If you only had $100 to invest in crypto…
This article appears courtesy of RiskHedge, LLC.
How many stocks have outperformed bitcoin (BTC) in the past 10 years?
Just one.
Nvidia (NVDA)—the green line below—has surged 27,000%, beating BTC’s 26,000% gain:
Source: TradingView
Bitcoin soared past $100,000 for the first time last week. Many smaller cryptos are surging, too. Not just speculative “memecoins,” but quality cryptos.
Take Ondo Finance (ONDO), for example. It’s “tokenizing” US government bonds for the world’s largest asset manager, BlackRock (BLK). It’s surged 160% since Election Day. We’ve owned it in RiskHedge Venture since May and took profits on it last week.
Crypto is still the most misunderstood asset. Everyone knows about the joke that is Dogecoin (DOGE)… but few investors know there are dozens of real crypto businesses producing real revenue.
I covered this during a recent Ask Me Anything marathon session.
I received over 100 questions. Today, I’ll go rapid fire and answer six of the best ones:
- How much would you recommend a 70-year-old retiree invest in crypto?
I can’t give personalized investment advice, but my general guidance is to put 1%–2% of your portfolio into crypto.
Why only 1%–2%?
Crypto is an extremely asymmetric investment. Since Election Day, more than 200 cryptos have at least doubled. Some are up over 1,000%.
In crypto, you can risk a little to make a lot. The biggest mistake many investors make is owning zero crypto. The second biggest mistake is owning too much.
Crypto prices are extremely volatile, and they can rise and fall alarmingly fast. You need conviction and staying power in this market, which is hard to maintain when you own too much.
- Stephen, if you only had $100 to invest in crypto, what would you buy?
There’s an old saying: “Don’t tell me what you think, just show me what’s in your portfolio.”
We use a barbell strategy in my crypto advisory, RiskHedge Venture. On one end, we invest 75% of our allocation into larger, “safer” cryptos. We put the remaining 25% into higher-upside tokens.
This strategy allowed RiskHedge Venture members to crush bitcoin last year, as these numbers show. And we’re enjoying another strong year in 2024.
- Are ETFs a good way to take advantage of the crypto surge? And did I already miss the entry point, or is there still time to get in?
The first bitcoin and Ethereum (ETH) ETFs launched earlier this year. They’re the easiest way to profit from crypto’s two largest assets.
But there’s a whole universe of innovative crypto businesses that don’t have any ETFs and won’t for a while. You have to buy these cryptos through an exchange like Coinbase (COIN).
Our research suggests this bull market is only getting warmed up. Now is the best time to own crypto.
- Why has bitcoin outperformed Ethereum and most other smaller cryptos this year? Is “alt season” still coming?
It’s been a bitcoin-led bull market so far. BTC now makes up 60% of crypto’s total market cap, the highest since 2021.
This is a direct result of the regulatory onslaught against crypto businesses. Invest in a protocol that could get sued tomorrow? Nah, I’ll just buy BTC instead.
But with the results of the US election, it’s time for a new playbook: A.B.B.—Anything But Bitcoin.
Bitcoin can hit $150,000 soon—and $250,000 in this cycle. But the real money will be made buying great crypto businesses emerging from regulatory hell.
Protocols will now be able to share fees with token holders without fear of SEC action. Entrepreneurs can build real products without calling up their lawyers first.
You can already see this shift in the market since Election Day. Dozens of smaller cryptos are outperforming BTC. “Alt season” has arrived.
The smart money is buying the tokens that were handcuffed by regulation.
- Do you think iShares will offer a Solana (SOL) ETF in the near future?
Several firms, including VanEck and Bitwise, have already filed applications for Solana ETFs. I expect a new wave of crypto ETFs to be approved next summer.
What I love about crypto is that, unlike in the stock market, the little guy often has the upper hand against Wall Street.
Want to buy SOL before the big dogs come marching in with bags of money? You can buy Solana on Coinbase with a few clicks.
- What is your thinking on Solana in comparison to Ethereum for this cycle in terms of potential upside?
Both ETH and SOL can at least double from current levels.
Ethereum and Solana are “base-layer” blockchains. The foundations upon which crypto apps are built.
And it’s not a winner-take-all market. It's a multi-blockchain world.
Solana = fast and cheap. Great for applications that don’t need Fort Knox-level security.
Ethereum = safe and decentralized. BlackRock CEO Larry Fink said he wants to tokenize every stock and ETF. I can almost guarantee the new “New York Stock Exchange” will be built on Ethereum.
Ethereum and Solana are great plays to capitalize on this crypto bull run.
But to make the most of this boom, you’ll want to invest in the tiny, lesser-known names with even more upside… like my latest Venture pick that’s currently trading for under $5.
Stephen McBride
Chief Analyst, RiskHedge
PS: I plan on releasing a Part 2 to this Ask Me Anything series on Wednesday. Sign up for The Jolt here so you don’t miss it.
This article appears courtesy of RiskHedge, LLC. RiskHedge publishes investment research and is independent of Mauldin Economics. Mauldin Economics may earn an affiliate commission from purchases you make at RiskHedge.com