Chris’ note: This week, the U.S. government seized another failing bank. This time, it was First Republic Bank. And the feds brokered a rescue deal with JPMorgan Chase.
First Republic catered to wealthy clients. So, most of their accounts are over the FDIC $250,000 insurance limit. And this year, those clients have yanked out more than $100 billion of deposits.
Which leads us to an intriguing question: Where are they putting their money? A significant number of them are turning to a new way to store wealth… one that insures them against further trouble at the banks.
It’s all in the insight below from colleague and former hedge fund manager Teeka Tiwari…
The banking crisis has claimed another victim.
This time, it’s the nation’s 14th-largest commercial bank, First Republic Bank.
On Monday, the Federal Deposit Insurance Corporation (“FDIC”) seized the San Francisco-based bank. And it sold its $229 billion in assets to JPMorgan Chase.
It’s now the second-largest bank failure in U.S. history. And it takes this dubious title from Silicon Valley Bank (“SVB”), which failed in March.
Like SVB, First Republic Bank was taken down by a run on deposits. This year, it’s lost more than $102 billion in deposit outflows. That’s nearly half of the bank’s total deposit base.
Where’s all that money going?
A great deal of it is headed to bitcoin. It’s up 69% in 2023. That makes it the best-performing asset of the year.
Friends, in the span of two months, we’ve seen three major U.S. banks fold. It’s clear we’re in the worst banking crisis since 2008.
The ultra-wealthy are starting to see bitcoin as an insurance policy against bank collapses. And they’re buying…
Bitcoin Is the New Banking Insurance
Ultra-wealthy Americans have been looking at bitcoin from the sidelines over the past 10 years.
Now, they’re finally seeing the role it can play in diversifying their wealth… and protecting their legacies.
These folks typically own stocks, bonds, real estate, and precious metals… But they have little exposure to crypto.
Now, they’re thinking, “What happens if I’m wrong, and the bitcoin advocates are right?”
I had a similar come-to-Jesus moment in 2016.
I had watched bitcoin for years. And I thought it was a Ponzi scheme.
In 2014, crypto exchange Mt. Gox got hacked. Up to 80% of bitcoin traded through this exchange at the time. And it blew up.
People got locked out of their crypto. Some investors are still trying to recover bitcoin from Mt. Gox almost 10 years later.
After that, many people – including me – expected bitcoin to go to zero.
But the strangest thing happened: Bitcoin came back to life.
From a low of $172 in January 2015, bitcoin climbed to $465 in December that year.
That’s when I realized it was here to stay. So, in April 2016, I recommended paid-up subscribers of my Palm Beach Letter and Palm Beach Confidential advisories buy bitcoin at about $420.
Today, it trades at $28,125. That’s a 6,596% gain.
Friends, that’s the type of thinking going on right now among the ultra-wealth wealthy.
These people aren’t stupid. They’ve seen bitcoin get the stuffing knocked out of it time and again – only for it to go on to hit new all-time highs each and every time.
They know the costs are high if the traditional banking system blows up on them. And many of them have no bitcoin exposure yet.
An Escape Hatch
Am I saying the entire global financial system will melt down?
No. It’s a low-probability event.
But there’s a chance we’ll get another meltdown like 2008… or worse.
So, why not take 0.5%–3% of your investable wealth and dollar-cost average into bitcoin as an insurance policy?
That just means setting aside a fixed dollar amount to buy bitcoin every month… no matter what the price.
It will protect your wealth against a banking collapse. And as the backbone of the crypto revolution, it’s poised to go a lot higher from here.
I’m on record with a price prediction of $500,000 per bitcoin. And it could go a lot higher than that.
That’s what the ultra-wealthy are realizing – bitcoin is a win-win proposition.
If the banks go up in smoke, you have a hedge in bitcoin.
And if the banks don’t go broke, you own a technological innovation that will go up in price as blockchains revolutionize the economy.
That’s why I call bitcoin an escape hatch from the traditional financial system.
If you self-custody your bitcoin, no one can charge you any fees on it. No one can inflate it away. You’re essentially your own bank.
Exodus From Banks Into Crypto
This is the worst banking crisis since the 2008 Great Financial Crisis.
And bitcoin is finally starting to show its potential. That’s why it’s the best-performing asset so far this year.
But I believe we’ll see an even bigger exodus from the traditional banking system to crypto… One that will bring trillions of dollars into this emerging asset class.
That’s why, earlier today, I hosted an urgent online strategy session. And I revealed some critical intel I received thanks to my connections in the crypto sector.
It’s all to do with a new banking regime set to take effect June 1 – one that will trigger a $19.4 trillion bank run.
The financial authorities involved in this new catalyst have set this date.
And it’s an opportunity for life-changing gains as a small number of cryptos soar.
I’m talking about the opportunity to turn $1,000 into a six- or seven-figure payout… just like those who followed my first call on bitcoin had.
If you missed my briefing earlier, don’t worry. I’m making the replay available to you this evening, at 6 p.m. ET.
I know it’s short notice… But in just one hour, you can unlock the key to completely transforming your wealth with crypto.
I’ll discuss this new regime in detail. I’ll share three new coins I’ve never recommended before. And I’ll give away my entire crisis-proof portfolio for free.
This should do well no matter what happens with the economy. All you have to do is attend to get it. No strings attached.
These kinds of opportunities don’t happen often. So, don’t let this one slip past you.
Go here to watch the replay. And I’ll see you soon.
Let the Game Come to You!
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Teeka Tiwari
Editor, Palm Beach Daily