By Justin Spittler, editor, Casey Daily Dispatch
Stocks have been taking a beating.
The S&P 500 dropped 6.6% in May. The Dow dropped 6.7%. And the Nasdaq slid 8%.
There’s a good chance the selling isn’t over, too.
I say this for a few reasons. One, appetite for risky stocks is drying up. Just look at how hard Tesla, Uber, and Lyft have been hit recently.
The S&P 500 also closed below 2,800 on Friday. That level, as I explained last week, was acting as a critical support. But that safety net just ripped wide open… suggesting U.S. stocks could be in trouble.
These are major warning signs. I encourage you to take them seriously…
• After all, markets take the stairs up…
But they take the elevator down.
In other words, sell-offs unfold faster than rallies. If you’re unprepared, they can be absolutely devasting.
That’s why I’ve encouraged readers to hold extra cash. As I’ve explained before, this simple step will cushion you against heavy losses if stocks keep falling.
I’ve also been recommending gold for the simple reason that it’s a time-tested safe haven.
But there’s something else you could be doing. And I’m going to need you to hear me out on this one…
I say this because most people don’t consider this asset safe. They view it as risky…
• I’m talking about bitcoin…
You probably weren’t expecting me to say that. But it’s true.
Bitcoin could save your portfolio. I’ll get to why in a second.
But I should first say a few words on bitcoin.
Bitcoin, in simple terms, is a digital currency. It was created 10 years ago by Satoshi Nakamoto. Satoshi is a mysterious figure. No one knows who he or she is.
But that’s not the only thing that makes it unique.
• Bitcoin is decentralized…
No single person, company, or government controls it. Its network of users controls it.
Another advantage of bitcoin is its supply. Unlike paper money, bitcoin’s supply is fixed.
Specifically, the supply of bitcoins will grow at a slowing rate until the last bitcoin is “mined” in 2140. You can see what I mean in the chart below.
• This is why libertarians were some of the earliest bitcoin adopters…
They recognized its obvious advantages over paper money.
But bitcoin’s no longer just for anarcho-capitalists and cypherpunks. It’s gone mainstream. Heck, my grandma even owns a little bitcoin.
Of course, most people bought bitcoin as a speculation. They saw it as a quick way to get rich.
And it’s true…
• Bitcoin is one of the world’s most explosive assets…
Its price skyrocketed 1,600% during a five-month span in 2013.
Two years later, it began an even more explosive bull market. This time, bitcoin soared 11,596% from January 2015 to December 2017.
Of course, bitcoin has also experienced some gut-wrenching downturns. Since 2010, it’s crashed 30% or more 12 times.
But it’s bounced back every time.
That tells me bitcoin’s here to stay. But there’s another reason why it deserves a place in your portfolio…
• Bitcoin is a great diversification tool…
I say this because bitcoin is an uncorrelated asset.
It doesn’t follow the movement of stocks, bonds, and other traditional assets.
See for yourself. This chart compares bitcoin’s performance with the S&P 500’s over the last three months.
You can see that bitcoin does its own thing. It doesn’t matter what’s going on with the global economy… corporate profits… or other financial markets.
• Of course, anyone could dig up a chart like this to prove their point…
But the research backs up what I’m saying…
Bitwise – a leading provider of cryptocurrency index funds – recently dug into this matter. It looked into how owning a little bitcoin impacts portfolio performance and volatility.
And what it found may surprise you…
According to Bitwise, a traditional portfolio returned 32% from the start of 2014 to the end of March 2019. Its monthly volatility was 8.1%. A traditional portfolio is 70% stocks and 30% bonds.
That’s not bad. But you could have done much better with a little bitcoin in your portfolio. In fact, you would have made 37% instead of 32% if just 1% of your money was in bitcoin.
What’s even more impressive is that your monthly volatility would have fallen to 8.0%. In other words, you would have experienced fewer ups and downs.
If you put 2.5% of your money in bitcoin, you would have made 44% over the same period… with just 0.3% more volatility.
In my eyes, you’d be crazy for not wanting something like this in your portfolio. But there’s an even bigger reason why you should consider buying.
• Wall Street loves uncorrelated assets…
Take it from Teeka Tiwari.
Teeka is a friend of mine and the editor of Palm Beach Confidential. He’s also a world-renowned cryptocurrency expert.
He recommended bitcoin at $428 in April 2016. Today, bitcoin trades at $8,500… meaning Teeka’s subscribers are sitting on a 1,886% gain. Another one of Teeka’s crypto picks is up 2,885% since April 2016, and a third is up 10,760% since February 2017.
In short, it pays to listen to Teeka. And he says uncorrelated assets are in hot demand on Wall Street:
Uncorrelated assets are unaffected by the forces affecting correlated assets. And that’s why Wall Street loves them.
A portfolio made up of highly correlated assets reduces risk-adjusted performance – which is how most major institutions grade funds. But adding uncorrelated assets to the mix can increase risk-adjusted returns.
And right now, traditional asset classes – stocks, bonds, and commodities – are mostly moving in sync with each other.
In other words, institutions are attracted to bitcoin because it can boost returns while lowering overall risk.
• That’s why Teeka sees a “truckload of money” heading into the crypto space…
More specifically, Teeka expects major institutions to buy bitcoin for the first time.
That’s a game-changer.
After all, the institutions that Teeka’s talking about manage billions of dollars. Some oversee trillions. Not only that, the last crypto bull market was almost entirely fueled by retail investors.
So you can imagine what happens when the big boys enter the space. It will be like nothing we’ve ever seen before.
So consider adding a little bitcoin if you haven’t yet. Just remember to exercise discipline. In other words, don’t risk money on bitcoin that you can’t afford to lose. It only takes a small stake to make a fortune in the years ahead – and reduce your portfolio’s volatility.
Delray Beach, Florida
June 3, 2019
P.S. Bitcoin isn’t the only big money-making opportunity Teeka recommends today.
In fact, he hasn’t been this excited about a new industry since cryptos back in 2016.
Right now, he sees massive opportunity in the cannabis space. Specifically, he’s pinpointing a unique type of cannabis. It has nothing to do with pot.
This industry is growing fast – at the same speed cryptos were in their early days. And now’s the time to take advantage.
Teeka will explain everything you need to know, including how to start profiting, this Wednesday, June 5 in an urgent presentation: How to Make 100% Legal Cannabis Profits – This Year. You can sign up – for free – here.