Steve's note: We know cryptocurrencies are unprecedented... and volatile. So if you're interested in these assets, I want to make sure you're hearing from the only guy I trust in this space. Today, we're sharing another essay from my colleague Eric Wade. He covers one more reason why this technology isn't going away anytime soon...
What is it about cryptocurrencies that is so powerful?
Blockchain, cryptos, tokens, all of it... What is it that is so powerful, that in the middle of a 50% correction, not only are people holding on tight (or buying more) but actually debating whether we're even in a bear market?
What other asset class would there be a question about this? What other asset class do we sit around for 30, 60, 90 days of rope-a-dope markets and rolling with the punches?
Today, I want to share a glimpse of why crypto investors are willing to hold through all of this volatility – and one big reason why this asset class is completely different from anything else in the markets...
What is it about cryptos that is worth holding on to as an investment?
We'll start by talking about an issue that doesn't get talked about enough... mining.
Mining cryptos can be difficult. And depending on several factors – if you're mining a popular coin, or if you have old equipment, or if your electricity is expensive – it can be difficult to make a profit from it, too.
But it can also be just downright difficult. It can take thousands of different configurations to mine a particular coin with a particular algorithm.
Miners need a computer with multiple graphics cards. It could take three working all day to crank out $3 per day of Ravencoin, for example. Most people don't have the patience for this – let alone setting up the machine – so mining doesn't get much discussion. Even if you ran it all year, you'd have just about $1,000.
Yet mining is one aspect that not only makes cryptos different from everything on the planet... but makes it unstoppable.
Folks who want to mine crypto can use tools and websites to find out if it's worth it. The websites can account for factors like processing power, what you pay for electricity, and which exchanges you're willing to look on. They then come up with what's worthwhile to mine, calculating the revenue and profit per day.
In this way, miners can accumulate coins cheaper than the market price. And what's the payoff?
Well, in our example from before, you end up with $1,000 worth of Ravencoin that has never touched an exchange. If you wanted to, you could build your own wallet, have the algorithm mine the coins into that, and then they're yours... free and clear.
This is what makes crypto unstoppable. Again, it takes patience. But it's available to anyone. Would-be miners can go on eBay and easily find the equipment they need.
And then, they can accumulate crypto on their own... having never touched a bank at all.
This is the independent nature of cryptocurrencies. This is what makes this asset class different from anything else.
We see this whenever the powers-that-be try to put a stop to crypto. Mining isn't super profitable now. But it did become much more profitable in the recent past for bitcoin – because China tried to stop it.
Mining profitability shot up because hash rates dropped. So we can see that if individual governments ever did try to stop this unstoppable technology, miners would clean up.
The fact that you can have off-the-grid cryptos is one of the facets that makes this technology so valuable...
And boy, believe me, if someone has gone through the time, the energy, the work, and the patience to learn how to mine and set it up for themselves – of course they're not ready to give it up just because the price drops.
This is only one piece of the puzzle. But you can see why a 50% drop isn't where the story of crypto ends... not by a long shot.
We as crypto investors deserve all the upside we get. And it's not because we're lucky. I don't believe anyone in this space succeeds out of pure luck.
It's patience... and tenacity. And most important – it's evidence that when it comes to cryptos, we are truly holding lightning in a bottle.
Good investing,
Eric Wade
Editor's note: Eric believes the crypto space is entering a brand-new era... And it will allow investors to "opt out" of the traditional financial world. Plus, he says it's creating a unique opportunity to generate huge income streams in a way that hasn't previously been possible... with potential yields as high as 10%... 20%... even 30% or more. He recently shared the details in a free online event – click here to watch the replay.
Further Reading
"Most people stick with what they know," Eric writes. It can be scary to branch out into an asset class you aren't familiar with. But if you can overcome your bias, you'll find some revolutionary opportunities... Read more here: These Investors Are Overcoming Their 'Default Bias'... Can You?
After the recent correction in cryptocurrency, it might look like we're headed for another big crash. But Eric believes the "speculative frenzy" has already given way to something more powerful. And that could mean sky-high prices for cryptos... Get the full story here: Why I Expect Crypto Prices to Go Up From Here.
Bitcoin is unlike any other financial asset on the planet. And even though its price varies from day to day, it has a major advantage over traditional assets...
WE'RE SEEING NEW ALL-TIME HIGHS IN CLOUD TECHNOLOGY
Today, we're highlighting another winner from the trend in cloud-based technology...
Regular readers know that long before the pandemic, businesses and technologies were moving online. Folks began to access data and software remotely over "the cloud," making remote collaboration easy... And COVID-19 has only accelerated that trend. Today's company is winning out as cloud-based products take off...
Adobe (ADBE) is a $300 billion software giant. Its products include things like Acrobat, for editing PDF documents, and Dreamweaver, for building websites. Through its cloud-based subscriptions, customers can use their accounts on any computer – which has helped folks work from home. In its latest quarter, Adobe reported revenue up 23% year over year to more than $3.8 billion. And it had a record $2 billion cash flow from operations.
As you can see, ADBE shares are in a strong uptrend. Over the past five years, they're up an incredible 535%, and they recently hit new all-time highs. As the pandemic accelerates the trend of moving to the cloud, this trend should continue...
