The cryptocurrency market is setting up to reach new highs.
Cryptos became mainstream in late 2017, led by the parabolic rise of bitcoin from $1,100 to $19,500 in only nine months.
Investors from all backgrounds rushed to buy, causing demand to greatly outweigh supply.
Everyone wanted a piece of bitcoin, even people who had been investing in only risk-free bonds for years…
Crypto was in a bubble.
Like all bubbles eventually do, it burst. The Cryptocurrencies 100 (CRYP100) Index declined by 89% in less than a year.
We’ve seen this play out before. The same thing happened to the Nasdaq Composite Index during the 2000 dot-com bubble.
During this time, the Nasdaq declined by 77%. Since then, it has gained 800%!
I expect the same thing to happen to the cryptocurrency market.
In the chart below, cryptocurrencies (yellow line) and the Nasdaq (orange line) appear to be demonstrating a similar pattern:
Cryptocurrencies (2016-2020) vs. the Nasdaq (1999-2003)
Crypto is just at the beginning of its recovery and will explode higher. There are fundamental reasons why…
The Most Secure Form of Money Transfer
Since 2017, the global value of digital payments annually has increased by 74% to $4.4 trillion. By 2024, the value is expected to increase another 88% to $8.3 trillion.
As the value of digital payments increases, so does the demand for security.
Cryptocurrencies were created to become the most secure form of money transfer. With security in high demand, more money is expected to flood into cryptos over the coming decades.
Right now, the value of all cryptocurrencies is $275 billion. This represents only 3% of the estimated value of digital payments in 2024.
If this number increases to even a conservative 33%, the value of cryptos would be $2.7 trillion, 900% higher than it is today.
Big Investors Are Buying Cryptos
Institutions are taking advantage of the opportunity.
In 2019, 94% of endowment funds had investments in cryptocurrencies, and cryptocurrency hedge funds doubled their assets under management.
This institutional interest has led to a surge in volume in the cryptocurrency market.
Crypto volume was up 61% in the first quarter of 2020. As volume increases, more institutions can buy cryptos, which will cause their value to skyrocket.
The crypto bull market has begun.
Research Analyst, Automatic Fortunes