America 1.0 Crash — Stay #BOP on Bitcoin & These Stocks!
We’re nowhere near the end of growth to come in America 2.0.
It’s a Strong Hands market and not because of any crash. We’re coming off of a “great depression” in innovation stocks.
And we’re long overdue for America 2.0 stocks to rise and keep going up — producing massive gains.
We’ve got a lot to cover today on the market, TSLA, pot stocks and especially crypto:
- Crypto correction … What’s happening behind the scenes that’s telling us it was a temporary weak hands moment in the market. (12:07)
- My three big crypto predictions on bitcoin, Ethereum and Uniswap — what these will mean for a potential new Bold Profits crypto service. (28:20)
Check out IanCast and find out why you should stay bullish, optimistic and positive (#BOP) in 2021 during the Fourth Industrial Revolution:
Nerve-Wracking Post-Election Stock Rally
We have a relentlessly rising America 2.0 stock market to discuss. We have a crash in crypto. We have people, including a famous investor, going short on Tesla to discuss. Then the potential legalization of cannabis in one of the biggest states in the United States is potentially imminent.
Let’s start with the stock market. It certainly feels a little nerve wracking just seeing stocks get bid up day after day — sometimes by 10%, 15% or 20%.
A lot of stocks just since late October or early November have gone up 100%. It can be nerve wracking. We are still holding on strong. There still seems to be solid demand for these stocks. After such a brutal time earlier in 2020, a lot of them were undervalued for their future potential.
Now it looks like the market is starting to finally take notice of this.
There is something many folks have to keep in mind. We live in a world of trillion-dollar stocks. We have stocks that are as big as Apple, Microsoft, Amazon, Google and others that are trillion-dollar stocks and then we have all these other stocks.
Even though they are rising by 10%, 15% or 20%, they are valued sometimes in the millions and sometimes in the billions. However, no one is approaching anything close to where Apple and Microsoft are. This is post, in our judgement, a great depression in innovation stocks which began in 1999 and 2000.
Post that, for 15 or even 20 years these stocks were unsupported by the market. No one wanted them. No one wanted innovation. Everyone wanted a sure thing, a dividend or something safe. This is a long overdue moment where there is a long path to the normalization for the valuations of these stocks.
It’s going to be nerve wracking to see these gains come and the desire to want to take profits is going to be great. Then there’s going to be some money left on the table, including by us. Obviously, we are also going to take some profits and lock some profits in. We’ve done that with some new energy stocks.
That area in particular is hot with SPACs. You see all these companies coming public that aren’t going to make any sales for three or four years and they are being valued at tens of billions of dollars. It’s a sign that it’s a little overheated in that area.
If you look at older charts of solar stocks they completely plummeted from 2015 to 2018 and then the new bull market started. There are going to be some dips, maybe even 30% or 40% sometimes. But overall, we’re starting to see these stocks pricing in the whole future industry of alternative energy.
Globally, it’s hundreds of trillions of dollars. It still will go up over time. Sometimes it will go up more and then it will have corrections. That’s just the way it works.
We talk at Bold Profits about strong hands. The nature of gains that come fast and quickly is that it draws the opposite folks in — the weak hands. Those folks have little conviction, no belief and no desire to have anything other than rapid gains.
Often their arrival signals something like a short-term moment that people refer to as corrections, reactions or many other words. However, the vast majority of the market — the America 2.0 market — still looks pretty solid.
There are so many areas being disrupted. With alternative energy, everybody is pricing in the future of that. Everybody is going to have some form of solar or hydrogen or both. That’s just the start of the alternative energy market. You also have things like biotech with all these medical revolutions.
They were going on for decades but now the market is starting to take notice. That is another example of a sector that got destroyed a few years ago. There’s plenty of examples of that. Now we’re starting to see what we’ve been talking about, which is the shift from the old market, which are trillions of dollars.
We’re seeing that money start to focus on what’s coming rather than what’s already here.
Healthcare is one of the places we have been calling for a big stock market value shift from where it currently sits, which is in the Mercks and Pfizers of the world, to these new diagnostic companies that are making use of all the research and work that’s been done in the genetic space for 15 or 20 years.
Now you can get accurate diagnoses that are much more likely to be correct than in the old way of diagnosis. Then you can be matched with your genetic type to the right kind of medication and treatment. The value of this is incredible, Ian.
It can be unlocked in terms of money and then in terms of human wellbeing.
The charts can throw people off because some of these companies went public when this was in a huge bear market. No one even knew what it was and there was a lot of skepticism. These companies were only valued at $20 million or $30 million. Now you see them valued at $1 billion.
The fact is, they should have been valued that to begin with. It’s not the fact the stock has gone up 1,000% and it shouldn’t be. It’s that it should have started there. When we can see public prices it depends on the type of market you are going into. If you time it badly and you go into a bear market your stock is going to look overheated.
But it’s not necessarily true if you look at it in terms of the company versus the industry.
Extreme Fortunes, for those of you who are unaware, is our small-cap service and 100X Club is our micro-cap service. There still continues to be this enormous gap between innovation companies in the private markets and those in the public markets.
You see that in these small-cap companies and these micro-cap companies. The same company if you went and took it private would be valued in the billions and billions of dollars.
However, because many of these companies came public at the wrong time or came public too early when public markets were unsupportive of them, they have these valuations that suggest they have nothing. They really have valuable technology, products and services which can keep rising and rising.
It’s valuing the technology rather than focusing on sales, which the technology is going to turn into tons of sales for the leaders in these new industries.
These things have survived. They have somehow made it through 20 years. For 20 years to just survive on tiny equity offering, bank loans and pipe offerings. However, they have made it. Now this is their moment.
The Death of America 1.0 Companies is Coming
New technologies are being used and adopted. With that, you are going to see their sales skyrocket, their revenue skyrocket and huge acceptance of their products and services. This is why we continue to be bullish, optimistic, positive — BOP — across all our services.
Because in some way, shape or form, that same thing is happening with all the stocks we focus on at Bold Profits across all our services. We are BOP on what we call America 2.0 stocks. We will reissue the warning. Cathie Wood has been warning folks about the time getting close for America 1.0 stocks.
She is spot on. We saw that with the difference in how America 1.0 and 2.0 stocks reacted after the correction last March. A lot of America 2.0 stocks are at least double where they were back then.
A lot of America 1.0 stocks that you should watch out for and try to avoid as much as you can are the ones that haven’t even come close to making a new high yet.
Our subscribers have access to what we refer to as the America 1.0 Blacklist. It’s, in our opinion, a list of America 1.0, old world stocks that are surely on their way. The destination is certain, which is zero. Only the speed is unknown. These include banks, insurance companies, pharmaceuticals.
They represent the old world which is slowly and surely going away and being replaced by the companies we focus on — America 2.0 companies. We will leave the stock market discussion with that. We are still BOP on America 2.0 stocks. Rather than the stock market, we are focused and exclusively BOP on America 2.0 stocks.
That is going to become more and more important as 2021 unfolds and into the future.
BTC’s 1-Week Drop
Sure enough, almost on cue BTC goes from $42,000 to $30,000 in under two days. Let’s discuss what is going on behind the scenes so people understand what is happening.
Just like stocks, crypto can go down pretty fast. It’s kind of a different reason from a market mechanic standpoint. With crypto, there are a lot of websites that offer crazy deals where you can buy $100 of BTC with just $1.
This means if BTC goes down a tiny bit you are wiped out of the trade and you are back in cash. That happens and creates a snowball effect with people getting crushed in these crazy 100 to 1 positions. That’s what happened on Friday.
It’s called “getting liquidated” when you get forced out of those trades because you are put back into liquid cash. If you look at that picture, you see a gigantic spike and then the next day there was almost nothing. It was back to normal.
This correction is not going to last at all. It creates a fast snowball effect. It creates panic and uncertainty in the market. Also, like we talked about before, all the new buyer at the top are selling too. They think, “I guess BTC is finally dead.”
So, the weak hands get pushed out. It’s not a good situation, but it’s usually very temporary.
Just to make this even clearer, there are actual websites — we would tell anyone to stay away from this leveraged trading. In other words, it’s 100x leverage. Every $1 they lend you $99 to bet on BTC. If it goes well, it’s great for you. If it goes just slightly wrong you are liquidated.
You have lost all your money. This is one of the reasons you tend to see these large moves happen very quickly. Oftentimes over the weekend when there is already much less liquidity than during regular business hours which is when the institutional and much larger traders in BTC are active and buying.
If BTC goes down it affects all kinds of other cryptos. BTC is the clear leader. When it’s struggling, all kinds of other cryptos are going to go down too.
In the space of about two days, BTC went from $42,300 to about $30,300.
Would you estimate there is $10 billion looking to buy BTC today? $15 billion? What would you say? It’s really sitting there as latent demand waiting to buy. An article this morning stated that as retail investors were liquidating, institutions were buying.
This is what we see with Grayscale. They just bought a bunch of BTC again yesterday and it wouldn’t surprise me if they bought more today as it’s lower. There’s billions and billions of dollars from big investors buying every single dip. We had a 20% flash crash a few weeks ago where it went from $28,000 to $18,000 or something like that.
It was $34,000 to $28,000.
And that got bought up almost immediately. This one took maybe another day. Clearly there’s billions of dollars waiting on the sideline for every opportunity.
Every big asset manager is looking to buy crypto and setting up infrastructure to buy crypto, particularly BTC and Ethereum (ETH). These are the two heavyweights of crypto. Somewhere in all this the overall crypto market arrived at a milestone of being valued at $1 trillion.
That’s a big milestone. A few years ago nobody would have thought that was possible. Here we are at $1 trillion.
There’s so much institutional interest. It’s in the hundreds of billions if you really put it together — asset management companies, hedge funds, all kinds of companies looking at what MicroStrategy and Square has done. It has to be in the hundreds of billions.
BTC is already up more than $700 billion in total market cap. If you compare that to future demand it’s relatively small. If you compare it to gold, it’s tiny. Gold is around $12 trillion globally with the largest capitalization in the world.
We think gold is headed for a decline because its purpose is being taken by BTC, but there’s no need for us to get into that.
ETF and DeFi Coins Are on the Rise
Let’s talk ab out what’s going on with ETH and these DeFi coins. Those are starting to rise by a lot.
ETH is what we have compared to before as Android. You can create apps, which at this point are mostly financial. It’s a totally decentralized way to manage your own money, take out loans, trade cryptos and all these things. So there are these new projects that are solving these issues and making more efficient platforms for all kinds of financial transactions.
They are being built on the ETH network. The ETH network is also like the internet. These are websites you can go to take these actions. The other thing with ETH is to use these apps you have to pay trading fees or fees to take out a loan. Those are all paid in ETH.
That whole ecosystem is building itself and ETH is almost at new highs as well.
Last week we laid out in simple form what BTC is. This has become the universal digital store of value. There can be a maximum of 21 million coins that can be mined, which is different than digging a hole in the ground mining. This is digital computer mining. 18.5 million have been mined already.
So there are very few left. It’s very finite. It’s divisible out to eight digits, which is a reference to a computer. It’s highly portable because it’s a piece of digital information. You can carry it around on your phone or you can carry it on a USB stick.
We did read about someone who threw away a drive with, at one point in time, was seen as a worthless amount of BTC. This was in the UK. It was thrown in a dump. The person knows where they threw it. That BTC on a drive like this is worth $288 million.
They are willing to pay a quarter of the value to the county where the dump is located as a inducement to find it. So far the town is unwilling to let them go dig up the dump to find it.
You hear about people losing their passwords or private keys to access it. They bought it when it was a few cents and figured it would be worth nothing. Now it’s gotten crazy. You hate to hear stuff like that.
To define ETH, many people use Ethereum, ETH and Ether interchangeably. Ethereum is actually the blockchain technology. ETH, which people call Ethereum, is actually a reference to Ether which is the currency.
The whole Ethereum network scaling like hit has has driven demand for Ether currency. Whenever you want to use it, you have to have money in Ether to pay.
If you want to use the Ethereum blockchain, you have to use the Ether currency to get onto the blockchain. Every time you use it, it generates a fee which also has to be paid in the Ether currency. As you put projects on this blockchain it generates a request for you to pay, no different than getting a Venmo request.
It has to be paid in Ether. This is what drives the accumulation of Ether and what we believe is going to drive the price of Ether up.
As of December 1, they did a big update on their platform. So now people with ETH can go stake it on the new platform. That means that it’s like getting a dividend. If you put $1000 of ETH into this, you get 10% to 12% a year. That’ driving demand too.
You can earn a yield on it and a lot of people think the price of Ether is going to skyrocket. You would be earning dividends in Ether. That’s skyrocketing too. So you are compounding your money quickly doing that.
So there’s an element of store of value, which is what BTC primarily has to Ether as well. However, it has a utility as a coin and a technology. Then there are all these projects on it that convert the technology and the coin into a service. They have the same features of Ethereum and Ether themselves.
This world is now starting to stack up. You have BTC, Litecoin, Bitcoin Cash being largely a store of value. They are used here and there as projects, but largely people are buying it as a way to store money knowing it’s finite. Then there is Ether on the Ethereum blockchain, Lumens on the Stellar Lumen blockchain, XRP on Ripple.
These are platform currencies out there. Obviously their prices are going up as people anticipate their utility as a platform and the use of their coin.
Some of these have been around for a long time. Ripple has been around since 2014. Then there are others that have just come onto the scene in 2020. There’s so much demand for a lot of these coins. The sentiment behind BTC and ETH really can drive these smaller alt coins higher.
We were having a discussion with our publisher and trying to make an analogy for what the blockchain is for these platform blockchains and accompanying coins. The real comparison is the internet. It’s hard to imagine, but there was a time when a lot of companies felt it was completely okay to operate with no website.
Take it back even further and many companies thought it was okay to operate without a phone number. The same is going to be true for blockchain. Eventually people are going to have to get data on the blockchain.
It will act as a source of information, knowledge and trust. There’s a lot of utility that is still very fuzzy because we are still in very early days. That also means that the prices of these things as their utility and benefits are shown out is a little like being in Amazon in the 1990s when people questioned its value — or any of those kinds of companies.
Look at what they have done to the leaders? You can tell which ones are the leaders because they do kind of crash when the whole industry crashes but they manage to survive. The ones that do survive the crashes are the leaders. It’s going to keep narrowing out.
80% of the value of crypto will be in about 20% of the coins. That’s the structure of most markets. The big things will gain the market share and hold onto it. It’s no different than what you see today in the internet space.
Facebook dominates social media, Netflix dominates its business, Google dominates its business and Amazon dominates its business. It’s going to be something like that. Store of value is going to be dominated by BTC. We know that one of the winners, for sure, of the platform currencies is ETH.
You have talked a little about DeFi coins and that’s just beginning to emerge as to what the leaders might be. It’s still very early days. As you know, we are going to launch a crypto service this year that incorporates our understandings and our beliefs about where this market is going.
We are incredibly BOP about crypto and BTC. People love to hear predictions about BTC.
BTC Price Predictions
We have three. BTC will hit $115,000 by August. By the end of this bull cycle, which is anywhere between one to three years, it will hit $350,000 per coin, which would be about a $7 trillion market cap. That’s still just over half the market cap of gold.
ETH will hit $8,000 within the next year or year and a half. A smaller coin, Uniswap, is going to be one of the big winners of DeFi. It’s a decentralized exchange where you can trade all sorts of tokens.
That’s exactly the kind of coin that we are going to be laser focused on. Much smaller. Something that in all likelihood you are unlikely to see anyone else talk about. We are going to lay out coins like Uniswap and a list of others we have been putting together.
They are going to alter our financial system, our accounting system and create systems where you can get paid for the data that we generate that Facebook and Google are using for free and paying us nothing in return. Crypto can do that. We have an entire world view we can lay out. You are going to be stunned.
In time, crypto is going to take enormous market value from all these banks like Bank of America and Wells Fargo where the investors seem to be restless. They seem to have some inkling of what’s coming.
It’s kind of weird because you are seeing the banks put out these huge predictions for BTC but they won’t integrate with blockchain or stable coins at the rate they should. It’s a slow adoption. There are other companies disrupting the big banks right now. It’s not looking good for them.
One last thing for crypto just to lay out the promise for it, if you are looking for a practical application, Ian has made this big prediction about stable coins. Repeat what that prediction is.
This year there is going to be $1 trillion worth of stable coins in circulation in crypto.
A stable coin that Ian is talking about is essentially a digital dollar. The benefits of a digital dollar in comparison to what some people might consider like a wire transfer. If you initiate a wire transfer in the morning, get it in by 8 am if you want it to be available the same day. Otherwise, you take your chances.
It’s untrackable. They give you a reference number but you never know where the money is at any given time. You never know until it gets there that it got there. If it doesn’t get there, it’s a cumbersome process to find out where it got stuck and where it got lost. It’s very expensive.
So expensive, inconvenient, hard to track, money can be lost. There have been a number of thefts from an equivalent system called Swift that is run by all the world’s banks. Then compare that to what Ian is talking about which is the stable coin. There are two or three out there.
A stable coin, let’s call it a digital dollar. If you wanted to send Ian $20 or $2,000 through this way, you could send it and it would be there in a few seconds or minutes. If there was any question as to where it is.
It would be recorded on the blockchain where everything is recorded and we would know where this packet of information, which we call money, is at any point. It’s completely trackable. It all happens like that [snaps fingers]. That’s the benefit. It costs almost nothing. It might be a few cents.
Compare that to a wire transfer which might be $25, $50 or $100, sometimes even more depending on who you are dealing with and how many banks they have to deal with. It can get complicated. That’s the benefit of crypto. Its speed, convenience, trackability and cost.
This is the promise of crypto. Our expectation is for BTC to get to $250,000 in the next one to three years. Ether can get to as much as $4,000 this year. It’s certainly going to make new highs this year.
Tesla Opens Up Shop in India
It’s one of the best markets in the world. It has more than one billion people. It’s a super young population that’s very into new tech. They have just transformed their entire infrastructure when it comes to mobile communications and internet in general.
It’s a perfect place for Tesla to come in and take share quickly. We were talking earlier about how all these companies talk about expanding and all these big plans but they don’t actually do anything. Tesla is always right on the ball.
Tesla does things, other companies talk about doing things. Apple talked for years about entering India and somehow never seemed to do it. They finally did it last year. They hemmed and hawed forever about it hurting their margins.
That’s the difference between Tesla, which is an America 2.0 company and Apple which is an America 1.0 company. Tesla still has growth ahead of it. People keep comparing it to these America 1.0 companies like GM and Ford. You can see GM and Ford now live on different planets.
They aren’t even taking any steps really. Tesla is just going full force at it. They are getting as many areas as they can first. They are the leader in almost every area they are in. It’s impressive.
It furthers what Tesla’s mission is, which is to bring non-carbon-based energy transport to everyone around the world, not just the United States or Western nations. We believe in that and we like that. More power to them. We believe it shows you why Tesla is worth what the rest of the car industry is.
The rest of the car industry has no mission. They have no purpose. As a result of that, their market value represents a narrow viewpoint on the world versus Tesla. We are BOP on Tesla. We do realize it has gone on a massive run and the likelihood of another 700% run in 2021 is very unlikely.
Nonetheless, there is still upside left in Tesla. It is obviously less than what it would be if you bought it in 2020. Nonetheless, it is still growing. It still has opportunity in front of it in its battery business and in its transportation business and its autonomy business as well. Still BOP on Tesla.
Cannabis Stocks Are on Fire
We are seeing it in ETFMG Alternative Harvest ETF (NYSEArca: MJ). My prediction for that was that it would hit $40 this year, which is a 180% gain. So far, halfway through January it’s up 40%. It’s just the beginning for cannabis stocks.
Clearly the market is thinking there’s a very good chance that marijuana gets legalized under a Biden presidency. It’s looking good. A lot of the stocks that were crushed in a bear market are hitting 52-week highs. They hadn’t hit them the whole time. It’s looking very bullish right now.
We were obviously too early into cannabis trades. Nonetheless, we stuck to our guns believing the business is still there, the business is huge and the business is going to grow and keep growing. That is unfolding.
The great thing about going through the ugly period of a bear market and coming through on the other side, this is now a strong hands market if you had the conviction to sit through the ugliness of that bear market.
Cannabis stocks are now held by true believers and people who believe what we have been telling our folks. Even at 40% up they are unlikely to sell.
People who haven’t bought in who are looking at this and saying it’s a dead-cat bounce or too much of a spike to buy in are going to see it continue to go up at a rate they are not comfortable buying in. Then a lot of people will buy in and drive it up higher from there.
We believe a normal bid-up market is unfolding for cannabis. The piece of news that has come out in the past couple of days is that New York is considering full legalization, which is probably just going to be a series of announcements which will be where it’s legal all across the states in the United States.
Then we will have federal legislation that will make it easier for these companies to operate across the United States. With that, you are going to see massive growth everywhere. You sent me an article talking about how Portland’s cannabis sales were $1 billion in 2020.
There’s a few states like that. Illinois was $1 billion. Ohio was another one that had a lot.
By the end of 2021, that list will have tripled or quadrupled from there. It’s just going to be very large growth. That’s when you will really see the stocks explode higher. It will make this bear market seem like nothing.
Editor, Rapid Profit Trader