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Where to invest when the stock market is overheated

As an alternative to the stock market, I choose cryptocurrencies.

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I am not a crypto enthusiast, because the capitalization of any cryptocurrency is nothing but market trust. Unlike stocks, it is not backed by real goods and services.



On the other hand, bitcoin has been with us globally since 2014, i.e. for 8 years. During this time, he is constantly "buried", but each time he comes to life like a phoenix, and renews its peak value.

 

Peak value of Bitcoin by years:

2014

953 USD

2015

465 USD

2016

975 USD

2017

19 497 USD

2018

17 527 USD

2019

13 016 USD

2020

29 001 USD

2021

64 662 USD

 

In July 2021, the value of bitcoin was $ 31,686 - twice lower than the peak value this year. In addition, unlike stocks that are indivisible, you can buy 0.0032 BTC for $ 100.

 

In addition to bitcoin, there are many other altcoins that can grow several times higher. However, their growth is still associated with bitcoin. If the BTC falls, all other cryptocurrencies also fall in 99.9% of cases.

 

Why is it time to invest in cryptocurrencies

Whenever bitcoin updates its peak value, it collapses. This is due to the fact that there are many who want to record their own income.

 

But in addition to another collapse, there is another important factor: China has banned cryptocurrency mining at the state level to prevent an energy crisis. After all, 70% of mining activity took place in China.

 

Almost every day there is negative news that correlates with the fall of the course. This means that the crypto market is now in a bearish trend.

 

According to Warren Buffett: "Buy when everyone sells, sell when everyone buys."

 

How to buy cryptocurrency

There are many different cryptocurrencies. Personally, I choose Binance, which has numerous advantages:

 

  • the largest stock exchange in the world;
  • convenient ways of depositing/withdrawing funds (including hryvnia);
  • large selection of cryptocurrencies for buying/selling;
  • support for all languages.

 

How I buy cryptocurrency

  1. Once a month I visit bestchange.com. Here you can buy or sell bitcoin without any documents and within a few minutes!
  2. I choose the top 25 cryptocurrencies by capitalization (excluding stablecoins).
  3. I buy the top 1-3 cryptocurrencies with a coefficient of 5.
  4. I buy the top 4-10 cryptocurrencies with a coefficient of 3.
  5. I buy the top 11−25 cryptocurrencies with a coefficient of 1.

 

Stablecoins are low-volatility cryptocurrencies pegged to the US dollar. They are needed to convert the dollar into a blockchain: for further conversion into any cryptocurrency.

For example, when buying cryptocurrency for $ 1 thousand 1, the coefficient is equal to $ 19.60 (1000/51).

 

The first three cryptocurrencies by capitalization: Bitcoin, Ethereum and Binance Coin. I buy each of them for $ 98 (19.60 × 5).

 

In accordance:

  • Top 4-10 - $ 58.80 (19.60 × 3) for each of them.
  • Top 11-25 - $ 19.60 each.

 

So easy? And what about the analytics of each cryptocurrency?

 

Behind each of them is exclusively marketing. Therefore, the capitalization of cryptocurrency is enough to understand its liquidity. Also, these are not stocks where I can do a fundamental analysis of a particular company based on quarterly SEC reports.

What does my own investment portfolio look like?

  • 85% - on the dollar account of the broker.
  • 15% - cryptocurrencies.

After the stock market collapses (minus 30-40% of current S&P 500 values), my portfolio will look like this:

 

  • 50% - shares;
  • 35% - ETFs;
  • 15% - cryptocurrencies.

 

I realize that 15% of cryptocurrencies can depreciate completely. And he is ready to take risks, because in the long run this asset can bring three or even four times the income.

 

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