The Weekend Edition is pulled from the daily Stansberry Digest.

We need to talk about cryptos...

The price of bitcoin, the world's most popular crypto dropped roughly 25% this week as of Friday morning... And Ethereum, the No. 2 crypto, fell more than 30% in the same time frame.

What in the world is going on?

Well, if you've followed along with us for any length of time, you know that we've come to expect volatility spikes in bitcoin – and across the entire cryptocurrency universe, for that matter.

This round of volatility stemmed from a few things...

First, Tesla CEO Elon Musk sent out a series of tweets, which some followers took to mean Tesla was selling its cryptocurrency holdings (Musk later clarified this wasn't the case).

Then, there's China's proposed crypto "ban." Nick Koziol shared the story in Stansberry NewsWire on Wednesday...

Last night, the People's Bank of China ("PBOC") said that virtual currencies – like bitcoin and Ethereum – cannot be used in the marketplace. It said that this is because they are not "real" currencies. The central bank also said that payments companies and financial institutions cannot price items in cryptocurrency.

It's worth noting that the PBOC is in the middle of launching its own digital version of the yuan. So the crackdown on cryptocurrencies is likely because the Chinese government only wants its people to use the yuan crypto.

This just adds another argument for the crypto bears in the near term. But the bulls are using this as a buying opportunity...

According to data from market intelligence firm Glassnode, crypto exchange Binance saw its largest day of inflows ever yesterday, even as the price dropped.

Such is life with an emerging asset or technology...

As it starts to go mainstream, you have to deal with more "mainstream problems." As Crypto Capital editor Eric Wade wrote in a special alert to subscribers on Wednesday...

We think this is an overreaction. Longtime crypto investors know that China has repeatedly threatened to ban cryptos. But as we've said before, we believe the markets will win out.

If a ban does pass, we'll begin to see something we've long expected: crypto propelling some economies forward and trapping others in the past. No matter what a single country does, innovation is one of those things that's hard to put back in the bottle.

In short, I'm not worried about this morning's sell-off. I've been warning about coming volatility for a while. So I'd recommend using this sell-off as a buying opportunity.

With any investment, times like these can be tough to endure. But smart investors know staying disciplined is critical... as is knowing why you own any asset in the first place... and, most important of all, allocating your portfolio to align with your risk tolerance.

That's part of the reason we suggest that folks not put any money into cryptos that you wouldn't be comfortable losing completely. Because even if you tell yourself you're in it for the long term, big short-term sell-offs are bound to happen along the way...

And during these times, if you're unclear on your goals or time horizon or owning any investment, it's easy to get caught up in natural emotions and sell at exactly the wrong time. This is one of those trying times, according to Eric.

Eric sent his latest monthly issue to Crypto Capital subscribers on Tuesday...

In part, it covered the recent sharp sell-off. Eric acknowledged that it's hard not to look at cryptos today and "worry that the market's getting frothy." From the issue...

Recent media coverage of non-fungible tokens (NFTs), Dogecoin's price surge, and Elon Musk's tweets have only added to the overexuberance – and chaos – in the crypto market.

However, we believe this is just cryptos "crossing the chasm" from early adopters to the early majority. We got more evidence of this recently...

A survey from the New York Digital Investment Group estimated that 46 million Americans own bitcoin. That's about 17% of the country's total population.

While 53% of respondents said that they don't currently hold digital assets, more than half of these folks said they would consider adding cryptocurrencies to their portfolio in the future. So the percentage of Americans holding bitcoin will only grow from here.

Eric says to keep the long game in mind...

As more buyers enter the bitcoin market, there simply isn't enough supply (remember bitcoin's fixed supply and predetermined "mining" rate) to meet demand. So as new investors flood into cryptos, prices will eventually move higher.

Still, this sell-off is a good reminder that cryptos are extremely volatile...

Bitcoin is only 12 years old, after all. And it's behaving like a "pre-teen" asset. Drops of 20% or more have been common in its history, along with quick rebounds.

It's natural to get caught up in a sell frenzy... much like it is to get caught up in the euphoria on the way up. So while Eric is still optimistic about the crypto market, he says that folks should expect more volatility to come.

At the same time, there are opportunities to be had – if you know where to look...

In the midst of this broader crypto sell-off, one of Eric's recommendations has seen generous gains... As of Friday morning, it had climbed roughly 30% in a week and was up roughly 400% over the past month.

Stephen Woolridge II, who recently joined our Crypto Capital team as an analyst, told us this week that this crypto is a "Layer 2" solution... It's creating long-term scalability, cheap fees, and instant transfers for the Ethereum network. As Stephen put it...

Layer 2 solutions are like a sticky note on top of a crowded notepad. They make mainnet blockchains like Ethereum and bitcoin easier to navigate, while making fees cheaper.

This is something that has become a more recognizable need as of late... with "gas" fees – essentially transaction fees on the bitcoin and Ethereum blockchains – rising dramatically as more people have started buying cryptos.

In fairness to Eric's paid subscribers, we can't name this crypto today. But this behavior illustrates another example of how lucrative this market can be... as the crypto world "crosses the chasm" into popular life.

Today, this position is up more than 1,000% overall since Eric recommended it back in February. In the latest Crypto Capital issue, he recommended subscribers take partial profits, but still hold the majority of their stake.

If you don't already subscribe but are eager to learn more about cryptos, click here to learn how to get a Crypto Capital subscription today...

You won't find a better place to learn everything you need to know about the crypto world.

Regards,

Corey McLaughlin

Editor's note: As Eric knows well, investing is all about calculated risks. Recently, that truth led him to share a specific crypto strategy with 500%-plus upside potential. If you have money in cryptocurrencies, and you're wondering how to navigate these assets' wild ups and downs, make sure you get in on this story and learn how to access Eric's research and ideas... right here.