The U.S. Securities and Exchange Commission ("SEC") just made a landmark decision... And importantly, this move will revolutionize the bitcoin-investing market.
Editor's note: We're doing something different in the Chaikin PowerFeed today...
In short, you'll hear from one of the world's biggest experts in cryptocurrencies.
I'm talking about Eric Wade from our corporate affiliate Stansberry Research.
Eric began mining bitcoin – the world's first cryptocurrency – all the way back in 2013. So he now has more than a decade of experience in this still-evolving corner of the market. More recently, he has also authored a new economics book (more on that further below).
At Stansberry Research, Eric has led his subscribers to some massive returns in the crypto space. His biggest winners over the years include gains of 1,169% in four months, 1,164% in five months, 978% in less than one month, and 963% in 22 months.
We haven't discussed cryptos in depth in the Chaikin PowerFeed yet. They're highly speculative. But Eric is proof that you can make a lot of money with the right approach.
To that point, a major event is taking place in the crypto space right now. So we've asked Eric to share his expert take about what it all means for regular investors like us...
It's Finally 'Happening' in Cryptos
By Eric Wade, editor, Stansberry Research
The U.S. Securities and Exchange Commission ("SEC") just made a landmark decision...
And importantly, this move will revolutionize the bitcoin-investing market.
You likely know that bitcoin is the original and oldest cryptocurrency. It was introduced to the world in 2008. And at first, it didn't have a lot of value or interest...
For example, in 2010, Laszlo Hanyecz practically threw away 10,000 bitcoin on two pizzas. That means he spent the equivalent of roughly $430 million in today's dollars.
That's an expensive dinner. But it speaks to how bitcoin's value and popularity have surged.
And as I'll show you today, the recent change I mentioned will only make bitcoin's value and popularity even greater. This move is groundbreaking for everyday investors like us...
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In the past, investors needed to either buy bitcoin directly or through futures contracts.
That all changed in early January...
The SEC approved the listing and trading of spot bitcoin exchange-traded funds ("ETFs"). So now, investors like us can gain exposure with just a couple clicks in our brokerage accounts.
One reason why the SEC decision is so important relates to the storage of bitcoin...
As its name implies, the Commodity Futures Trading Commission ("CFTC") oversees futures trading relates to all sorts of commodities. The CFTC regulates trading in things like...
• Agricultural commodities (wheat, coffee, sugar, and livestock)
• Metals (gold, silver, and platinum)
• Energy products (crude oil, natural gas, heating oil, and electricity)
The CFTC also oversees financials such as interest rates, foreign currencies, stock indexes, and U.S. Treasury securities. It's one of the world's most important governing bodies.
Now, you may or may not have ever traded commodities or their futures contracts. But you can likely imagine how hard it would be for an investor who saw coffee prices dropping to buy and hold 37,500 pounds of beans – the size of a standard CFTC-regulated contract.
In fact, you might recall a big commodity-related event during the COVID-19 pandemic...
Crude-oil futures briefly traded for next to nothing in April 2020. That's because storing hundreds of barrels of West Texas Intermediate ("WTI") crude oil was challenging – if not impossible.
That brings us to the advantage of the SEC's newly approved spot bitcoin ETFs...
In short, folks like us can now get exposure to bitcoin with a regulated service provider such as Fidelity or BlackRock. They'll buy and hold the bitcoin – and offer the ETF shares to us.
Notably, the providers can't leverage the bitcoin they're holding on behalf of customers.
That's important, because numerous organizations have been wiped out by leverage... such as digital-asset exchange FTX and crypto-lending platform Celsius.
The ETFs are a convenient way to get a third party to hold bitcoin for regular investors. And they do it without exposing everyday folks to the dangers of too much leverage.
Moreover, assets flowing into these bitcoin ETFs are expected to boost the innovation and development of the overall crypto industry. More funds and resources will get allocated to improving the technology, security, and regulation of bitcoin and other digital assets.
Plus, spot bitcoin ETFs can enhance the diversification and efficiency of investors' portfolios. Bitcoin offers a unique and uncorrelated asset class that can help investors hedge against inflation, currency devaluation, and geopolitical risks.
I'd be remiss if I didn't urge you to tread carefully, though...
Savvy investors know that if you hold shares in an ETF, you're a beneficial owner of the underlying asset – but you really own shares in the fund. The fund itself owns the asset.
And just by owning a bitcoin ETF, your shares won't give you direct access to the bitcoin network itself. It's the same way that just owning coffee futures doesn't get you a latte.
But for investors who don't intend to use the bitcoin network, that isn't a problem.
Here's what you should take away from the SEC's landmark move...
These spot bitcoin ETFs will become increasingly popular with investors, traders, and speculators in the coming months. A lot of folks will start putting money into these ETFs.
That's great news for the long-term value of bitcoin. And you don't want to miss out.
Good investing,
Eric Wade Editor's note: Over time, Eric believes the U.S. dollar could become partially backed by bitcoin and other so-called "hard assets." That might sound like a radical idea. But given Eric's expert perspective in the space... we pay attention when he talks about cryptos.
In fact, Eric talks about this exact idea in his new book, America vs. Americans...
He makes the case for this shift as part of a broader discussion on the problems facing the U.S. economy and everyday Americans. And importantly, he offers ideas on what we can do about it. You can pick up a copy of America vs. Americans right here.
Market View
Major Indexes and Notable Sectors
# Hld: Bullish Neutral Bearish
Dow 30
+0.39%
15
14
1
S&P 500
+0.27%
178
241
79
Nasdaq
-0.2%
48
43
8
Small Caps
+0.86%
565
989
365
Bonds
+0.98%
Materials
+1.77%
2
20
6
— According to the Chaikin Power Bar, Large Cap stocks and Small Cap stocks are Bullish. Major indexes are mixed.
* * * *
Sector Tracker
Sector movement over the last 5 days
Health Care
+2.43%
Industrials
+1.55%
Discretionary
+1.03%
Communication
+0.75%
Staples
+0.57%
Information Technology
-0.07%
Real Estate
-0.76%
Financial
-0.97%
Materials
-1.07%
Energy
-1.67%
Utilities
-1.87%
* * * *
Industry Focus
Health Care Equipment Services
6
51
11
Over the past 6 months, the Health Care Equipment subsector (XHE) has underperformed the S&P 500 by -18.82%. Its Power Bar ratio, which measures future potential, is Weak, with more Bearish than Bullish stocks. It is currently ranked #18 of 21 subsectors.
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