Another week, another record for Bitcoin.
At $7,000, Bitcoin’s total market capitalization is now $118 billion, based on a total supply of 16,658,125 coins (as I’m writing this).
For the sake of comparison, that’s just a bit more than one-fifth of the market cap of Amazon (NASDAQ: AMZN) or Facebook (NASDAQ: FB) and about one-eighth that of Apple (NASDAQ: AAPL).
That’s also a 926% increase over November 2, 2016 — a growth factor unmatched by any of those previously mentioned stocks over any year of their public trading history.
Incredible, and yet a drop in the bucket when viewed in context with the rest of the trading history of the first and most important cryptocurrency.
Five years ago, just as Barack Obama was about to win his second term as POTUS, Bitcoin was trading at a measly $10.
Today, a five-year hold would have returned about 70,000%, once again utterly destroying any other publicly traded investment vehicle and just about any private investment I’ve ever heard of along a similar timeline.
And that’s still not the whole story.
Go back just a bit over two more years to August of 2010 — right around the time of the first-ever public transactions utilizing the digital currency — and you’re looking at a Bitcoin price of $0.06.
The few who were lucky and cool-headed enough to have held Bitcoin from beginning to end — and there were definitely at least a handful — would have seen returns exceeding 11.7 million percent, or 117,000 times their initial investment back.
That’s all pretty breathtaking, to be sure, but what impresses me the most about all of this is that there are investors, educated people out there with seemingly above-average IQs, who are still bullish on Bitcoin.
Next Stop… Infinite?
These are the people who continue to drive demand, even as gains unseen in the world of finance are realized by those who got in early.
While these gains are unprecedented, the mentality driving them is far from it.
In fact, this run-up reminds me most of one of the first and worst-ever financial bubbles: the Tulip Mania of 17th century Holland.
During an extraordinary seven months between November 1636 and May 1637, the price of tulip bulbs rose to a peak of 4,200 guilders.
At the time, the annual salary of a skilled worker was only 300 guilders, making it possible to purchase a luxurious home for the price of a single bulb.
Speculators watching this insanity continued to pile into it, until one day in February, there were more traders selling than buying.
And that’s when the mania turned to panic, and the bloodletting began.
Three months after the peak, prices had collapsed back to where they were before the run-up started.
Looking at that chart and imagining the heartbreak that speculators were feeling in early May, can you even imagine the mindset it required to pile into the investment even as single flowers were trading for values exceeding those of average homes?
I have a feeling the emotion driving these latecomers isn’t too far off from the one governing the actions of today’s Bitcoin investors.
Seeing a Fortune Slip Through Your Fingers Would Make You Emotional, Too
We’re taught that past performance is never an indicator of future performance, and yet tulip trading almost four centuries ago and Bitcoin trading today seem to be predicated on exactly that belief.
The truth is, reality will always prevail, no matter how much hope or how many dreams hang in the balance.
Does this mean the digital currency boom is over? Hardly.
Bitcoin was the first, and is today still the biggest, but it’s far from the only digital currency out there.
More than 800 others have come into existence since Bitcoin, with more added to the list every week.
Most are destined to fail, but a few have already risen to the top and even had manias of their own — Ethereum’s meteoric rise from $7 to over $300 in 2017 being the most notable example.
The unfortunate reality is, however, once one of these cryptocurrencies becomes mainstream enough for the average investor to get wind of it, those moments of dramatic gains are usually in the past.
I’ve been watching Bitcoin and Ethereum closely for a while now, but I wasn’t doing it to lament a missed opportunity… I was doing it because I knew that identifying the chief characteristics of a winning cryptocurrency and recognizing the exact moment when a previously unknown currency is about to explode into mainstream popularity will be crucial to spotting the next one.
Of those 800, most will probably fade into obscurity, but a few will inevitably rise and see gains similar to those exhibited by Bitcoin in its earlier days.
From Hundreds Down to Handfuls in Just a Few Years’ Time
It’s a natural culling process that affects almost all newly emerged industries.
It happened with cars in the early 20th century; it happened with airplane manufacturers; it happened with consumer electronics; most recently, it happened with the internet.
In the next few years, that list of 800 will be cut drastically, until only a handful remain in common usage.
That handful will become the Fords, the Sonys, the Apples, and the Googles of the future — each commanding huge chunks of the market, with commensurate market capitalizations.
My research has yielded just two names, from that list of 800 relative unknowns, that most resemble Bitcoin and Ethereum — before the mainstream investment community got its hands on them.
In the right hands, the information I’ve compiled could be worth seven, maybe even eight figures.
I made this information accessible to my readers just a few days ago.
Now, you can get an exclusive look at it yourself, completely obligation free.
This could be a life-changing moment, so don’t take it lightly… And don’t take your time, either, because you’ve already seen how fast prices move in this space.
The next one could be the last there is.
Fortune favors the bold,
Alex Koyfman
Check us out on YouTube!His flagship service, Microcap Insider, provides market-beating insights into some of the fastest moving, highest profit-potential companies available for public trading on the U.S. and Canadian exchanges. With more than 5 years of track record to back it up, Microcap Insider is the choice for the growth-minded investor. Alex contributes his thoughts and insights regularly to Energy and Capital. To learn more about Alex, click here.
