There’s a lot riding on this.
As you know, I have a bet with my InvestorPlace colleague, the legendary growth investor Louis Navellier, about whether bitcoin or the Dow Jones Industrial Average will hit 40K first.
It’s a fun bet for charity, but the ideas behind it are quite serious. I’m glad you’ve signed up to hear us both make our cases next Wednesday, August 5, at 4 p.m. in The Race to 40K debate.
If you’ve read our recent articles, you know I’m also very bullish on stocks and agree with Louis that Dow 40,000 could happen in the near future.
But my best is that bitcoin will get there faster.
Let me give you a sneak preview of a few reasons I’m convinced that will happen
For starters, bitcoin is already hot and bullish sentiment is soaring. It broke through $11,000 on Monday on strong volume, climbing 13% for its biggest single-day gain in nearly three months.
It is up over 55% this year, almost double gold’s increase, while the Dow Jones Industrial Average is down more than 8% – although it’s made a fantastic 40%+ climb off its March 23 bottom.
To reach $40,000, bitcoin still needs to climb 250% from its current level.
Is that doable? Absolutely.
Bitcoin’s breakout makes a lot of sense when you start to consider two big catalysts. One is increasing mainstream adoption. It’s simply becoming more and more a part of our everyday lives.
Rumors are swirling that digital payments leaders PayPal (PYPL) and its smaller mobile payment service Venmo both plan on rolling out cryptocurrency buying and selling to users soon. Venmo has 52 million user accounts and PayPal has 325 million. That’s 377 million more potential customers coming online!
Square (SQ), another digital payments firm helmed by Twitter (TWTR) CEO Jack Dorsey, allows bitcoin purchases in its Cash App – and the feature keeps gaining popularity.
The company reported $306 million in bitcoin revenue in its first quarter, handily beating the $222 million in revenue on all of its other traditional currency services for the quarter.
The federal government also moved in a big way to open up crypto investing to more investors.
Last week, the Office of the Comptroller of the Currency said it will finally allow federally chartered banks to custody cryptocurrency.
I expect we’ll soon see a major bank step up and begin storing crypto for its customers, which means even more folks will be able to invest in bitcoin.
Another Huge Catalyst
Another big reason I think bitcoin will reach 40K faster than the Dow isn’t a future event that might happen. It’s something that’s already happened.
It occurred less than three months ago. It didn’t get much coverage, but it was a trigger that’s set to send bitcoin soaring. After all, it’s happened before.
The first time this event happened in 2012, bitcoin shot up 2,135%.
The second time it happened in 2016, bitcoin rose 3,122%.
The third time was on May 11, 2020.
If we get even one-tenth of the gain we saw in 2016, $40,000 is a done deal.
I’m talking about the “halvening,” or “halving” as it’s also known. That’s when the reward for mining a bitcoin is cut in half.
Up until a couple months ago, a “bitcoin miner” received 12.5 bitcoins for mining a block. Miners today receive 6.25 bitcoins as a reward.
The end result is that ALL bitcoins are more valuable.
The two halvenings prior to 2020 show it takes a little time for bitcoin to take off. Bitcoin started to go vertical about five months after the halvening that took place in November 2012.
In 2016, the halvening took place in July, but bitcoin didn’t start to soar until almost a year later.
The latest breakout could well be the start of this next big move, so you haven’t missed out. In fact, you could be in the perfect position to capitalize on bitcoin’s next big boom.
That’s exactly what Louis and I will talk more about in The Race to 40K next Wednesday, August 5, at 4 p.m. ET. It’s going to be a lot of fun and educational.
After all, who doesn’t love talking about big moneymaking opportunities?
I’ll see you then.