Last week, one of the world’s largest investment firms made a bold prediction.
It predicted that Bitcoin could soon soar by nearly 1,000%.
But how realistic is this forecast?
And is an investment in it today worth the risk?
Those are the questions I’ll dive into today.
The investment firm that’s behind this prediction might surprise you.
You see, not only is it one of the oldest asset managers in the world, but historically, it’s also been one of the most conservative.
The firm I’m referring to is Fidelity Investments.
Fidelity was founded in 1946. It currently has over $3 trillion in assets under management, most of which are in traditional investments like stocks and bonds.
But last week, the firm published an in-depth report on the crypto-currency market. And in this report, it confidently forecasted that Bitcoin could soar to record highs:
More specifically, it predicted that Bitcoin’s market cap could rise to over $2 trillion.
Based on its value today, that means investors like you could potentially earn profits of about 1,000%.
But before you get too excited, let’s take a look at the reasoning behind Fidelity’s forecast…
Disrupting Multiple Trillion-Dollar Markets
According to Fidelity, Bitcoin has reached the point where we can’t simply view it as a “weird” experiment anymore.
It’s currently valued at more than $200 billion, and it’s being used by millions of investors and consumers around the world.
But that’s just the tip of the iceberg…
Now that Bitcoin has “gone mainstream,” Fidelity predicts it’ll begin to take market share away from other investments — which could have an explosive impact on Bitcoin’s price.
For example, Fidelity says if Bitcoin captures just 5% of the $13 trillion market for Alternative Investments, it could add close to $670 billion to its market cap…
And if it captures 10%, Bitcoin’s value could rise by over $1.3 trillion.
On top of that, given today’s historically low interest rates in the bond market, Fidelity predicts Bitcoin could capture a piece of that market as well.
The bond market is the largest asset class in the world. It’s worth over $100 trillion. So if Bitcoin captures just 0.5% of it, that would add an extra $500 billion to its market cap.
Add it all up — and now you can see why Fidelity believes Bitcoin’s market cap could soon reach $2 trillion.
But here’s the thing…
Is the Juice Worth the Squeeze?
While a 1,000% return would be a homerun for any investor…
We still have to ask ourselves: are there easier and less risky ways to earn the same (or better) returns by investing elsewhere?
Remember, Bitcoin is the “blue-chip stock” of the crypto markets. It’s large, mature, and relatively stable — all good things, to be sure.
But these characteristics also mean that Bitcoin tends to rise less dramatically, and less quickly, than smaller cryptos.
For instance, a couple of weeks ago, I wrote an article for you about the emerging market for “Decentralized Finance”…
And I introduced you to a number of “small cap” cryptos that have exploded over the past several months. For example:
- During the first seven months of 2020, a crypto called ChainLink (LINK) shot up by 979%.
- With Yearn Finance (YFI), investors could have earned 2,422% year-to-date.
- And Aave (LEND) has soared by 3,403% this year!
Big Profits, Fast!
Those returns are even bigger than the 1,000% gain Fidelity is predicting with Bitcoin, and they delivered their profits quickly.
But because such cryptos tend to focus on smaller and less proven markets, they also come with more risk.
Which is why we advocate, as always, that investors build a portfolio of investments like this.
Such a portfolio would contain blue-chip cryptos like Bitcoin, as well as higher risk cryptos with more near-term upside potential.
This way, even if Bitcoin doesn’t shoot up by 1,000%, your overall crypto portfolio could still return 10x your money.
Where Will You Find Your Gains?
So now let me ask you something:
Do you think you’ll invest in Bitcoin, which might eventually go to $2 trillion?
Do you think you’ll be looking for 1,000% gains in smaller crypto currencies?
Or will you build a portfolio of cryptos — or not invest in them at all?
Reply to this email and let us know your opinion!