Bullish: Our Bitcoin Outlook For 2018

Bullish: Our Bitcoin Outlook For 2018
By Christina Flood
Date December 7, 2017

A Triple Stampede From Retail Investors, Institutional Money, and ETFs

By Adam Sharp

2017 was a big year for cryptocurrency.

Bitcoin started the year off trading around $1,000. Then it broke through $11,000 in less than 12 months.

First Stage Investor (our investment letter) members who bought bitcoin on our initial recommendation are now up more than 190%. We’re also up nicely on Litecoin, Bitcoin Cash, and Ethereum.

It’s been an impressive run so far, but this crypto bull market is not even close to over yet.

I have not sold any of my holdings. And I recommend readers to keep on holding for the long term.


There are now more than 120 hedge funds dedicated to investing in cryptocurrency. Of those, 90-plus launched in 2017. The funds we know of so far total $2.3 billion. And billionaire Mike Novogratz just raised the biggest fund yet at $500 million (which includes a big chunk of his own money).

This is a large amount of capital that was raised very quickly. It indicates very strong interest from wealthy and professional investors.

And with recent bullish price action, I can almost guarantee there are hundreds more hedge funds on the way. It’s not often you can raise hedge fund capital this easily.

As proof, Coinbase (the largest U.S. cryptocurrency exchange) just launched a new custodian service for hedge funds and other institutional investors. Coinbase says it believes there’s $10 billion on the sidelines waiting for a trustworthy commercial storage and purchase option.

According to Bloomberg, Coinbase CEO Brian Armstrong said…

By some estimates there is $10 billion of institutional money waiting on the sidelines to invest in digital currency today. When we speak with these institutions, they tell us that the number one thing preventing them from getting started is the existence of a digital asset custodian that they can trust to store client funds securely.

Cryptocurrencies are on the rise. And I believe a large percentage of the world’s traders are destined to get involved.

Today, the vast majority of professional investors own zero cryptocurrencies. It is just coming on their radar now. And it typically takes people a while to get comfortable enough to invest. Large bureaucratic financial institutions take even longer.

In other words, I think you still have time to buy cryptocurrencies. But the window is somewhat narrow. I’d say by February 2018 the race will be on. Tens of thousands of financial institutions will be rushing to get an allocation in bitcoin. Their investors will ask, “Why don’t we own any bitcoin?”

There are only 21 million bitcoins. With approximately 33 million millionaires worldwide, that’s not even enough for a whole coin each.

Hedge funds are leading the way. Wealth managers will follow. I suspect wealthy tech billionaires are already helping to push prices up.

The money herd is coming.

But you should also be prepared for times of high volatility. Hedge funds and algorithmic traders may accelerate market moves up and down. Sharp corrections are common in all cryptocurrencies.

Short-term drops of 20% to 35% happen occasionally. Just be aware of it, and don’t let it scare you out of the market.

Retail Investor Stampede

Coinbase is one of the few cryptocurrency exchanges that publicly posts its user numbers and updates them in real time. You can find this number at Coinbase.com/about.

As of November 20, 2017, Coinbase is on track to add approximately 1.2 million users per month. This is nothing short of incredible.

The exchange currently has 13 million accounts total, and the number is still growing.

As of November 20, 2017, Coinbase is on track to add approximately 1.2 million users per month. This is nothing short of incredible.

The exchange currently has 13 million accounts total, and the number is still growing.

A recent survey of 564 bitcoin owners showed an average investment size of $3,000. That could be $3.6 billion in new money flowing in every month, just from Coinbase.

The buying pressure from this one exchange alone is incredible. And there are several more exchanges around the world as big as Coinbase, and probably a hundred small and midsized exchanges.

Plus, people who buy bitcoin tend to hold it. The same survey I mentioned earlier showed that 67% of holders had not sold any. And 20% plan to hold for at least seven years.

I strongly recommend being a longtime holder, of course. Don’t cash out too early on this one. If you do, keep at least some of your bitcoin for the future.

Bitcoin ETFs in 2018?

The U.S. Securities and Exchange Commission has denied all proposed bitcoin ETFs (exchange-traded funds) so far. One of the primary reasons the SEC cited is that bitcoin lacks a futures market.

On December 11, 2017, the CME Group’s bitcoin futures market goes live. When it does, one of the SEC’s primary objections will disappear, which will (hopefully) clear the way for bitcoin ETFs.

In fact, Bloomberg just ran an article headlined, “Bitcoin ETFs Are the Next Step After Futures.”

I believe the launch of ETFs would be gigantic for bitcoin.

Imagine if every investor could simply buy bitcoin like a stock in their retirement account.

The increase in demand would be tremendous. One of the top objections people have to buying bitcoin is that they can’t do it in their “regular accounts.”

With the retail and institutional stampedes already underway, we don’t need ETFs to drive bitcoin higher.

But if it happens? Pouring gasoline on lava is a workable metaphor, though even that may not do it justice.

I believe an ETF backed by real bitcoins could easily reach a $50 billion market cap (bigger in time), locking up a big chunk of liquidity from the bitcoin markets and driving prices far higher.

Faster, Cheaper Transactions

Bitcoin is often criticized for having high transaction fees and slow performance. That’s starting to change with the use of new SegWit software (a recent scaling upgrade the industry is still adopting).

But soon we should have two major upgrades to the bitcoin network.

The first is the Lightning Network. This is a scaling solution that should enable extremely fast and cheap bitcoin transactions. This network will allow parties to transact in bitcoin off the blockchain, which is typically the bottleneck that slows things down.

The Lightning Network’s developers claim that their solution will enable bitcoin to scale to millions of transactions per second (from the current seven transactions per second).

The Lightning Network will also enable so-called “atomic swaps.” This will allow users to swap cryptocurrencies directly from their wallets. So bitcoin will be easily exchangeable with Litecoin and other digital currencies, all from within a user’s wallet.

The second big upgrade that’s coming is Schnorr signatures. These will change the way that bitcoin signatures are written, making them far more efficient.

Schnorr will open the door for a dramatically faster bitcoin network. It will also improve current security methods.

Since bitcoin is open-source and free to use, other cryptocurrencies also stand to benefit from these technical upgrades.


With major technical upgrades arriving, on top of all the buying pressure we expect in 2018, the cryptocurrency world should have a very bright year in 2018 and beyond.

While bitcoin is likely to grab all the attention in the first half of the year, alternative cryptocurrencies should rise as well.

The flood of new bitcoin owners will eventually get curious about altcoins and shift some of their profits into smaller coins.

It’s a win-win for cryptocurrency owners.

Buckle up and get ready for another exciting year.

Today’s Biggest Profit Opportunity

I’ve been a crypto trader for years. And what’s going on right now in digital currencies is absolutely crazy.

I bought into Ethereum at less than $10… before it jumped to $355.

I got in on Antshares at $1.50. Then it jumped to $10.71.

And I obtained 27,000 coins in another digital currency for just $0.185 apiece.

Those coins trade at more than $4 each.

It’s not to brag about my personal winnings, but rather… because this has got to be one of the most exciting and unusual profit opportunities in the history of the markets.

I have put together a free presentation detailing this whole opportunity, and three digital currencies that I believe are the next to ignite.

You can watch it free of charge here.

Good Investing,
Adam Sharp