Editor’s Note: The past week has been nothing short of chaotic. A Chinese company, DeepSeek, claims its AI model surpasses ChatGPT while using significantly fewer resources. Concurrently, President Trump announced a one-month delay on tariffs affecting Canada and Mexico.
If you’re feeling lost in this uproar, you’re not alone. During uncertain times, many investors turn to a unique asset class: cryptocurrency. Although I don’t personally trade crypto, I recognize its appeal in turbulent markets. My colleague, Luke Lango, is hosting The Great American Crypto Project event to discuss effective crypto trading strategies amid chaos. Click here to reserve your spot automatically.
In this article, Luke shares three historical instances over the past 20 years where cryptocurrency thrived despite market chaos. Now, let’s hear from Luke…
**********************
With markets shaky due to trade wars, AI advancements, and geopolitical issues, one asset has repeatedly transformed chaos into substantial profits.
This past week illustrates the volatility present in the markets… and the crucial role of that particular asset.
On Monday, Trump introduced sweeping tariffs against our largest trading partners—Canada, Mexico, and China—igniting fears of a global trade war, which were somewhat mitigated only by a last-minute agreement.
Before that, a new AI model from China, known as DeepSeek-R1, prompted a massive sell-off in the tech sector, marking the worst day for AI stocks since the surge in their popularity began.
Although the market has rebounded from these dips, there’s a consensus that conditions may worsen before they improve.
Additionally, there’s a looming fragility in the Middle East that could lead to increased volatility in oil and gas prices, coupled with recent changes in the European Union’s energy policies aimed at reducing reliance on Russian gas through renewable sources.
Unquestionably, the world is feeling disordered right now… and many investors are gravitating towards gold.
However, it is not always the top-performing asset during periods of turmoil. Surprisingly, cryptocurrencies tend to outperform when the world is unstable.
But it’s important to approach crypto trading with caution, as these assets are among the most volatile during times of upheaval.
In this discussion, I will highlight three significant historical events where cryptocurrency prices surged amid global chaos.
Let’s begin our retrospective with the years 2020-2021…
Historical Context: Crypto Markets Amid Chaos
Remind yourself of the following:
- A global pandemic prompted widespread shutdowns of businesses and schools.
- Joe Biden and Donald Trump engaged in a fiercely contested presidential election.
- The streets of America echoed with protests and unrest.
Despite this turmoil, Bitcoin (BTC/USD) thrived. In fact, Bitcoin rose by 40% in 2021, while around 70 alternative cryptocurrencies surged by over 1,000%!
Now let’s travel back to 2016.
That year also had its fair share of global instability:
- Trump’s unexpected rise in American politics culminated in his election.
- Impeachments rocked Brazil and South Korea.
- A coup attempt against President Erdoğan in Turkey failed.
- North Korea conducted nuclear tests.
- The United Kingdom voted for Brexit.
Surprisingly, amidst this turmoil, Bitcoin soared nearly 1,000% in 2017!
Finally, let’s consider 2012.
Like today, it was a period of heightened tensions in the Middle East. Significant incidents included the assault on the U.S. Consulate in Libya and Israel’s actions against Hamas. Yet, despite such conflict, Bitcoin increased by a staggering 4,500% in the following year.
These examples highlight a trend: despite their reputation as volatile investments, cryptocurrencies often thrive during times of geopolitical strife.
Now, let’s discuss how we can leverage this information…
Opportunities and Risks Ahead
What situation do we find ourselves in now?
Rising geopolitical tensions parallel those from the past. The Middle East remains at risk of renewed conflict, much like in 2012. Political discord in the U.S. mirrors that of 2016. Inflation concerns and potential trade wars echo 2020.
This mix mirrors past conditions that often sparked significant crypto market rallies.
We believe history may repeat itself; fortunes could shift dramatically in the crypto space over the next year.
However, a word of caution: don’t simply invest in Bitcoin and smaller altcoins.
Cryptocurrencies can plummet just as swiftly as they rise, especially during periods of market chaos.
As high-risk assets, their movements can be much more drastic compared to standard stocks. While they can lead to significant profits as conditions stabilize, they also experience rapid fluctuations that can unsettle inexperienced investors.
For instance, leading up to recent tariff announcements, Bitcoin dipped below $100,000 for the first time since mid-January, while many major altcoins fell by 20% or more.
In other words, movements in traditional stocks pale in comparison to the volatility seen in crypto.
This is why I am hosting an event called The Great American Crypto Project— where I will share my team’s quantitative trading strategies designed to identify consistent patterns before cryptocurrencies have the potential to multiply in value significantly within 90 days.
This Thursday, February 6, I’ll present three potential trades that could surge during the upcoming shifts in the market.
Moreover, I’ll be outlining three new crypto-related policies from the White House that could spark the largest crypto boom we’ve seen by 2025.
For those who have traded alongside me during previous market instabilities, this is a significant moment. In 2021 alone, our Ultimate Crypto portfolio saw one-month gains of 276% on CELO and two-month returns of 605.3% on MANA, to name a few highlights.
Click here to automatically RSVP for my Great American Crypto Project event happening Thursday at 10:00 a.m. Eastern.
I look forward to seeing you there.
Best regards,
Luke Lango
Senior Analyst, InvestorPlace
