the new crisis currency

WHY EVERY AMERICAN SHOULD OWN AT LEAST $100OF THE HARDEST MONEY THE WORLD HAS EVER KNOWN

CRISIS CURRENCYT H E N E W

BY NICK GIAMBRUNO, CHIEF ANALYST, THE CASEY REPORT

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THE NEW CRISIS CURRENCYThe Casey Report

Dear Reader,

For most of human history, gold hasn’t had much competition.

For thousands of years, gold has been the safe-haven asset. That’s because it’s durable, divisible, consistent, convenient, and has intrinsic value.

Physical precious metals in your possession cannot be easily confiscated, nationalized, frozen, or devalued at the drop of a hat.

Gold is universally valued. Its worth doesn’t depend on any government.

There is nothing particularly American, Chinese, Russian, or European about gold. Different civilizations have used them as money for millennia.

Nothing was able to stand next to gold as a safe-haven asset – except for silver.

But that all changed recently with the advent of the digital age and Bitcoin. People now have a new type of hard asset to lean on that is just about as hard to produce as gold.

And in less than four years, its hardness will be almost twice that of gold’s.

Satoshi Nakamoto, the anonymous creator of Bitcoin, once wrote:

The root problem with conventional currency is all the trust that’s required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust.

Owning Bitcoin offers you a way to opt out of this lunacy. I think an increasing number of people around the world are going to do exactly that as the global elites’ plan for the “Great Reset” comes to fruition..

As you’ll learn in this report, in a crisis, Bitcoin is invaluable to the common man.

And this is why every American should own Bitcoin.

Regards,

Nick Giambruno Chief Analyst, The Casey Report

https://www.caseyresearch.com/team/staff/nick-giambruno/

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THE WORLD’S FIRST DIGITAL HARD ASSETBitcoin shares many of the same attributes of gold that make it attractive as money. It’s durable, divisible, convenient, consistent, and has tremendous value as a transfer mechanism that is outside of anyone’s control.

In this special report, I want to focus on another aspect that makes Bitcoin attractive: its scarcity. Bitcoin is the world’s first scarce digital asset.

First, we must understand a few things about Bitcoin.

Bitcoin is a free-market form of money. People all around the world determined that Bitcoin has value to them. They voluntarily chose to exchange other forms of value for Bitcoin.

They did not choose Bitcoin because of legal tender laws, or because government decrees forced them to, as they do for fiat money.

The Oxford English Dictionary defines fiat money as “inconvertible paper money made legal tender by a government decree.”

Bitcoin is not fiat money.

Second, Bitcoin has no central authority. Instead, it runs on a secure decentralized network scattered around the world on thousands of computers.

Bitcoin does not rely on so-called “trusted” intermediaries or third parties. It has no counterparty risk and no single point of failure. Unbreakable encryption helps secure the network.

Think of the Bitcoin blockchain as simply a public database of transactions distributed across thousands of computers.

About every 10 minutes, a new block – or set of transactions – is added to the existing database (blockchain).

New Bitcoins are created through what is known as the block reward. The block reward consists of two parts: 1. Transaction fees 2. Block subsidy (the preset rate of new Bitcoins that are created after each new block).

The block reward is paid to people who verify new transactions and secure the overall Bitcoin network. It’s a crucial part of keeping the Bitcoin network self-sustaining and is what is known as “mining.”

A key feature of the Bitcoin protocol is that the block subsidy gets cut in half roughly every four years through a process known as “halving.”

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So far, Bitcoin has been through three halvings, one in 2012 when the block subsidy dropped from 50 Bitcoins to 25 Bitcoins, and another in 2016 when it dropped from 25 to 12.5. The last one happened in May 2020, which brought the block subsidy down to 6.25 new Bitcoins per block.

The halvings will continue every four years, drastically slowing the rate of increase in the supply of new Bitcoins. By 2024, the block subsidy will be cut to 3.125. By 2028, it will fall to 1.5625.

By the end of the 2020s, the annual growth rate of new Bitcoins relative to the current stock will be close to zero.

As each halving cuts the rate of increase of the new Bitcoin supply in half, the effect on Bitcoin’s SF ratio will be drastic.

THE HARDEST MONEY THE WORLD HAS EVER KNOWNNo other cryptocurrency is genuinely scarce and decentralized like Bitcoin.

All other cryptos have key players, insiders, and development teams that can potentially act like central banks and increase the supply if they choose to.

It’s a temptation that humans will likely find impossible to resist. Eventually, it will happen – that is the nature of putting the potential to tinker with monetary policy in the hands of humans.

For example, there have been debates within the Ethereum community – the second-largest cryptocurrency after Bitcoin – on what the inflation schedule should be.

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The fact that altering the ether supply is not only possible, but a practical proposal under serious discussion, is proof that it is not a hard asset.

Bitcoin, on the other hand, takes humans out of the equation. Its non-discretionary monetary policy is in the hands of an unalterable protocol.

Bitcoin is the only crypto that is truly not controlled by anyone. Nobody can get together and alter its supply, which is fixed for eternity.

That’s the essential difference between Bitcoin and all other cryptos.

It is for this simple reason that no other cryptocurrency – and no asset other than gold – even comes close to possessing the monetary properties of Bitcoin.

As a free-market, non-government, hard money, Bitcoin is in the same league as gold. None of the other cryptos are.

THE STOCK-TO-FLOW RATIOThe stock-to-flow (SF) ratio quantifies the hardness of an asset.

The “stock” part refers to the amount of something available, like current stockpiles. It’s the supply already mined. It’s available right away.

The “flow” part refers to the new supply added each year from production and other sources.

Stock / Flow = SF ratio = the number of years of new supply (flow) needed to equal the current supply (stock).

A high SF ratio means that the new supply is small relative to the existing supply.

A high SF ratio also indicates a hard asset. A low SF ratio indicates the opposite.

A low SF ratio means that the new supply (flow) can sway the market balance easily. If an annual supply of something is close to its current stock, the new supply will have a lot of power over the price of that commodity or asset.

Today, Bitcoin’s SF ratio is around 56, well above silver (4.7), and about equal to gold (58).

As Bitcoin’s supply growth continues to shrink, Bitcoin’s SF ratio will double gold’s in less than four years – and continue growing after that.

The SF ratio shows how Bitcoin will soon become the hardest money the world has ever known.

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Typically, an increase in demand leads to a rise in price. This incentivizes more production, which creates more supply, and eventually, downward pressure on prices.

But Bitcoin’s supply is perfectly inflexible and is entirely resistant to this process.

In other words, no matter how high the Bitcoin price goes, it cannot induce the production of more Bitcoins.

There is no other asset in existence like this.

This is why Bitcoin is the hardest asset the world has ever known.

PEAK BITCOINBitcoin is the only large, tradeable asset in the world that has a known and fixed supply.

According to the unalterable Bitcoin protocol, we know precisely how Bitcoin’s supply will grow.

There will never be more than 21 million Bitcoins, and there’s nothing anybody can do to change it.

As of writing, there are over 18.6 million Bitcoins in existence, about 89% of the total potential supply.

The remaining 2.4 million new Bitcoins will be added at an ever-decreasing rate until the 21 millionth Bitcoin is created about 120 years from now.

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By the end of this decade, over 98% of all Bitcoins will have already been created.

The supply of Bitcoin won’t grow much at all from here – and demand is set to explode.

We’ve already reached what I call “Peak Bitcoin.”

THE BITCOIN SUPREMACYThe Bitcoin phenomenon is the birth of an entirely new form of money.

We’re talking about the emergence of a new asset that became a significant global money in less than a decade.

There is nothing else comparable. Bitcoin is a completely new animal.

Bitcoin has gone from having no market value when it was launched in 2009… to being used to purchase two pizzas in 2010 – the first commercial exchange… to today generating over $16.7 billion in daily transaction volume from every country in the world.

Right now, over 15,000 merchants accept Bitcoin as payment, including Overstock.com, Expedia, Microsoft, and Starbucks. That number is rapidly growing.

This is what the process of a new asset becoming money looks like, and it’s just getting started.

It doesn’t happen overnight. But when you take a step back and understand the fundamentals of the long-term trend, the Big Picture is profound.

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Today, Bitcoin has grown to have a market capitalization of about $872 billion – almost 30 times as large as the monetary base of Argentina.

If it were a government currency, Bitcoin would be the fifth-largest currency.

Think of Bitcoin’s strict scarcity and shrinking supply growth like a black hole sucking in capital from weaker currencies.

Capital is attracted to hard assets, and Bitcoin is the world’s hardest.

I think this process will not only continue but accelerate exponentially in the years ahead.

Some proponents believe the endgame for Bitcoin is to eventually emerge as the world’s dominant form of money – a process I call the “Bitcoin Supremacy.”

It’s a global, voluntary transition from inferior currencies to a superior one.

If the Bitcoin Supremacy even comes close to happening – the case for which gets stronger every day – it would be the greatest transfer of wealth in human history.

You can be on the right side of it by owning some Bitcoin.

With that Big Picture view in mind, I think it’s clear we are still in the early days of Bitcoin.

In terms of global financial assets, Bitcoin’s market cap is barely a blip, as you can see in the following chart.

If Bitcoin is going to compete with, and eventually, overtake government fiat currencies – and I think it has an excellent chance of doing that – then its market cap must grow substantially.

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If Bitcoin’s market cap rises to that of gold’s, the price of a single Bitcoin would be worth $532,095.

If the Bitcoin Supremacy happens, and Bitcoin’s market cap rises to that of all of fiat money, a single Bitcoin would be worth almost 5 million dollars – $4,589,857 to be exact.

(Remember, each Bitcoin can be divided into 100 million units called satoshis. In the event of the Bitcoin Supremacy, each satoshi would be worth nearly five cents.)

With that perspective in mind, Bitcoin has incredible upside at current prices.

Moving towards the Bitcoin Supremacy is not as far-fetched as it might seem.

Remember, right now, Bitcoin’s SF ratio indicates its hardness is roughly equal to that of gold. As Bitcoin’s supply growth is continuously decreasing, its hardness will double gold’s in less than four years, and only increase from there.

Further, it’s clear to me that Bitcoin is a superior form of money to government fiat currencies, which, of course, have no limit on how much can be printed. And Bitcoin’s market cap has already surpassed the monetary base of most countries.

I think this process will not only continue, but accelerate. That’s because governments around the world are printing unprecedented amounts of currency.

BITCOIN IS THE NEW CRISIS CURRENCYI’ve long called Bitcoin the new crisis currency.

That’s because I recognized that it possesses many of the attributes of a good money, and because of its strict scarcity or hardness, as indicated by its high and rising SF ratio.

For example, Bitcoin is hugely popular in countries with high rates of inflation, like Zimbabwe, Venezuela, Turkey, and Argentina.

That’s no coincidence.

Bitcoin offers regular people a haven. They can easily use it to send and receive wealth. That might mean paying for goods and services when the local paper money becomes worthless, or discreetly receiving a much-needed influx from relatives who have managed to get out.

I spend a lot of time in Argentina and have seen it firsthand.

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According to a 2018 study, Buenos Aires had the highest Bitcoin adoption rate in South America. And in the midst of the current crisis, Cointelegraph reported in April 2020 that Bitcoin peer-to-peer trading volume in Argentina, Chile, Venezuela and Morocco had reached all-time highs. Below is a picture of me next to a Bitcoin ATM in Buenos Aires, where locals can exchange their pesos for Bitcoin.

Argentina is in the middle of a full-blown currency crisis. It’s only a matter of time before the local currency collapses. When that happens, I wouldn’t be surprised to see Bitcoin absorb a significant portion of the country’s monetary base. It certainly has the capability.

I expect Bitcoin’s market cap will only get bigger for three reasons:

1. First, the world is moving towards crises on multiple fronts.

2. Second, the central banks of the world are going full throttle on money printing.

3. Third, at the same time, Bitcoin’s SF ratio roughly doubled after the May 2020 halving… and will do so again in 2024.

In the months ahead, the demand for Bitcoin has the potential to skyrocket.

I want to clarify an important point. While Bitcoin shows great promise, it’s still a new technology. It doesn’t have a track record that stretches for thousands of years like gold. Bitcoin is a new type of asset that is at the earliest stages of possible monetization.

I don’t see Bitcoin as a substitute for or competitor to physical gold. Nor do I think it’s a threat to gold’s value proposition. Gold is the best way to preserve wealth over the long term.

Instead, I see Bitcoin as a complementary tool for advancing your financial freedom. It’s also a great way to speculate on an experiment that could prove to be the hardest money the world has ever known.

Nick Giambruno, chief analyst of The Casey Report, at a Bitcoin ATM

in Buenos Aires, Argentina

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Further, there is a tendency for people to be attracted to harder money over time. During financial crises or when government-issued fiat currency rapidly loses its value, the process is in fast motion.

That’s when people rush toward harder assets.

In a crisis, Bitcoin is invaluable to the common man. And this is why every American should own Bitcoin.

Action to Take: BUY Bitcoin (BTC) up to $50,000. We recommend you hold at least $100 worth of the Hardest Crisis Currency.

HOW TO BUY AND HOLD BITCOINThere are many ways to buy Bitcoin. Coinbase.com may be the most convenient option right now.

Please note that Coinbase is a third-party service. It’s not affiliated with Casey Research. If you have problems buying Bitcoin through Coinbase, you need to submit a request to Coinbase directly.

That’s only step one, though. Don’t leave your Bitcoin on an exchange like Coinbase. It’s much more secure to hold your Bitcoin in your own wallet, off the exchange’s website.

If you’re new to cryptocurrency, these steps might seem complicated at first. That’s why we created a series of walkthrough videos to guide you through the process. You can access these videos by clicking here.

Or if you prefer, you can read through these steps in this special report.

SQUARE (SQ)Aside from owning Bitcoin, Square (SQ) is one of the best ways for us to profit from the Bitcoin Supremacy trend.

Twitter co-founder Jack Dorsey created Square to facilitate transactions between customers and merchants.

Dorsey is a big believer in Bitcoin. He has repeatedly stated he thinks Bitcoin could become the “native currency” for the internet – a big step towards the global adoption of Bitcoin.

It was one of the first payment processors to integrate Bitcoin.

Today, the company aims to build out an entire Bitcoin ecosystem – making it easier, faster, and cheaper for everyone to use Bitcoin.

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Square aims to build out an entire Bitcoin ecosystem – making it easier, faster, and cheaper for everyone to use Bitcoin.

In 2018, Square’s Cash App added the ability to buy and sell Bitcoin.

The move marked a significant step in the company’s transformation process.

As you may remember, Cash App is a digital wallet where users can send, spend, store, and invest money.

About 35% of Square’s total revenue in 2020 came from the transaction fees it charges on payments processed through its system. Though still a substantial amount, this was a notable change from just a year ago, when roughly 65% of the company’s revenue was transaction-based.

Below is a more detailed look at the company’s business segments broken down by the revenue it generated last year.

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Square has made a strategic effort to move beyond just being a transaction tool for businesses. At 48% of its overall revenue, Square’s Bitcoin business is an essential part of this strategy.

More importantly, Bitcoin has been generating an increasing percentage of overall revenue for Square quarter after quarter, as we can see in the chart below.

The best part is the company’s Bitcoin business continues to boom.

The company’s recent quarterly results are a case in point. The report showed growing revenues and a growing base of Cash App users fueled by increased interest in Bitcoin.

At $1.76 billion, Cash App’s Bitcoin revenue was 10x higher than last year, while gross profit surged 13-fold to $41 million.

As you may remember, Cash App is a digital wallet where users can send, spend, store, and invest money. But it was the possibility to buy and sell Bitcoin with ease that has helped it grow.

Excluding Bitcoin, Cash App revenue was $416 million, growing 127% from a year ago.

It’s clear that while Bitcoin-trading capabilities still carry a relatively slim margin for Square, the cryptocurrency continues to contribute significantly to the app’s overall success. In other words, Bitcoin continues to be a boon for Cash App (and Square).

I expect Square’s Bitcoin business will continue growing.

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But it won’t only come from Cash App.

You see, Square recently purchased roughly 3,318 Bitcoins at the cost of $170 million.

That’s not the first time the payments giant bought Bitcoin.

The first time Square bought Bitcoin was in October 2020… and it said this:

• “We believe that bitcoin has the potential to be a more ubiquitous currency in the future.”

• “As it grows in adoption, we intend to learn and participate in a disciplined way. For a company that is building products based on a more inclusive future, this investment is a step on that journey.”

The fact that the company has doubled down on Bitcoin again shows its ongoing commitment to the cryptocurrency.

Square has a sound understanding of Bitcoin, its economics, and superior monetary qualities.

All this tells me that it will likely continue to be a buyer for years to come.

Action to Take: BUY Square (SQ) up to $250.

If any of the recommendations are trading above their buy-up-to guidance by the time you read this, please be patient and do not chase higher.

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