Simmer-Down Sunday: The Sultans Of Crypto Swings

You Gotta Have Crypto Faith

You smell that, Great Ones? No, that’s not napalm in the morning. That’s the outrageous odor of crypto gains!

‘Course, you can’t have your crypto gains without the obligatory crypto bears chiming in with their pessimism … which is also why we’re here today. Name a better combo than a bright Sunday morn’ and hot crypto takes — I’ll wait.

We saved you this lil’ nugget of shame from this week’s news slate, and you’re just in time for another crypto-craving Sunday Simmer-Down:

The whole thing may come crashing down. Crypto is an act of faith — like gold, like the dollar.

The longer it goes on, the more of a threat it poses to the existing financial order.

— Michael Lewis, author

So that’s what we’re doing today, huh?

What I'd miss keep Greatness flowing meme

We’re arguing about why things have value?

I’m glad someone finally caught up to Great Stuff of years’ past…

There are like, a bajillion things to comment on here, so let’s pull this quote apart like some nice, fresh pretzel bread.

Cool it with the food cravings, sheeesh.

So the whole crypto shebang might come crashing down, you say? We’re just hovering over the edge of oblivion, eh?

Kinda like … everything else? Stocks, gold, the housing market, the markets for certain metals and materials, Pokémon cards…

Good thing I have faith. And Pokémon cards.

Don’t worry, we’re not going all apocalyptical today — that’s reserved for weekdays.

Our anti-Quote of the Week up there might go heavy on the faith angle, because when you really boil down to it, all investing could be an act of faith … but only if you believe it to be.

I sense a rant coming … go on, oh captain, my captain.

I mean, if you really want to get down to it (and I do), why does anything have value?

We’ve been having this non-debate ever since the crypto conversation first surfaced. I’ll let the ghost of Great Stuff’s past chime in:

Because, enough investors decided [crypto] has value. There are lots of factors that go into that decision, but, ultimately, that’s your answer.

The U.S. dollar has value because it’s a representation of the U.S. economy and the stability of the country itself. It used to be backed by gold, and more than a few people are upset that it isn’t anymore.

That might sound a lot like Michael Lewis’ “everything’s about faith” quote up top, but what he doesn’t mention here is that only gamblers use faith.

Investors, on the other hand, have conviction. A slight difference maybe, but a vital one. And if we’re gonna play along with Michael Lewis’ silly game, we might as well make the distinction.

Crypto gamblers might need faith, just like someone buying extremely short-dated, out-of-the-money options or lottery tickets might need faith. But if you’re relying on sheer hope for your investments to soar, why, you’re not looking at the right crypto investments, son!

Out here in the crypto market? What you’re looking for is conviction.

Crypto investors have conviction behind their picks … usually backed up by two crucial rules establishing why crypto has value.

So what is it about those elusive, shiny, virtual coins that crypto investors deem valuable?

Two things: utility and scarcity.

Cryptocurrencies like bitcoin are traceable, exchangeable and not tied to any government. Blockchain’s built-in ledger lets you see how and where bitcoins were previously traded. Compared to paper money, this is currency security like you’ve never seen it before.

Useful, eh? Now for the scarcity part.

Also missing from Mr. Lewis’ quote is how gold, diamonds, etc. have long held value tied to their scarcity. There’s supposedly a finite supply … especially if you ask De Beers.

As for crypto, there are only 21 million bitcoins in existence. And there will only ever be 21 million bitcoins. Period. You wanna talk scarcity?

Now, now, I can already hear your furious fingers a-typing…

Bah! How can something pushed by the likes of Paltrow and Justin Bieber be scarce? Or useful?

I’m glad you asked! Remember our two rules? Utility and scarcity? Them’s the difference between a coin that gets pumped and dumped based off of social media posts and personalities and an actual, you know, cryptocurrency.

When you see some random no-name coin pushed by Kim Kardashian on Insta … are you questioning the crypto’s scarcity and utility? Is there any actionable info on it other than the celebrity name?

Probably not.

But such is not the case for all cryptocurrencies.

For something like bitcoin or Ethereum, enough investors have decided they have value … so they have value. This is because of their actual scarcity and their utility as a means of payment. Never mind the whole “bitcoin is a store of value” conversation…

For many crypto bulls, the value of these alternative currencies also lies in the very fact that they disrupt the financial order — the same fear that quotable Mr. Lewis thinks will bring down the crypto market in the first place.

For some crypto traders, that’s kinda the whole point, Mr. Lewis, and I’m worried that you don’t already know that.

Now, if this was all about preaching faith, we’d be teaching Sunday school. But this is about investing. And if you’re investing in the Great Stuff Picks, you should already have a toe dipped into the cryptocurrency market.

Great Stuff Pick Coinbase (Nasdaq: COIN) is a crypto exchange that makes bank … no matter which coins are being traded. But if you’re like your fellow Great Ones, what’s one crypto pick with conviction when you can have … all of them?

Ian “the Crypto” King knows more about cryptocurrencies than just about anyone I know.

He’s been trading in and out of bitcoin since 2013. His other crypto trades have posted gains of 1,061% … 1,934% … and 1,934%, all in less than a year. Bottom line: This guy knows how to spot the most profitable cryptos.

And he’s just identified another crypto that he’s saying “will be 20X bigger than bitcoin.”

Click here to find out more.

And now for some other Stuff you might’ve missed this week: