Editor's note: The Weekend Edition is adapted from the daily Stansberry Digest. This week, Crypto Capital analyst Fred Marion shares three reasons why cryptos could go from the fringes of society into the mainstream in 2020. Steve is cautious when it comes to cryptos, but he's always looking for moneymaking opportunities to share with DailyWealth readers. So if you're interested in crypto investing, you must read this essay...
The first time I bought bitcoin, it took a week...
I spent two days setting up the necessary software on my computer. Then, after filling out all the required forms, I had to take the printouts to a nearby drugstore. At the store, I called a number in California from a red, ancient-looking MoneyGram phone.
The woman on the other end read me a code over the crackly line. I took that code to the cash register, along with my paperwork and cash... Finally, a few anxiety-filled days later, the money transfer cleared my bank and a tiny bit of bitcoin showed up in my crypto wallet.
Looking back, I wish I bought more... Bitcoin is up roughly 32 times since my first purchase.
Meanwhile, since that day in 2013, the crypto landscape has transformed dramatically...
Now, you can buy bitcoin in about five minutes with resources like Square's Cash App and Coinbase's debit card purchases. You don't even need to leave your own home.
And of course, the crypto industry has evolved to include many more options... Bitcoin is one of more than 6,000 cryptos you can actively buy and sell with the right tools today.
Also, "blockchain developer" is one of the fastest-growing job categories on the planet...
In February, a report from job-search website Hired showed that demand for software engineers with blockchain-development skills grew by more than 500% over the past year. And as the website noted in its report, this demand isn't going to disappear anytime soon...
There was an explosion of demand in the past 12 months for developers with blockchain skills and we expect demand to continue growing as businesses begin implementing its countless use cases, from digital identity and smart contracts to workforce management and distributed data storage.
But even though we've seen such incredible growth in the crypto space over the past several years, we've only laid the groundwork for what's to come. And as I'll explain today, 2020 could make the past decade of blockchain development look like child's play...
"Can you buy anything with it?"
That's one of the first questions most people ask me about bitcoin. I point to a few websites that accept it – like Overstock.com, for example – but that doesn't impress anyone.
Even though it's easier than ever to trade cryptos, they still haven't gone mainstream. I'm sure a lot of DailyWealth readers have heard of bitcoin... But how many of you actually own any?
That could soon change in a big way...
You see, in the first half of next year, Bakkt – a digital-assets startup that's backed by Intercontinental Exchange, which owns the New York Stock Exchange – plans to test a bitcoin merchant network. Coffee giant Starbucks (SBUX) will be its first launch partner.
In other words, if everything plays out as expected, many folks in the U.S. should be able to walk into the nearest Starbucks just months from now and buy an espresso with bitcoin.
While we don't know all the details yet, we know around 75 million customers visit Starbucks each month. Exposing so many folks to bitcoin as a payment option would be the biggest public relations boon in crypto's history. It could change perceptions of bitcoin overnight.
The act of training Starbucks' more than 180,000 U.S. employees on processing bitcoin transactions is big in and of itself. I look at it like a mandatory bitcoin education program... one that will generate countless coffee-shop conversations.
I expect bitcoin payments to become popular at Starbucks, especially among millennials...
Millennials are digital natives, after all – a generation that came of age with the Internet. They trust bits and bytes in a way that older generations struggle to comprehend.
Consider this... According to a survey published earlier this year by investment platform eToro, 43% of millennial online traders trust cryptocurrency exchanges more than they do the U.S. stock market.
Based on an online survey conducted this spring, meanwhile, Americans ages 18 to 34 are four times more likely to own bitcoin than those ages 45 to 64, and 10 times more likely than folks 65 and older. Younger folks view money through a different lens...
For them, it's not something you entrust to the government. It's something you entrust to the inalienable laws of mathematics and computer code. And nearly 30% of them would rather hold bitcoin than bonds or stocks.
Some millennials trust bitcoin so much more than the U.S. dollar that they've given the dollar a nickname... "boomer bucks." The idea of carrying around cash is just quaint to many millennials.
But in 2020, we could see something bigger than Starbucks' entrance into the crypto world...
As I explained in the November 15 DailyWealth, social media giant Facebook (FB) officially unveiled its own crypto – called "libra" – earlier this year. It's not a bitcoin clone...
Instead, Facebook and its roughly 20 partners in the so-called Libra Association seek to create a form of money with a stable value – what's known in the crypto industry as a "stablecoin."
Today, most stablecoins are pegged to national currencies...
For example, crypto token Tether – which trades in the crypto universe under the symbol "USDT" – launched in 2014 with the goal of maintaining a 1-to-1 ratio with the U.S. dollar. That means 1 USDT should always be worth $1. To maintain that peg, Tether Limited – the token's creator – aims to back every USDT it issues with a fiat dollar in a bank account.
That's where libra will be different... Rather than being backed by the U.S. dollar alone, libra will be backed by several countries' currencies, as well as sovereign bonds.
Since its launch in 2014, Tether has grown into a behemoth. Its trading volumes often exceed even bitcoin's. Some $20 billion of Tether change hands every day, much of it moving capital between China – with its strict capital controls – and the rest of the world.
While I was attending Vegas Blockchain Week last month, libra came up in conversation...
A prominent entrepreneur in the space described libra as "crypto's punching bag."
It's the first high-profile project to take the full brunt of the U.S. government's anger over the birth of cryptocurrencies. Essentially – and I'm paraphrasing here – the entrepreneur said this about Facebook CEO Mark Zuckerberg and the U.S. government...
He didn't just poke the bear. He stripped off all his clothes, slathered honey all over his body, climbed into the cave, and grabbed the bear's newborn cubs.
From almost the moment libra was announced, you got the sense that regulators and lawmakers smelled blood...
First, they called David Marcus, Facebook's crypto chief, before U.S. congressional committees. They wanted the company's commitment that it wouldn't release libra before new regulations were put in place.
"I committed to waiting for us to have all the appropriate regulatory approvals and have addressed all concerns before moving forward," Marcus responded.
That wasn't good enough... So government officials summoned Zuckerberg to Capitol Hill for six hours of excruciating hearings.
This wasn't testimony so much as verbal abuse. And it sets a dangerous precedent... the idea that entrepreneurs must go to Washington and beg for permission to innovate.
There's a reason why Washington is nervous, though...
Facebook's user base is staggering. Between the company's four products – Facebook, Instagram, WhatsApp, and Messenger – it has 2.8 billion monthly users worldwide.
To put that in perspective, only around 356 million people – everyone living in the U.S. and a handful of other territories and countries, including Puerto Rico, American Samoa, Ecuador, and Zimbabwe – use the U.S. dollar as at least one of their official currencies.
If libra launches next year, it could become one of the world's largest currencies overnight.
And even if it doesn't happen in 2020, I believe libra will launch at some point.
Despite the regulatory outcry – and the departure of some of the Libra Association's high-profile partners, including financial-services companies Mastercard (MA), Visa (V), and PayPal (PYPL) – the opportunity is too big for it not to happen... even if it takes until 2021.
And another wild card could make an even bigger impact than libra in 2020...
I'm talking about the world's most populated country – China.
You see, while Facebook's potential entrance into the crypto industry continues to meet opposition both here in the U.S. and abroad, China is taking things into its own hands...
In a speech in late October, Chinese President Xi Jinping said the country intends to "take the leading position in the emerging field of blockchain." And he noted that the country will increase investments to make it happen. Bitcoin prices rocketed 40% higher on the news.
But Xi wasn't endorsing bitcoin so much as setting the table for the release of China's own digital currency. And it could be coming sooner rather than later...
The Chinese government has been working on a digital currency since 2014. And it's "almost ready," a senior official at the country's central bank said in August.
China is playing 3D chess while the rest of the world is playing checkers...
"They already have all the systems and the network ready," Jack Lee, managing partner of HCM Capital, told financial news network CNBC earlier this month. "I think you will see it very soon, in the next maybe two to three months."
Today, the dollar reigns supreme as the global reserve currency. It's an exorbitant privilege for the U.S... one that has allowed us to run massive trade deficits for decades with few to no repercussions. But if the Chinese yuan is suddenly cheaper, faster, and easier to use thanks to nearly instantaneous settlements, nothing will stop the world from switching.
Old habits die hard... But they die quickly if it means more money in people's pockets.
Facebook's libra and China's looming digital currency both share a major problem, though...
As far as we know, they'll both be backed by the same fiat currencies we use today. That means they will also ultimately inherit the biggest problem with fiat money... inflation.
Meanwhile, bitcoin was designed to be the hardest form of money in history...
Eventually, the world will have 21 million bitcoin... and no more. That's the way bitcoin's founder – an individual (or group) known as Satoshi Nakamoto – programmed the network when bitcoin was first released in 2009. There will never be a 21,000,001st bitcoin.
It's such a finitely scarce asset that it's hard to even conceptualize what it means...
If everyone in the world got an equal number of bitcoin, we would each have less than 0.003 bitcoin (about $22 worth at today's prices). If we only gave out bitcoin to millionaires, the 14 million of them in the world today would each get roughly 1.5 bitcoin (about $11,000 worth).
That radical scarcity is one of the reasons many people refer to bitcoin as "digital gold." It's a place for investors to store their wealth where it can't be watered down by bureaucrats.
So what does all this mean?
In 2020, we'll finally see people spending bitcoin to buy coffee. And we'll see corporations and governments embracing cryptos – from Facebook's libra to China's digital currency.
Bitcoin will finally go from the fringes of society into the mainstream.
In June, a survey from Statista showed just how far we have to go... The market-research firm polled roughly 1,000 people in each participating country to find out how global consumers think. The following chart shows respondents' familiarity with cryptocurrencies...
As you can see, Turkey leads the way with about one in five of the poll participants from the country saying they own crypto. The depreciation of the country's fiat currency – the lira – has resulted in the rising popularity of cryptocurrencies over the past several years.
But here in the U.S., only 5% of the Statista survey's respondents – all Internet users between ages 18 and 64 – said they have owned cryptocurrencies. That's a lot of potential market share before you even leave our country.
Bitcoin's market cap remains small... It's still only about $150 billion today. Many U.S.-listed stocks are bigger than that.
And bitcoin's supply is limited... We'll never have more than 21 million, as we said. So if a lot of people from just one country start pouring money into the space, its price could rocket higher.
In fact, it could go much higher than almost anyone can imagine today...
Though it likely won't be a straight move up, bitcoin is becoming more accepted every day.
You no longer need to spend a week jumping through hoops – installing hard-to-understand software, talking to someone on a beat-up phone while standing in the corner of a drugstore, and then waiting impatiently for days – just to buy a small number of bitcoin.
We're seeing it with Starbucks... We're seeing it with libra... And we're seeing it with China.
My colleague and Crypto Capital editor Eric Wade believes bitcoin will soar to $1 million in our lifetimes. That's more than 13,000% higher than today's price (about $7,500).
While I'm excited about bitcoin's prospects, it isn't the biggest opportunity in the crypto space right now...
Earlier this week, Dr. Ron Paul – the 12-term U.S. congressman and three-time presidential candidate – joined Eric for a special crypto-focused event.
They gave attendees a behind-the-scenes look at what's happening in the crypto space right now. And more important, Eric revealed all the details about the "next bitcoin"...
This tiny crypto currently trades for less than one penny. Yet Eric believes it will ultimately change the way you – and millions of Americans – do business in dozens of different ways.
It could be even bigger than buying bitcoin for $0.05 back in 2010... If you invest just $100 in this crypto at today's prices, you'll be up more than $500,000 if it climbs to $50.
If you missed the event, that's OK. The good news is, it's not too late to get all the details...
You see, for the next few days, we're offering a free replay of the event. We want to make sure as many folks as possible have the opportunity to hear from Eric and Dr. Paul. Watch the replay right here.
Good investing,
Fred Marion
Editor's note: During this week's event, Eric shared all the details about an incredible buying opportunity in the crypto space. He said it's like "going back in time and buying bitcoin for a nickel back in 2010." Eric believes this crypto will be on the tips of everyone's tongues in 2020... yet it trades for less than a penny today. Get all the details right here.
