On January 1, 2020, the world’s first cryptocurrency was changing hands for $7,200.
As I (Chris Lowe) type these words, you need $34,000 to buy one bitcoin (BTC).
That’s a 372% gain… in just over a year. That’s roughly 23 times the return from U.S. stock market bellwether the S&P 500 over the same time.
World-renowned crypto expert Teeka Tiwari added bitcoin to the model portfolios at our Palm Beach Letter and Palm Beach Confidential advisories in April 2016.
Back then, one bitcoin changed hands for $428. So that’s a 7,843% gain for subscribers who acted on his recommendation.
And I’ve been spreading the word on bitcoin since we first launched the Cut in August 2018 to all Legacy Research readers. (When I first urged you to buy, one coin was trading at $6,500. I remember folks thinking it was pricey back then.)
If you answered our call to buy bitcoin, congratulations. You’re reaping the reward for investing ahead of the crowd in one of the world’s most profitable market megatrends.
And if you still haven’t made your first investment in bitcoin, don’t worry. As you’ll see today, we’re still in the early days of bitcoin’s bull run.
I call it a “billboard” for bitcoin. It’s a giant advertisement to get some savings out of the U.S. dollar and into bitcoin.
The chart is of a measure of U.S. dollar supply the Fed uses called M2.
M2 tracks the bills and coins in circulation, plus the dollars that exist in electronic form in bank accounts and money market mutual funds.
And it’s blowing up…
As you can see from that dogleg on the right, M2 money supply rocketed 25% higher in 2020. That’s its biggest yearly jump since 1960, when this data was first recorded.
After two special election wins in Georgia, the Democrats look as though they’ve taken back the Senate.
It ain’t over ’til the fat lady sings. But if Democrats take both seats, they’ll control the House, the Senate, and the White House.
That means they can spend on pandemic relief checks… infrastructure… and a version of a Green New Deal – and there’s not much Republicans can do about it.
Investment bank Goldman Sachs says it expects this to unlock $600 billion in additional stimulus – immediately. That’s almost 3% of U.S. GDP.
And everyone knows the Fed is standing by to digitally “print” a gazillion new dollars. No one can stop it.
As Legacy Research cofounder Bill Bonner has been saying for years, it’s “inflate or die” for the Fed. It’s not going to let the economy… and the stock market… stumble after so many years of propping it up.
That means trillions of new dollars coming into existence via keyboard strokes in Washington.
This next chart shows market expectations of annual U.S. dollar inflation.
Said another way, it measures the annual erosion of your purchasing power if you earn and save in U.S. dollars. (As inflation rises, it takes more dollars to buy the same amount of goods and services.)
As you can see, investors expect annual inflation to average above 2% over the next five years.
That would be the highest rate since before the pandemic.
As regular readers know, the supply of bitcoin can’t be modified at the whim of central banks or governments.
Instead, new bitcoins enter the supply on a predetermined schedule. This was programmed into the bitcoin software when it was created in 2008.
And thanks to the “halving,” which happens roughly every four years, the supply of new bitcoins tapers off over time.
This will go on until 2140. That’s when bitcoin will reach its hard cap of 21 million coins. From that point on, there will be no new bitcoins.
Not in the sense of being tangible like gold, but in the sense that it’s hard to produce more of.
Because it runs on a predetermined schedule governed by code, bitcoin is the first store of value where increased demand doesn’t affect supply.
And as another of the bitcoin bulls on the Legacy team, Casey Research analyst Nick Giambruno, has been showing his readers… bitcoin is even “harder” in this sense than commodities such as gold and silver.
If the prices of these metals go up, entrepreneurs can create a company to go mine more. Existing mining companies can mine more too.
Eventually, higher prices lead to increased production and more supply… and prices come down again.
But with bitcoin, nobody can go out and mine extra. New coins enter supply like clockwork, regardless of what price they’re fetching.
Over time, that will send more and more savers out of the dollar and into bitcoin.
As I wrote about in August, Teeka believes bitcoin could reach $60,000 or $70,000 a coin sooner than most folks realize.
And that’s just one milestone in a longer and even more profitable rally.
I showed you here how experts see bitcoin soaring to $400,000 a coin.
That’s a 1,076% rally from here.
So if you haven’t already, I’m asking you to take even a small first step and put $100 in bitcoin. If you’re not sure where to start, download our free guide to buying your first bitcoin here. Then take the plunge and buy.
It’s easier than you think. But remember, keep your position size reasonable… and don’t bet the farm. Teeka recommends an initial stake of $200 to $400 for smaller investors, and $500 to $1,000 for larger investors.
We leave the last word with him…
Even a small allocation can make a big difference. Cryptos offer you a chance to make asymmetric bets. That means you need to invest only a tiny stake to have a chance at life-changing gains.
Regards,
Chris Lowe
January 6, 2021
Bray, Ireland