Tyler Winklevoss made his fortune on Facebook, Inc. (Nasdaq: FB). He and his twin brother Cameron sued Mark Zuckerberg for stealing their idea for a social network. The rest is (cinematic) history.
Now, the Winklevii, via their Winklevoss Capital Management, are major Bitcoin investors and boosters. Theirs is not quite Jim Bianco-level empirical and emotional remove. But these billionaire brothers have put their money where their tweets are.
And Tyler, recently, asked a series of pertinent questions that’s all about the future:
There are almost 3 billion video game players worldwide.
— Tyler Winklevoss (@tyler) March 15, 2021
Do you think they prefer gold or #bitcoin?
Do you think they prefer cash or crypto?
Do you think they prefer physical art or NFTs?
Do you think they prefer Wall Street or DeFi?
It's the bottom two lines where things get really interesting.
“Do you think they prefer physical art or NFTs?”
“Do you think they prefer Wall Street or DeFi?”
You’re probably familiar with DeFi — it’s short for decentralized finance. DeFi is a middleman-killer, a potential nightmare for old-school Wall Street. Dr. Martin Weiss discussed it yesterday, calling it “the Greatest Money Revolution of All Time.”
You might not yet be familiar with NFTs — it’s short for non-fungible tokens. A non-fungible token is a unique digital file stored on a blockchain. It’s what’s most commonly referred to these days as “digital art.” And people are paying preposterous sums to “own” particular “pieces.”
Altogether, as Jim Bianco recently tweeted, “Crypto/DeFi/NFT is going to be the biggest game changer since the BoE invented the paper currency in 1693 (fiat). Yes, it is that big!”
We provide daily coverage of Bitcoin and the broad (and getting broader) cryptocurrency market in our free e-letter Weiss Crypto Alert. Here’s Monday’s update (on a wild weekend) from crypto analyst Alex Benfield:
The crypto market has experienced a lot of volatility over the last month. From the highs set in mid-February to the dip at the end of the month, recent price swings have been harsh.
It’s important to keep in mind that cryptocurrencies are known for their high implied volatility during bull markets, a key difference separating them from assets on traditional markets.
This can be a very hard concept to grasp for investors new to the space, and this is why crypto investors have coined two important terms: “HODL” and “Buy the Dip.”
First, no that’s not a typo; “HODL” is a signal to everyone to hold on to your crypto long term, no matter what, throughout all types of market swings. It was a social-media mistype, then it was a meme, now it’s a malaprop-battle cry.
Now, as for “Buy the Dip,” it’s the same mantra applicable in hot equity markets to names of conviction that have eyes on the future. When the market suffers through sharp retracements — and crypto markets are known for such moves — it’s time to increase positions. These retracements are opportunities.
Right now, we appear to be in limbo. The market hasn’t been able to make up its mind whether we’ll see new highs, or whether we’re in the beginning stages of a longer correction. Time will tell. For now, we’ll keep an eye out for the levels we discussed here today to help make an educated forecast on short-term direction.
On Monday, Martin identified “three broad ways to participate” in DeFi’s “explosive growth”:
Depending on how much experience you have with cryptocurrencies, I would steer you to just one, two or all three.
Method 1 for making money in decentralized finance is simply to invest in the asset that provides the backbone for most of the DeFi-related projects and enterprises. That’s Ethereum.
Method 2 is to own a short list of smaller cryptos that are already proven leaders in the world of decentralized finance, cryptos like the so-called Ethereum killers.
Method 3 is the most intriguing of all. I’m talking about the rare coins that are still virtually unknown and not so easy to buy.
Why bother with them? That simple question pinpoints the main reason they’re so intriguing ...
It’s precisely because they’re hidden and not as easy to buy that most people don’t know they exist. And it’s precisely because most people don’t know about them that the opportunity is so large.
For regular updates on Bitcoin, DeFi and other crypto topics, sign up for our free e-letter, Weiss Crypto Alert.
Best,
David Dittman