Nick Hodge,
Publisher
Dec. 10, 2024
I have told you that I own Bitcoin a few ways.
Today, I want to talk about the Bitcoin in my safe.
More specifically, I want to talk about the value of that Bitcoin.
As its price has risen to $100,000, the value of the Bitcoin in my safe exceeded the value of the gold in my safe for the first time.
This is remarkable, and I have more remarks about it.
First, I am not an either/or guy. I own both gold and Bitcoin. And I think you should, too. It’s going up for many of the same reasons as gold. The biggest one, of course, is the constant money creation by global governments that generates the perpetual inflation needed to make mounting debts serviceable relative to something you can’t create more of like gold and Bitcoin.
Second, Bitcoin is now approaching “must-own” status for nearly every serious long-term portfolio. It’s now easier for people and money managers to do that on their own with recently approved ETFs, which also means Bitcoin can go into tax-advantaged accounts like individual retirement accounts (IRAs). Soon, people who don’t manage their own money will demand their advisors get them an allocation to Bitcoin. Blackrock’s Bitcoin ETF is the fastest-growing ETF in history. It’s only been around for ten months and is already bigger than any other ETF launched in the past ten years. It has the most inflows of any ETF in 2024, by far. And the second, third, and fourth top inflow funds this year are also Bitcoin-related.
Third, the performance it delivers will beget more buying. Adding as little as 1% Bitcoin has improved the performance of a traditional 60/40 portfolio over the past decade by 15 percentage points. Adding 5% Bitcoin has more than doubled the performance.
Fourth, big tech cometh. Yes, we have Microstrategy. But real tech companies like Amazon and Microsoft are now being asked by their shareholders to hold some of their cash reserves in Bitcoin. They are also going to start plying their craft with crypto.
Google had a major quantum computing announcement this week.
But what’s gone unnoticed is the search giant’s foray into using crypto to disrupt the $1.4 trillion credit card market. And it’s partnered with a crypto firm that’s building the fastest transaction network in the world. I expect it will be highly profitable.
The Bitcoin in my safe, like the gold beside it, will continue to sit there as silent insurance.
But like I invest in gold funds, gold miners, and other gold-adjacent projects… so too am I investing in other crypto and blockchain firms.
And at the risk of mixing my metaphors, crypto is similar to uranium in this way as well.
We all knew uranium would deliver a clean energy future. But it wasn’t until large tech companies embraced it this year to power their data centers that the rest of the investment community took it seriously. And related nuclear stocks have soared since they did.
That moment is now here for crypto. It’s moving beyond a risk asset or alternative currency to a must-own sector that’s driving real change in large markets.
Google is now in.
When will you be?
Call it like you see it,
Nick Hodge
Publisher, Daily Profit Cycle