If you’re one of the hundreds of readers who’s asked:
“When will RiskHedge get into cryptos?”
Today’s issue is for you.
For the first time, I called up RiskHedge Chief Analyst Stephen McBride to discuss how we plan to help readers profit in crypto.
You’ll see why the upside in crypto is unlike anything else...
And you’ll get one specific trade idea you can use to start potentially profiting in cryptos today.
Chris: Stephen… we’ve had a lot of readers ask us about cryptos recently…
Earlier this year, digital currencies entered a full-blown mania. In fact, just over two months ago, Bitcoin—the world’s largest cryptocurrency—struck an all-time high.
But since then, Bitcoin has taken a nosedive. It’s down 45%.
Ethereum, the second largest crypto, has dropped 52%. Chainlink, another popular coin, has plummeted 64%.
Does this selloff present a good buying opportunity?
Stephen: My one-word answer is “yes.” I’m a lot more interested in cryptos today than I was two–three months ago. But not for the reasons most people think...
Before we go on, I need to set something straight. Chris, you just used three terms that I really dislike because they muddy the waters in understanding crypto.
These are the hot buzzwords. And I get it. When people think “crypto,” they think “digital money.”
They think Bitcoin—because it was the first and most popular crypto.
But the truth is, that’s just a distraction from the game-changing opportunity that’s unfolding in cryptos.
Chris: Go on...
Stephen: Cryptos are so much more than “digital money.” In fact, there’s essentially a “new stock market” forming in cryptos.
Cryptos are now a place where everyday investors with as little as $10 can invest in the world’s most disruptive young tech companies.
This has never existed before. It’s an exciting new frontier for investors.
I want to emphasize that the popular narrative on cryptos is completely wrong. Most folks think of cryptos, as you said, as “currencies” that compete with the US dollar. They think people might someday keep their savings accounts in bitcoin, and pay for everyday things with bitcoin.
Frankly, this is the least exciting aspect of cryptos. The cryptos I’m most interested in represent true ownership stakes in real, disruptive, cash-generating businesses.
Chris: Can you elaborate on what you mean by “new stock market?”
Stephen: As you probably know, the technology behind Bitcoin and all other cryptos is called “blockchain.”
Blockchain has essentially transformed what computers can do. I won’t bore you with the details. All you need to know is that today’s newest and most innovative companies are being built on the blockchain.
I’m talking real companies… making real money… using the blockchain to disrupt some of today’s most exciting industries.
You can invest in these companies by buying crypto “tokens” in them.
Chris: What is a token, exactly? Is it the equivalent of buying shares in a company that trades on the stock market?
Stephen: Yes, think of a token like equity or shares in the business.
And today, many of the most exciting, cutting-edge business ideas are happening on the blockchain, not in the stock market. There’s just a firehose of innovation going on.
Legendary trader Paul Tudor Jones, when asked about Bitcoin late last year, said the crypto was like “investing in a startup tech company.”
Chris: So it’s like being a venture capitalist?
Stephen: In a way, yes. It’s a new way to invest in incredibly early stage disruptive companies. A way that doesn’t exist in the traditional stock market.
See, in the stock market, there are all sorts of rules and barriers to investing in early stage companies. A lot of them you never even hear about unless you run in the right circles.
Even if you do hear about them, you have to be “accredited” to invest in most private companies. And you often need to invest a minimum of $50,000 or $100,000.
So the average guy is locked out in the cold.
Cryptos knock down those barriers. Unlike the stock market, cryptos aren’t dominated by Wall Street. And you can buy tokens in many crypto startups for as little as $10. Sometimes less.
Chris: Tell us about one of these new innovative companies.
Stephen: There's a startup called Helium. It allows your phone to basically become a mini 5G cell tower.
This company sells “hotspot” routers you can plug into your phone. They reach about 200x further than a standard wi-fi connection. You can then “sell” internet to nearby folks through this Helium router. For doing that, you get rewarded with Helium “tokens” which you can then exchange for real US dollars.
Helium’s making real money selling these routers today.
Chris: So say somebody wanted to buy helium.
What do they do? Can they go into E-trade and type helium into their search bar?
Stephen: No, Helium’s not listed on the stock market.
You’d go to a crypto exchange like Binance, for example. You fund your account, just like you would a stock brokerage account. Then you can buy the Helium tokens, just like you would with a stock.
Chris: What about folks who don’t have accounts with crypto exchanges yet? Is there a way to play this on the stock market?
Would you recommend buying shares in Coinbase (COIN), the biggest crypto brokerage, for example?
Stephen: What Coinbase is doing is valuable. They’re opening up this “new world” of cryptos to millions of people… in an easy-to-use app.
I’m not against owning its stock. But you should know what you’re buying in Coinbase.
You ARE buying a very large company that should do well as crypto continues to grow.
You’re NOT buying an early stage crypto project that could return 100-1. You have to buy the specific early stage tokens for that.
Owning Coinbase is a fine alternative if you don't want to open a crypto account.
If that’s the path you want to take, I’ll suggest buying Coinbase at its current price, with a “stop” at its recent low of about $200/share. That's good risk/reward setup.
Coinbase is a volatile stock that you want to treat as a trade, not an investment.
Chris: Thanks, Stephen. Anything else you want to share on cryptos?
Stephen: Crypto prices, really for the last year or two, have been way too high… completely out of whack with any reasonable investment approach. I’m glad they’ve finally come down. There are some incredible opportunities available at today’s lower prices.
And one last point I’d like to make: You don’t need to put a ton of money in these things to make meaningful profits. In some cases, all it takes is a tiny stake.
For instance, one project we follow has shot up 400% over the past eight months. Another has gone from $16 a token to $288. That’s a 1,700% return.
Chris: So when are you planning on recommending cryptos?
Stephen: RiskHedge is developing a new venture to take advantage of this massive opportunity. We’ll focus on finding “asymmetric” opportunities in cryptos—where it’s possible to make 20-1, 30-1, or 50-1 on your stake.
At this point, it’s looking like we’ll be able to launch in the fall. I can’t spill too many details here, because nothing’s set in stone yet.
Chris: Is there a waitlist for readers who are interested?
Stephen: No. Members of our RiskHedge Reserve club will be first in line to get access.
Beyond that, I can’t say for sure how many members we’ll accept. We’re going to be recommending tiny crypto companies—even tinier than microcaps in some cases. So, we’ll have to strictly limit membership—because too many investors piling into a tiny token can cause its price to skyrocket.
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Executive Editor, RiskHedge