Ken Mack made a career out of buying and selling companies before he became a crypto investor in 2017, during a bull run that saw bitcoin and other altcoins reach new highs.
Last year, after seeing an increase in money printing, especially the US dollar, he began investing more heavily into crypto. Bulls like him have recently warmed to cryptos like bitcoin partly because of its capped supply, which contrasts the copious amounts of central bank stimulus being created.
"The millionaires of today are the middle class of tomorrow," Mack said. "With the insane money printing that is going on, [crypto] is the best way for normal everyday people to create exponential levels of wealth and perhaps generational wealth, if things are done in a certain way."
The combination of inflation which many experts including Federal Reserve officials have pegged as transitory with the wave of retiring baby boomers, means that money could rapidly shift to new sectors including crypto. To be exact, an estimated $68 trillion will move between generations within 25 years, according to the research firm Cerulli Associates.
But these aren't the only reasons why Mack is bullish on crypto or evangelizing about the asset class. He co-hosts a YouTube show with another crypto influencer, Coach JV, focused on helping others understand the wealth shift and benefit from the transition.
They both believe that blockchain technology and crypto will be among the leading technology drivers in the fourth industrial revolution, a transition the World Economic Forums refers to as the fusion of technologies that flatten the physical and digital worlds; think of wearables that digitize your workouts, voice-activated virtual assistants, and yes, paperless transactions stored on blockchains, as examples.
These beliefs have driven Mack to become involved in blockchain development. He's an advisor at Node Kapital, a venture fund focused on early blockchain projects, and he has a seven-figure portfolio in crypto, according to screenshots of his Blockfolio and Nexo accounts seen by Insider.
Previously, he made a career out of private mergers and acquisitions. He said at 21, he started buying companies, mainly manufacturing-based ones such as ECP, a Brazilian LED maker. In 2017, he and his team acquired a third-division football club in Spain without any money down. He used so-called leveraged buyouts, which wield the assets of the company being acquired as collateral. He continues to use this strategy to acquire cash-flowing assets today.
Right now, he's focused on the opportunity to trade his way up what he foresees as an upcoming crypto bull run in the last quarter of 2021.
But he stresses the need to be diversified: Even if you are invested across 10 different cryptos, you still need to hold less volatile assets, like real estate and commodities, and have secure streams of income.
"Trading crypto is very risky. I personally have lost a lot of money in the past trading," Mack said. "Time in the market is worth more than money in the market. And the best strategy is to just buy and hold."
One of his biggest mistakes was when he was leverage-trading ether and forgot to decrease his stop loss. He told Insider he woke up the next morning and realized an amount to the tune of six figures had been wiped out of his account.
"These small mistakes can cost people their life savings," Mack said. "Thankfully, I'm only trading with a very small amount of my portfolio."
The crypto market has big swings and has historically operated in a four-year cycle dictated by bitcoin and its halving cycles. The last halving took place in March of 2020, followed by a bull run that tapered off in the first quarter of this year.
Mack notes that September is usually a flat month in terms of price action, something that's currently playing out.
"My technical analysis and on-chain indicators are showing that we are about to enter a bull run, phase two," Mack said. "I believe that this is going to last for about three months. Unfortunately, most people will end up buying the top and selling the bottom. This is historically what happens."
Despite recent news of China banning crypto, Mack isn't worried because he's seen this movie before.
"If we look historically, how many times [China] has banned crypto, I think the market is getting to the stage now where it's not as responsive as it used to be when they were releasing this news," Mack said.
One caveat that could impact the bull run is if the US debt ceiling isn't raised on October 18. Also, an overvalued stock market could pull back if the Fed signals it will slow quantitative easing. These could lead to the "mother of all disasters" and cut the bull run short, he warns.
Otherwise, he's expecting some altcoins to reach their all-time highs in December or January, where bitcoin's price could hit the low six figures, at most (it hit a record high above $64,000 in April). But he adds that if we repeat historic patterns, then it will be followed by a major sell-off, sending crypto into a strung-out bear market .
Because of this, Mack plans on exiting all of his positions in altcoins by the end of the year because they lose 90% of their value in bear markets. And he doesn't plan on buying back until late 2022 or early 2023. He will only keep a 25% position in bitcoin.
He told Insider he'll sell at regular intervals starting in November and exit completely if bitcoin reaches $75,000 to $85,000.
Some estimates suggest that bitcoin could reach as much as $200,000 by the end of 2021. But Mack says the only thing that could drive it to those ridiculous highs is if the US approves a bitcoin ETF.
For now, his signal for the uptrend is when bitcoin breaks through the $52,000 resistance point, Mack said. After, the Fibonacci extension level, which traders use to determine the next price wave following a pullback, is showing $88,000.
Mack also warns that the crypto market is highly manipulated by whales, or those who hold millions of dollars worth of bitcoin. So he also uses on-chain data from websites like Whale Map and Glass Node, which track the price points at which large players are flowing onto exchanges.
He is extremely bullish on ether (ETH) because all of decentralized finance is practically built on its blockchain, requiring the coin to transact. Its recent EIP-1559 upgrade, which aimed to lower transaction fees, also made it deflationary. He said about 50% of his personal portfolio is invested in ether, with the second-largest position being bitcoin.
He's predicting a conservative high of $5,000 at year-end for ether, and plans on fully existing if it hits as high as $8,000.
Elrond (ELGD) is another one of his favorite cryptos because it's highly scalable and fast, with great use cases for enterprise.
He compares it to Solana but because its market cap is lower, it still has 10x potential. He says he will begin to scale out of Elrond if it reaches $400 and will fully exit if it hits $1,000.
Polkadot (DOT) is another altcoin Mack is bullish on. He says it hasn't had its run, but has been his most stable crypto in terms of growth. He's also been earning 12% in passive income on Kraken, where he has it staked.
"In terms of what potential Polkadot has, once they roll out the parachains, it's highly likely that we could be looking at a $70 to $100 polkadot," Mack said. "It's a very strong, very stable project. And, it hasn't had a lot of press."
Because of its scalability, it potentially has exponential growth compared to its competitors. He plans on exiting 25% of his position in DOT at around $75, with a full exit by $95.
He's also holding binance coin (BNB) and believes it's one of the best global exchanges. It previously reached all-time highs of $672 in May. He believes it can easily reach a new high of $1,000 during this run.
He plans on exiting 25% of his BNB position at its last all-time high, another 25% at around $750, and fully exiting at $950.
Finally, a surprise pick is pancakeswap (CAKE). He told Insider it's one of his highest staked earners. His returns can range from 74% to about 77% APY, without locking it into set terms. This is the third largest holding in his portfolio.
"CAKE is also a utility token for the platform, which is one of the most used decentralized exchanges right now," Mack said.
He plans on scaling out of CAKE at around $37 and fully exiting if it reaches its previous all-time high, or around $43.
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5 Altcoins to Buy in the Bull Run, According to Crypto Investor - Business Insider