Steve's note: My colleague Eric Wade has been racking up huge gains in his crypto model portfolio – even through periods of volatility. In this essay, he shares one of the keys to his success. And if you'd like to hear more, make sure you watch his free event this morning at 9:30 a.m. Eastern time... He's sharing an important update on what's next for bitcoin (and a whole lot more). You can get the details here.
It was a little-known crypto called Band Protocol (BAND)...
BAND is building out a network of computers called "oracles." Its goal is to publish reliable data that can be updated by anyone, but can't be manipulated or spammed with fake data.
I told my Crypto Capital readers it was time to buy on April 21, 2020. We slowly trimmed our position as it rose 177%... and higher... and higher. By the time I recommended selling on August 12, 2020, we had locked in gains of 1,100% on the total position.
You don't get 1,100% gains by accident. They're the result of careful analysis, planning, and execution.
So in this essay, I'm going to share with you one of the key steps to how I choose projects that can help you make five times your money – or, like this example, even more...
To make outsized gains in 2021, you'll need to have deep-rooted conviction in whatever you buy.
You see, large gains typically come with extreme volatility. That volatility can shake you out of great positions. So you have to believe in your investments, and you need to have a plan to lock in your gains.
Finding investments you can hold through even the most gut-wrenching volatility is hard. That's why, over decades of investing (including my time as a professional financial advisor), I honed a proprietary system for identifying winning investments.
Over the past eight years, I've modified that system for cryptos. And it's how I've found big winners like BAND. It's also how I believe we'll find many more cryptos that can soar fivefold – or higher – in the years to come.
In my experience as an early crypto miner, angel investor, and experienced crypto trader, the decision to invest comes down to seven indicators...
I can't share them all with you today. But in this essay, we'll go over the first thing I look for... "Use and Users."
In the Use and Users category, I aim to answer four key questions:
- What is the coin used for?
- Is it easy to use?
- Who is using and supporting it?
- Who will use it in the future?
As a crypto investor, it's crucial to understand a token's purpose and application before you invest. For example, privacy coins are generally designed for very different reasons than gaming tokens or coins that are used as a store of value.
BAND has a specific use, too: Again, it makes sure that group-edited data remains accurate. And it does so by creating the right incentives... If data providers supply accurate data, they make money. If they don't, they lose money.
Next, I analyze how easy the crypto is to use. Importantly, I want to see ease of use that matches its intended audience. Cryptos designed for the general public should be easy to use... But a token meant for developers or skilled programmers might be difficult for the general public – and that's OK.
Mismatches in who a crypto is meant for and who is using it usually affect how quickly the crypto grows, or if it grows at all.
Pinpointing the pool of users is my next step, but timing can be tricky. Finding a crypto that has an active, well-developed community is important – but we also want the user base to be in its early phases if we hope to capture the biggest gains.
The most critical thing here is to know the demand exists. Building and deploying a crypto protocol platform, for example, is useless if there isn't a community of developers who are going to build applications on it. And there's no point building a blockchain drawing and painting app if no artists are going to use it.
The final element I consider is the potential base of future users... These could be end users, organizations, or other cryptos. This is a highly subjective measure, and it's hugely important.
Our goal is to buy tokens that will turn into multibillion-dollar currencies, platforms, or businesses. To achieve that, we want crypto assets with the potential to benefit everyone on earth.
In short, to get a perfect score on Use and Users, a crypto should have an obvious use that makes sense... have a community of users and supporters... and be something that everyone will want.
That's the first thing I look for as a crypto investor... And it's key to identifying cryptos that can soar five times in value or higher in the coming years.
Good investing,
Eric Wade
Editor's note: Today, when the markets open at 9:30 a.m. Eastern time, Eric is participating in an important video briefing about what's next for bitcoin... as well as what's beyond it. If you want to learn the details, including how several new under-the-radar crypto opportunities could potentially help you make 10 times your money in 2021, sign up here to tune in for free.
Further Reading
If you're like most folks, you don't consider a cryptocurrency beyond its price in dollars. But that can lead to misconceptions that hold you back as a crypto investor. Understanding a crypto's true purpose can actually help you grow your net worth... Read more here: Look Beyond Bitcoin's Price to See Its Real Value.
Bitcoin might not seem like it has any inherent use at first glance. And you might just see it as a fad or a way to bet on the price of an asset. But the truth is that the best is yet to come for cryptocurrencies... Get the full story here: Three Ways to Use Bitcoin Before the Blockchain Revolution.
"Crypto" can refer to a number of assets with various functions. And to better understand them, it helps to break them down into three categories...
AGING SENIORS ARE A BOON FOR THIS HEALTH CARE GIANT
Today, we're looking at another winner from the bull market in health care...
Regular DailyWealth readers know Dr. David "Doc" Eifrig's thesis on health care stocks. About 73 million Baby Boomers are expected to be 65 or older by 2030. More elderly people means more money spent on health care – and that's great news for today's company...
UnitedHealth (UNH) is one of America's largest health care companies. In addition to its 48 million health insurance customers, the company's data-driven Optum division helps more than 98 million customers do anything from manage pharmacy prescriptions to find primary care physicians. And UnitedHealth is enjoying specific tailwinds from our aging population... While most of its segments saw sales increases last year, its Medicare & Retirement revenue rose 9% and topped $90 billion last year – outpacing the company's 6% overall growth.
As you can see, UNH shares have roughly tripled over the past five years. They also recently hit a fresh all-time high. As Baby Boomers keep aging, Doc's bullish call on health care stocks should continue to be a solid long-term bet...
