There’s been a ton of news lately about Bitcoin and other cryptocurrencies…
And a lot of it has been pretty bad.
First, Jamie Dimon, the CEO of J.P. Morgan, called Bitcoin a “fraud.”
Then Chinese regulators banned Initial Coin Offerings (ICOs) from their country…
Then Chinese regulators went even further:
They banned Chinese citizens from owning and trading cryptocurrencies entirely.
This must be the end of the crypto bull market, right?
On the contrary…
“The Sky Is Falling!”
Certainly, none of these headlines would qualify as “good news.”
The leader of one of the largest banks in the world talking trash about Bitcoin isn’t good…
And the second largest economy on Earth banning cryptos isn’t good, either.
But here’s the thing:
All investments have detractors — but that doesn’t mean these investments will drop in value.
And this is especially true when the detractors are biased or uninformed…
687% Profits (and Still Going Strong)
To explain what I mean, let’s go back to 2007, when Apple first launched the iPhone…
At the time, Microsoft’s CEO Steve Ballmer bluntly stated that there was “no chance” the iPhone was going to gain significant market share.
Fast-forward to today — and the iPhone has become the #1 smartphone in the U.S.
Not only that, but since 2007, Apple’s stock price has increased by 687%.
Simply put, Mr. Ballmer was biased in his assessment of Apple’s iPhone…
Motivated to protect his company and his own wealth — and blinded by his company’s seeming invincibility — he dismissed the looming threat of a major new competitor.
But as you can see, investors would have been well served to ignore him.
An Axe to Grind
Whenever a new breakthrough innovation comes along, it’s the incumbents — the folks who have the most to lose — that come out most strongly against it.
That explains why Jamie Dimon and China are railing against Bitcoin:
Mr. Dimon has a vested interest in the “old way” of doing things — in other words, keeping governments and central bankers in control of global currencies.
The old way of doing things allows his firm to keep accepting deposits all over the world, and to keep earning handsome returns on that capital.
A major innovation like Bitcoin that’s controlled by individual users could threaten J.P. Morgan’s business — and could threaten Mr. Dimon’s personal wealth.
It’s the same story with China:
Currently, China has strict laws against its citizens taking capital out of the country.
But with cryptos like Bitcoin, citizens can move their money around freely, without China’s bureaucrats butting in.
This terrifies China. It’s scared that it will lose control of its own citizens.
Bitcoin’s Dead, Long Live Bitcoin!
As an investor, it can be frightening to see headlines like, “Why China Crushed Bitcoin.”
On the other hand, it might be helpful to keep in mind that Bitcoin has been declared “dead” 166 times over the past six years…
And guess what: not only has it been “resurrected” every time, but it’s generally gone on to reach new highs shortly thereafter.
In fact, it seems that the crypto markets have learned to shrug off “bad” headlines pretty quickly by now.
For example, after Mr. Dimon’s remarks and the news of the China ban, Bitcoin briefly fell below $3,000 — but it’s already rebounded to nearly $4,000 per coin.
And that’s a 400% gain from where it was at the beginning of the year.
Can’t Keep a Good Man Down
At times like this, it pays to keep a cool head.
The fact is, we’re in a bull market for cryptos…
And as we’ve learned from history, bull markets are a thing of great resilience:
They have the power to ignore negative news…
They can just keep running higher and higher.
To be clear, like all bull markets, the glory days for cryptos will eventually fade — and as investors, we need to be vigilant and prepared for that moment.
But we believe we’re in the first innings of this bull market.
So we’re continuing to go long on cryptocurrencies.
Happy investing.
Best Regards,
Founder
Crowdability.com
