- After the dot-com bust, traders moved away from stocks such as Amazon.
- Today, investors are making the same huge mistake with bitcoin.
- A new narrative will send the price of bitcoin soaring 1,000% higher.
If only I knew then what I know now.
The year was 2003. I was managing a proprietary trading desk on Wall Street.
The dot-com bubble had blown up a few years earlier, and the stocks that had led the mania (Amazon, Yahoo and AOL) were radioactive to trade.
Investors who had bought at the height of the mania didn’t want to hear or talk about the dot-com bust, and there was very little media attention.
At the time, traders had moved on to hotter sectors such as energy and housing stocks.
But that was a huge mistake.
The time to buy was when Wall Street had completely given up on the beaten-down dot-com sector.
A similar cycle is happening right now with bitcoin.
Bitcoin’s 400% Comeback
In many ways, the crypto mania of 2017 mirrored the dot-com bubble. There was a boom, followed by a bust.
At its peak, bitcoin traded for $19,783. It then collapsed 84% to $3,128 a year later.
Markets always take the least expected path, and bitcoin’s journey has followed this course.
As the financial news media penned one bitcoin obituary after another, it went on to rally over 400% in the first half of 2019.
Even after a pullback in the second half of the year, bitcoin still outperformed every major asset class, gaining 87% in 12 months.
A New Narrative for Cryptocurrencies
The infrastructure supporting this new crypto asset class has taken incredible leaps in the past few years.
Institutional trading and custody solutions are now available that didn’t exist in 2017.
The Bakkt futures exchange allows speculators to buy and sell contracts that settle with bitcoin rather than cash.
There are even a few exchanges that offer bitcoin options.
However, there’s another narrative taking shape — an event that’s sent the price of bitcoin soaring 500% to 1,000% higher in the past when this occurs.
Learn all about it by watching my new video:
Editor, Automatic Fortunes
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