Van’s Note: Longtime readers know our beat is high technology. And we regularly cover the blockchain and digital asset space.
As Jeff noted in his 2020 predictions, he believes government regulation could be a headwind for crypto this year. Teeka Tiwari – Jeff’s friend and colleague – has a different perspective.
Teeka agrees regulation will be a challenge. But he sees one major dynamic pushing crypto higher in 2020. Read on to discover what your financial advisor isn’t telling you about crypto…
By Teeka Tiwari, Editor, Palm Beach Venture
If you have a financial advisor, you’ll probably want to fire them after you read this.
You see, many Wall Street firms won’t tell you the truth about bitcoin – at least, not yet.
Merrill Lynch, Morgan Stanley, and JPMorgan Chase ban their financial advisors from talking about bitcoin. Wells Fargo advisors can only hand out research “primers” on bitcoin – and only if their clients ask about it.
These bigwigs are hiding behind something called “fiduciary responsibility.” It’s just a fancy way of saying they must act in their clients’ best interests.
Sure, advisors should protect the best interests of their clients. But here’s the ugly truth…
These corporate shills won’t tell you about bitcoin because there’s nothing in it for them.
Wall Street won’t do anything unless it gets paid for it. But as soon as it figures out how to rip you off, you’ll be the first to know.
That’s why I left Wall Street to write newsletters. I’m not beholden to corporate interest. I can do my own independent research – and bring you my best ideas.
So today, I’ll tell you what secret Wall Street is keeping from you – and why you need to act before the big banks and brokerage houses come into this space.
Plus, I’ll also comment on the recent weakness in crypto prices…
The Big Secret It’s Hiding
According to a study by Bitwise Asset Management, bitcoin can boost the performance of your portfolio while lowering its overall volatility.
For instance, adding a 5% allocation of bitcoin to a standard 60/40 portfolio mix of stocks and bonds boosted overall returns by 50% – without increasing your risk.
Even if you dipped your toes in crypto with just a 1% allocation during the 2018 Crypto Winter… you would’ve still outperformed the 60/40 model, while also reducing volatility.
Now, you might be wondering how that’s possible, especially when crypto got annihilated from December 2017 through December 2018.
The answer lies in bitcoin’s characteristics…
Low Correlation: Bitcoin moves independently of the stock market and other assets. So no matter what happens to equities, gold, bonds, and so on, it won’t affect bitcoin. This helps smooth out volatility.
New Asset Class: Much like tech stocks in the 1990s, crypto is still a small market with huge upside. In fact, bitcoin’s market cap is only about $126 billion… a drop in the bucket compared to the trillions of dollars in gold and equities markets.
Liquidity: Investments with high upside (like micro-cap stocks, private equity, and rare collectibles) can be difficult – if not impossible – to buy or sell. Bitcoin’s daily trading volume is in the billions. So it’s easy to trade.
Here’s the thing: Your financial advisor already knows all of this. To me, it borders on criminal negligence that they still won’t tell you about it.
But mark my words… As soon as they can charge you for it, they will.
Show Me the Money
Fees are the lifeblood of Wall Street. It’s estimated that financial firms rake in about $439 billion per year from fund management fees alone.
This is Wall Street’s gravy train. These firms make it simpler for millions of people to buy financial products. Then, they charge billions in fees for making them available.
But this gravy is drying up…
Over the last decade, Wall Street profits from managed funds and security products have decreased by about 24%.
So they’ll soon turn to crypto financial products as a new revenue source. They’re just waiting for the regulatory environment to open up.
And we’re seeing that unfold now.
Late last year, Fidelity Investments – the fourth-largest U.S. asset manager – received approval in New York to begin offering crypto trading and custody to its clients in the state.
Plus, giant companies such as NYSE parent company Intercontinental Exchange (ICE), Nasdaq, and TD Ameritrade are all beginning to roll out their own crypto platforms, too.
Here’s why that’s important…
Morgan Stanley expects the traditional 60/40 portfolio model to return only 2.8% per year over the next 10 years.
With lackluster returns like that, you can bet the farm financial advisors will be begging to pitch bitcoin to their clients. And they’ll charge you a pretty penny for that privilege.
That’s why it’s so important you add some bitcoin exposure today. Remember, you just need a small amount – even a 1% allocation – to boost the performance of your portfolio.
Friends, when Wall Street finally finds a way to easily bring this asset class to 500 million stock investors… we’ll see prices run to the roof.
But until then, we’ll see volatility just like we’re seeing now.
I’ll share with you what I shared with my paying Palm Beach Confidential subscribers a few weeks ago…
I warned them we were coming into a weak period of the year for crypto prices. So be ready to see lower prices at the start of the year… but higher prices as we get through the end of the first quarter of 2020.
Every year that I’ve been in crypto, I’ve seen this seasonal weakness take hold. But even with it, bitcoin has still been one of the best-performing financial assets of the past year.
Here’s the key takeaway: Don’t let a short bout of well-documented seasonal weakness rob you of what could be the best-performing investment of your lifetime.
Let the Game Come to You!
Editor, Palm Beach Daily
P.S. Crypto won’t be the only big investment I’ll be following this year…
On January 8, I’ll reveal my No. 1 wealth-building opportunity of 2020. It’s a chance for you to get in on a pre-IPO deal with a billionaire before it lists on the Nasdaq. Already, this company is drawing interest from heavy hitters.
I’m calling this event Freedom 2020… because this one opportunity has the potential to help you reach financial freedom this year.
If you attend this event, you’ll have the chance to secure your stake in this pre-IPO deal for as little as $250. And on the day that it does go public, you will have the chance to fund your entire nest egg.
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