Everything you need to know about the coming crypto futures market, and why should still hold property.
So you all know I’m getting excited about crypto currencies right now. No secrets there.
Does that mean I’ve fallen out of love with property?
Hardly. I still love property. I’m still committed. We’re just experimenting with a more open, less rigid relationship for a while.
There’s enough love to go around.
No, seriously. I’m still all-in on property. And the crypto madness just means I’m even more committed.
And yes, I said crypto-madness. If you think that this is a sane and normal market, then you, in my professional opinion, are nuts.
Like most hysteria runs, there’s a core of truth and a veneer of hype.
(The trick is knowing which is which.)
Seriously, the more I skill up, the more I realise that this isn’t a space you shouldn’t be wandering blind into.
(If you want a reputable guide, I know a guy… Actually, I paid him several thousands of dollars to personally mentor me – you can get access to him for free – Find out how here)
But Bitcoin in particular, and cryptos in general, are pushing into territory where they’re soon going to be “systemically important.”
And by that I mean, once they’ve been around long enough and people realise they’re not a fad, people are going to start demanding that their fund managers take a position.
Soon, all the institutional money houses in the world will have a crypto fund. Might take a few years, but we’re not far off.
After that, it’s kind of hard to see how it plays out. But once we start talking about serious money – and by serious I mean money that has been in the same hands for centuries – once they start getting involved (if they’re not already) the market can get a little weird.
And given authorities haven’t really caught up with the crypto reality, and are still arguing about whether its an asset or a currency or a contractual arrangement, then you have the prospect of serious money with very little oversight or control.
Imagine ten T-rex’s on a basketball court, while the umpire is trying to decide what the definition of ‘ball’ is.
Oh man it’s going to be wild.
But I hope that prospect is as exciting as it is terrifying for you. There’s going to be serious money to be made for people who know what they’re doing.
(And for people who know how to tell the difference between a T-rex and a bison).
And now people are saying that the big switch has started now that the first Bitcoin futures market has been created on the Chicago exchange.
(Yesterday there were only 22 traders active on the exchange, so it might be a while before we see solid action.)
The argument goes that this will allow the big money to hedge their positions, which they’ll want to do since Bitcoin is so volatile, and therefore it’s going to open the flood gates to a serious onslaught of serious money.
I think that argument is probably true in the longer run. But in the shorter run there’s some serious risks.
So imagine you own a serious stack of Bitcoin. No one knows for sure who owns what, but the general feeling in the market is that there is a good chunk concentrated in a small number of hands.
So imagine you wanted to close out your position. You’ve had a good run. Maybe like the Winklevoss twins you’ve made a billion dollars, and you think that’s good enough.
Now if you have a serious amount, then when you try to sell it all you’re going to push down the price. The more you sell, the lower the price goes, until the final coins you’re selling get you way less than the ones at the beginning.
Is there anything you can do?
That is, make a bet on the futures market that Bitcoin will go down. Arrange it so the further it goes, the more you make.
Structure it properly, and for every dollar you lose on the price, you make a dollar on the bet. Effectively you can sell all your Bitcoin at the current price, even if the price ends up falling 40%.
(Fun fact – No Bitcoin will ever be exchanged in these futures markets. It’s totally derivative. It’s just like betting on horses. You don’t actually buy the horse. You just bet on how it will race. Yes. Isn’t the modern financial system wonderful?)
And so yes, the futures market may make the market more attractive to big players.
But it may also make it possible for the T-Rex’s to close out their positions and send the price tumbling.
I expect it could be a bumpy ride.
But if Bitcoin weathers the storm (I feel it will), and then the serious money gets involved, soon enough, Bitcoin becomes too big too fail.
That is, if anything happens to Bitcoin – a better, more functional currency is created for example – then the entire financial system is at risk.
What happens then? Where do you want to have your money?
a) – under a mattress
b) in property.
I’ve said it before and I’ll say it again. In a financial system that is 99% fiction and derivatives of fiction, property is the most solid ground you can stand on.
So that’s going to be my strategy.
I initially invested thousands of dollars in several different newsletters and then I joined a high-end mastermind and paid a small fortune to get involved and access to the knowledge required. My mantra is knowledge first – money second.
I’m going to ride the wild waves and make as much money as I can.
But I’m going to make sure I’m pulling a good chunk of that money back out and moving it over to property.
Property, as always, is the key to inter-generational wealth.
Just ask T-Rex.
P.S. I’ve just done the numbers. $2000 invested in 2017 with the top 20 Cryptocurrencies returned $74,357. No trading, No in and out of deals – just frigging BUY and HOLD – but you’ve got to know what to buy and how long to hold.