The Deep Woods: Crypto: Currency or Commodity?

You are receiving this email because you signed up to receive our free e-letter The Deep Woods, or you purchased a product or service from its publisher, Eagle Financial Publications. [The Deep Woods] [Successful Investing]( [Bullseye Stock Trader]( [About Jim]( In This Issue: • Crypto: Currency or Commodity? • ETF Talk: The Future (of Bitcoin) Is Still Bright • Studio Life Is the Life for Me • Break My Heart Easy Crypto: Currency or Commodity? by Jim Woods Editor, [Successful Investing]( and [Bullseye Stock Trader]( 09/04/2024 Sponsored Content [Get in the Companies Solving HUGE Problems with AI Today... And Profit Tomorrow]( The AI boom has only just begun. But already, people are giving up and sticking to tried-and-true trades like Nvidia. This ignores the fact that the companies using AI to dominate their industries are going to be HUGE in 2025. We've got 7 stocks to share with you that are perfectly positioned. [Download the free report here.]( Crypto: Currency or Commodity? “Jim, is cryptocurrency such as Bitcoin an actual currency, or is it more like a commodity?” This is a question I was asked over the holiday weekend while attending a friend’s barbecue, and it’s a very good one. I say that, because despite its existence for over 15 years, Bitcoin is still not very well understood. Yes, investors have benefited from the digital currency (or is it a commodity?) for much of that decade and a half, but the debate still rages on whether there’s a future for Bitcoin and for the slew of other crypto assets, and what that future might be. Indeed, there is even a big question as to just how to classify the asset, hence that good question I fielded over the weekend. The way I look at Bitcoin and other cryptocurrencies is that it’s an asset class (possibly a hybrid between a currency and a commodity), that offers tremendous upside to investors with a stable constitution that allows them to benefit from the upside in this innovative technology. I say “technology,” because at the heart of Bitcoin is the blockchain technology that it’s based on. To understand this aspect of Bitcoin, we need to understand its origin. The digital asset was created by a shadowy and mysterious individual (possibly a group of individuals) known as Satoshi Nakamoto. The technology behind Bitcoin is super interesting, and I will write about that in future issues of The Deep Woods. For now, the goal of the early proponents of this technology saw it as a way of moving monetary policy out of the hands of governments and central banks and into an autonomously managed system. This removal of currency from government is a dream state for a libertarian mind such as mine, and of course, I am far from the only one who sees this as a most laudable societal development. Again, I will write more about the freedom aspect of Bitcoin and its potential role in a more libertarian society in future issues of The Deep Woods and in other upcoming channels you will be hearing much more about very soon (hey, how’s that for a teaser!). For now, know that Bitcoin is a technology designed to act as money and as a digital form of payment outside the control of any one person, group or entity. This removes the need for trusted “third-party” involvement (e.g., a mint or bank) in financial transactions. Now, while you can buy goods and services with Bitcoin, the problem, practically speaking, is that the price of Bitcoin fluctuates much more like a commodity than a currency. That makes its purchasing of goods and services quite impractical. The one aspect that you, as an investor, can take advantage of is precisely the commodity-like price volatility of cryptocurrencies. Bitcoin price in U.S. dollars over the past five years. The chart here shows Bitcoin in U.S. dollars over the past five years. As you can see, it’s been a volatile ride to say the least. And while the “crypto winter” of late-2021 through the end of 2022 was a big downer for those long the asset, if you would have owned it since its 2022 low, you would be holding a gain of about 270% through its current price point. Still, the question remains: Is crypto a currency or a commodity? The great Bruce Lee once said that when it comes to borrowing styles and techniques from various martial arts, the only thing that matters is whether it will help you win a fight. If it helps, then you should use it, as Bruce famously said. When it comes to cryptocurrencies, I feel the same. As an investor, you’re in a fight to grow your capital the best way possible. And if using Bitcoin or other cryptocurrencies (or related assets such as exchange-traded funds, related stocks and/or related put and call options) is a good way to do that, then you should definitely use it. That applies to cryptocurrencies -- whether they’re currencies, commodities or a hybrid of both. Hey, like Bruce says -- if it helps you win a fight, then you should use it. [China’s Global Conspiracy to Destroy the American Dollar]( China is nearing the end of its 40-year plan to dominate the world’s economy. Only one obstacle remains: The U.S. dollar. But not for long... because China has enlisted many co-conspirators to sink the dollar: Russia, India, Brazil, Argentina, Germany, and even Canada. And – no surprise – the International Monetary Fund (IMF) wants to jump in to help China win. This means China now has the power to crush the dollar almost overnight... and bankrupt America. But there’s still time to protect the money and retirement of investors. [Click here now to find out how... before it’s too late.]( ETF Talk: The Future (of Bitcoin) Is Still Bright While much of the rest of the market is eagerly anticipating the Federal Reserve’s signaled rate cuts, one sector is more hesitant than most. [Certain analysts are predicting]( that Bitcoin prices may fall as much as 20% in response to the rate cuts. Coupled with September being a traditionally rough month for the cryptocurrency, the future of Bitcoin may look rocky to its skeptics. However, I believe this view of Bitcoin’s future is ultimately shortsighted. Cryptocurrency is still going strong, and this dip should be treated less as a fall from grace, and more as an opportunity for a great investment. The real question is: how should we best invest in Bitcoin’s future? I think the answer lies in Bitcoin futures -- more specifically, the ProShares Bitcoin Strategy ETF (BITO). Issued in 2021 by ProShares Advisors LLC, BITO provides exposure to Bitcoin returns in the form of an ETF. Instead of directly investing in Bitcoin, the fund manages a portfolio of cash settled, front-month Bitcoin futures. The value of these futures is determined by the CME Group and Crypto Facilities Bitcoin Reference Rate. Their value is found by aggregating Bitcoin trading activity across major global Bitcoin spot trading venues during a one-hour window and dividing those windows into 12 five-minute segments. Each segment has a volume-weighted median (VWM), and the value is expressed as the mean of those 12 VWMs. BITO’s Bitcoin futures are held through two relatively equally represented means: The U.S. Dollar (50.94%) and United States Treasury Bills (49.06%). The fund has a current expense ratio of 0.95% and has $1.74 billion in assets under management. Chart Courtesy of [www.stockcharts.com]( As of Sept. 2, the fund is down 6.63% in the past month and 15.02% in the past three months. However, the fund is also up 31.33% year to date and an astonishing 109.83% in the past year. This shows the true long-term viability of the crypto market despite temporary setbacks. While the future of Bitcoin continues to shine, it may not be right for your own financial future. You should always consider your investment goals and do your due diligence before adding any stock or exchange-traded fund (ETF) to your portfolio As always, I’m happy to answer any of your questions about ETFs, so do not hesitate to [email me](mailto:askjim@successfuletfinvesting.com). You may see your question answered in a future ETF Talk. [This A.I. Spots Trades Like a Spy, See it Live]( If you want to trade smarter, not harder, and be prepared for this week's markets, you won't want to miss this. Join us live as we reveal which stocks and commodities might explode in the next few days and how to conquer volatility and avoid losses. Anticipating market changes is crucial, and nothing is more rewarding to us than helping you steer clear of potential losses. [Secure your spot now](! In case you missed it… Studio Life Is the Life for Me Roll me over and set me free The cowboy’s life is the life for me… --Thin Lizzy, “[Cowboy Song]( Recently, I’ve spent many hours engaged in what I call “studio life.” Now, by studio life, I am referring to both a TV studio on one side of the country, and a music recording studio on the opposite side of the country. Two weeks ago, I was in a Washington, D.C.-area TV studio to record a video for a project that I am extremely excited about. This project is designed to help individual investors simply and easily participate in two of the best “alternative asset” classes in the market today. Now, as much as I want to tell you all about this new venture right now, my publisher isn’t quite ready yet for me to reveal the details. However, over the next several weeks, I will be writing about these asset classes in The Deep Woods, so that you can get your mind wrapped around the topics in question, and why I think they’ll be the “next big thing” for investors looking for that alpha “force multiplier” we all seek. Your editor filming content for the soon-to-be released “force multiplier” investing service. After my TV studio session that Friday, the next day I flew back to Southern California. One day later, I found myself in another studio, this time for a 12-hour session of recording for my passion project -- an album of songs I’ve composed and performed. Interestingly, the whole whirlwind of filming a video one day, on one coast, and then recording for a full day on the opposite coast, got me thinking about just how much I love “studio life.” I read once that the affliction known as “glossophobia,” more commonly known as the fear of public speaking, is the most common phobia ahead of death, spiders or heights. Now, I am not a big fan of spiders, but death, heights and especially fear of public speaking aren’t things I’m worried about. First, we all know we are going to die, and knowing this shouldn’t produce fear. I mean, why be afraid of something you know is going to happen? As for heights, well, my stint as a U.S. Army paratrooper cured any queasiness on that front. Hey, there’s nothing like standing in the door of a C-130 transport plane and looking down at the ground some 1,200 feet up to make you shed any fear of heights. Now, when it comes to public speaking, well, it is here that I am most at home, as I love being on display while teaching people how to do what I know how to do best -- helping investors make money in the markets. The way I see it, being in front of a camera to teach investors, or being in front a microphone singing with a guitar or while playing piano, is just another aspect of doing what I love to do best -- i.e., sharing my knowledge and passions with others. Your editor at [4th Street Recording]( with violinist and vocalist [Jessy Greene](, who toured and/or recorded with artists such as the Foo Fighters, P!nk, Wilco, Ben Harper, Tom Freund and Glen Campbell. She is a featured player on my new project. You see, creating content of all sorts, from information to music, is one of my greatest pleasures and passions. I love it because it starts with an idea. Then, that idea is cultivated via thinking and researching and then writing -- either via prose such as you find in The Deep Woods or in my other advisory services, or via musical notes such as what you will be able to listen to on the new album. Of course, to make these things happen and to bring them to you in the best possible way, it all comes together with the “studio life.” So, while rockers Thin Lizzy told us that “The cowboy’s life is the life for me,” I have to alter that lyric a bit and say that “The studio life is the life for me.” In the very near future, you will be able to watch and listen to the byproducts of my recent dual-coast studio sessions -- so stay tuned here each week for all the soon-to-be-unveiled details. ***************************************************************** Break My Heart Sweetly There’s a scar on my soul So let me down easy Break my heart sweetly Like you always do I guess I can't let go ’Til you wreck me completely Break my heart sweetly Drape me in blue --John Moreland, “[Break My Hearty Sweetly]( Life is… beautiful, harsh, revealing, caustic, gentle, abstract, absolute and finite. Pick your favorite adjective and it probably modifies the noun “life” quite well. One aspect of life I find more and more interesting as I get older is the nature of sadness and the scars on my soul I’ve collected in my journey. Sometimes I touch those scars and it makes me melancholy, and that doesn’t usually feel good. However, those scars are part of what makes me resilient, steadfast and resolute. And though life is beautiful, part of that beauty is allowing yourself to get your heart broken sweetly. Wisdom about money, investing and life can be found anywhere. If you have a good quote that you’d like me to share with your fellow readers, send it to me, along with any comments, questions and suggestions you have about my newsletters, seminars or anything else. [Click here](mailto:askjim@successfuletfinvesting.com) to ask Jim. In the name of the best within us, [Jim Woods] Jim Woods Editor, Successful Investing & Bullseye Stock Trader About Jim Woods: [Jim Woods]Jim Woods has more than 25 years experience in the markets, as a stock broker, hedge fund money manager, author, speaker and independent analyst. Today Jim serves as editor and investment director of the long-running newsletters [Successful Investing](, [Bullseye Stock Trader]( and a new Live Coaching service offered exclusively to his readers. His articles have appeared on many leading financial websites, including StockInvestor.com, InvestorPlace.com, Main Street Investor, MarketWatch, Street Authority, and many others. About Us: Eagle Financial Publications is located in Rosslyn, VA. – Blocks from the Capitol. Our products have been helping investors build their wealth for several decades. 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