In today’s Exponential Investor…
- Backed up or backup?
- Halt on everything, except…
- The equation was simple
How much bog roll do you keep as a “backup”?
Be honest, you’ve got a surplus in storage at home somewhere. I know you do, because we all do. It’s a vicious memory of a time, not that long ago, when the thought of having no bog roll was the most terrifying thought in society.
Remember that time? Remember that week prior to 20 March 2020? That week before we all went into the first lockdown?
That week when people were literally fighting in the supermarket aisles over the last package of toilet paper? When the shelves were barren and desolate. When long life milk was widely considered as “white gold”.
It was and will always be one of the wildest times in history. A period when the world was on the brink of imminent lockdowns, restriction of movement and the shackling of society at the authority of the government.
Then we all went into authoritarian lockdown. Fat lot of good that did.
Here we are almost a year later and it’s still the same thing, albeit in an ever-changing situation. Except for one thing that’s been constant.
In March it wasn’t just society that was going mad. The markets were in freefall as well. Once the fear of the coronavirus kicked in, fear spread itself like a virus through investors and investor sentiment.
Market went down, down, down. All markets too. The stock markets, the property markets, the crypto markets.
Over the space of a month from 12 February to 12 March 2020, bitcoin’s value slid from $10,300 to $7,900. That’s a four week slide of 23%.
Then from 12 March to 13 March, in 24 hours, it fell even more… all the way to $5,300.
A further 33% fall in just a single day.
It was enough to terrify traders and investors as much as the thought of not having bog roll. Perhaps one, a catalyst for the other…
However, not everyone was terrified about this “crash” in bitcoin.
Halt on all action… except bitcoin.
Those were my words to subscribers on 18 March 2020. Five days after bitcoin “crashed” and was languishing around $5,300 as I wrote those exact words.
I said to cease all trading and investing in other crypto. Not to sell. Just to hold fire. Except bitcoin.
Why? Why, in the midst of one of the most wild, unpredictable market moves of all time, would I say hold all investing, all trading, except bitcoin?
Money printer goes brrrrrr
I should also add at this point I said to hold on all action in the stock market too. Across the board, stocks, crypto, everything, I said to hold fire… except bitcoin.
In a time of crisis, I had one active recommendation to my subscribers. It was to keep accumulating bitcoin.
Why? What made it so special that it was the only thing I was recommending in the midst of a global pandemic and market black swan event?
It was a simple equation for me.
1. We were approaching bitcoin’s renowned “halving” event. These “halvings” are a crucial point in bitcoin’s existence that occur about every four years. The significance of the halvings cannot be underestimated. I didn’t underestimate it at all.
2. As I explained to my subscribers,
When governments print billions, trillions of dollars, they are eroding the value of the currency in which they do it with. They are adding to an already destabilised system with more tinder, ready to light up with the faintest of sparks.
And that spark will be rampant inflation. Inflation will come when you print that much money and juice it into the financial system. The value of your cash will erode. The value of savings in a zero and negative interest rate world will erode the value of your cash.
What do you think people will do when rates are negative and it costs you a percentage of savings just to hold your money in the bank? They will want their cash out. But what happens if there’s inflation and that cash on its own continues to erode in value and buys less, and less, and less?
This is why bitcoin exists, because of the shockingly poor management and control over the global financial system. It started in 2009 and has been going for a decade – now it’s going to get doubly as bad.
It all bodes well for bitcoin long term. And it adds to my view that bitcoin will emerge from these events as an even more financial instrument for the masses as we come out of this crisis and the fractured financial system continues to fracture even more.
To understand the failures of the traditional financial system is itself quite something to undertake. Most people don’t really understand what it means when they hear the government is adding “stimulus” to the economy.
Most people don’t get what all these extraordinary fiscal and monetary measures really do to an economy. I’ll tell you what they do… They destroy it.
That’s right, these measures don’t help. Not really. It’s short-term relief for long-term destabilisation. It’s a Band-Aid when you’ve severed your arm.
Meanwhile, the underlying story of bitcoin is constant. It has been constant. In over a decade of existence, it hasn’t fundamentally changed at all. It’s the most consistent financial instrument the world has ever seen.
If all you see when you see or hear about bitcoin is “how much is it worth” then you miss the real underlying story. That’s why when its “price” crashes around 50% in about a week, I don’t worry about it. In fact, I told people to get more of it.
Now, almost a year later with bitcoin around 805% more valuable in fiat money, it’s clear what the right call was.
Now I’m saying to people you need to really understand what bitcoin is about. However, it’s far more than just bitcoin. What’s happening in crypto markets is much, much bigger than just bitcoin. It’s much bigger than fast money. It’s much bigger than the mainstream will ever figure out.
We are in the middle of a revolution that’s been building for a decade, and in the last year it has taken a step up to a level that I’ve been expecting for the last decade I’ve been involved in it. There’s so much to learn, to understand, to take action on that you simply can’t ignore it any longer.
Soon, I’m going to show you exactly what it means and what you need to do to join the revolution.
Editor, Exponential Investor