$57,543 as I (Chris Lowe) type, to be exact.
That’s about 20% more than it was going for at the start of this month.
It’s about 100% more than it was going for at the start of the year.
And it’s 540% more than you could have bought it for at the start of the pandemic, in March of last year.
So it’s easy to see why a lot of investors think they’ve missed the boat.
But you shouldn’t let that keep you on the sidelines.
As colleague and world-renowned crypto investing expert Teeka Tiwari has been spreading the word on, $50,000 is more of a floor for bitcoin (BTC) than a ceiling.
And the ceiling is a lot higher than you may think.
Teeka says folks who buy bitcoin today can expect 10x returns from here… as the crypto soars to $500,000-plus a coin.
The Daily Cut is the premium e-letter we created for all paid-up Legacy Research subscribers.
Our goal is to make sure you never miss a big moneymaking idea from Teeka, Jeff Brown, Dave Forest, Jason Bodner, and Greg Wilson.
I’m not talking about ideas that can unlock returns of 10%… 20%… or 30%.
These days, you can get those kinds of returns from many index funds and ETFs (exchange-traded funds). Or you can find the ideas in the pages of Barron’s or The Wall Street Journal.
I’m talking about ideas that target gains of 500%… 1,000%… 10,000%… and even higher.
He first recommended bitcoin and ether (ETH) to our Palm Beach Letter and Palm Beach Confidential readers in April 2016.
Since then, they’re up 14,274% and 39,471% respectively.
Another top open crypto recommendation at Palm Beach Confidential is Neo (NEO). It’s up 36,928% since Teeka first added it to the model portfolio in 2017.
Kudos if you acted on these recommendations. You invested in a market megatrend early on, and you reaped the rewards. You’ve smashed the returns of most Wall Street fund managers and expensive hedge funds.
And if you’re joining us as a new reader, don’t worry. There’s still plenty of opportunity ahead.
As Teeka has been showing his readers, even at more than $57,000, bitcoin is still wildly undervalued.
This is something a lot of folks struggle with.
Bitcoin kicked off an entirely new asset class. There was no such thing as a cryptocurrency before bitcoin came on stream in 2009.
Truth is, nobody knows exactly how much bitcoin is worth.
Its price reflects what hundreds of millions… and eventually billions… of people think its value is.
But since Teeka first started recommending bitcoin more than five years ago, he’s seen it as a digital type of gold.
I know because I talked to him about it around that time. As he put it in a Q&A I had with him for the July 2016 issue of our Legacy Inner Circle advisory…
Bitcoin in particular is becoming a “chaos hedge” of choice among investors, traders, and hedge fund managers. It’s almost become the new gold. It’s obviously a lot newer than gold… and I think it has MUCH more upside.
I write about this a lot. But if you want to know where the bitcoin price is headed, it’s a critical piece of the puzzle.
Gold is physical… while bitcoin exists in cyberspace. But they’re a lot more alike than you may think.
First, their supplies are limited. There’s only so much gold on Earth. And it’s written into the bitcoin code that there can never be more than 21 million coins.
Second, you have to expend real-world resources to make more of both.
Mining gold requires diggers and dozers. “Mining” bitcoin requires rows and rows of high-speed computers cooled by fans.
Together, these two traits make bitcoin and gold great long-term stores of value… and great alternatives to inflation-prone government currencies such as the U.S. dollar.
That means the sum value of all bitcoins in circulation stands at more than $1 trillion.
That’s still less than the $1.1 trillion combined market values of financial services giants Visa (V), Mastercard (MA), and PayPal (PYPL).
Here’s Teeka with more on that…
I value bitcoin in two parts. The first part is the bitcoin payment network, which is the ability to move money anywhere around the world at low cost to anyone with a smartphone. If you believe, as I do, that bitcoin is a superior payment network to the ones that exist today, that makes bitcoin the most undervalued payment network in the world.
On its global payment network merits alone, bitcoin is easily a $1 trillion asset. And that will put the price of one bitcoin at $50,000 to $53,000.
But bitcoin is more than just a payments network. It’s also a savings vehicle. Teeka again on this second part of his bitcoin valuation…
When I factor in the finite, non-dilutable, and secure nature of bitcoin, I’m left with no other conclusion than that it will take gold’s place as the go-to store of value for the world’s investors.
The global gold market is now worth roughly $10 trillion. Over time, bitcoin will eat away at gold’s market share as a savings asset. The value of gold will drop as demand falls away. And the value of the bitcoin market will rise to roughly $10 trillion. In that scenario, each bitcoin will be worth half a million dollars.
That’s a 10x return if you buy at today’s price.
Take Wall Street bank JPMorgan Chase (JPM).
The bank’s bigwig CEO, Jamie Dimon, is a well-known bitcoin hater.
In 2017, he called the cryptocurrency a “fraud.”
And as recently as this month, he compared it with “fool’s gold.”
But the analysts at JPMorgan take a different view. Last Thursday, in a note to clients, they said:
The re-emergence of inflation concerns among investors has renewed interest in the usage of bitcoin as an inflation hedge. Institutional investors appear to be returning to bitcoin perhaps seeing it as a better inflation hedge than gold.
Since the start of the year, bitcoin is up 86%.
Gold, meanwhile, is down 6.9%.
Over that time, more than $10 billion has flowed out of gold ETFs. And more than $20 billion has flowed into bitcoin funds.
And here’s the kicker… We can expect that gap to grow as baby boomers retire and millennials take center stage. Back to Teeka…
Millennials have grown up with digital assets their whole lives. So bitcoin makes a lot of sense to them. I speak to a lot of young people who are independently wealthy. They’re worth tens of millions of dollars through either private businesses, crypto, or a combination of the two. For them, crypto is a core holding.
When I ask if they’re adding gold to their portfolios, they say, “Oh, no. I’m buying bitcoin. That’s the way I sidestep what’s going on in the rest of the traditional fiat currency world.”
It’s not just anecdotal. The “millennial effect” shows up in the numbers, too.
Research firm Edelman found that about 1 in 4 millennials who earn at least $100,000 in individual or joint income owns cryptocurrencies. And another roughly 1 in 3 expressed interest in using them.
That’s a big deal when you consider that millennials are the largest generation demographic in America. And they’re set to inherit about $68 trillion of their parents’ wealth.
If they deploy even a fraction of that wealth into crypto, that’ll send demand for bitcoin soaring even higher.
Teeka reckons it’s wise to keep a small part of your portfolio in gold – about 1%.
And he says you should have up to 10% in bitcoin.
Precisely how you allocate between the two is up to you. Some people prefer more gold. What’s important is you don’t stick with only gold and ignore bitcoin altogether.
If you believe our case that bitcoin serves the same function as gold – but with higher upside – it would be crazy not to own some.
You don’t have to fork out for one whole bitcoin. You can buy a fraction of one in whatever dollar amount suits you.
Just make sure you follow Teeka’s allocation advice… hold for the long run… and prepare for plenty of volatility along the way.
Regards,
Chris Lowe
October 11, 2021
Barcelona, Spain