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Eric Wade: Why I Sold ALL My Stocks for Bitcoin

You’ve probably heard about folks getting rich from cryptocurrencies like bitcoin. But is bitcoin “useful”? To get to some answers, I’d like to share a piece from Eric Wade. He’s an editor of Crypto Capital newsletter.

You’ve probably heard about folks getting rich from cryptocurrencies like bitcoin. But is bitcoin “useful”? To get to some answers, I’d like to share a piece from Eric Wade. He’s an editor of Crypto Capital newsletter.


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Why I Sold ALL My Stocks for Bitcoin

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Full details here.


Three Ways to Use Bitcoin Before the Blockchain Revolution

I answer a lot of questions from my readers. A few weeks ago, one of my readers sent me one that surprised me…

He told me that he doesn’t see the utility of bitcoin. And I’ll admit, it isn’t obvious at first.

Most people know bitcoin is a volatile digital asset. But how useful is bitcoin? What good does it do you to own it, as opposed to gold, or a car… or any other crypto, for that matter?

Today, I’ll show you three big ways that bitcoin has utility. But most of all, I’ll show you why those three reasons are just the beginning… because to really answer this question, you have to take the long view.

Here’s what I mean…


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First, bitcoin is a store of value. If you own one bitcoin, you own one. It can’t be taken away.

This confuses a lot of people. They think of a “store of value” as something that will store the value of your dollars. Bitcoin isn’t like that. It fluctuates in relation to U.S. dollars and other currencies… So it’s possible to put more dollars in and take fewer dollars out.

But bitcoin is a store of value – in the most literal sense. If you own 2, 3, 5 bitcoin, those are yours. They cannot be taken away unless you sell them or you lose them. By contrast, the fiat money in your bank account is always subject to seizure by the IRS, creditors, and others.

And it isn’t just that… Remember, bitcoin is finite. One of the Federal Reserve’s primary goals is devaluing or inflating the dollar by 2% a year. Today, bitcoin’s inflation rate has fallen to less than 1.8% (and over the years will eventually fall to zero). That means that even if demand for bitcoin stays flat, its price should rise relative to the dollar – which we know for a fact the Fed is actively working to devalue.

The dollar has lost roughly 98% of its value over the past 100 years. It’s a system that punishes savers and encourages spenders. Bitcoin, on the other hand, is designed to reward long-term savers with ever-decreasing inflation.

Second, bitcoin is also by far the most common unit to trade with on most of the crypto exchanges. So even if you wanted to buy another crypto, you would most likely buy bitcoin as a first step… You buy bitcoin or Ethereum, and then you can use those to buy the other token you really wanted.

Finally, you can’t interact with the bitcoin blockchain without it. This one takes a little explaining…

If you’re not familiar, the blockchain is a public ledger that records all transactions that take place on its network. Because everything is verified publicly by the world’s most powerful network of computers – and because the network is decentralized – it’s an incredibly secure system. And it’s going to change the way we send money securely in the future.

So, for one thing, if you buy bitcoin with fiat currency (like dollars) and move them to a digital wallet, that transaction is recorded on the blockchain – and the transaction fee has to be paid in bitcoin.

But it’s much more than that. Because of the blockchain, bitcoin can’t be copied. It can’t be faked. It can’t be hacked. Forget about counterfeit bills or cybercriminals trying to get into your bank account. That’s the benefit of using the blockchain – and bitcoin, a secure form of digital currency.

These are three simple reasons why bitcoin has utility. But I want to mention one more thing…

You see, the future utility of bitcoin is hard to predict today.

Think back to 1994 or 1995 and imagine that someone told you, “You have Ethernet. We’ve had it for years. You can either plug that into your computer to access the Internet… or, you can have a wireless connection, which is a lot slower than Ethernet.”

You might have said, “Well, who needs wireless on your computer? I have Ethernet. If I really need to get online, I can plug into that wherever I go.”

For a long time, millions of computers were sold without any wireless capabilities… even after wireless was invented. Now, Wi-Fi is everywhere. No one wants to do without it.

There was a gap in time when the utility of Wi-Fi wasn’t obvious to everyone. Bitcoin is at that stage now.

You might think to yourself, “Oh, what’s the utility of that?” As I’ve shown you today, we do have answers. But the bigger point is, we almost certainly don’t know everything that bitcoin will be used for… or how widely it will spread.

I believe the next generation will build things we haven’t even imagined yet with blockchain, bitcoin, and other crypto tokens. None of us imagined in 1994 that one day, we’d have iPhones with more computing power than the Apollo 11.

So keep this in mind – the best is yet to come.

In the meantime, bitcoin is just an unstoppable digital store of value… that can’t be counterfeited, hacked, or duplicated… with billions of dollars’ worth of value transferred over its network every day.

If that isn’t utility, I don’t know what is.


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Today, he’s revealing the next big crypto to buy … for FREE.


Editor’s note: If you had invested just $100 in bitcoin in 2010, you would’ve made more than $40 million through today. Hearing that, you might feel like you’ve missed the boat. But the good news is, you still have the opportunity to make potentially life-changing gains in cryptos. Eric recently walked through an example trade to demonstrate how his crypto strategy works – watch it right here.

What Is a Bitcoin Stock? Is It A Great Way To Play The Bitcoin Megatrend

You don’t need to buy bitcoin directly to profit. You can also gain exposure to it in the stock market. Read on below for what this stock is and why we believe it’s great way to play the bitcoin megatrend.

If you’re a longtime reader, you’ll know we’re bullish on bitcoin. What you may not know is you don’t need to buy bitcoin directly to profit… You can also gain exposure to it in the stock market. That’s why, today, I’m sharing with you part of a chat Chris Lowe from Legacy Research had with Nick Giambruno, Editor, Crisis Investing. Last August, Nick recommended a “bitcoin stock” to his readers. Since then, it’s up 441%.

Read on below for what this stock is and why Nick believes it and others like it are a great way to play the bitcoin megatrend.


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Chris Lowe: Last August, you recommended a “bitcoin stock” to your paid-up Crisis Investing subscribers. It’s a business analytics software company called MicroStrategy (MSTR).

It’s up 441% since you recommended it. The average annual gain for U.S. stock market bellwether the S&P 500 over the past 20 years has been 7.5%. So a return of 441% in six months is phenomenal.

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The software MicroStrategy makes has nothing to do with bitcoin… or the blockchain technology that underpins it. So what about MSTR caught your attention last summer?

Nick: It was August 11, 2020, to be precise. That’s when Michael Saylor, the CEO of MicroStrategy, made a breakthrough announcement in a press release. It explained how the company had adopted bitcoin (BTC) as its primary cash reserve asset. It was a bold and pioneering move, and I think it will go down in financial history.

There’s a lot of confusion over bitcoin. Most folks don’t understand it. But when I read Saylor’s explanation of why he made the move, I immediately knew he had a sound understanding of bitcoin. Not just the technology, but also the economics.

He made it clear he was buying bitcoin as a sound money alternative to the U.S. dollar. As he put it in his press release, “Bitcoin is digital gold – harder, stronger, faster, and smarter than any money that has preceded it. We expect its value to accrete with advances in technology, expanding adoption, and the network effect that has fueled the rise of so many category killers in the modern era.”

The next day, I recommended my subscribers buy MSTR. Not because of its business analytics software. I’m not interested in that at all. I recommended it because MSTR was the first public company to plug its balance sheet into bitcoin – an unstoppable emerging dominant monetary network. I knew this move would have a powerful effect on the value of the company. And that’s exactly what has happened.


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Look who’s getting banned in America. Will you be next?

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According to MarketWatch, ordinary Americans are being put on “restriction lists,” being banned from using certain businesses.

Why is this happening? And what does it mean for you?

Widely-followed geopolitical expert Nick Giambruno explains:

“This is just the beginning of a much larger movement I’ve been watching unfold for years in the United States.

Law-abiding Americans will soon have a critical decision to make.”

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Chris: For folks who are new to the conversation, can you unpack that? What’s the problem keeping cash reserves in dollars?

Nick: U.S. dollar cash is a decaying asset. Saylor uses a great analogy. He likens holding cash to holding a “melting ice cube” in your hand. You’re watching inflation melt away your cash balance.

So he put all the excess cash reserves he doesn’t need to pay for MicroStrategy’s operating expenses into bitcoin. He could have paid this dollar cash out as a dividend to shareholders. But then that capital would no longer be available to deploy in a way that adds value to the company.

Saylor hasn’t realized the gain on the bitcoin MicroStrategy bought. But in total, the company spent $1.1 billion buying bitcoin. That bitcoin is now worth $2.6 billion. So that’s an unrealized profit of $1.5 billion, which is roughly 26 times the company’s operating profits in 2020.

Saylor’s move into bitcoin has been far more lucrative than the underlying business of MSTR, in other words. He now has a huge pile of extra capital he can tap into if he wants to grow the business or make an acquisition.

It’s very smart. I think there will be an explosion of companies following his lead.


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Chris: If the dollar is a melting ice cube, why isn’t bitcoin also melting?

Nick: The Federal Reserve can create as many new dollars as it likes, thus diluting each one’s value. That’s why the dollar has lost 84% of its value since 1971, when President Nixon severed its last link to gold. Ever since, the Fed has had no limit on how much it could inflate the money supply.

Bitcoin, on the other hand, is totally resistant to inflation. As I’ve been showing my readers, it’s the world’s hardest asset.

A lot of folks think a hard asset must be something tangible… such as a metal or real estate. But that’s not what hardness means. Hard, in this context, means hard to produce. That’s what makes hard assets resistant to inflation.

That’s why gold was the best money for thousands of years. It was the hardest thing for humans to inflate. Now, there’s bitcoin. It’s even harder to inflate than gold. No other asset is more resistant to inflation than bitcoin. That’s why it’s not a melting ice cube… because nobody can inflate its value away.

No matter how high the price of bitcoin goes, it can’t incentivize further production.

Chris: This is a critical point. And it’s one a lot of folks overlook. Without getting too far into the weeds, why can’t folks just rush out and produce more bitcoin if they see its price going up?

Nick: The thing you’ve got to grasp about bitcoin is the rate at which new bitcoins enter the supply – their inflation rate, in other words – is governed by an unalterable protocol. And the rate is decreasing over time…

Let’s compare bitcoin with gold. The annual rate of increase in the supply of above-ground gold is about 1.7%. Bitcoin has a similar inflation rate right now. But unlike gold, the supply of new bitcoin gets cut in half every four years. This goes on until it reaches its hard cap of 21 million bitcoins.

There’s a euphemism central bankers use for digitally “printing” money. They call it quantitative easing. Well, here’s something that’s not a euphemism – bitcoin’s “halvings” are quantitative hardening.

Bitcoin is becoming harder every day. If you study the history of money, you know it’s the history of the hardest money winning.

Over time, this will cause more people and companies to follow Saylor’s lead. They’re going to dump their government confetti currencies and buy bitcoin to protect their buying power. There is no other asset in existence like bitcoin.

It’s important to clarify that none of the other 4,000 or so cryptocurrencies are genuinely scarce in the way bitcoin is. They all have key players, insiders, and development teams that can potentially act like central banks and increase the supply or change the rules if they choose to.

The other cryptocurrencies are not hard assets. They’re more akin to digital Chuck E. Cheese arcade tokens or frequent flyer miles. That’s why companies such as MSTR are putting bitcoin – and not any other cryptocurrencies – on their balance sheets.


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Chris: Against the backdrop of trillion-dollar stimulus bills and the most aggressive monetary easing by the Fed in history, it seems to me this is going to become more and more relevant.

Nick: That’s right. People flock to hard assets because they’re not inflatable and are better stores of value as a result. The more governments and central banks pump up the supply of their currencies, the more people are going seek out inflation-resistant alternatives.

That’s why I’m such a big believer that the bitcoin rally is still in its early stages. You’re going to see many more corporations do what MicroStrategy and others have done… and plug their balance sheets into bitcoin. You’re even going to see nation-states do it.

Chris: What about individuals? Should they use bitcoin to protect against inflation, too?

Nick: Absolutely. That’s what I’ve been urging my readers to do. You don’t need to be a publicly traded company to do this. Anyone reading this can plug their personal balance sheet into bitcoin.

It doesn’t matter if you’re a doctor, plumber, freelancer, Uber driver… you can sweep your excess dollar savings into bitcoin. This allows you to front-run big corporations… and central banks… by going on a bitcoin standard yourself.

I hope more people do that. It’s a huge opportunity to profit, as bitcoin could potentially emerge as the world’s dominant form of money – what I like to call The Bitcoin Supremacy.

Considering Bitcoin? Watch This First …

Just $100 in Bitcoin in 2010 would have made you over $40 million today. And yet recently, there’s a huge new rally – with Bitcoin already hitting all-time highs in 2021.

Just $100 in bitcoin in 2010 would have made you over $40 million today. And yet recently, there’s a huge new rally – with bitcoin already hitting all-time highs in 2021. Sure, there’s some volatility. But people are pouring into cryptos like we haven’t seen in years…

So please, don’t do anything until you see what this crypto insider says first.


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Bitcoin price rises as second-biggest cryptocurrency ether hits all-time high

Bitcoin rose more than 7.4% in the last 24 hours to trade around $34,807, looking to recover from steep losses last week. Ether, the world’s second-biggest cryptocurrency, notched a new all-time high of $1,476 early Monday morning.

Bitcoin rose more than 7.4% in the last 24 hours to trade around $34,807, looking to recover from steep losses last week. Ether, the world’s second-biggest cryptocurrency, notched a new all-time high of $1,476 early Monday morning.

“Penny Trade” Pays Warren Buffett as much as an extraordinary 4,429%?

Bitcoin’s price rose on Monday after a brutal sell-off that saw the virtual currency briefly dip below $30,000. Meanwhile, ether — the world’s second-biggest cryptocurrency — hit a fresh record high.

Bitcoin rose more than 7.4% in the last 24 hours to trade around $34,807, according to data from CoinDesk, looking to recover from steep losses last week that wiped out more than $100 billion from the entire crypto market.

Ether, the digital token of the Ethereum blockchain, notched a new all-time high of $1,476 early Monday morning. The cryptocurrency climbed 6.2% to a price of $1,415 at about 9:15 a.m. ET.

Altcoins, or alternative cryptocurrencies, have been known to rally in times of strength for bitcoin. Ether’s latest price movement was attributed to increased use of Ethereum — its underlying network that is undergoing a major upgrade — and interest from institutional investors in crypto.


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“Ethereum’s current rise cold shoulders the sceptics, many of whom were quick to denounce crypto when bitcoin recently fell from its $40,000 high,” said Simon Peters, cryptoasset analyst at online investment platform eToro.

“With a whole range of logistical improvements to the Ethereum network in the works, increased institutional inflows, and more and more developers building on the platform, the future is bright for Ethereum. I believe that a price of $2,500 by the end of the year is very feasible. As with all crypto, however, there will be bumps along the way.”

Bitcoin, the world’s largest cryptocurrency by market value, has had a wild start to 2021. After quadrupling last year, bitcoin’s price briefly topped $40,000 for the first time on Jan. 7. It’s down 17% from its all-time high, but still up over 17% since the start of the year.

Advocates of the digital coin say it’s benefited from heightened institutional demand and its perception as a safe haven asset similar to gold. But skeptics are worried bitcoin is in a bubble.


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Source: cnbc.com | Original Link

This Crypto Loophole Rule Could Save You on Taxes

There’s a way to turn losses on your crypto holdings into immediate tax savings – while keeping possession of your crypto. It involves a loophole under Section 1091 of the IRS code. It’s known as the “wash-sale” rule.

There’s a way to turn losses on your crypto holdings into immediate tax savings – while keeping possession of your crypto. It involves a loophole under Section 1091 of the IRS code. It’s known as the “wash-sale” rule.

By Grant Wasylik, analyst, Palm Beach Daily

Most people don’t know this… But there’s a way to turn losses on your crypto holdings into immediate tax savings – while keeping possession of your crypto.

It involves a loophole under Section 1091 of the IRS code. It’s known as the “wash-sale” rule.

A wash sale is when an investor sells a security at a loss to claim a tax write-off… only to repurchase the same (or nearly identical) security within 30 days of the sale.

The IRS prohibits such sales…

However, its rules don’t cover cryptos, which are treated as “property.”

This means they’re not subject to a holding period for tax-swap sales.

So if you’re sitting on losses on individual cryptos, you may want to take advantage of this loophole before the end of the year.

And I’ll show you how. But first…


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How to “Wash Sale” Your Cryptos

I wanted to find out why conducting a wash sale now would be good for crypto owners.

So I spoke to Shehan Chandrasekera, head of tax strategy at CoinTracker. It uses software to track crypto portfolios… calculate capital gains and losses… and harvest tax losses with a click of a button.

Shehan is one of a handful of CPAs in the U.S. recognized as an expert on crypto taxation.

Here’s what he told me:

According to IRS Notice 2014-21 and the FAQs issued in 2019 by the IRS, cryptocurrencies are treated as property. Since cryptocurrencies are not treated like stocks and securities by the IRS, they are not subject to wash sales rules. This allows you to harvest tax losses without honoring the 30-day rule that stocks are subject to.

Many cryptos have been big winners this year. But if you’re a crypto enthusiast, you probably have some losers, too.

If you act quickly, you should be able to harvest your losses this tax year.

Here’s an example of how it works…


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“Penny Trade” Pays Warren Buffett as Much as an Extraordinary 4,429%?

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Say you purchased ether (ETH) at $1,200, and now it’s worth only $600.

In this hypothetical, you can sell your ETH before the end of the year to harvest $600 worth (per coin) of capital losses. And you could quickly get back into the same position at $600 per coin to maintain your position.

Since cryptocurrencies are treated as property, the asset class allows you to harvest tax losses more aggressively than stocks. (With stocks, you have to wait 30 days to buy back the same position. If you don’t wait, the IRS will disallow the loss for tax purposes.)

Keep in mind that there are various fees associated with transferring and trading crypto. So you’ll want to make sure these costs are less than what you’ll write off in taxes.

And if you don’t use up all your losses this year, you can roll them forward into future tax years. And if you don’t have an offsetting gain, you can still take up to a $3,000 loss in the current year.


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Consider These Three Steps Before Acting

Remember, this information is for general tax purposes only.

And crypto is still somewhat of a “gray area” in terms of taxation. So we strongly encourage you to consult a tax professional before conducting a crypto tax swap.

But if you want to consider this strategy, here are some steps to help with the process:

  • Talk to your tax adviser: Tell them what you’re contemplating. Could you use some losses to offset gains on a one-for-one basis? There’s a chance your CPA may not even know this avenue exists.
  • Consult a tax consulting crypto firm: CoinTracker is one option. ZenLedger is another.
  • Know your situation: Before you reach out, know which cryptos you own, the quantity, the price you paid, your tax bracket, etc.

If you’re ready to make the swap after talking to your tax consultant, here’s a preview of what comes next…

This tax loophole allows you to benefit from falling crypto prices (in the past or the future). And you’ll still be able to keep the same cryptos you started with… just with a new cost basis.

Be sure to act before the end of the year if you want to use any losses for 2020.

And remember, you don’t have to wait for year-end to employ tax-loss harvesting. You can use this strategy to your benefit at any time of the year.