcoin, Ethereum and Litecoin.

Bittrex allows users to trade 200 different cryptocurrencies, including all the top ones offered by Coinbase. The other 197 “altcoins” are what really set Bittrex apart.

Altcoins have exploded in popularity over the last year, as the price of Ethereum rose from less than a dollar in 2016 to $294 today, giving it a $27 billion market cap.

On Bittrex, users can search for the next big opportunity. Many of the coins on this exchange are tiny, with market caps in the low millions.

Bittrex also offers a flat trading fee of 0.25%, while the fees on Coinbase vary and tend to be higher.

The one drawback to using Bittrex is that you can’t buy coins directly with dollars or other fiat currency, as you can on Coinbase.

Still, it’s a great example of a disruptive startup shaking up the incumbents of a new industry. By offering users a much wider selection of alternative cryptocurrencies, Bittrex is gaining ground on crypto powerhouse Coinbase.

Bittrex’s founding team has deep experience in web security, having worked at Amazon, Blackberry and Microsoft.

With a talented team, great tech and impressive growth, Bittrex is definitely a crypto startup to watch.

Crowded Startup Pipeline

We’re just beginning to see how transformative and disruptive the crypto market can be.

An entire ecosystem of new financial technology is being created. This sort of thing doesn’t happen very often, to say the least.

Many crypto startups will launch over the next few years, and some are likely to become the fintech titans of tomorrow.

We’ve already started to see a few high-quality crypto deals utilize equity crowdfunding.

Just last month we recommended one to members of our research service, First Stage Investor. It’s called Balance, and it’s building a user-friendly financial dashboard app that tracks not only your traditional financial transactions, but your crypto ones too. Soon users will be able to buy and sell cryptocurrencies directly through its app, and many more features are in the works.

The deal was quite popular, and it filled up after the company raised the maximum allowable $1.17 million. With a focus on simplicity and ease of use, Balance is well-positioned to help bring crypto to the mainstream.

Balance is among the first crypto- and blockchain-related startups to utilize equity crowdfunding, and it certainly won’t be the last.

I can’t reveal any details yet, but developments are coming that will merge the equity crowdfunding and crypto worlds in ways I couldn’t have even imagined a year ago.

It’s going to be a very exciting time.

Good investing,

Adam Sharp
Co-Founder, Early Investing

Can a $10 Bill Really Fund Your Retirement? The digital currency markets are delivering profits unlike anything we’ve ever seen. ​23 recently doubled in a single week. And some like DubaiCoin have jumped as much as 8,200X in value in 18 months. It’ unprecedented... but you won’t receive any of the rewards unless you put a little money in the game. Find out how $10 could make you rich HERE. ​