| | | The next 100 million crypto investors. |
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| Health, Wealth, and Happiness |
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| "You have powers you never dreamed of. You can do things you never thought you could do. There are no limitations in what you can do except the limitations of your own mind." - Darwin P. Kingsley |
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| New Investor Scorecard: Ripple (XRP) |
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Longtime readers will remember that Ripple (XRP) was part of our first Blockchain Believers Portfolio. We removed it when the SEC brought legal action against it.
What do we think of XRP now? Our new XRP Investor Scorecard reveals the answer. |
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Our analysts put Ripple through our rigorous, peer-reviewed evaluation process to give it a fresh investment rating for 2022.
Premium members can download the complete scorecard here and get instant access to our complete library of investor research.
Not yet a Premium member?Click here to sign up and get access to our Premium section, members-only workshops, investor alerts, and more. |
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| | | Must Read Today’s most important story for crypto investors. |
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Is the Merge Priced In? (Bankless): A deep dive analysis of the upcoming upgrade to Ethereum and whether the market is correctly pricing ETH today (the article is long, but there's also a video podcast version).
Investor takeaways: It's clearly written by an ETH investor, so take their enthusiasm with a grain of salt. However, there are some good predictions:
1) The new ETH may generate "real yield" (as opposed to the "inflated yield" we wrote about a few days ago) of up to 5%.
2) The Merge has been plagued by FUD primarily because it's been delayed so many times. As the date gets closer, FUD will turn to FOMO, driving the price up.
3) Because of this monumental upgrade, Ethereum may prove to be a better long-term investment than bitcoin and even surpass it in market cap.
4) Liquid staking protocols (like LDO) may be the real beneficiaries, as they are bringing staking services to the masses.
If you agree the Merge is a game-changer, it's likely less than a month away. You can purchase Ethereum here or here. |
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| | | Money Grows on Trees by John Hargrave |
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| I spent this week planting trees. Last weekend was Tax-Free Weekend™ in Massachusetts, which is designed to stimulate the economy. My wife and I stimulated it by buying some trees. We went to our local nursery, where we were delighted to find they had a markdown section since we’re approaching the end of the growing season (you know I love a bargain). This was not a Home Depot; this was a classy joint, with specimen trees that had been marked down 75%. They were still healthy and beautiful, so we scooped up those saplings and sowed them in the soil. Planting a tree (planting anything, really) is extremely satisfying. It’s work, of course. You’ve got to dig the hole, mix in your fertilizer, soak the root ball with water, fill it in, then water, water, water. But you have the sense you're doing something positive and long-lasting. You are starting (or continuing) some natural process that will endure, and when you’re planting trees, they will likely endure longer than you will. This is the mental attitude we must have as investors: we’re planting trees. |
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| How to Grow Money Trees Growing up, my parents always told me money doesn’t grow on trees (it would if we used leaves as currency, but we’d have serious inflation every spring). But money, in a sense, does grow on trees. You’ve got to carefully plant your investments – whether that’s an investment in yourself like education, or monthly investing into bitcoin – then water, water, water (there’s a reason we call it steady-drip investing). This is not the way most investors get into crypto. They’re looking for the Magic Internet Money that will give them short-term pleasure and status: the Lambo, the yacht, the $12 million Bored Ape. It’s hard to get our brains to care about the long term because they are short-term pleasure machines. Our brains evolved about 200,000 years ago and they haven’t changed much. Back then, life was brutish and short. Your primary tasks were to “eat and mate;” get food and get busy. These are short-term goals, and they formed our short-term brains. The good news is we can retrain our brains. In “Short Term Thinking Is a Long-Term Problem,” Stelian Nenkov shows how short-term thinking is counterproductive to long-term investing. He uses an example from Nassim Nicholas Taleb’s book Fooled by Randomness and shows that even a high-performing investment will look worse and worse the more you check it. |
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| Crypto investors are surely familiar with this phenomenon. The endless refreshing of the bitcoin price feed quickly becomes a sea of noise as our brains can’t make any sense of short-term price movements. It’s only in hindsight that we can see how we've done. The article goes on to quote legendary investors like Warren Buffett, Jamie Dimon, and BlackRock’s Larry Fink, who have all suggested ways to get investors out of short-term myopia (read Buffett and Dimon’s opinion piece in the Wall Street Journal). If these financial titans are locked in for the long term, let’s follow their leads. |
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Think long term. Warren Buffett didn't get insanely rich until late in life.
That’s why our approach is to create set-it-and-forget-it investments. You plant once and they’re watered automatically with monthly contributions from your bank account. Most short-term, get-rich-quick schemes fail (even if they succeed, you think, “Hey, this is easy” and fail hard the next time). Most long-term investing approaches, on the other hand, succeed. They're like trees. With the right selection and the right care, most trees take root, grow, and thrive. They’re pretty hardy. Check out this bad boy below, for example:
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Types of Money Trees Investing in yourself. The best investment you can make is in yourself: going back to school, getting professional certifications, even watching YouTube to learn new skills. These add to your market value, which adds to your earning potential. Retirement plans. If your employer offers a 401k plan, use it. If they match your contributions, take it (free money). If you’re self-employed or a gig worker, get a self-employed 401k. No excuses. College savings plans. If you have kids, start a 529 plan which lets you set up tax-deferred monthly contributions (as parents of college-aged kids, we are so glad we started saving when they were born). Bonus: you’ll be more likely to send them to college. Starting a business. It’s not for everyone, but your own business – even a side hustle – can be a tree that produces long-term financial fruits. Before you make the leap, be sure you have enough saved to get through tough times (your odds will be improved by going to business school first). Blockchain Believers Portfolio. Of course, you can also use our method of crypto investing to build wealth over the long term. It’s a diversified approach that, unlike the other crypto "plans" out there, balances risk and reward. Planting on Two Levels Planting financial trees is important, but planting mental trees is even more important. The reason I spend so much time writing about the mental level is because you can’t build long-term wealth without it. Like lottery winners or young sports stars who blow their winnings in a year, you’ve got to have the right mindset: the tree-planting mindset. We've covered a number of specific techniques for developing the right mental mindset:
Repeating helpful thought loops. See last week’s newsletter on Émile Coué’s affirmation that hypnotized the western world.
Writing down who you want to become. See our column on Ruby Payne’s wealth worksheet to jump social classes.
Reading about other great investors or entrepreneurs. Our Read and Grow Rich reading list is a great place to start.
Taking a financial planning or investing course. A good course, taught by a reputable financial advisor, can change your thinking and your life.
Staying subscribed to our newsletter. Note each newsletter has a new “seed thought” to grow your mind. This week, plant some trees and keep them well-watered. Whenever you need some inspiration, just think about this guy. |
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Health, wealth, and happiness,
John Hargrave Publisher Bitcoin Market Journal |
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| | | ICYMI In Case You Missed It |
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Bitcoin Market Journal is a daily newsletter that makes you a better crypto investor. It is created by John Hargrave, Nick Marinoff, Steve Walters, Anatol Antonovici, Daniel Joel, Preetam Kaushik, and Stephen Robert.
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