Dear Student,

Over the past week, we’ve been talking about Bitcoin’s (BTC) seemingly unstoppable post-election rally as well as the rest of the crypto market.

In case you missed anything, here’s what we covered:

1. The 3 ways options traders can profit from bitcoin’s historic rise

2. Why you need to pay attention to Ethereum’s “silent” rally

3. Everything you need to know about bitcoin’s explosion

4. My full analysis of the post-election market rally – one week later

And today, I want to spend some time going through the several crypto questions I’ve received from the Patterns & Profits family. After all, it’s important to know the best crypto strategies to use right now… But it’s even more important to understand the basics of crypto before putting your money down on a trade.

Here we go…

Q: How can I keep my cryptocurrencies safe?

There are a lot of ways to store your coins safely – especially compared to the early days of crypto back in 2018. Here are a few:

• Hardware wallets – physical devices, like Ledger or Trezor, and are the most secure

• Software wallets – apps, like Trust Wallet or MetaMask

• Cold storage – offline storage for long-term safety

Whichever one you choose, I recommend enabling the two-factor authentication – and NEVER share your private keys.

Q: I’m new to crypto (largely wrote it off until now) and live in Canada. Can I still trade?

Yes, you can. Crypto trading is legal in the U.S., the E.U. (European Union), Canada, and Japan. It’s restricted in India and South Africa, so any residents there will need to check regulations before opening an account. And it’s banned outright in China, Algeria, and Bangladesh.

Q: What are your favorite cryptocurrencies to trade aside from Bitcoin?

Great question! And I’m not going to give you a full answer… yet. I’m actually putting together an updated watchlist of my top coins to follow post-election, which we’ll get into soon. But one of the coins on my list is the one we discussed on Wednesday – Ethereum (ETH).

ETH is the second-largest coin in the crypto market, now representing just 14% of the market. Launched in 2015, ETH is more like a “digital infrastructure” rather than digital money. It introduced the concept of a programmable blockchain, allowing developers to build decentralized applications (dApps) and smart contracts (self-executing contracts that run automatically when specified conditions are met).

And for how bullish and great BTC has been so far this year, ETH has been on an impressive – and important – run itself.

In the short term, whether ETH is underperforming or outperforming BTC tells us the state of how many other altcoins are performing. Simply put, altcoins are smaller, alternate digital currencies, with many of them based on Ethereum’s network. Dogecoin (DOGE) is an example and is one of the few major proof-of-work coins besides Bitcoin that recently saw a 20% price jump.

Q: I keep hearing the term “smart contract.” What is that and how does it work?

In very basic terms, a smart contract is a crypto version of a simple purchase agreement between a buyer and a seller – a much more modern version.

For example, say you’re a big industrial company like Hitachi, Ltd. (HTHIY)…

One of the things Hitachi is famous for is heavy equipment… like huge excavators used in mines.

And if you’re going to manufacture these excavators quickly and efficiently… you need the right parts at the right time. So, if one supplier provides the bolts for the excavator, Hitachi can pay them directly with a smart contract. If another supplier provides the steel for the excavator, Hitachi can pay them directly with a smart contract.

And here’s the key…. they can buy all these parts without a middleman. In other words, they skip right over the crazy expensive distributors… and go right to the source. That means Hitachi gets the goods right when they need them – saving billions of dollars.

With digital smart contracts, the contract and the enforcement are all built on the crypto token (specifically blockchain). 

Q: What is blockchain?

The blockchain is the advanced technology built into and powers cryptocurrencies. It acts as a decentralized ledger – like a perfect book-keeper – that can record everything to a “T.” The record can never be altered, erased or compromised, which means that corporations can track their purchase agreements without human error – and a heck of a lot faster!

So, in terms of smart contracts, whatever is written in that contract sticks like glue – automatically. That’s why many cryptocurrencies, specifically altcoins, would never exist in so many industries without them.

These were excellent questions! Remember… you message me at any time right here. So, don’t be a stranger.

And one last thing before you go…

I’ve got a new episode of the Patterns & Profits Podcast queued up and ready to go. And today, I’m going to dive into: 

1. The election’s impact on the stock market and Bitcoin’s meteoric rise.

2. What the last 25 years of political and financial patterns reveal about future trends.

3. Bitcoin’s potential new role in shaping government policy.

4. How politics influence market behavior.

5. The real force behind Bitcoin’s $70,000 to $93,000 boom – and what’s next.

Click on the video below to watch now.

Have a great weekend!

Tom Gentile
America’s Pattern Trader