In times of uncertainty, consolidation and solidification of wealth comes to the forefront of everyone’s mind. It’s the proverbial flight to safety attitude that prevails.
I can’t help but feel a sense of out of control nature wafting from the markets as volatility continues to be the theme for the 2018 year. From stocks to cryptocurrencies and international geopolitical chaos, shaky times are before us.
Investors in multiple global asset classes rejoiced when Donald Trump and Chinese President Xi Jinping emerged from the G20 Summit in Buenos Aires declaring a truce in the trade war that had been escalating since the summer. Skepticism, however, is starting to creep into the markets as they reexamine the terms and character of the truce.
Looking at the initial reporting on the agreement fresh out of G20, it was said that Trump had agreed not to boost tariffs on $200 billion of Chinese goods from 10% to 25% on January 1st. With that, the White House declared that Trump and Xi had held a “highly successful meeting.”
But let’s put the magnifying glass to the agreement and see what the fine print actually says. While the agreement does stipulate that the U.S. tariffs on Chinese goods will remain unchanged for 90 days, it also warns that “If at the end of this period of time, the parties are unable to reach an agreement, the 10% tariffs will be raised to 25%.”
It was only a few days after the putative trade agreement that Trump used Twitter to communicate his threat that he is a “Tariff Man”:
The prospect of a return to the trade war, which would impact the Chinese economy as well as a broad range of American businesses, sparked concerns about slowing global growth and rocked the stock market. On the day of the Trump tweets, the major stock-market indexes were all down approximately -3% at one point.
Clearly, the markets were skeptical of the viability of the trade agreement; they know what we all know, which is that it only takes one party to renege on an agreement to render it null and void. Given all of that, it’s understandable that a number of markets are feeling jittery in the current environment.
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It’s during tumultuous times like this that you want to stay parked in assets that are considered the best in their class, so as to minimize undue risk and maintain stability in your portfolio. In the world of cryptocurrency, this means narrowing your focus to tokens that are well-known name brands with very high volume and liquidity.
In light of a huge correction in Bitcoin following the historic 2017 bull market, reentering the Bitcoin trade now is highly strategic to resume accumulation.
Tone Vays, world-renowned cryptocurrency expert and owner and publisher of ToneVays.com and LibertyLifeTrail.com, explained it quite well when he described Bitcoin as being on the level of a blue-chip stock. And one of the main advantages of a blue-chip asset it that has a very small chance of ever going to zero.
Veteran Bitcoin investors like Tone Vays know that much like blue-chip stocks, Bitcoin has had its share of drawdowns and survived them all. Indeed, even after multiple corrections of 80% or greater, Bitcoin always recovered and eventually printed fresh all-time highs.
Being strategic with entry and price is how you will accelerate your accumulation of Bitcoin in a way that will leverage the upside that I believe will inevitably come.
That’s one of the hallmarks of a blue-chip asset: the longevity and resiliency that comes from battle wounds and hard experience. Surviving drawdowns like the one we’re in the middle of now is exactly what has made Bitcoin a best-in-class asset.
This is a market that is miles from saturation. Consider gold and silver which have had 2,000 years for society to find its price, Bitcoin is still largely being introduced to the world.
Long time readers of the CrushTheStreet.com letter know that we alerted our readers and listeners to Bitcoin from $11 dollars all the way through $800, making our biggest investments at these levels. Just as importantly, we locked in our profits from $12,000 to $18,000 – stellar returns, and we’re positioning ourselves to repeat this performance.
It was important to me that the Bitcoin profits we did make were put to use in diversified assets solidifying crypto gains: My goal is to take the remaining gains and dollar-cost average into accumulating three times as many nominal Bitcoins over the next 12 months than I had during the historic 2017 bull market for spring-loaded profits during the next bull market super cycle.
The price appreciation of Bitcoin over the years has been life-changing for Crush the Street’s loyal readers and followers. In a stock-market environment where G20 cheers can so quickly turn into G20 fears, it’s reassuring to know that we’re holding a diverse portfolio that includes the blue-chips of multiple asset classes.
Irrespective of how the back-and-forth trade negotiations pan out, it’s never a bad idea to have some uncorrelated assets in one’s long-term investment holdings. And with Bitcoin as one of my most reliable blue-chips, I know I’ll be on solid ground no matter what happens in time.
Chief Editor, CrushTheStreet.com
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