Building multi-generational wealth requires a combination of strategies.
If you can afford to enter the highly volatile, and potentially high return, cryptocurrency market, I say do it (after you have studied enough to know what you are doing).
Unlike the dollar, which can be printed, items like gold, and land, hold value because they are a finite, limited resource. Cryptocurrency is also a finite resource, but unlike gold and land, it is digital and more easily transferrable.
Tune in to learn more, then visit www.myindestructiblewealth.com for even more free resources to build and keep your wealth.
About Indestructible Wealth: I’m Jack Gibson. I’m your wealth strategist and I’m here to help you make some money. The Indestructible Wealth Podcast is for young entrepreneurs who want to make, keep and grow wealth to enjoy now, and for years to come.
Episode #50 – Why Bitcoin, (aka Digital Gold) will Hit $500k
Podcast Episode Transcripts:
Disclaimer: Transcripts were generated automatically and may contain inaccuracies and errors.
A lot of folks think that Bitcoin is going to end the year at $100,000.
I’m one of those folks. But the other day, when one of my friends said, “Bitcoin is going to $100K,” I responded by sarcastically joking, “Stop being a Debbie Downer. Stop being so bearish!”
Because while some see Bitcoin hitting $100,000 by the end of this year 2021, I believe that Bitcoin prices will soar much, much higher in the long run.
Like 5X higher.
That’s right. I think Bitcoin is going to $500,000.
And the rationale is simple.
Bitcoin, in its most fundamental form, is the digital version of gold. The gold market is an $11 trillion market. If Bitcoin gets that big, you’re talking an $11 trillion market on 21 million tokens, which implies a price per token of about $500,000.
Of course, that math rests on the huge assumption that Bitcoin is, indeed, the digital version of gold.
But it looks like that may already be the case…
Long story short, as inflation expectations rise, investors sell bonds, and the 10-year Treasury yield rises, too. To protect against that inflation, investors typically buy gold as a store of value. But this year, instead of buying gold, they’re buying Bitcoin.
Bitcoin has become the go-to hedge against inflation in 2021 – not gold.
This comes as no surprise to us. Fundamentally speaking, Bitcoin is better than gold.
The modern value of gold derives from scarcity. Sure, maybe once upon a time, gold was used to barter for goods, or used to make swords and shields. Not too long ago, it was used in some semiconductor chips.
But those days are gone. Today, gold is used for nothing. Its value is in the fact that it has finite supply, and therefore, is a good store of value.
But that is even more true for Bitcoin. There are, by definition, only 21 million Bitcoins in the world. There will never be more than that. Meanwhile, in the gold market, more gold mining efforts can always be put online to increase supply as demand increases.
In other words, Bitcoin has more scarcity than gold, and therefore, isn’t just the digital version of gold – it is a digital and superior version of gold.
Meanwhile, Bitcoin is digital, while gold is physical, and the whole world is pivoting toward digitization these days. Everything from media, shopping, and entertainment to communications, work, and health are digital.
Everything is digital.
In that world, money will inevitably become digital, too. Indeed, that’s already happening. Venmo, Cash App, PayPal, SoFi… all these digital money apps are soaring in usage right now, while the volume of cash transactions is plummeting.
Therefore, Bitcoin is gold made for the modern world. You can’t send gold through a social media platform, or a streaming service, or use it to buy goods online. But you can use Bitcoin for that.
To that extent, it’s easy to see why folks will ditch their physical store of value (gold) for a digital store of value (Bitcoin) – and why the Bitcoin market will become as big as (if not bigger than) the gold market.
This is already happening.
And that means Bitcoin prices will trend toward $500,000 long-term.
How long will it take to get there? No one really knows. Our best guess is about 10 years – and if so, you’re talking about an asset that will increase 10X in value in 10 years.
That’s an amazing return.
The numbers back it up…
Since the start of the year, bitcoin is up 86%.
Gold, meanwhile, is down 6.9%.Over that time, more than $10 billion has flowed out of gold ETFs. And more than $20 billion has flowed into bitcoin funds.
And here’s the kicker… We can expect that gap to grow as baby boomers retire and millennials take center stage. Back to Teeka…
Millennials have grown up with digital assets their whole lives. So bitcoin makes a lot of sense to them. I speak to a lot of young people who are independently wealthy. They’re worth tens of millions of dollars through either private businesses, crypto, or a combination of the two. For them, crypto is a core holding.
When I ask if they’re adding gold to their portfolios, they say, “Oh, no. I’m buying bitcoin. That’s the way I sidestep what’s going on in the rest of the traditional fiat currency world.”
It’s not just anecdotal. The “millennial effect” shows up in the numbers, too.
Research firm Edelman found that about 1 in 4 millennials who earn at least $100,000 in individual or joint income owns cryptocurrencies. And another roughly 1 in 3 expressed interest in using them.
That’s a big deal when you consider that millennials are the largest generation demographic in America. And they’re set to inherit about $68 trillion of their parents’ wealth.
If they deploy even a fraction of that wealth into crypto, that’ll send demand for bitcoin soaring even higher.
That doesn’t mean you should rush out and sell your gold…
Teeka reckons it’s wise to keep a small part of your portfolio in gold – about 1%.
And he says you should have up to 10% in bitcoin.
Precisely how you allocate between the two is up to you. Some people prefer more gold. What’s important is you don’t stick with only gold and ignore bitcoin altogether.
If you believe our case that bitcoin serves the same function as gold – but with higher upside – it would be crazy not to own some.
You don’t have to fork out for one whole bitcoin. You can buy a fraction of one in whatever dollar amount suits you.
Just make sure you don’t allocate too much of your portfolio, hold for the long run… and prepare for plenty of volatility along the way.