Justin’s note: Doug Casey found his cryptocurrency guru.
His name is Marco Wutzer. Marco has been following digital currencies for decades. He was an early investor in bitcoin. And like Doug, he’s truly an “international man.” He made so much money from cryptos, he dropped everything and traveled the world for five years.
It’s no surprise that Doug handpicked him to spearhead Casey Research’s first blockchain-focused advisory, Disruptive Profits.
Since Disruptive Profits is brand-new, many Casey readers don’t know Marco yet. So, I recently called Marco to talk about his background… why the blockchain is going to change the world… and why he thinks cryptos are still an incredible speculative opportunity. I hope you enjoy.
Justin: Welcome to the team, Marco. You were an early investor in cryptos. How has that gone for you?
Marco: I first got interested in digital currencies in the late 1990s and early 2000s. This was pre-blockchain. So, unlike now, digital currencies were still centralized.
One of the first digital currency experiments I got interested in was called e-gold. It was basically digital cash backed by gold. At its peak, the company was doing about $2 billion in transactions a year.
E-gold payments were encrypted and anonymous. And there was a lot of money laundering going on. The guy who ran it was American. So, the feds eventually shut it down.
Then you had Digital Monetary Trust (DMT) in 2003. It was put together by an old-school cryptographer, J. Orlin Grabbe. Like e-gold, DMT was an anonymous way of moving money around. But unlike today’s cryptocurrencies, it was built on top of the existing banking system.
DMT also reached something like $2 billion a year in turnover. The problem again, though, was that you had all kinds of scams running through this anonymous system. And it was shut down eventually, too.
Now we’re in the blockchain phase of the digital money revolution. We have this groundbreaking new technology that allows you to completely sidestep the banking system… and other financial middlemen.
What I’m interested in now is how blockchain technology is going to change the world we live in.
Justin: I’m also very interested in that. But could you first explain what blockchain technology is?
Marco: A blockchain is just a giant digital ledger that’s shared online. All crypto transaction records are kept on this ledger and shared among thousands of different participants on a network. You can trust each new record because the verification process is done cryptographically by the network. No one participant, or group of participants, has special privileges.
Justin: What changes might blockchain technology bring about? How will it impact the average person?
Marco: Blockchains are giving power back to the individual. Take currency transactions. It’s still early days. In everyday transactions, we still mostly use government-issued fiat currencies. But we’re at the beginning of a paradigm shift in money. Nation-states are losing power over the supply.
And it’s not just in currency transactions that power is flowing back to the individual and away from government. No matter what you’re using a blockchain for, nobody can interfere with it. It’s global. It’s distributed. It’s decentralized.
That means there’s no way any one person or group can control it. This gives power back to individuals—you, me, and your readers—to act whichever way they want… no matter what any government believes they should or shouldn’t do.
Most people don’t know it yet. But we’re about to enter a blockchain-based world, just like we entered an internet-based world in the 1990s. I call this new phase a “Second Renaissance,” because it will liberate so much entrepreneurial and creative force.
So many layers of corruption and bureaucracy will fall away. For the first time, we’ll have a truly global— and truly free—market.
Justin: When do you see this Second Renaissance happening?
Marco: All through the 2020s and beyond. Just like with the internet, once we switch to a blockchain-based society, there’ll be no going back. Once the cat is out of the bag, it’s not going back in there.
Justin: In Miami, you told me how the blockchain will radically impact the nature of trust between human beings. Can you elaborate on that a bit?
Marco: Sure. So, the blockchain is all about getting rid of middlemen. With blockchain technology, you’ll no longer require middlemen to referee transactions, like we do today when we send a payment to someone electronically via the banking system.
If I want to send a payment to you using a blockchain-powered network, I don’t need to trust a bank. I don’t need to trust any kind of regulator. Nobody can freeze my bank account or interfere with what I’m trying to do. The payment is guaranteed.
That’s not the way it works today with the traditional financial system. We pay middlemen—banks, credit card companies, and central banks—to referee those transactions and make sure both sides can trust that the transaction will happen as agreed. But those middlemen are either corrupt or corruptible.
Justin: What do you say to people who won’t touch cryptos because they’re “too speculative?”
Marco: Look, it’s understandable. We have seen big run-ups in prices. These have been followed by big price falls. And that can be scary. But blockchain technology is still in an embryonic state. And when you have a revolutionary new technology that people can invest in, you tend to have bubbles.
Last year, bitcoin went from just under $1,000 to a peak of about $20,000—a 1,905% gain. And the total market value of all cryptos went from about $18 billion at the start of 2017 to a peak of $835 billion this January—a 4,425% increase.
Any time you see asset prices shoot up that high, you can be pretty sure the market has gotten ahead of itself. It was almost straight up late last year for cryptos. I see the recent fall in prices as a healthy correction. Prices can’t continue going up in a straight line forever.
Remember, shares in Amazon dropped 94% in the dot-com bust. Since then, they’re up more than 27,000%. Facebook shares were cut in half after the company went public in May 2012. Since then, shareholders are up about 900%.
A lot of people are asking, “Is it too late to get in now?” They’re asking the wrong question. It’s still really early. Blockchain technology is still in the early stages of development.
About 24 million people out of the 7.6 billion people on the planet own bitcoin. That’s only about 0.3% of the world’s population. The penetration in the general population is so insignificant that the vast majority of growth has to still be ahead of us. It’s like asking in 1994 if it’s too late to invest in the internet.
Justin: And how should newcomers get involved in cryptos?
Marco: I’d definitely start with bitcoin. It’s the reserve currency of the crypto economy, just like the U.S. dollar is the reserve currency of the global economy.
To buy most other cryptos, you first need to buy bitcoin. It’s the on-ramp of the entire crypto economy. Bitcoin is also the most established cryptocurrency. It has the biggest network and the biggest brand recognition.
It’s no longer the most advanced blockchain technology. But thanks to its first-mover advantage, bitcoin will be a major player for years to come.
Just keep in mind that cryptos and the blockchain are about a lot more than just price. What matters is the big picture. As an investor in this space, you need to be constantly asking, “What will be the result of all this new technology coming online?”
And blockchain means that the power is going back to the individual. We’re going to see, for the first time ever, a truly globalized, free market that’s free of corruptible middlemen.
Justin: Great stuff, Marco. Thanks for taking the time to speak with me today. I look forward to following your work in Disruptive Profits.
Marco: You’re welcome, Justin.
Justin’s note: Marco says the last “phase” in the development of the blockchain resulted in a slew of 300-baggers. And the next phase is just beginning. In his new letter Disruptive Profits, he’ll show you, step by step, how to bet on the best blockchain plays set to soar in the years ahead.
If you’re interested in learning more and signing up for Disruptive Profits, click here.
But keep in mind, today is your last chance to sign up for Disruptive Profits at the steep discount we’re offering to Casey readers. Click here to take advantage of this special offer.
Today, readers respond to Marco’s big presentation last week…
Hello, thanks for the invitation to the webinar of Marco Wutzer. I enjoyed it and am willing to subscribe to Disruptive Profits.
Dear Marco, your presentation last week was a great beginning. As a double-major in computer science and finance of years gone by while raising my children now in college, my curiosity craved more. I fully understood the blockchain “layers” you spoke of and completely agree.
I enjoyed your talk last week and signed up for your crypto service. I am already a crypto investor and have been with Palm Beach Confidential since it started in 2016. Your two new recommendations I have purchased.