📈 Wall Street Just Got Flipped Upside Down

What’s on the Menu 🍴

This week the markets got whiplashed by the ups and downs of the bitcoin ETF approvals...

And everyone's left asking "What's next"?

So today we're giving you our outlook on the implications and potential future developments.

Let's roll!

• Wall Street Just Got Flipped Upside Down 📈

• 5 Ways Biases Destroy Your Wealth 💸

• Don’t Ignore THIS Potential Black Swan 🦢

• Bitcoin ETFs Approved! What’s Next? 📺

Today’s newsletter is a 5 minute read.

Wall Street Just Got Flipped Upside Down 🙃

Four billion dollars.

That’s approximately how much volume traded across the newly approved Bitcoin ETFs on their first trading day yesterday.

On Wednesday, all 11 Bitcoin Spot ETF applications were approved by the SEC…

But in a typical crypto style, this didn’t happen without its fair share of drama.

There’s Never a Boring Day in Crypto

On Tuesday, the official X (Twitter) accounts of the SEC and the SEC’s chair Gary Gensler announced the ETF approvals.

Champagne was popping, people were celebrating, but it only took 10 minutes to realize something was wrong.

The tweets got deleted and the SEC came out with an official statement that the accounts were hacked and that no ETFs were actually approved.

Thankfully, just 24 hours later, we finally got the REAL confirmation.

This marks a historical event in crypto. It’s a moment for early adopters to truly celebrate.

10 Years of Record-Breaking Performance

For the past 10 years, I’ve helped millions of people learn the right way to trade and invest in bitcoin.

And for the past 11 years, bitcoin has been the best performing asset on the planet!

No matter what opinions or bias someone holds about bitcoin, it’s now become irresponsible NOT to incorporate it as a part of an investment portfolio.

So what happens now?

Unsurprisingly, this week has been very volatile…

But this didn’t turn out to be a “sell on the news” event.

Bitcoin’s price held up during the first day of trading, and other crypto-assets like Ethereum popped over 10% on hopes it would get a spot ETF approval in the coming months.

Over the long-term, Spot ETFs give investors and financial advisors another way to add bitcoin to their portfolios.

It’s uncertain how price action will respond over the next few trading days, but we welcome and breakouts or dips!

The Old Guard Staying Stubborn

As of Thursday, Vanguard, Citi, Merrill, Edward Jones, and UBS were not allowing clients to trade the ETF.

Investors in Twitter have been jumping ship from Vanguard as they made a silly statement:

“Currently we aren't allowing those to be purchased as it doesn't fit with Vanguard's investment philosophy.”

On the other hand, Fidelity has embraced the ETFs with open arms.

This reminds us of the Robinhood debacle where they stopped customers from being able to purchase GME stock during its short squeeze.

In our opinion, it’s not a broker’s job to tell us which assets we can and cannot buy.

They exist simply to help facilitate transactions. Full stop!

5 Ways Biases Destroy Your Wealth 💸

1. Misconceptions: The Bitcoin Case

• Bias: Bitcoin's Drug Dealer Stigma

• Outcome: Missing Out on a Lucrative Asset

• Example: In the early 2010s, Bitcoin was often associated with illicit transactions, primarily due to its use on platforms like the Silk Road. This negative perception led many investors to dismiss Bitcoin as merely a tool for illegal activities. Consequently, these individuals missed out on what became the best performing asset of the decade. As Bitcoin gained legitimacy and surged in value, those who held onto this bias were left regretting their misjudgment.

2. Panic Selling During Market Downturns

• Bias: Herd Mentality & Fear-Driven Decisions

• Outcome: Selling Low, Buying High

• Example: The 2008 financial crisis and the 2020 pandemic market crash are prime examples. During these periods, a widespread panic ensued, and many investors sold their holdings in a frenzy, often at significant losses. This behavior is driven by a herd mentality and the fear of losing everything. The irony is that these periods often present buying opportunities – those who sold in panic typically missed out on the subsequent recoveries and rallies.

3. Confirmation Bias in Investment Choices

• Bias: Seeking Information That Supports Pre-existing Beliefs

• Outcome: Ignoring Diverse Perspectives and Potential Red Flags

• Example: An investor heavily invested in fossil fuels might ignore emerging trends in renewable energy, viewing them as insignificant or unprofitable. By only consuming information that reinforces their existing belief, they overlook the potential growth in green energy sectors, potentially missing out on significant gains.

4. Overconfidence in Personal Stock Picking Abilities

• Bias: Overestimation of One’s Investment Skills

• Outcome: Poor Portfolio Diversification and Higher Risks

• Example: A common pitfall among amateur investors is the belief that they can consistently outperform the market through individual stock picks. This overconfidence often leads to a lack of diversification, increasing the risk of substantial financial losses if a few chosen stocks underperform.

5. Anchoring on Past Performance for Future Expectations

• Bias: Relying Heavily on Historical Data

• Outcome: Misjudging Future Potential

• Example: Investors often anchor on the past performance of a stock or asset class to predict future returns. For instance, expecting real estate to always appreciate because it has historically done so can be misleading. This bias can lead to underestimating the potential of emerging markets or technologies.

Key Takeaways

Investment biases are often deeply ingrained and can significantly impact financial decisions.

By recognizing and actively countering these biases, we can make more rational, informed choices, potentially leading to better investment outcomes.

The key is to remain open-minded, flexible, and well-informed, avoiding the trap of letting emotions or misconceptions dictate investment strategies.

Don’t Ignore THIS Potential Black Swan 🦢

Earlier this week, US Republican presidential candidates verbally jousted against one another in a testy debate ahead of upcoming state primaries.

The debate got a lot of American media coverage as you’d expect.

But there’s another pivotal national election on the other side of the globe that’s received far less western media coverage.

Voters will go to the polls this very weekend to decide that election…

Where?

Taiwan.

The small democratic island will hold its presidential and parliamentary elections on Saturday, and the future of both China-Taiwan and China-US relations hangs in the balance.

Taiwan, the dominant source of critical semiconductors to the world, is also the source of huge tensions between China and the US.

Chinese leadership believes that Taiwan is a breakaway province of the mainland that should ultimately come under Chinese control.

A majority of those living in Taiwan believe that Taiwan is a distinct democracy separate from China, with its own constitution and elections.

The US is also a major ally to Taiwan, creating a rift between two global superpowers.

This weekend’s elections have the potential to create changes in Taiwan’s power structures, and potentially ignite a political powder keg globally.

Yet markets don’t seem concerned, with the volatility index near its 1-year lows:

Perhaps that’s because betting markets currently predict the most likely winner of the election will be the incumbent DPP party:

However, we have seen betting markets get national elections very wrong. Donald Trump’s surprise win in 2016 is a prime example.

Investors should keep an eye on how this election plays out, particularly if the Kuomintang (KMT) party were to surge to a surprise victory.

The KMT party would usher in much closer relations between China and Taiwan, and potentially firm up China’s influence in the region to the detriment of the US.

Here’s a summary of the three Taiwanese presidential candidates:

The incumbent DPP party has won the last two elections handily, but the presence of a third party candidate in this race throws more uncertainty into the mix.

We’re sharing a short term “risk hedge” idea with members of our Skill Incubator wealth building community on Friday, so check that out if you think it would meet your needs.

Buckle up for the first of many important national elections this year!

 Video of the Day:
Bitcoin ETFs Approved! What’s Next? 📺

After an insane week of false starts, the Bitcoin ETFs have been approved!

So while is this such a massive deal for bitcoin and the crypto ecosystem?

In this week’s episode, you’ll learn:

• What do Bitcoin Spot ETFs mean for its price?

• How will the ETFs work and are they safe?

• Why did the SEC finally approve them?

• And we answer a bunch of your questions!

Food For Thought 🧠

"If you are looking for a way to preserve shareholder
value in an inflationary environment, you can't find a
better idea than converting your treasury to Bitcoin."
- Michael Saylor

DISCLAIMER: We are not investment advisors, and this content is for educational purposes only. We don’t offer financial, legal, or tax advice. Nothing we say is a recommendation to buy or sell any assets. Trading and investing are extremely risky, so please be careful and do your own research.