Investing

If You Made Money in the Trump-Powered Bitcoin Rally, Be Careful

Austin Smith

Published: November 19, 2024 9:40 am

Key Points:

• Given its recent dramatic and rapid ascent to $100,000, investors want to understand what’s happening with Bitcoin.
• Support from former and future President Trump, as well as acceptance of retail ETFs by the Securities and Exchange Commission, have clearly driven some demand.
• Investor enthusiasm is skyrocketing along with the price, creating a frenzy.
• Also: Are you ahead, or behind on retirement? Take this quiz to see for yourself (sponsored)

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Transcript:

[00:00:00] Doug: Okay, I don’t understand the Bitcoin rally. I mean, people have given me explanations for it, but for an asset to rise this fast, this far, I don’t know what it is. I mean, maybe it’s Nvidia, but there’s nothing, what else is there that goes up at this rate? So it’s a simple question, why?

[00:00:23] Lee: Well, needless to say, President Trump, through a lot of his, support behind the crypto markets.

[00:00:35] Lee: And I think that was big. But the biggest thing and again, it’s closing in on 100, 000 per bit. just astonishing. And a l least from what I’ve read a hard time understanding to be candid with everybody. But one thing I have read is that all of these..

[00:00:56] Lee: When the Securities and Exchange Commission, allowed all of these retail ETFs, the money goes poured in, and I mean poured in. And that just, when that money comes in, it inflates the price of the underlying asset, and I would think that’s a big reason, but closing in 100, 000. for bitcoin.

[00:01:18] Lee: And again, that’s a part of it, you out supply to my, at leas that could be part of it. it’s almost a mania now because this time, a year ago, 14 months ago, it was 25, 000, 20, 000. And, people were saying, Oh, it’s over, it’s doomed. And of course the crypto heads were like, no, it’s not. And they probably, pushed in their whole stack on the table. And it’ll be interesting to see. How much more the retail investor getting gets involved and that’s the thing that always makes me see It’s going to be here, cryptocurrency and digital currencies here for good that I do know But what I don’t understand is it truly a tulip sort of?

[00:02:10] Lee: Dot com mania because when all the retail money comes in. Oh that sometimes is kind of a kind of a tipping point for, an asset that could be a little bit overvalued.

[00:02:24] Doug: Well, I’m gonna give you some advice, . Okay. if, you were in bit, if you were in Bitcoin as you say, 12, 14 months ago, and you had a run like this, I would take some money off the table.

[00:02:38] Doug: Oh, absolutely. Sit around and think it’s gonna double, triple, quadruple again. Maybe it does. I would be, I would take 50 percent of my money off the table instead of assuming this is going to continue to go up like a rocket. It’s, not

[00:02:54] Lee: Years ago when I first got into the business, I was literally a retail stockbroker in a small firm that doesn’t exist anymore. Like, like many small firms, it just got bought out by somebody else. But I’d been in the business a year or so, and I was busy cold calling people in 1991 and 92, and one of the older, more experienced brokers, who was probably my age now, was in there, and I walked up to see him, and I said, hey, Jim, what are you doing here?

[00:03:20] Lee: And he goes, I’m just between vacations. Why? What are you doing here? And I said, well, I’m trying to call people. And I said, if you had one salient issue, Piece of advice to give me that I can use my entire career as a stockbroker. And I became an institutional sales guy. What would that advice be? And he said, what you just said, he said, sell half and keep half.

[00:03:44] Lee: He goes, if you sell half and keep half, if it goes higher, you’re a genius because you still have half. If it goes lower, you’re a genius because you sold half.

[00:03:52] Doug: Yeah, it’s very true.

[00:03:54] Lee: Yeah. So I think, your advice is prudent. I’d be careful now at these levels, especially if you don’t own any, if you’re trying to stick your toe in the water, be careful.

[00:04:04] Lee: Yeah.