Buy This, Not That: Tapping Into a Speculative Trading Frenzy

Shah Gilani|April 10, 2024

You might notice Buy This, Not That looks a little different this week…

That’s because I’ve invited my colleague and top crypto expert Robert Ross to join me.

Together, we’re going to address some of the big questions we’ve been getting lately (and there have been a lot!).

As you know, this video series takes a playful look at a handful of stocks in a particular industry or sector…

But in a first…

We’re leaving the stock market behind… and entering the crypto sector.

Clearly, that’s where a lot of our readers have been focused. And there’s a simple reason why…

Next week Bitcoin will go through its “fourth halving.”

And history proves that will spark a crypto trading frenzy.

The profit potential is huge.

I’ll admit it… I was a crypto skeptic before meeting Robert. But for all the reasons he shares in our video… he’s got me convinced now is the perfect time to put a portion of my portfolio in the sector.

Click on the thumbnail below to watch.

 

Transcript

Join Us at Our Bitcoin Mega Halving Training Event!

Shah Gilani: Hey, everybody. Shah Gilani here with your weekly BTNT, as in Buy This, Not That. Except this week, we’re going to do something a little different. We’re going to do a Try This, Not That, mostly about trying stuff.

And with me is Robert Ross, crypto expert, investor par excellence and all-around great guy. Thank you for being with me, Robert, because I’m going to put some stuff on you because you taught me a lot about trying stuff, especially with crypto. So this Try This, Not That is going to be about you. So welcome.

Robert Ross: Thank you so much for having me, Shah. Really excited to be here.

Shah: Well, it’s my pleasure. So let’s get right to it, everybody. For anyone who doesn’t know what’s happening next week to Bitcoin and why it’s such a big deal, I’m going to ask you, Robert, to answer that question. What’s happening, and why is what’s going to happen going to be monumental?

Robert: Yeah, so it’s a huge week for crypto coming up here. For people who don’t know, there’s been three major bull runs in crypto. One that started in 2012, one that started in 2016, and another that started in 2020. And if you haven’t noticed, the last year has been amazing for crypto as well.

But part of the reason we had those three previous cycles was because of something called the Bitcoin halving. The Bitcoin halving is basically a scarcity feature built into Bitcoin’s code where the rewards for mining Bitcoin – which involves solving complex mathematical problems with powerful computers, not something you can do by hand – get cut in half about every four years, hence the term the halving.

And as anyone who’s taken Economics 101 knows, when you cut the supply of something while the demand stays the same, you tend to have upward pressure on prices, which is exactly what happened after each halving. So those three cycles I mentioned before that started in 2012, 2016 and 2020, all of those happened after Bitcoin halved. And we have another halving coming next week. That’ll be the fourth halving ever, and I think it’s going to kick off another big crypto bull run here.

Shah: And people want to be prepared for that. But you’re talking about supply and demand, so let me throw this at you. Speaking of demand, we got major institutions now buying into Bitcoin this year. I think there’s something like 12 spot Bitcoin ETFs already. Is there more institutional adoption or is this my imagination? And is there going to continue to be more institutional adoption and more retail adoption as these ETFs start exploding?

Robert: Personally, I think so. I mean, just to put this into context, so many analysts were using the introduction of the SPDR Gold ETF as a proxy for how retail would react to the new Bitcoin ETFs that got approved recently.

And anyone who was there back when the GLD ETF came about or has read about it since knows that gold went on a major bull run after investors could easily buy gold through the ETF.

And while these comparisons prior to the introduction of these Bitcoin ETFs were a nice corollary that analysts like me would use, we now know that the retail appetite for Bitcoin is huge, and it’s way bigger than what we saw with GLD, as it only took the Bitcoin ETF two months to hit $10 billion in inflows, and it took two years for the SPDR Gold ETF to do the same thing.

And plus, while last cycle I feel like the big story was how companies like Tesla and Block were adding Bitcoin to their balance sheets, and MicroStrategy of course, and even countries like El Salvador were buying Bitcoin using their treasury, I actually think the next logical step for this cycle – and this is kind of a big call, I know, I’m putting myself out there a little bit, but that we’ll actually see-

Shah: Put yourself out there. We love to hear that. Put yourself all the way out there.

Robert: I know you do, Shah, so you’re going to like this one too. I think we’re actually going to see the first central bank add Bitcoin to their balance sheet this cycle. It just seems like the next logical step. And since it really is digital gold, I mean, central banks are the largest holders of gold around the world.

I think it’s only natural that a smaller central bank, I’m not saying the Federal Reserve is going to buy Bitcoin, but I could see a smaller central bank somewhere in the world adding Bitcoin to their balance sheet this cycle.

Shah: Well, like you said, El Salvador and other countries are already dabbling in it in a big way in some cases. But speaking of “try this,” as far as anyone who wants to get started with crypto who may not be in it or is a little nervous about it and is thinking about trying, thinking about getting started, what’s the right mix with their other investments?

Is there such a thing as a right mix, and how would they go about figuring out how much, say, capital to apply to it? And how much should the average retail person allocate to either Bitcoin or any of the other altcoins?

Robert: Yep. So I wrote about this exact topic in my book, A Beginner’s Guide to High-Risk, High-Reward Investing. And the secret of it is that there’s not a one-size-fits all answer because everyone just has different risk tolerances and investing goals.

But when it comes to crypto, the one thing that anybody investing in the space needs to know is that there’s going to be lots of volatility. It’s not uncommon for Bitcoin to swing 5%, 8%, 10% in a single day, which you can get that, as you know, Shah, in the options market.

But many people, if you’re simply used to buying stocks, especially blue chip stocks or bonds or anything, that volatility can be a little bit shocking at first. So you want to probably start small. I always recommend people start small when they first start investing in crypto.

I have 25% of my investment portfolio in crypto. But as I’ve told you before, Shah, that concentration is a result of letting my winners run in crypto. It was only 5% of my portfolio at the start of 2023, but it’s up so much that it’s just a bigger part of my asset mix now.

But to your original question… if you’re new to crypto, I think a 4% to 5% allocation is a great place to start. Just make sure that most of that is in what I call “blue chip” projects like Bitcoin and Ethereum.

Shah: Well, that’s a great way to start. It makes a lot of sense. Start small. And having 25% of it being the value of your portfolio, that speaks to the appreciation that you have enjoyed.

But there’s another question I have because this is something that’s always baffling, especially in the beginning. And I’m following Bitcoin, I’m following all of the altcoins and I’m thinking, “I just don’t get… I know where my stocks are located. I know where they’re registered. I know all that stuff, but I’m still unsure about… ”

And I think it’s complicated, maybe it’s not. You’ve got to help us here. Where do you put your stuff? It’s complicated to buy. So if you have to write down a 50-plus character address and store it safely somewhere and you lose that, you’re kind of “you know what”!

I’m terrified to lose something like that. Is it still difficult for a newbie, people who want to try it to get in, and where do they put these coins?

Robert: So I think, unless you’re buying highly speculative Solana meme coins or getting deep in the NFT airdrop space or something like that, you’re not going to really have those accessibility issues that really plagued crypto for a long time.

When I first started investing in crypto in 2017, I was using Binance in China, which you don’t even have access to in the U.S. anymore. And it was much more of a cumbersome process to even buy crypto back then, but now it’s a lot easier. The friction involved with buying crypto is much lower than it was back in 2017.

And I always recommend, especially if you’re based in the U.S. and have access to Coinbase, to just use a broker that’s been around for multiple cycles like Coinbase, that’s also regulated in the U.S. by the FTC and the SEC.

They’re not a sponsor of mine or anything. I just want you to be with the most reliable broker that has made it through multiple cycles.

As we saw during the last bear market, even some of the large players like FTX, they had liquidity issues during the bear market. So I think staying with a tried-and-true company like Coinbase where you can easily buy basically every cryptocurrency that’s out there, especially the blue chip projects I usually recommend people start with, you’ll have no issues there.

I will say you pay a little bit more in terms of the transaction fees, but what I like to say is that you’re paying for the security. And I’ve always felt comfortable storing my cryptocurrency on Coinbase, and I have since about 2017, 2018.

Shah: Well, that speaks volumes. Thanks. Because that whole idea of some kind of cold wallet or putting it on a stick and losing it has always scared me.

Now, we got a big webinar coming up tomorrow talking about what’s going to happen to crypto, talking about the halving, talking about altcoins, talking about all kinds of cool stuff.

So for anybody who’s watching – and hopefully all of you watching are going to want to come and join this webinar tomorrow because it’s going to be huge – I want to ask you in advance of that if you are willing to throw out a price prediction for Bitcoin with a halving coming, with all the things that are percolating? You want to throw out an idea of where Bitcoin could go?

Robert: So I think we’re going to have to save the exact price target that I have for this cycle until tomorrow. And if anyone wants to join us, we’d love to have you on there. Shah and I go deep into my outlook for the crypto market, and I’m even giving away a free altcoin that you can buy right on Coinbase. We’re going to talk about that tomorrow.

But let’s just say that I think Bitcoin is going to be much higher from here, and from today’s price, I want to say it would more than double from here. But if you want to get that exact price, yeah, you’ll have to tune in tomorrow.

Shah: Oh, that’s a good tease. All right. Thank you, thank you, thank you, for, first of all, educating me. I have learned to try crypto because of you. So, everybody, we’ll catch you guys tomorrow at our webinar. You better tune in. There’s going to be a lot happening there, and Robert’s going to tell you things you probably don’t know. Robert, thank you, and I’ll catch everybody tomorrow at our webinar. Cheers, everyone.

Robert: Thanks for having me, Shah.

Shah: My pleasure always, mate. See you.

Robert: Yep.