Is cryptocurrency the best hedge against war?

Hi, Sam Volkering here.

Nick let me write to you today to talk about an idea that’s really caught hold among our readers over the last week… cryptocurrencies.

You’ve probably heard a lot about bitcoin and cryptocurrencies recently. But I wanted to write to you directly to explain one of the reasons (there are many) why I’m so excited to be involved in the “crypto” market right now.

It’s nothing to do with the incredible returns we’ve seen this year. Quite the opposite. It involves… war.

Let me ask you. Are you prepared for Armageddon? We’re not talking about a concrete bunker 30 feet below ground. We’re not talking about a store of AK-47s, five years’ supply of canned food and some anti-zombie defence.

We’re talking about… actually, maybe we are talking about that kind of Armageddon.

Let’s say North Korea sends a “nuke” over to Seoul via airmail. And let’s say the US replies with its own “postal service”. We would be confident that stockmarkets around the world would fall.

It’s pretty rare that (to start with at least) markets rise on the prospect of global warfare. Often they’ll realise that it’s not as horrible as it seems and then march on to record highs.

But with the world almost constantly anticipating World War III – you have to ask, what will happen if there actually is a World War III?

Will you need to brush up on your hand-to-hand combat skills? Probably. But that’s what Liam Neeson movies are (now) for. Will you need to learn the basics of survival including how to find water, track food and navigate without Google Maps? Probably. But that’s what Google Maps’ “offline mode” is for.

Those things are important. But more important is your financial preparation. SO are you prepared? Financially? If war breaks out or any other massive crisis, are you financially ready for it?

The money tree is a real thing

You might say yes. You might have moved your money into cash. And you’re now safe, secure and sitting pretty. But what if not even cash is safe in all-out war? Are you 100% confident that you’ll be able to get your money out of the bank? Can you say for certain that the ATMs will still work?

Really? Ask the people of Cyprus how the ATMs were in 2013.

Okay, so maybe you store your cash under the bed. Or maybe you have gold. Two reasonable defences. But they’re no good to you if war doesn’t break out. Remember there is no war right now. There might be. But there might also not be.

So then you’re pretty screwed too. That cash isn’t going to work for you while there is no war. And that gold? Well it might go up in value a little. It might lose value a little. At best it might double your money one day. That’d be nice.

Wrong. That’d suck. Doubling your money is no good. That’s not what you invest for. You invest to make five, ten, 100 times your money. That’s where real wealth is made.

But how can you even contemplate returns like that when we’re on the brink of war or crisis, or a crisis of war?

At this point you might anticipate I’ll be suggesting buying stocks. Small-cap or micro-cap or technology stocks. But again, you’d be wrong.

What if I said there was a way to hedge yourself against crisis that didn’t involve stocks. What if there was somewhere to put your money that works for you when things are great and works even better for you when things are rubbish.

Would that be something you’d want to know more about? Making money when things are good. And making money when things are bad. All in the one kind of investment. Sounds like that ethereal money tree doesn’t it?

Well I used to think money trees were as real as a leprechaun riding a unicorn. And then I discovered bitcoin back in 2010.

In its early days bitcoin was the money tree. You could simply use a (reasonably powerful) computer to “mine” bitcoin. If you were successful in “mining” a block on bitcoin’s blockchain you’d get 50 bitcoin. Mining just one block back in 2010 would today be worth US$66,500. But back then 50 coins was actually worth about US$150.

Today, mining bitcoin is way harder. It’s near on impossible for an average user at home to mine blocks. Today, for people like you and me, the easiest way to get bitcoin is to buy it.

And that’s something I’ve been advocating for a while now. You see bitcoin is one of the best hedges against all-out crisis – all-out war – that I’ve ever seen.

The primary reason is because a central bank or a government does not control it. It’s a distributed, decentralised system that allows people to anonymously store wealth. And when there’s financial crisis, bitcoin tends to do very well.

Japan is in trouble. But at least it likes bitcoin

Japan, for instance, looks like it’s going to print a whole heap more cash. Its ten-year bond yields are once again back down around the 0% mark. Considering its relentless pursuit of quantitative easing and printing cash, the yen has (somehow) been holding on. But not for long. The yen could be in for some serious pain. And that’s worrying for anyone living and earning in Japan.

If your country is dead set on running its economy into zombieland, what else can you do with your money? Well Japan actually accounts for around 41% of the bitcoin exchange market. And recently Japan has just recently put into law that bitcoin is a legal method of payment.

What we’re seeing is Japan looking at alternative options for its citizens. Perhaps bitcoin will become the main currency of Japan. Imagine what that would do to the price of bitcoin! But remember this possibility is only because of Japan’s economy being on life support.

And it’s also no surprise that with North Korea on the brink of war that the price of bitcoin has continued to rise to all-time highs. It’s now at US$1,388 at the time of writing. That’s more than US$100 higher than an ounce of gold.

It’s also the best performing currency across the world year to date. The worse things get, the better bitcoin does. And then even if things are good, it still does well. That’s because in our view it’s the financial system of the future.

The cryptocurrency world is the Wild West

But bitcoin isn’t the only coin of its type. There’s a whole world of “cryptocurrencies” that you can buy and hold and store your wealth in. There are cryptocurrencies like Ethereum, Ripple, Litecoin, Dash, Golem and NEM that you can buy and sell, invest in and hold long term.

We’ve been involved in this area of investing since 2014. We’ve seen big wins, big losses, bankrupt businesses, theft, fraud and everything in-between. We know the market better than anyone else we know. And we think the market is now mature enough that non-tech people, people who are curious and want to know more, should have an opportunity to do so.

Of course this area of investing isn’t for rookies. It’s really the “Wild West” still. If you don’t know the difference between POW, POS, ICO, blocks, smart contracts, ASIC, hard or soft fork, multisig, or the difference between a public and private key, then you need a tour guide.

We think that investing in cryptocurrencies could be the best and biggest opportunity of 2017 and even for the next decade. If you’re interested in more information, there’s only one thing you need to do. Follow this link now and we’ll show you which three cryptos are a buy today.

Regards,

Sam

Category: Investing in Bitcoin

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