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I've been doing the Christmas party rounds over the past few weeks, and at every single one I've had this same conversation.
Someone asks me about Bitcoin.
I explain what it is… how it works… why it's run up 1,500% this year alone… the works.
Then I brag a little.
As the crowd of "Bitcoin curious" gathers, I tell them how I began talking with my Nova-X Report members about how big Bitcoin was going to become way back in early 2013. At the time, the encrypted digital currency was trading for roughly $100. By the end of the year, the price had topped $1,200 – for a 1,100% gain in just a few months.
As I write this Wednesday morning, Bitcoin stands at around 170 times what I recommended it at, meaning those followers of mine have stacked up gains of around 16,900%.
I tell them they'd be hard pressed to find a bigger Bitcoin bull than me. And I tell them to use their best judgment to take some profits – but to hold onto a good chunk of their Bitcoin. (I'll tell you why in an upcoming report here.)
Then I tell them not to buy any more – at least not right now.
Here's the thing. At least two Wall Street outfits are setting up Bitcoin futures markets.
And that means hedge funds, short sellers, and other assorted bad actors are getting unleashed on the Bitcoin market.
Plus, Bitcoin owners have seen the value of their holdings swing by $1,000 or more over the last few weeks. I don't want any rookie investors walking into that kind of volatility.
However, as we enter 2018, there's another digital currency out there that offers investors much less volatility and much more upside.
With everyone from your broker and golf partner to your barber and dentist talking about Bitcoin, you may have completely missed the fact that this crytpo coin has tripled Bitcoin's gains so far this year.
It costs a lot less than Bitcoin.
Thanks to its high-level security protocols, it has far more utility to investors, banks, and tech companies.
And it's set up to continue delivering huge profits in 2018.
Check it out…
I still remember, back in June 2013, taping a special report recommending what was then a brand-new form of money.
For that special report, I spoke with a number of leaders and CEOs in the Bitcoin sector. At the time, Bitcoin was trading at $90.
That was a great time to invest.
In 2017, the price went from $1,073 to a peak of roughly $17,825 for a one-year profit of 1,561% – so about a year ago was also a prime opportunity.
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But I'm telling retail investors to not buy new Bitcoin at this moment. That's because the crooks on Wall Street are, virtually as I type this, getting into Bitcoin in a big way.
On Dec. 10, trading in U.S. Bitcoin futures began on an exchange run by CBOE Global Markets Inc. Rival CME Group Inc. just brought its futures product to market, and I expect other players to do so as well.
This is a big vote of confidence for Bitcoin and cryptocurrencies in general. But it also means some very rich, very cutthroat people can start shorting Bitcoin and really moving its price in whatever direction they want.
Fact is, the big-money traders on Wall Street have the most advanced tools money can buy – artificial intelligence, Big Data, supercomputers, you name it. With that kind of technology, they can make money on every single tick up or down. Meanwhile, rookie Bitcoin investors won't have time to respond to the chaos they're creating.
I can practically guarantee that, after such a massive run in 2017, dedicated, professional short sellers are entering the Bitcoin market and trying to drive the price down. They'll make money on the decline and on the rebound.
New Bitcoin buyers will be left holding the bag.
I know what many of you are thinking…
Futures trading has existed on the stock market for decades, and you're doing alright there. But this is new – and so I believe all kinds of "mistakes," like a sudden flash crash, are likely in the first few months of Bitcoin futures trading.
That said, I'm not suggesting you cover your head and hunker down.
If you're a longtime Bitcoin investor, you're still going to see huge gains from here. John McAfee, for one, thinks it's headed toward $1 million.
It's just that now – as we head into 2018 – is not the moment to start making new Bitcoin buys.
However, 2018 is the time to invest in one of Bitcoin's top rivals.
About the Author
Michael A. Robinson is a 35-year Silicon Valley veteran and one of the top technology financial analysts working today. He regularly delivers winning trade recommendations to the Members of his monthly tech investing newsletter, Nova-X Report, and small-cap tech service, Radical Technology Profits. In the past two years alone, his subscribers have seen over 100 double- and triple-digit gains from his recommendations.
As a consultant, senior adviser, and board member for Silicon Valley venture capital firms, Michael enjoys privileged access to pioneering CEOs and high-profile industry insiders. In fact, he was one of five people involved in early meetings for the $160 billion "cloud" computing phenomenon. And he was there as Lee Iacocca and Roger Smith, the CEOs of Chrysler and GM, led the robotics revolution that saved the U.S. automotive industry.
In addition to being a regular guest and panelist on CNBC and Fox Business Network, Michael is also a Pulitzer Prize-nominated writer and reporter. His first book, "Overdrawn: The Bailout of American Savings" warned people about the coming financial collapse - years before "bailout" became a household word.
You can follow Michael's tech insight and product updates for free with his Strategic Tech Investor newsletter.