Why I’m Super-Bullish on Crypto

I pulled out my magical Way Back Machine for today’s dispatch. Our destination: June 29, 2007. It’s a Friday. 

The Standard & Poor’s 500 closes in the red. In reports wrapping up the day’s trading, most financial news sites don’t mention that one of the biggest events in modern history is slated for 6 p.m., out on the West Coast: Apple will release its very first iPhone. 

Frankly, investors don’t care. On Monday, Apple’s shares close lower. 

Not hard to see why…not when commentators like one writing for Bloomberg note that the iPhone’s impact on the wireless industry would be minimal, that the phones would only ever appeal “to a few gadget freaks,” and that (then-big) competitors “such as Nokia Oyj and Motorola Inc. won’t be whispering nervously into their clam shells [old flip-top phones] over a new threat to their business.” 

I mean, when’s the last time you saw a flip-top phone in the wild? 

Even for 2007 that was some of the most ignorant ink to spill for what was clearly going to be a society-changing innovation.  

But so it goes with the mainstream media: They feel they’re not doing their job unless they flippantly disregard the new in favor of the status quo. 

Which neatly brings us to an email I received recently from Hong Kong-based Crypto.com, one of the world’s most popular cryptocurrency exchanges. It noted that in new research, it has calculated that about 220 million people now own crypto.  

Sounds like a lot. 

It’s not. 

It’s just 3% of the world population. A barely audible hiccup. 

And it’s not hard to understand why crypto penetration remains so small.  

Politicians and bureaucrats ignorant to crypto’s real purpose—and media skeptics who are truly clueless about crypto in all its forms—continue to fill the world with so much misinformation, disinformation, and asininity that would-be crypto owners sit on the sidelines unsure of what to do. 

Though crypto has been around for more than a decade now, 3% penetration is nothing. We’re still in the early days of what crypto will become, just as that first iPhone was but a hint of what mobile technology would become. 

Back then, iPhone’s App Store offered roughly 500 apps. Today—more than 2.2 million, with billions of downloads. There’s not much we can’t do on our phones. 

The iPhone launched a rash of smartphone competitors so that, today, smartphone penetration exceeds 78% globally, meaning nearly 8 of every 10 people on the planet has a smartphone of some sort. I was in Kenya a few years ago, and people who had never in their lives seen a physical bank branch or even a landline phone were using smartphones to move money around. 

That’s technology-leaping innovation. 

Crypto is no different. 

It’s a technology-leaping innovation, despite the uneducated commentary of those who pan it and who refuse to believe that money and finance as we know it today will ever give way to electronic bits and bytes zipping through the ether. They will, over the course of this decade, look very much like that Bloomberg columnist who disregarded the iPhone as something only geeks would ever play with. 

So, remember this column when, in coming months, you see Fidelity, the giant brokerage firm, begin to offer crypto trading. 

Remember this column when you see credit card juggernaut Visa and others begin to offer back-office services that allow every Main Street Bank & Trust from Portland, Oregon to Portland, Maine to trade and store crypto for mom-and-pop bank customers who want an easy and convenient way to own and save crypto just as they save dollars. 

We are, today, on the cusp of June 29, 2007. 

Tomorrow, the crypto markets might be down—who knows? 

But not too far into the future, investors are going to look back on crypto prices in the summer of 2021 and wish they’d bought. (You can see my specific crypto recommendations in the Global Intelligence Portfolio Tracker.) 

By the way…Apple shares closed at a split-adjusted price of $4.36 on that June day 14 years ago. As I write this, a share of Apple will cost you about $145—a 30x gain for investors who saw that the iPhone was going to change the world. 

I know where the next change is coming from. And I don’t need my Way Ahead Machine to see it.