It’s been a busy week for everyone here at the Legacy Investment Summit in Bermuda. But we still had time to catch up with our experts for some answers to your questions.
Let’s start with something a bit out of the ordinary…
In last Friday’s mailbag – “Your Roadmap to Escape America” – we answered Daily Cut reader Jerry R.’s question:
What countries are considered to have the least control… or where do citizens have the most freedom?
Six of our most traveled experts chimed in: Legacy co-founders Bill Bonner and Doug Casey… Daily Cut editor Chris Lowe… Casey Report senior analyst Nick Giambruno… Bill Bonner Letter co-author Dan Denning… and Disruptive Profits editor Marco Wutzer.
And one of your fellow readers made arguments for Colombia, Costa Rica, and Panama. (Catch up here.)
But another reader asked about one little-known country that didn’t make the list…
Reader comment: I noticed, that no one mentioned Liberland in the search for personal freedom question.
Thoughts anyone? Thanks!
– Rick R. (Legacy Research member)
Liberland, founded by Vít Jedlička, has been on our experts’ radar for some time. In fact, Doug Casey was one of the first to apply for citizenship.
Here’s what he told us:
As you may know, I’ve been involved in projects like this for many years. The closest comparable to this is the Principality of Sealand.
Will it work? It mostly depends on Vít… his ability to raise at least a few hundred million dollars… and make some really powerful connections.
I’m optimistic. For many reasons, we’ll see lots more secession and “micro-nations” in the years to come. One problem is that organizing libertarians is like herding cats.
That said, although Vít may need to run the show much more aggressively, and more like a business, it’s most impressive what he’s done so far – in Europe, of all places. But you guys should let readers know what he’s doing… and how to join the party.
Legacy co-founder Doug Casey (second from right) at lunch with Vít Jedlička, founder and president of the Free Republic of Liberland (far right), in 2015
And Doug isn’t the only one interested in Liberland. Our very own Daily Cut editor, Chris Lowe, caught up with Vít in 2016. So we asked Chris to bring Cut readers up to speed:
I flew out to Prague in the Czech Republic to meet with Vít, the president of the Free Republic of Liberland. It’s an interesting project. But there’s really no physically habitable land in Liberland.
The territory Vít has claimed as Liberland is a no man’s land between Serbia and Croatia, which fought a brutal war in the early 1990s. This land is only 3 square miles. There are no residents there.
Vít sometimes takes folks there. But the authorities there tend to chase him off. Long story short, you can’t actually live in Liberland… although you can become a virtual citizen.
Moving on… your fellow readers continue to flood our inbox with questions about the everchanging cryptocurrency space.
First up… following our essay on “Why the ‘Warren Buffett of Yale’ Is Buying Cryptos”… Disruptive Profits editor Marco Wutzer answers a question about investing in crypto funds…
Reader question: Dear team at Legacy Research, thank you for your excellent work.
You wrote about Yale’s David Swensen investing in Marc Andreessen’s a16z cryptocurrency fund and in Fred Ehrsam’s Paradigm crypto hedge fund.
How can I, as an average investor, invest in these funds?
– Michael S. (Legacy Research member)
Marco’s answer: Investing in a crypto venture capital (VC) fund is a matter of contacting the fund directly. Many successful funds raise additional capital for subsequent funds.
However, for the most part, these big VC funds raise hundreds of millions of dollars and are aimed at institutional investors. So unless you have millions of dollars to invest, big VC funds are not a good fit for individual investors.
These funds come with three disadvantages:
High minimum investment.
High fees. Funds typically charge 2% of assets per year and 20% of any profits.
Lockup of investor’s capital for many years.
The crypto space is littered with many funds that lack an intelligent strategy and have no competitive advantage. The only reason why they are active in the crypto space is because they have heard there is money to be made.
Here’s what to do instead:
Find a crypto expert with a good track record to follow. This way you can invest as little or as much as you want… any gains will be yours to keep… and you can take profits anytime you want.
Next… a question about bitcoin exchange-traded funds (ETFs) for Legacy’s world-renowned crypto expert – and Palm Beach Confidential editor – Teeka Tiwari…
Reader question: I have a question for Teeka. He keeps saying that one of the big catalysts for bitcoin will be the establishment of the first bitcoin ETF.
I am confused by that statement as I understand that such an ETF already exists, which is called: Bitcoin Investment Trust (GBTC/OTCQX). Please explain… what am I missing?
– Bill W. (Legacy Research member)
Teeka’s answer: Grayscale’s GBTC trust is not an ETF; it’s a form of a closed-end fund that trades anywhere from 100%–150% premium to the underlying price of bitcoin.
It’s really not a vehicle that is designed for widespread adoption. The volume on it is not that great, and yet it still trades at a massive premium to the underlying price of bitcoin. So if bitcoin was at $10,000, I’d see the Grayscale trust trade to the equivalent of bitcoin being $20,000. And that’s just not rational.
What the first bitcoin ETF will do is it will allow the wide-scale adoption and addition of bitcoin to people’s portfolios at a price that’s going to mimic the price that you’re going to get in the marketplace.
It’s not going to have this massive, inflated premium, which is what you have to pay right now through the Grayscale trust… and that’s not a knock on the Grayscale trust. There was just so much demand for it, and it’s a closed-end fund, so it’s being driven to a huge premium.
We recommend avoiding GBTC.
That’s it for this edition of the Friday mailbag.
Before I sign off… I’d like to thank everyone who made the trip to our inaugural Legacy Investment Summit in Bermuda this week.
From the folks who took three- and four-leg flights from as far away as Hanoi, Vietnam; St. Petersburg, Russia; and Mount Maunganui, New Zealand… To the folks who took the ferry from just across the bay in Hamilton, Bermuda…
It was a pleasure meeting you all.
I know I speak for the entire Legacy Research team when I say we truly appreciate how much you helped make this a great event… and we’re already looking forward to seeing you again at next year’s Legacy Investment Summit.