Update - May 25, 2021
An Update on the Crypto Market
Let’s talk about crypto…
Goldman Sachs just declared it a “new asset class.”
Famed Shark Tank investor Kevin O’Leary just said it’s here to stay.
And Elon Musk… well, his thoughts vary with the weather.
There is no doubt the past week has been tough on the crypto markets. A trio of headlines and a “too far, too fast” explosion in prices had folks rushing to cash in their recent gains.
But the “why” behind crypto has not changed.
Negative real rates still have immense amounts of free money sloshing throughout the economy, and fresh technology has brought crypto from the imagination into the everyday world.
As I’ve said many times before, until real rates rise and money finds a place that will treat it better, the crypto market deserves a significant slice of our portfolio allocation.
Green Money
I outlined one way to get the job done in our most recent monthly issue.
Our reporting on Universal Carbon (UPCO2) came at the perfect time. It is getting a lot of attention as Musk publicly debates himself over the dirtiness of Bitcoin.
In fact, the exchange behind Universal Carbon – Uphold – recently released another environmentally focused coin. It’s called Bitcoin Zero. It’s touted as a zero-carbon alternative to the world’s No. 1 coin.
But it’s not really carbonless.
The coin is minted by simply combining a traditional Bitcoin with 10 Universal Carbon tokens.
What’s interesting is that Uphold is trying quite hard to get Musk to bite on the idea. It’s launched a social media campaign and is even promising to give away five brand-new Teslas if Musk makes the Bitcoin Zero a payment option for his cars.
It’s this sort of PR-focused chicanery that keeps Universal Carbon out of our official portfolio and makes it much more of a speculative play.
But it illustrates a big push in the crypto world.
The industry is still very, very young. There is still a lot of market discovery ahead. A lot of positioning for market share will take place in the coming months and years.
If you haven’t read my full report on the coin and why it’s worth a few of your speculative dollars, be sure to read the latest issue. Here’s a link.
From One to the Other
And since we’re on the subject of oddball asset classes… Take a look at gold.
As with crypto, our thoughts on how much gold a person should own right now makes us a bit of an outlier in the financial realm.
Again, as long as real rates are negative and are being pushed down by inflation, gold will shine.
We saw it when rates first dipped below zero last year, and we’re seeing it again as inflation fears become more than fears.
Over the past month, the value of an ounce of gold has risen by about $100. The trend is likely to continue.
In fact, the more volatile the crypto market, the higher the price of gold is likely to rise.
As I track this week’s money flow, it’s clear that plenty of the cash being pulled from crypto has flowed into gold.
Overall, it is good news for our portfolio… and it proves our thesis is spot-on.
Until rates move materially to the upside, crypto, gold and buyback stocks will remain the market’s dominators.
We’ve loaded up on all three.
Very nice.
Note: I’ve been everywhere this week talking about another HUGE money move. This one has to do with an incredible pre-IPO opportunity. Until recently, this sort of deal was extremely hard to get into. But now you can get in for less than $10. You need to hurry, though. The ticker I’ve got my eye on is set to do something very big on June 10. Click here for all the details.