They called it a “shot heard around the world” for freedom... The phrase comes from Ralph Waldo Emerson’s poem “Concord Hymn.” It refers to the first musket shot that rang out at Old North Bridge in Concord, Massachusetts on April 19, 1775. That’s when American militia companies numbering about 400 men engaged roughly 90 British Army troops. And it was the first time American forces advanced in formation on British soldiers and routed them. It also marked the outbreak of the war between the Kingdom of Great Britain and its 13 American colonies that led to the creation of the United States of America. “A shot heard around the world” is also how colleague Nick Giambruno described the news that the president of El Salvador plans to make bitcoin legal tender. It’s a move Nick believes will eventually lead to freedom from today’s government-run “fiat” money system. He sees the news as the start of the fulfillment of the Bitcoin Supremacy trend he’s been pounding the table on since last fall. This will see bitcoin become the world's dominant currency, much like gold was during the Gold Standard monetary era. And if Nick’s right, it will send the price of bitcoin up 1,600% from here… and more. If you’re just joining us, welcome aboard… The Daily Cut is the premium e-letter we created for all paid-up Legacy Research subscribers. So if you’ve just signed up to one of our investment advisories, that’s why you’re reading this. Our mission is to transform your financial life… and teach you the secrets of investing… by delivering you the best non-consensus research from Nick, Teeka Tiwari, Jeff Brown, Dave Forest, and the rest of the Legacy team. Each day, they write about what’s going on with stocks, commodities, bleeding-edge tech, cryptocurrencies, and other alternative ways to really move the needle on your wealth. It’s so much research, it takes hours every day to pore through. We know you’re busy. So my team and I (your editor, Chris Lowe) read through it for you and bring you the choicest “cuts.” We’re looking for big ideas about money and markets that need to be on your radar – right now. And today, I’m shining the spotlight on Nick’s Bitcoin Supremacy idea… and how it ties in with what’s happening in El Salvador. | Recommended Link | | ANNOUNCING: Big T’s Next Big Idea Big T just announced something that got everyone in our office very excited. He said his next big idea (this one) has the potential to beat all his past gains in crypto. Remember, anyone who listened to him back in 2016 had the chance to make as high as 10,180% in Bitcoin… 42,122% in Ethereum… and 151,323% in NEO, just to name a few. On Wednesday, June 9, at 8 p.m. ET, he’ll be revealing all the details of his next big idea. | | | -- | First, what is the Bitcoin Supremacy? It’s what happens when folks around the world voluntarily move from inferior currencies to a superior one. This goes on until the superior currency reigns supreme – like gold did when it backed the U.S. dollar and other major world currencies in the late 19th and early 20th centuries. Nick says this is what we’re seeing with bitcoin right now. Folks are moving out of “soft” currencies such as the dollar, the euro, and the yen. These are soft because governments and central banks can produce them at will and at virtually no cost. And they’re moving into bitcoin because it’s a “hard currency.” That is to say, it’s hard to produce more. Remember, new bitcoins are issued on a strict schedule that’s governed by code. And it costs so-called bitcoin miners real-world resources, in the form of advanced computing rigs and the electricity it takes to power them… to mine new coins. That means, unlike with fiat currencies, governments and their central banks can’t inflate bitcoin’s value. Here’s Nick with more… Buying bitcoin today is a speculation on bitcoin becoming the money of the future – which is an excellent bet. If it were a government currency, bitcoin would be the 16th-largest currency in terms of its market cap, just ahead of the Mexican peso, which is used by over 126 million people. That’s not surprising. Hard currencies hold their value. So capital is attracted to them. And bitcoin is the world’s hardest currency. It’s even harder than gold because you can’t produce more of it as its price goes up. The consensus protocol – which is enforced by a globally distributed network of over 10,000 computers – won’t let you. Think of bitcoin’s hardness as a black hole sucking in capital from weaker currencies. It’s eating the demand for monetary goods from inferior forms of money, such as government fiat confetti currencies. That’s why I expect bitcoin to crack the list of the top 10 biggest currencies in the months ahead, and go higher from there. That’s why the news out of El Salvador is so important… The country’s president, Nayib Bukele, is the leader of the aptly named New Ideas Party. And he broadcast his intentions to make bitcoin legal currency there, by video, at the Bitcoin 2021 conference in Miami over the weekend. If El Salvador’s congress – which is controlled by the New Ideas Party – backs his proposal, it will make the country the first to formally adopt bitcoin. And it would see bitcoin used alongside the U.S. dollar, the country’s official currency. That not only means you’ll be able to buy stuff with bitcoin… it also means you won’t pay capital gains tax on bitcoin profits, as you do in the U.S. Bitcoin Billionaires Are Buying THIS (Get the ticker) Critics of Bukele say he’s using the bitcoin announcement to move focus away from his recent firing of an anti-corruption commission that was investigating members of his government. And folks are concerned that he’s responsible for democratic backsliding, after he sent soldiers into congress to force through the passage of a bill. So there are plenty of caveats here… But it shows that Nick was onto something when he predicted bitcoin would “compete with, and eventually overtake, government fiat currencies.” It’s not just bitcoin’s hardness as a currency that’s attracted Bukele… It’s also that it’s a superior monetary network for sending and receiving payments than the one that revolves around banks and central banks. Remittances – money sent home by El Salvadoreans living abroad – make up 20% of the country’s GDP. And traditional remittance services can charge as much as 10% or more in fees for international transfers. These can take days to arrive… and sometimes require a physical pick-up by someone in El Salvador. So they’re not ideal. And the hope is that bitcoin will be a better option. On the plus side, bitcoin is an easier and cheaper way to send remittances. But it’s also a more volatile currency to rely on than the U.S. dollar. You could be unlucky and send bitcoin funds back home right before a crash in its exchange value versus the dollar. Or you could be lucky and see the value of your remittances rise in dollar terms. More importantly, bitcoin could help the 7 in 10 El Salvadoreans without a bank account or a credit card. By adopting bitcoin as an official currency, Bukele could allow those folks to quickly access basic financial services. This is something we’ll be keeping a close eye on at the Cut… Bukele’s exact plans for bitcoin adoption are still a bit fuzzy. And it remains to be seen whether bitcoin’s famous volatility will stymie adoption. But it shows it’s not just individuals and corporations that are attracted to bitcoin over fiat currencies. As Nick has been predicting, governments are too. This transition won’t happen overnight. But Nick is convinced the trend is already underway. And that’s hugely bullish for the world’s first and most famous cryptocurrency. Bitcoin is still tiny relative to other monetary goods, such as gold… The market value of all mined bitcoin is about $674 billion. That may sound like a lot. But it’s still over 17 times smaller than gold’s $12 trillion market cap. So if bitcoin’s market cap rises just to the same level as gold’s market cap… it would mean a bitcoin price of $640,711. That’s a 1,679% gain from the bitcoin price, at writing, of $36,014. That’s more even than the roughly 242% gain on bitcoin in the Crisis Investing model portfolio since Nick recommended it in January 2018. And that’s just if bitcoin hits the same market cap as gold. If the Bitcoin Supremacy comes to pass… and bitcoin matches the value of the global fiat money supply of about $40 trillion… that implies a bitcoin price of almost $2 million. I’ll have more for you on this megatrend later this week. Meantime, consider taking advantage of the recent dip in bitcoin to position yourself for the upsurge Nick sees ahead… In the mailbag: “Only those who have been in combat can truly know the horror of war”… Last Monday, markets were closed for Memorial Day. Here at the Cut, we marked the occasion with a powerful essay from our friend, master trader Jeff Clark. Jeff shared his reflections on his visit to the American Cemetery in Normandy, France. It’s the resting place of thousands of young American soldiers who died storming Normandy’s beaches in World War II. Many of your fellow readers were moved to share their reactions to Jeff’s essay… My family and I visited all the same spots that Jeff mentioned. We were there a week before the 75th D-Day Anniversary in 2019. His description of the American Cemetery really was poignant. The day we were there, my wife couldn’t make the long walk, so I read Jeff’s essay to her to give her a sense of it. I couldn’t stop my voice from cracking as I read his words. Later, we visited a World War I battle site near Amiens, where her great uncles had fought on horseback to liberate Europe in 1918. The countryside there is dotted with many cemeteries, each with rows of the same white markers. In the cemetery near Amiens, it was noted on a plaque that each grave is cared for by its own French family. While for some here Memorial Day is just a long weekend, others do not forget. They show their devotion to those who sacrificed, even a century later. – Michael M. Only those who have been in combat can truly know the horror of war. I served in Vietnam from 1966–67. I am 79. As I look back now, it is hard for me to justify trying to kill another human being without even knowing him. My enemy was a pawn of his Deep State, just like I was a pawn of my Deep State. If I were trying to kill an invader of the U.S., I could justify killing. But I was invading his country... – John H. In last Wednesday’s mailbag, reader June M. shared her father’s experience of World War II. He had served in a platoon that landed on the Normandy coast in the wake of D-Day. In June’s account… At the end of the battle, they had to stand down and wait for General Montgomery and his troops to march into Paris and take the glory. Those troops were so angry, it is a miracle Montgomery wasn’t shot. And sharp-eyed readers got in touch to correct the record… June M. falsely stated that American troops had to wait for General Montgomery to parade into Paris during its liberation. By pre-agreement, French General Leclerc, with his Second Armored Division, entered Paris first. The French Army held their victory parade in Paris on August 26, 1944. The U.S. Army held their victory parade in Paris on August 29, 1944. The British did not have a victory parade in Paris. June M. has unjustly maligned Field Marshal Montgomery and has misled your readers about important events of World War II. – Jeff N. June M. must have read different books than me. My recollection was that we let the French troops relieve their own capital. Just as the allies gave the French resistance credit, despite the relatively minor part they played in the war, perhaps the American troops should allow the British and empire troops some recognition for their resistance in the three years before they joined in? – Richard B. It was De Gaulle and the Free French that the Americans had to wait for. The French had to be seen to be liberating Paris. Churchill once said that in World War II, he had many crosses to bear. None were heavier than the Cross of Lorraine – De Gaulle’s symbol. – Charles M. Were you moved by Jeff Clark’s Memorial Day essay? How did you show your appreciation for America’s troops on that day? Let us know at feedback@legacyresearch.com. Regards, Chris Lowe
June 7, 2021
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