A Competitor for Gold?

[The Bleeding Edge]( A Competitor for Gold? By Jeff Brown, Editor, The Bleeding Edge --------------------------------------------------------------- Late last night, something special happened. The price of a single Bitcoin rocketed through $100,000. What an incredible milestone. I remember back in December 2017 when the digital asset topped $19,000. The pundits cried “speculative bubble” and “Ponzi scheme.” In the spring of 2021, the critics were loud again when Bitcoin eclipsed $60,000, confidently stating it was the low-interest-rate policies driving Bitcoin’s speculative fervor. The latest push above $100,000 is largely attributed to President-elect Trump’s choice of Paul Atkins for the chair of the Securities Exchange Commission (SEC). Atkins was a former SEC Commissioner from 2002 through 2008. Atkins has close ties to the blockchain industry, is pro-crypto, pro-innovation, well-versed in financial technologies, and believes in a regulatory structure that will support the digital asset industry. The stances of Trump and Atkins represent the polar opposite of the last four years under SEC Chair Gary Gensler. The industry has suffered the worst period in its history under the heavy hand, the lack of clarity on related regulations, and the “regulation by enforcement” approach that stifled the industry. Not only did the current administration proactively go after best-in-class companies focused on doing everything possible to maintain compliance with current regulations, but it also had a structured program to attack those in the digital assets industry. The program is known as Operation Chokepoint 2.0. Debanked In a recent podcast, venture capitalist Marc Andreessen openly addressed this topic and how far the government went: Operation Chokepoint 2.0 is primarily against their political enemies and disfavored tech startups. In the tech world, we had over 30 tech founders debanked in the last four years. It’s been a big recurring pattern. In that interview, Andreessen explained how individuals working in the digital assets industry were secretly debanked from financial institutions without explanation and with no recourse. Imagine that. Imagine receiving a notification from your bank that your account will be closed within a matter of days. Imagine not being able to open an account anywhere. These individuals literally had to go to cash. Their access to financial services was shut down, and they could only transact in crypto or cash. And they hadn’t done anything wrong. What were the offending acts? They were just building technology that was politically out of favor, and they were debanked for it. Criminals have better access to financial services than they did. So it was no surprise to see Bitcoin pop since the election and, most recently, since naming the choice of Atkins for SEC chair. But ironically, that’s not why Bitcoin is worth more than $100,000, nor why it has a market capitalization of $2 trillion. Recommended Link [Advertisement for Nvidia, Apple, Tesla, and Google stock recommendations]( [Forget Nvidia, Apple, Tesla, and Google]( Market Wizard Larry Benedict: “Forget 99% of stocks: It’s possible to make all the money you need for a happy retirement with just this one.” [Larry says this stock is all you need.]( The Reason for Bitcoin’s Rise Bitcoin is the economic representation of the most valuable blockchain network in the world. Each new Bitcoin that is mined is created through investment. That investment is in data centers, semiconductors, servers, and of course electricity – required to solve the complex mathematical problems that run the Bitcoin blockchain network. Bitcoin, as an asset, is the economic reward for those providing those computational services to keep the Bitcoin blockchain running. There is no Bitcoin “corporation.” There is no company to pay individuals or entities for their services to maintain the Bitcoin blockchain. With a decentralized technology where no one entity is in charge, a digital asset like Bitcoin, is the economic incentive to perform work. It has been a remarkable economic and technological experiment that has proven to be an incredible success, despite the antagonism of the current U.S. government. Bitcoin ignited an entire industry that now has a total market cap of $3.6 trillion… and these are still early days. Bitcoin is money. It’s a store of value. And it is an incredible investment. I first pounded the table to my subscribers to buy Bitcoin in June 2015. At that time, Bitcoin was trading at $240. Those who followed my recommendation are now up 422 times their money – 42,161% on their original investment. The chart below, since that original recommendation, pretty much speaks for itself. What the pundits continue to miss is that Bitcoin is the antithesis of fiat currencies. It stands in stark contrast to the reckless spending and money printing happening around the world. After the last four years, the U.S. national debt stands at $36.195 trillion. Worse yet, the U.S. government adds $1 trillion in new debt every 100 days. Source: U.S. Debt Clock Last fiscal year’s budgetary deficit was an astounding $2 trillion, and there was no pandemic or world war. In the first month of the current fiscal year, which began on October 1st, the U.S. fiscal deficit was $255 billion. That’s just for one month! That’s why Bitcoin has jumped 133% year to date. That’s the groundswell forming underneath Bitcoin’s incredible run of late. Capital is flowing out of an asset that is being devalued (fiat currency) and into an asset that is increasing in value with no risk of government abuse. Bitcoin’s monetary policy is preprogrammed. Everyone can see it and understand it. No government can control it. And no one can just press a button and “mint” new Bitcoin into existence… completely the opposite of the U.S. dollar. Just yesterday, the Chairman of the Federal Reserve, Jerome Powell, was at a conference and was quoted as saying about Bitcoin: It’s just like gold, only it’s virtual, it’s digital. People are not using it as a form of payment or as a store of value. It’s highly volatile. It’s not a competitor for the dollar, it’s really a competitor for gold. That’s incredible coming from the Chairman of the Federal Reserve. Not only is Bitcoin not a Ponzi scheme, but from his perspective, it is a competitor for gold. And what about gold? Are investors flocking to it like Bitcoin? Is gold the antithesis of the fiscal deficits and money printing, too? What About Gold? As we can see in the chart below, gold has certainly been positive this year. It’s risen 27.6% to $2,628 an ounce. This compares to Bitcoin’s rise of 133%. But how about since June 2015, when I first recommended Bitcoin? Again, gold has a positive increase in value, rising 122.4% during the last decade. But that compares to the 42,161% return from Bitcoin. Which asset would you rather hold? One would have thought after the trillions of dollars of money printing that gold would have gone to the moon, trading at more than $10,000 an ounce. I remember the confident predictions from 15 or 20 years ago predicting exactly that based on debt predictions much lower than what has happened today. The fiscal and monetary policy that we have experienced is far worse than the worst-case scenario that many bears and gold bugs predicted so many years ago. And yet, gold is nowhere near $10,000. It should have skyrocketed, but it didn’t. It has lost so much of its relevance. And Bitcoin is kind of like a digital gold, a modern version. Its supply is limited as it is determined by the Bitcoin blockchain’s programming. It is literally coded. Only 21 million can ever be mined, and almost 19.9 have been mined already. But unlike gold, Bitcoin has already proven to be a greater store of value. Yes, it has had greater volatility, but over time, the returns speak for themselves. And because Bitcoin is a digital asset, there is far less friction in transacting in Bitcoin. Each Bitcoin is divisible up to eight decimal points. They can be carried on a hard wallet that will fit in your pocket, and they can cross borders without raising an eyebrow. Bitcoin has one major leg up on gold – it has far better utility. No, we can’t touch or fondle a Bitcoin like we can do with gold. We may not be able to hold it in our hands, feel the weight of it, and gawk and goggle over it. But Bitcoin has far more utility as a financial asset when it comes to transactions, something that is far more relevant in the 21st century. And I’m sure you’re wondering… Is Bitcoin going higher? You bet it is. Is Bitcoin going to rise in a straight line? Not at all. It will continue to experience large bouts of volatility and soul-crushing pullbacks. But it will go higher. Bitcoin is money. Bitcoin is anti-fiat. Bitcoin, blockchain technology, and other digital assets are the future of financial services. Jeff [Brownstone Research]( Brownstone Research 1125 N Charles St, Baltimore, MD 21201 [www.brownstoneresearch.com]( To ensure our emails continue reaching your inbox, please [add our email address]( to your address book. This editorial email containing advertisements was sent to {EMAIL} because you subscribed to this service. To stop receiving these emails, click [here](. 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