First Stage Investor

We Never Did Say It Would Be a Smooth Ride, Did We?

We Never Did Say It Would Be a Smooth Ride, Did We?
By Andy Gordon
Date January 4, 2018

On Sunday, December 17, 2017, bitcoin broke through the $20,000 barrier, trading at $20,035.90.

It was a big deal for some investors. But for us?

Not really.

Don’t get us wrong. We’re big believers in bitcoin. We recommended bitcoin to our members back in August. (I hope you followed our advice!)

So, sure, we were happy, but not shocked. We knew it would probably reach this watermark sooner than most people thought.

But the fact that it happened as soon as it did – before the end of the year – was not a big deal for us.

You see, we’re in bitcoin for the long haul.

We’re much more interested in where bitcoin will be five years from now rather than five weeks or five months from now.

And, sure enough, bitcoin’s stay above the $20,000 mark proved short-lived.

And so, as the holidays approached and bitcoin continued its downswing, the vibe we were getting from social media was that of increasing nervousness.

Was this it? The end of the good times? The bursting of the bubble?

But Adam and I had seen this before – in fact, many times before. And bitcoin had always bounced back.

When we both broke camp on the Friday before Christmas – greatly looking forward to the following week off – Adam bid me happy holidays with this comment: “Want to bet that by the time we’re back in the office on January 2, bitcoin will be on its way up again?”

“No way I’m taking that bet,” I replied.

As it so happened, bitcoin bottomed that very day, approaching but never falling under $12,000.

As I write, it’s hovering around $15,000.

Well, we never did say it would be a smooth ride, did we?

There will be more swings. Some will be more extreme than what we just experienced over the last couple of weeks.

And some possibly much more extreme.

We try not to get too elated when new highs are breached or too grim when lows are revisited.

Cryptocurrencies, including bitcoin, are volatile. That’s not going to change anytime soon.

Just remember this: About the worst thing you can do to limit your upside is sell early.

Any selling you do should be based on our advice. For example, we recently advised members to roll their Bitcoin Cash profits into Ethereum.

We’ll be doing more strategic cashing out of positions as we see fit. But it’s not something we expect to do often or without a lot of hard thinking. So I suggest you keep a close eye on your inbox for our alerts to buy and occasionally sell.

News of the Week

I’d like to share with you three recent news items that are definitely worth knowing about…

Peter Thiel’s Founders Fund Makes Monster Bet on Bitcoin

Founders Fund bought $15 million to $20 million worth of bitcoin beginning in mid-2017. As a result, the firm has reportedly made hundreds of millions of dollars for its investors.

E-Trade Financial Launches CME Bitcoin Futures Trading

E-Trade Financial Corporation just opened trading in bitcoin futures from CME Group. While this doesn’t rise to the level of earth-breaking news, increasing institutional investment in bitcoin is important. So we’re tracking developments just like this one. Remember, more institutional investors means more money flowing into the cryptocurrency space at some point, with the mere prospect tending to drive bitcoin prices up.

Marijuana Stocks Soar as California Legalizes Recreational Pot

In a bit of non-cryptocurrency news, California dispensaries started to legally sell recreational marijuana on January 1. Shares in cannabis-related firms soared this Tuesday. It should be noted that despite California’s legalization, marijuana sales remain illegal under federal law.

Before signing off, Adam and I would like to wish you all good things in 2018. It’s going to be a very exciting year.

Good investing,

Andy Gordon
Co-Founder, First Stage Investor

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