The Dow industrial stocks shot up 12.7%. The broader S&P 500 rose 12.1%. The tech-heavy Nasdaq rose 10.6%.
The small-cap Russell 2000 did even better. It rocketed 18.5%.
Meanwhile, the rate of new COVID-19 infections has flattened.
Figures from Deutsche Bank show that the rate of new cases worldwide is the lowest since March 10.
We’ll be returning to what it means for the economy and the stock market in future dispatches.
Today, I want to shine a light on a development that’s flown under most folks’ radars.
The market value of the world’s most popular cryptocurrency, bitcoin, just eclipsed America’s third-largest bank, Citigroup.
As you’ll see, this confirms what world-renowned crypto expert Teeka Tiwari has been telling his readers for years…
People are turning to bitcoin as an alternative payment network that bypasses the fiat (or government-issued) currency system.
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It’s where you’ll catch the latest ideas and recommendations from Teeka, Jeff Brown, Bill Bonner, Doug Casey, Dan Denning, Nick Giambruno, Dave Forest, and the rest of the Legacy team.
And if ever there was a need for these independent ideas from the alternative press, it’s now.
As you’re no doubt aware, the mainstream press has gone into hysteria mode over the coronavirus. That’s because fear sells. “If it bleeds, it leads,” is the rule at many media outlets.
At Legacy, we’re different. We don’t rely on advertisers. And we’re not owned by powerful figures like Warren Buffett (who has a majority share in 30 regional U.S. newspapers)… Jeff Bezos (who owns The Washington Post)… or Rupert Murdoch (who owns Fox News).
Our job isn’t to scare you. It’s to help you maintain perspective and stay rational. That’s how you protect and grow your wealth… even as those around you panic.
Bitcoin has been on a roller-coaster ride this year. It rose as much as 44%. It fell as much as 42%.
And since the start of 2020, it’s down 4%.
But it’s held up a heck of a lot better than America’s biggest banks.
JPMorgan Chase is the biggest U.S. bank. Its market value (the sum value of its outstanding shares) has dropped 32% this year.
Meanwhile, Bank of America (the second-biggest U.S. bank) is down 34%. Wells Fargo (the fourth-biggest) has tumbled 45%.
And Citigroup is down 45%. That’s left its market value at $92 billion. That compares to bitcoin’s market value (the sum value of all outstanding coins) of $126 billion.
Banks profit by making new loans. About 30% of those new loans are mortgage loans. And right now, nobody is buying new houses.
Meanwhile, loans banks have already issued are in danger of defaulting.
If the lockdowns continue… and people keep losing their jobs… they’re going to stop paying their mortgages.
Business loans are also in danger of going sour.
That’s a double whammy. Banks are looking at loan business dwindling over coronavirus fears.
And loans they’ve already issued now have a big, fat question mark over them. This threatens to blow a hole in their balance sheets.
And people have confidence in that.
It may seem obvious… but bitcoin’s survival is the proof of its success.
Bitcoin came into being in the wake of the 2008 financial crisis.
Someone (or some group of people) going by the name of Satoshi Nakamoto published a white paper for the cryptocurrency on October 31, 2008. That’s just six weeks after the collapse of Lehman Brothers.
The white paper envisioned that a “purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution.”
Almost 12 years on… and that’s exactly what bitcoin does 24/7, 365 days a year, without so much as a pause.
It allows you to safely send, receive, and store electronic cash online without the need for governments, banks, central banks… or a national currency of any sort.
Up until the appearance of bitcoin, the only alternative to national currencies – dollars, euros, yen, etc. – was gold.
Regular readers know that we’re fans of gold at the Cut.
But gold is difficult to move around… and expensive to store. And it doesn’t travel across electronic networks well.
That’s where bitcoin and other cryptocurrencies come in. They provide a new alternative to national currencies that is better adapted to the Digital Age.
Palm Beach Confidential subscribers can catch up in full here.
But don’t worry if you missed it. Here’s the relevant part…
For thousands of years, we’ve accepted that only governments can issue money. This has led humanity to sheepishly accept the theft of its wealth in the form of insidious currency debasement [aka inflation].
Whether by the threat of violence or imprisonment, we could only watch meekly as governments seized our wealth. Like a whipped dog that only knows submissive obedience to its master… we’ve blindly accepted this assault against our financial sovereignty.
Those days are over.
Cryptocurrency gives us a powerful new way to secure part of our wealth in an asset outside of government control. Teeka again…
Imagine if the “small” people of the world switch their fiat earnings to digital assets they control. What happens to the banks? What happens to the brokerage firms? What happens to the tax collectors? What happens to a nation’s ability to raise money to wage war? […]
Once humanity wakes up to the idea that it doesn’t have to put all its wealth into fiat currencies, we’ll see a tidal wave of money rotate out of paper money into cryptographically secured money like bitcoin.
The denationalization of money trend means that just because we live in America… it doesn’t mean that we have to keep our wealth in U.S. dollars. We can use non-government alternatives like bitcoin.
That’s what we’re seeing play out now right before our eyes, as the value of bitcoin surpasses the value of one of America’s – and the world’s – largest banks.
As central banks and governments enter a new phase of currency manipulation, more and more people are going to seek alternatives to the currencies they control.
And bitcoin – along with gold – is going to become even more attractive.
That’s why, if you haven’t already, now is a great time to buy some bitcoin. You can find out how in our free guide here.
Just make sure to follow Teeka’s advice and never let cryptocurrencies make up more than 2% of your overall wealth.
That keeps your downside risk limited. And it still gives you exposure to the potentially life-changing profits Teeka sees ahead.
Regards,
Chris Lowe
April 14, 2020
Dublin, Ireland