by | Jul 7, 2021 | Newsletters

The mainstream media is intent on believing that the sky is falling on crypto. While it’s true that we’ve seen a price correction over the past few months, the price of Bitcoin is still more than 80% higher than it was on December 1st. 

If anything, Bitcoin is finally seeing the cool-off that we always knew was coming. And now that Bitcoin is stabilizing, the world is rushing to adopt the cryptocurrency. 

Guggenheim Partners, one of the world’s largest fund managers, with $275 billion in assets under management, announced in June that they’re seeking exposure in Bitcoin. After filing with the SEC, the fund intends to make an entry into Bitcoin investing for the first time. 

They wouldn’t be the first among the big funds to make moves into cryptocurrency, as other major fund managers such as VanEck Associates and Invescoe have already filed to launch a Bitcoin ETF later this year.  

Plus, the old guard is finally crossing the aisle. NBC Shark Tank’s Kevin O’Leary is now bullish on Bitcoin. The multi-millionaire recently announced that there’s no way he’s selling his BTC holdings, no matter how far it drops. Even the President of Iran has indicated that he wants to legalize Bitcoin “as soon as possible”, as the country has yet to establish a full regulatory framework for cryptocurrency.

Historic Bitcoin Adoption in Central America

Amid the media frenzy, perhaps the biggest news is that the Government of El Salvador announced that it will soon become the first to accept Bitcoin as legal tender. Beginning this September, the Central American country will be the first in the world to adopt Bitcoin as one of their two official currencies. If the policy succeeds in staving off currency inflation, El Salvador will likely end up being the first of many countries to embrace the Bitcoin Standard.  

Meanwhile, the stock market is going haywire.

In June, Microsoft (MSFT) became the second-ever company to reach $2 trillion in value after evading the eyes of antitrust regulators. Mega-cap tech companies such as Microsoft are almost single-handedly propping up the S&P 500, which rose 0.5% overnight on the news that MSFT had joined Apple in the $2 trillion club.

Is this a bubble? The price-earnings ratio (P/E) is currently the highest it’s been since the Great Recession and the dot-com crash. An out of control P/E is one of the strongest signals we have of irrational exuberance in the market.

Bearish Market Signals Abound

Should we be worried? Probably. After all, equity value to GDP stands at its highest level since the 1950s and a recent survey of the American Association of Individual Investors finds that the number of investors who think we’re in a bull market outnumbers bearish investors by 32 points. This is a contrarian signal, as the market usually follows in the opposite direction. 

Eventually, we’ll see a reckoning in the stock market. When it happens, you won’t want to be left bagholding. That’s why portfolio diversification is essential for preserving your wealth.

Today’s market is simply not on solid ground. Whereas the stock market has defied all rational expectations, Bitcoin’s cool-off has been steady and gradual, unlike the sudden crashes in 2013 and 2018. The ghosts of Bitcoin’s past are gone. The era of stablecoins and institutional Bitcoin is finally upon us. 

Get In While You Can

The time’s finally right—to capitalize on the dip in the market, open a Bitcoin IRA today. This way, you can diversify beyond unstable stocks and bonds. Not ready to get into crypto? Instead, consider opting for a precious metals IRA, which can feature gold, silver, platinum, and other rare commodities that hold their value in times of crisis. 

 

Mark Turner

Mark Turner is an author and editor at Sophisticated Investor. He has over two decades of experience in the financial industry as a broker in both Chicago and New York and has written for several top tier publications. He currently covers the topics of alternative investments, geopolitical events, US economy, portfolio diversification and others.

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