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| Hello, HODLers! Here's what's new. |
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NEW! Investor Mindset, Episode 7: Blockchain Believers can download the latest episode of our brain-boosting exercises for investors. Click to download.
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How Binance Became the World’s Biggest Crypto Exchange (WSJ): If you've invested in our Future Winners portfolio, be sure to read this history of Binance, whose BNB token is one of our top picks.
Investor takeaways: Our value-based approach is to look for the long-term leaders in each of their respective crypto markets. Binance is the largest crypto exchange in the world by far, trading $76 billion a day.
The company faces huge challenges from global regulators, but this is nothing new: Binance has shown a remarkable ability to navigate the tricky waters around crypto regulation.
Since Binance is not a public company, buying Binance Coin (BNB) is the closest thing to investing in Binance "stock."
BNB is also a crypto token, giving Binance traders lower fees and "lock-in" incentives for sticking with the platform. In our view, it's a great long-term buy. |
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BNB total revenue over the last year (courtesy Token Terminal).
Investor takeaway: Separate from Binance revenues, BNB brings in its own daily fees from users interacting with the BNB protocol (like paying gas fees to use ETH) -- currently around $5M per day. |
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Back in 2019, GameStop had been left for dead by most investors. In an age where video games were downloaded online, why would anyone still buy them in a mall? GameStop seemed destined for the same fate as Blockbuster Video. Hedge funds were "shorting" the stock: the morally questionable practice of betting that GameStop would lose. But one man still believed.
Keith Gill, a lowly marketing executive at a life insurance company who did stock trading as a side hustle, bought GME when the price was about $5 a share. Even though GameStop had been through five CEOs in about a year, Gill believed there was more value to the company than most investors thought. Gill began publishing his GameStop investing theories to YouTube under the name “Roaring Kitty,” complete with in-depth analysis of why GME stock was still a good buy. Watch this video and see if you don't want to invest in GME: |
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Plus: cats.
He shot dozens of videos. They weren't five-minute summaries like this one, but three-hour livestreams. He went deep on the GameStop business, GME stock, and the investor activity around it – particularly short sellers, which he discovered were getting increasingly risky with their gambles that GME would fail. But the match that lit the fire was his regular posts to Reddit’s r/wallstreetbets forum, where he posted screenshots of his brokerage account, under the screen name DeepF*ckingValue. It was his relentless leadership of his investment theory, combined with the proof of his skin in the game, that set the fire blazing. Reddit investors, quarantined at home during the pandemic, flush with free stimulus money, began flooding in to GME stock. It helped that there was a common enemy: Melvin Capital, one of the hedge funds that had bet heavily that GameStop would fail, aggressively shorting its stock. As retail investors began to flood into GME, the unusual story eventually drew the attention of the mainstream press. The more the stock went up, the more emboldened the Redditors became, and the more new investors piled in. Roaring Kitty started a roaring fire. The fire became an inferno.
As Bloomberg's Matt Levine put it:
"Something started the ball rolling—the stock went up for some fundamental or emotional or whatever reason—and then the stock going up forced short sellers and options market makers to buy stock, which caused it to go up more, which caused them to buy more, etc."
I'll tell you what started the ball rolling: Keith Gill. GME became not just an investment, it became a movement. When you bought GME, you now belonged to a tribe. You were buying it to get rich quick, to screw over hedge funds, and to be in on the joke, all at once. |
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| Gill posted the final screenshot of his brokerage account in February 2021. He shows 200,000 shares of GME, which at the time were worth $34.4 million. (If he held onto them, today they’d be worth even more.) Whatever you may say about Keith Gill, the Roaring Kitty, the king of DeepF*ckingValue, you have to admit he had the courage to lead. And that is how he bent reality to his will. |
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Crypto Investors? Yes, Crypto Investors. To bend reality to your will, you first need the courage to take a stand. Then you’ve got to keep taking the stand, again and again, sometimes for years. (Rule of thumb: the bigger the reality shift, the longer it will take.) We started Bitcoin Market Journal with one simple idea: there would soon be a new class of “crypto investors.” If this idea sounds logical to you today, then we successfully bent reality. Because in 2017, when we started, this was not at all obvious. Buying bitcoin was a gamble; anyone in crypto was a “speculator,” or worse. “Crypto” and “investors” were like peanut butter and sardines. They just didn’t go together.
We made a few conscious decisions. The first was that we’d put “Trusted by crypto investors” under the masthead, on every page of the website. There were millions and millions of page views, with every one reinforcing this idea. The second decision was to include a counter on every page, where we would list the number of investors who had read that article. Page counters were common in the early days of the web, but no one uses them anymore, because they don’t want you to know how much traffic they get. We said, let’s be transparent. |
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That transparency came with a benefit: it reinforced the value that other crypto investors were reading this content. It gave a sense of community. It became, in its own way, a movement. All we really wanted to do was remove the stigma from “crypto investing,” to make it legit. After all, for the industry to grow, people would have to trust bitcoin, to believe that you could use it as a long-term investment.
Today, here’s a look at search volume for “crypto investors” on Google Trends: |
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“Crypto investors”? Yes, crypto investors. To be clear, many people calling themselves “crypto investors” are still caught up in the get-rich-quick opportunity. Money still feels free and easy, which is why we see all these crazy bubbles around things like NFTs. This is not “crypto investing” the way we define it, which is finding a small number of high-quality digital assets, and holding onto them for the long term (five+ years). (You'll notice I repeat that phrase a lot, too.)
The idea of crypto investing is the one that we wanted to take hold, and it has. So we’ve now proven the formula: The Formula for Bending Reality Have the courage to lead on something you believe in; Keep leading, again and again, until it becomes reality. A note of caution: this same formula is also used by conspiracy theorists to convince uneducated folks that the Earth is flat, or there are subliminal messages in your pizza. Thus, the formula should be used with great care. It helps if we are aligned with the great human character strengths, if we are on the side of moving humanity forward. In other words, it helps if we want to help.
Successful Investors Are Leaders Now, let's apply this formula to becoming a successful crypto investor.
By definition, a successful crypto investor is also a leader. This is because to beat the market, we have to sometimes bet against the market. That requires leadership. If you never lead, if you always go with the crowd, it will be hard to achieve financial independence. Sometimes that leadership means taking a bold stand, like Roaring Kitty, and sometimes that leadership means not taking the bold stand, like sitting out the GameStop frenzy. (Full disclosure: I never bought GME -- nor have I bought DOGE, SHIB, or anything based on memes.) In our Investor Mindset MP3 series – think of them like guided meditations for investors – leadership is another of the core skills that we need to build in our brains.
This doesn’t mean we always lead -- knowing when to follow is also an important skill -- but when the opportunity calls us to lead, we take it. This week's episode will help you build leadership. Paid subscribers can get the entire series here, including our new Episode 7, which helps you build confidence in leadership: Investor Mindset, Episode 1 Investor Mindset, Episode 2 Investor Mindset, Episode 3 Investor Mindset, Episode 4 Investor Mindset, Episode 5 Investor Mindset, Episode 6 Investor Mindset, Episode 7
GameStop was a company in decline. Now it’s reinvigorated, and its stock price is soaring. The idea became reality.
The ideas in your head can also become reality. Learn how to lead, and begin to bend reality to your will.
Health, wealth, and happiness, |
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| John Hargrave Publisher Bitcoin Market Journal |
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| Yes, crypto is worth that much. |
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Bitcoin Market Journal is a daily newsletter focusing on blockchain and crypto investments. It is written and edited by Evamarie Augustine, Charles Bovaird, Mati Greenspan, and John Hargrave.
Paid subscribers get full access to our top crypto picks; both free and paid subscribers get content to build them into better investors.
Upgrade to paid, and become a Blockchain Believer! |
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