Transformative technologies have their skeptics.
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It’s not because they’re stupid. It’s more because they can’t see past what they already know.
In 1903, George Peck advised Henry Ford’s lawyer not to invest in the automobile. “The horse is here to stay,” he said, “but the automobile is only a novelty — a fad.”
Or how about J.P. Morgan’s father. Morgan correctly saw electricity as something that would revolutionize the world, but Junius Morgan, his father, believed it was just a fad.
And more recently, Microsoft (NASDAQ:MSFT) CEO Steve Ballmer famously said, “There’s no chance that the iPhone is going to get any significant market share.”
I’m not trying to pick on these folks. I want to illustrate that breakthrough technologies inevitably have critics whose vision is limited by what they know … not by what’s possible.
Fortunately for J.P. Morgan, he followed his instincts and not his father’s. Morgan hired Thomas Edison to wire his home and continue his research, and he invested in Edison General Electric Company, which turned into General Electric (NYSE:GE).
We’ve seen this movie before, including more recently with another breakthrough technology that’s on the cusp of changing the world …
Just five years ago in 2015, the International Business Times predicted that “bitcoin is dying.”
The price of one bitcoin was $217.
One year later, in 2016, The Washington Post said, “Rest in peace, bitcoin.”
Bitcoin’s price was $382.
Look what’s happened since 2015:
Today … one bitcoin is worth more than $18,000!
But the skeptics had trouble embracing the new blockchain-enabled technology and related cryptocurrencies, called altcoins.
In 2017, Jamie Dimon, chairman and CEO of Wall Street banking powerhouse JPMorgan Chase (NYSE:JPM), called bitcoin a “fraud” and “worse than tulip bulbs.”
Months later, after Jamie Dimon’s comments, JPMorgan Chase launched its own cryptocurrency.
And now … the smart money is catching on.
Seventy-five of the world’s biggest banks now use blockchain. This includes billion-dollar investment banks like UBS Group (NYSE:UBS), Barclays (NYSE:BCS), Goldman Sachs (NYSE:GS), and Credit Suisse (NYSE:CS).
It also includes firms like Wells Fargo (NYSE:WFC), Morgan Stanley (NYSE:MS), and Bank of America (NYSE:BAC).
With blockchain, sending money around the world will take seconds and cost mere pennies. Buying a home will take days, not weeks — and the transaction will cost a small percentage of what it does today.
The entire financial system is transitioning to the blockchain.
Take Nasdaq (NASDAQ:NDAQ), for example, the first computer-based stock exchange and currently the second-largest stock exchange in the world. It has been testing new blockchain technologies over the past five years.
The New York Stock Exchange and the Australian Stock Exchange are adopting blockchain technology, too.
The Singapore Exchange just released its first “digital” bond that lives on the blockchain. And you can also invest in bonds on the blockchain in Europe and Thailand.
Consider how not only the world’s biggest banks and stock exchanges are getting involved in this space, but also consumer finance companies like American Express (NYSE:AXP), Visa (NYSE:V), and Mastercard (NYSE:MA).
And that’s not even including huge tech firms like Amazon (NASDAQ:AMZN), Facebook (NASDAQ:FB), Google (NASDAQ:GOOGL), Microsoft, and more.
All these businesses are piling into DeFi — short for “decentralized finance” — or blockchain projects.
DeFi is a global movement toward an open financial system. I’m talking savings, loans, insurance, trading, betting, and more … all accessible in one place to anyone with an internet connection.
The key takeaway is this: People doubted bitcoin for years, which kept the price relatively low. But then Wall Street rushed to get in, and it made bitcoin’s price soar.
This same exact process is about to play out again.
Blockchain technology is the software of the Roaring 2020s. The best way to build wealth from this huge trend is through altcoins, which are the younger, smaller cousins of bitcoin with more upside potential.
It blows my mind to think about what’s coming — and the transformation is already underway. Blockchain and cryptocurrencies are being used in more and more places all the time, and this massive disruption creates a once-in-a-lifetime financial opportunity for smart investors who act today.
On the date of publication, Matthew McCall did not have (either directly or indirectly) any positions in the securities mentioned in this article.
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