Bitcoin Blasts Above $34,000! Why Its Long-Run Rise Is Unstoppable
Talk about starting 2021 with a bang! On the third day of the new year, Bitcoin (BTC, Tech/Adoption Grade “A-”) shot up to $34,400.
The very next day, Ethereum (ETH, Tech/Adoption Grade “A”) romped above $1,100 — spitting distance from its all-time high (near $1,200).
And both the King and Queen of Crypto are holding those levels. In the early morning hours today, BTC even broke $36,000 before correcting back down near $34,500.
Few things in this broken world are 100% certain. But coming right after death and taxes in the inevitability rankings … is the long-term rise of cryptocurrencies. This is a 21st century megatrend that will not be denied.
The reason is simple. Endless money printing by world central banks cheapens government-issued currencies, leaving nominal asset prices nowhere to go but up.
And that’s especially true for the world’s premier forms of alternative money — gold and Bitcoin. Plus other, newer crypto assets.
What if Central Banks Stopped Printing Money?
Wouldn’t That Halt Crypto’s Rise in its Tracks?
Theoretically, perhaps. But in the real world, that’s simply not going to happen. The lesson of monetary history is that once begun, money-printing swiftly becomes a tough habit to break.
To see why, consider the enormity of the global debt problem. World debt is now so pervasive, so overwhelmingly large, it overshadows nearly every monetary decision by every major central bank on the planet.
Global indebtedness now stands at a sky-high 330% of world GDP. And on top of that, it’s still growing. In just the last two decades, for example, it shot up more than 100 percentage points.
In other words, new debts are piling up far faster than nations of the world could possibly grow out of them.
Naturally, this leads to an irretrievably precarious state of affairs. Today, the only way central banks can keep the roof from caving in … is if they CONTINUE to:
- Print fiat money with wild abandon,
- Slam interest rates down to near zero,
- Hold them there indefinitely, or even force them below zero, and
- Function as the buyer of last resort — of an ever-larger list of debt securities ordinary profit-seeking investors wouldn’t touch with a barge pole!
What would happen if central banks suddenly halted (or, God forbid, reversed) these massively expansionist monetary policies? Answer:
- Across-the-board, round-the-world market collapses.
- A chain reaction of debt defaults.
- A tsunami of personal bankruptcies, business failures and bank closings.
- And most shocking of all, national governments going bust around the world.
What Would Bankrupt Governments Do? They’d Seize Assets!
Hard to believe? Well, history is riddled with examples.
In 2010, for instance, the government of Cyprus ran out of money.
European Union rules prevented officials from just printing the money they needed. So, they froze and raided private bank accounts.
We have seen similar actions in Argentina, Brazil and other relatively large, supposedly “stable” economies.
And never forget what President Roosevelt did in 1933. He decreed all the privately-owned gold in America be surrendered to the U.S. government for $20 per ounce — which he then promptly revalued at $35. (Talk about buying low and selling high!)
Of course, there are also somewhat more subtle ways of accomplishing the same thing. Big Western governments today, for example, may eschew confiscation. Instead, they impose ever-heavier “taxes” and ruthlessly enforce compliance. But the end result is the same.
Face it: Without massive central bank intervention, today’s global economy would plunge into a deflationary pit so deep and dark, it could make the COVID crisis feel like a sunny day by comparison.
And as governments go bust, virtually all privately held assets will be at risk as politicians commandeer resources to keep the lights on.
This is when another key feature of crypto assets really shines. I’m talking about direct ownership. With crypto, you (and you alone) can retain sole, direct custody of your assets. Because of this,
There are no accounts to freeze, or physical assets to seize. Result: Confiscators can’t touch your crypto.
Maybe this kind of direct ownership sounds like “no big deal” to you. And indeed, it may not be a big deal … until, that is, it suddenly becomes a big deal.
OK, what if honest government wasn’t such a contradiction in terms?
What if hard-pressed governments respect morality and decline to confiscate private assets?
Well, the unhappy truth is … your ownership may still not be assured.
The global financial system has evolved into a tangled global web of intermediaries, custodians and middlemen. If deflation ran amok, the weakest would not only go bust first, but they could also take down their counterparties in a giant domino effect.
- This is what came very close to happening in wake of the Lehman Brothers failure on Sept. 15, 2008 … until the Fed stepped in to buy up all the dominoes.
- This is what almost happened AGAIN in March of 2020, as pandemic panic swept through global debt markets … until the Fed stepped in to buy up even more assets, even more quickly than in 2008.
But the bottom line is this: If central banks stopped printing money, or failed to act as buyers of last resort, any asset that’s also someone else’s liability (or promise to pay) would be in instant jeopardy.
Crypto assets alone allow you to hold a liquid asset that can be traded for anything at the push of a button, and that can be transported effortlessly by its owner.
Crypto Assets Are Also Effectively Immune to the
Shenanigans of the Legacy Financial System
This fact alone makes them immensely valuable … and virtually guarantees their value will rise in nearly any scenario.
The world’s smartest investors are already waking up to this reality. This is the key reason Bitcoin recently punched through $20,000 to new all-time highs … and promptly surged beyond $34,400.
Mark my word, this is only the most recent of dozens — maybe hundreds — of new all-time highs yet to come.
So, make sure you have some BTC (and our other top Weiss-rated cryptos) securely salted away among your savings. It’s hardly an exaggeration to say this could be a matter of financial life or death.
Juan and Bruce