Seen Bitcoin’s Price Lately?

Why it's surging now 

Ric Edelman: It's Tuesday, November 12th, and we're off and running.  As I record this for you, bitcoin is now at $88,000.

All on the excitement that Donald Trump won the election. That the Republicans took control of the Senate. And whether or not the Democrats gain control of the House, that really doesn't matter. Because there are so many House Democrats who support crypto, they are going to cross the aisle for crypto legislation. Three-term Democrat Senator Sherrod Brown, the powerful Chair of the Senate Banking Committee and one of the biggest crypto-haters in Congress, was defeated for reelection last week.

His replacement is Bernie Moreno. He's not only a strong crypto-supporter, he won the election precisely because he's a strong crypto-supporter. Moreno was one of 58 candidates who received contributions from political action committees that were set up and funded by the crypto community. All told, the crypto community donated $200 million to 58 candidates or ran campaigns against their opponents.

And of those 58 pro crypto candidates, 50 of them won their elections. The other eight, well, they're still too close to call. In other words, so far, not a single supporter of crypto lost. That is sending a really big message to all of the other newly-elected and reelected members of Congress. You either support crypto or prepare to lose your seat.

Why did all these candidates take all that money? Why did they agree to support crypto? Well, hey, you cynics, it's not just because money talks in politics. It does. It's because these candidates know two things. First, they know that blockchain technology is revolutionary and transformative, with the potential to deliver massive benefits for global commerce.

And that it's vital that the United States be the leader of the development and deployment of this technology. Just like we were with the automobile, the airplane, the telephone, and the internet. And second, these candidates know that their constituents want them to be supportive of this technology. More than 50 million US adults already own bitcoin, out of 258 million voters. In other words, 20% percent of all voters own bitcoin.

With races being won by 1% or 2% or 3%, do you really want to antagonize 20% of the voters in your district? Only a fool would do that. And Sherrod Brown was one of those fools. And so, he lost. And so did 49 other candidates running for Congress who were opposed to crypto. And we're going to see how these last 8 elections go. But even if all 8 of those pro-crypto candidates lose, the message will nevertheless be clear. You oppose crypto at your peril. So, what's your excuse now for not investing in bitcoin?

The Bitcoin ETFs have been around for nearly a year now. They've amassed nearly 90 billion in assets, by far the fastest asset growth of any ETFs in history. It took 15 years for us to get to this point. There's no turning back now. Donald Trump made it clear during the campaign that he's a huge supporter of crypto.

He and his children have even gotten richer by launching several crypto businesses. His son Eric actually posted a picture of the White House with a Bitcoin flag waving over it. Conflict of interest? Sure! Isn't that standard operating procedure for Donald Trump? Sure! So, you can either sit on the sidelines and lament it or bitch about it, or you can join the fun.

SEC Chair Gary Gensler, the biggest crypto obstacle in Washington is done. He'll be gone by the time Trump is sworn in and he'll be replaced by someone who strongly supports crypto. You can watch for quick action on the laws and regulations that we need for this new technology to achieve everything that it can.  And that is why the price of bitcoin is skyrocketing.

Bitcoin's price was $67,000 the day before the election. It's now $88,000, a jump of 31% in just a week. It takes the stock market three years to do what bitcoin did in seven days. And I think we're just getting started. I told you a year ago that I expect bitcoin's price to hit $420,000 by 2030. Yeah, that's a 500% increase in the price of bitcoin over the next five years.

You want a glimpse of what we're going to see? Just look at Detroit. City officials there just declared that you can now pay your taxes and other city fees with crypto. Officials said that a big benefit of this is for the city's poor who can't afford to have a bank account, but they do have a cell phone. That means they have access to PayPal. So, the city signed a deal with PayPal to let users pay their taxes and other fees with bitcoin and Ethereum using PayPal's platform.

Detroit's not alone. The states of Colorado, Utah, and Louisiana already accept crypto for state payments. Miami and New York City say they're working on it. The more people can use crypto, the more they will. Because crypto is fundamentally a payments technology. Just like using checks and credit cards and debit cards, and PayPal, Venmo and Zelle. But bitcoin is a totally new technology. It's faster, cheaper, and safer than all of those others. You don't even need a bank account to be able to use it. And the more places that let you use it, like Detroit to pay your taxes, the more people will use it.

And to use it, you've got to exchange your dollars into bitcoin. The more people who do that, the more people who buy bitcoin, the higher the bitcoin price goes. Because the number of bitcoins that exist is fixed. Unlike the government, which just prints more dollars when people say they want more of them, making each dollar worth less. That's what inflation is. The devaluation of the dollar because we keep printing more of them. The number of bitcoins can't increase.

So, the only way you can buy some is to pay more than other people are willing to pay. It's pure supply and demand. And the demand right now is skyrocketing thanks to the election. So, the more people who buy it, the more people who will want to start buying it, and the more people who will start using it.

It's a virtuous circle. And here's the latest example. In the United Kingdom, a big pension fund just allocated 3% of its assets into bitcoin, saying they are doing so with a long investment time horizon. They also said they're doing so, so that the price increases would help reduce the pension fund's reliance on contributions they get from employees.

I already told you that South Korea's pension fund bought $34 million in crypto last month, and so did Michigan's state pension plan. The more that do this, the more that will. I've been telling you to buy bitcoin since 2014, back when the price was less than $1,000. Now with the election over, crypto is significantly de-risked. A lot of the fears and apprehensions that people had, they've literally gone away with the election.

I can understand why you might not have wanted to add bitcoin to your portfolio before. I didn't agree, but I could understand it. But frankly now, what's your rationale for not adding crypto to your portfolio with a small single digit allocation? What are you waiting for? And if your financial advisor doesn't have a good answer to that question, it's time to get a new financial advisor.

The election's over and the biggest winner is bitcoin.  

And hey, as enthused as I am about bitcoin, I'm not pretending that you're going to put 100% of your life savings into it or other crypto, generally, no, you're going to continue having a diversified portfolio filled with stocks and bonds and other assets. And that means you've got to deal with another issue unrelated to crypto.

And that is the fact we're now in a world, at least at the moment of declining interest rates. And if you're retired and you've been living off of the interest income or you need to, or you want to, how do you handle generating income in a world where interest rates are going down? This could be a struggle for a lot of retirees and investment advisors of them.

So that's why we're doing a webinar this Wednesday, November 13th. Hey, my goodness gracious. It's tomorrow. Yeah. Today's Tuesday already. It's tomorrow, November 13th, 1:00pm EST. Joining me are going to be Rene Reyna and John Burrello from Invesco, and they're going to show you ETFs that are designed for growth, consistent monthly income, and lower volatility.

You'll also learn about the newest member of Invesco's ETF suite, QQA. If you are at all interested in the issue of generating income, in an environment of declining interest rates for yourself or on behalf of your clients, you need to attend this event tomorrow, 1:00pm EST.

It's free. If you're an advisor, you get one CE credit. You can register by using the link in the show notes or visit TheTruthAYF. com.

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Links from today’s show:  

11/13 Webinar - An Innovative Way to Generate Income in a World of Declining Rates: https://www.thetayf.com/pages/november-13-2024-an-innovative-way-to-generate-income

10/9 Webinar Replay- Crypto for RIAs: Yield, Staking, Lending and Custody. What’s beyond the ETFs? https://dacfp.com/events/crypto-for-rias-yield-staking-lending-and-custody-whats-beyond-the-etfs/

Certified in Blockchain and Digital Assets including Crypto Taxation Course/Webinar: https://dacfp.com/certification/

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