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“Just In Case Fiat Money Goes To Hell”: Billionaires Are Finally Flooding Into Cryptos

"Just In Case Fiat Money Goes To Hell": Billionaires Are Finally Flooding Into Cryptos

It was back in September 2015, when we first predicted that bitcoin would surge exponentially (back then it traded at $250 and we said it would "soar past.

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"Just In Case Fiat Money Goes To Hell": Billionaires Are Finally Flooding Into Cryptos

It was back in September 2015, when we first predicted that bitcoin would surge exponentially (back then it traded at $250 and we said it would "soar past $500, past $1,000 and rise as high as $10,000 or more"... in retrospect it was "or much more") as millions realized that cryptocurrencies are the logical alternative to failing monetary systems. Fast forward almost seven years later and several thousand percent higher, and only now is the "real" money (not to mention the really dumb money... you know who you are), finally throwing in the towel and starting to load up on crypto.

Note, we said "real" money not smart money, because institutional investors entered crypto at the start of 2021 (just as we predicted at the start of last January), around the time Elon Musk discovered his infatuation with cryptos. And now that all the early - and easy - gains have been made, the slow, dumb money, read billionaires, are finally rushing in. Take Thomas Peterffy, the Hungarian-born billionaire founder of Interactive Brokers. It was just a few years ago, back in 2017, when he took out a full-page ad in the Wall Street Journal warning of the dangers that bitcoin futures posed to capital markets. Well, it looks like those dangers are not as dire as he first predicted. These days Peterffy, worth $25 billion, said it’s prudent to have 2% to 3% of one’s personal wealth in cryptocurrencies, just in case fiat currency goes to "hell."

A couple points here: fiat currency is going to hell, as even central banks admit with their relentless push to launch CBDCs (although if China is anything to go by, the rollout will be catastrophic), it's just a matter of time. As for what 2-3% of personal wealth being allocated to crypto means, consider that just since the covid pandemic, household net worth has risen by $34 trillion, and was $145 trillion at last check (of course, most of that belongs to the 1%).

So in a banana republic where the top 1% of Americans own more wealth than the entire middle class (i.e., those in the 20% to 80% range, as shown in the chart below) for the first time since the Great Depression ...

... what would happen if 3% of just US wealth was converted into cryptos? Well, 3% of $145 is $4.35 trillion, or about double the market cap of all cryptocurrencies in circulation today. So Bitcoin at $100,000, Ethereum at $10k and so on...

Of course, if one held much more of their net worth in cryptos over the past decade they would be, to loosely paraphrase Hans Gruber, sitting on a beach, not caring if they earn 20 percent.

To be sure, Peterffy is one such billionaire who has made the full conversion from skeptic to believer, and even endorser - as Bloomberg reports, he owns some himself, while his firm Interactive Brokers recently offered customers the ability to trade Bitcoin, Ethereum, Litecoin and Bitcoin Cash, after detecting “urgency” from its clients to get in on the action. Peterffy said Interactive Brokers will offer the ability to trade another five to 10 coins or so starting this month.

It’s possible that cryptocurrencies could reap extraordinary returns — even if the opposite is also true, Peterffy said.

“I think it can go to zero, and I think it can go to a million dollars,” he said in an interview. “I have no idea.”

Well, unlike Peterffy, we had an idea back in 2015 and so far that idea has returned over 200x in 4 years.

But what is more important, is that the Hungarian's tentative approach highlights the shifting attitude toward crypto by investors who once scorned or were wary of digital tokens but realized, especially in 2021, that they can’t bear to miss out on the potential for massive gains that have made millions of ordinary forward thinkers extremely rich.

One such example of slow money adoption is Bridgewater's Ray Dalio, whoe recently revealed he was holding at least some Bitcoin and Ethereum in his portfolio only months after questioning crypto’s utility as a store of wealth. The Bridgewater Associates founder views the investments as an alternative money in a  world where “cash is trash’’ and inflation erodes buying power. Paul Tudor Jones disclosed he’s invested as a hedge against inflation, and almost half the family offices Goldman Sachs Group does business with were interested in adding digital currencies to their portfolios.

What is remarkable, is that for once the world's richest are far behind the adoption curve, with even retail investors way ahead of them. Consider that while the SEC has yet to approve a token-based ETF, tens of millions of Americans are already investing and trading crypto, a process which made Coinbase founder, Brian Armstrong, worth some $10 billion. Elsewhere, an NFT from Beeple sold for $69.3 million at Christie’s. Tom Brady released NFTs tied to his legendary career, while Katy Perry, Grimes and the agency behind K-Pop sensation BTS all sought to profit from the burgeoning industry. El Salvador’s President Nayib Bukele even made Bitcoin legal tender in his country.

And, as Bloomberg notes, the crypto marketing juggernaut will keep going in 2022  — Staples Center in Los Angeles is now Crypto.com Arena, while FTX and Singapore’s Crypto.com are running ads during the Super Bowl  — even if prices don’t necessarily climb to the moon.

Still, that doesn't mean that prices will continue their stratospheric ascent. Billionaire Michael Novogratz, who runs Galaxy Digital, said last month that prices could go “sideways to down” in the near-term. There was a lot of “froth” in the markets in 2021, Novogratz told Bloomberg, as retail investors piled into NFTs and pursued unusual crypto investments. The New York-based digital evangelist also predicted Bitcoin won’t fall below a floor of about $42,000. It closed the year at about $46,300.

“So much money is pouring into this space it would make no sense if crypto prices would go much below that,” Novogratz stated.

Even if prices did drop, they would promptly find buyers - after all if only 21 million people bought (and held) just one bitcoin, there would be no more freely floating. Jesse Powell, chief executive officer of crypto exchange Kraken, acknowledges prices could fall, but said on Bloomberg TV on Dec. 14 that any move below $40,000 is a “buying opportunity.” Then again, one should take his forecasts with a ton of salt: in August, he predicted prices would reach $100,000 a coin in 2021; they peaked just below $70K. Ark Investment Management’s Cathie Wood, meanwhile, still expects Bitcoin to reach $500,000, and said last month that it isn’t necessarily due for a correction.

That said, not every billionaire is a believer. Citadel’s Ken Griffin recently described the rush to embrace cryptocurrencies as a “jihadist call” against the U.S. dollar. But Griffin said his own firm would trade crypto if there were more regulation. JPMorgan’s Jamie Dimon called Bitcoin “worthless” in October, but that came even as the New York-based banking giant was bulking up hiring to help its clients trade digital currencies. Of course, anyone who listened to Dimon who threatened to fire any JPM employees caught trading bitcoin, would have lost on the best investment opportunity of the 21st century... similarly to anyone who still pays for a Financial Times subscription. With its non-stop negative coverage of bitcoin over the past decade, the British (or is that Japanese) newspaper has singlehandedly been responsible for the greatest personal finance value destruction in modern history.

Tyler Durden Sun, 01/02/2022 - 18:25

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Government

Survey Shows Declining Concerns Among Americans About COVID-19

Survey Shows Declining Concerns Among Americans About COVID-19

A new survey reveals that only 20% of Americans view covid-19 as "a major threat"…

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Survey Shows Declining Concerns Among Americans About COVID-19

A new survey reveals that only 20% of Americans view covid-19 as "a major threat" to the health of the US population - a sharp decline from a high of 67% in July 2020.

(SARMDY/Shutterstock)

What's more, the Pew Research Center survey conducted from Feb. 7 to Feb. 11 showed that just 10% of Americans are concerned that they will  catch the disease and require hospitalization.

"This data represents a low ebb of public concern about the virus that reached its height in the summer and fall of 2020, when as many as two-thirds of Americans viewed COVID-19 as a major threat to public health," reads the report, which was published March 7.

According to the survey, half of the participants understand the significance of researchers and healthcare providers in understanding and treating long COVID - however 27% of participants consider this issue less important, while 22% of Americans are unaware of long COVID.

What's more, while Democrats were far more worried than Republicans in the past, that gap has narrowed significantly.

"In the pandemic’s first year, Democrats were routinely about 40 points more likely than Republicans to view the coronavirus as a major threat to the health of the U.S. population. This gap has waned as overall levels of concern have fallen," reads the report.

More via the Epoch Times;

The survey found that three in ten Democrats under 50 have received an updated COVID-19 vaccine, compared with 66 percent of Democrats ages 65 and older.

Moreover, 66 percent of Democrats ages 65 and older have received the updated COVID-19 vaccine, while only 24 percent of Republicans ages 65 and older have done so.

“This 42-point partisan gap is much wider now than at other points since the start of the outbreak. For instance, in August 2021, 93 percent of older Democrats and 78 percent of older Republicans said they had received all the shots needed to be fully vaccinated (a 15-point gap),” it noted.

COVID-19 No Longer an Emergency

The U.S. Centers for Disease Control and Prevention (CDC) recently issued its updated recommendations for the virus, which no longer require people to stay home for five days after testing positive for COVID-19.

The updated guidance recommends that people who contracted a respiratory virus stay home, and they can resume normal activities when their symptoms improve overall and their fever subsides for 24 hours without medication.

“We still must use the commonsense solutions we know work to protect ourselves and others from serious illness from respiratory viruses, this includes vaccination, treatment, and staying home when we get sick,” CDC director Dr. Mandy Cohen said in a statement.

The CDC said that while the virus remains a threat, it is now less likely to cause severe illness because of widespread immunity and improved tools to prevent and treat the disease.

Importantly, states and countries that have already adjusted recommended isolation times have not seen increased hospitalizations or deaths related to COVID-19,” it stated.

The federal government suspended its free at-home COVID-19 test program on March 8, according to a website set up by the government, following a decrease in COVID-19-related hospitalizations.

According to the CDC, hospitalization rates for COVID-19 and influenza diseases remain “elevated” but are decreasing in some parts of the United States.

Tyler Durden Sun, 03/10/2024 - 22:45

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International

Rand Paul Teases Senate GOP Leader Run – Musk Says “I Would Support”

Rand Paul Teases Senate GOP Leader Run – Musk Says "I Would Support"

Republican Kentucky Senator Rand Paul on Friday hinted that he may jump…

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Rand Paul Teases Senate GOP Leader Run - Musk Says "I Would Support"

Republican Kentucky Senator Rand Paul on Friday hinted that he may jump into the race to become the next Senate GOP leader, and Elon Musk was quick to support the idea. Republicans must find a successor for periodically malfunctioning Mitch McConnell, who recently announced he'll step down in November, though intending to keep his Senate seat until his term ends in January 2027, when he'd be within weeks of turning 86. 

So far, the announced field consists of two quintessential establishment types: John Cornyn of Texas and John Thune of South Dakota. While John Barrasso's name had been thrown around as one of "The Three Johns" considered top contenders, the Wyoming senator on Tuesday said he'll instead seek the number two slot as party whip. 

Paul used X to tease his potential bid for the position which -- if the GOP takes back the upper chamber in November -- could graduate from Minority Leader to Majority Leader. He started by telling his 5.1 million followers he'd had lots of people asking him about his interest in running...

...then followed up with a poll in which he predictably annihilated Cornyn and Thune, taking a 96% share as of Friday night, with the other two below 2% each. 

Elon Musk was quick to back the idea of Paul as GOP leader, while daring Cornyn and Thune to follow Paul's lead by throwing their names out for consideration by the Twitter-verse X-verse. 

Paul has been a stalwart opponent of security-state mass surveillance, foreign interventionism -- to include shoveling billions of dollars into the proxy war in Ukraine -- and out-of-control spending in general. He demonstrated the latter passion on the Senate floor this week as he ridiculed the latest kick-the-can spending package:   

In February, Paul used Senate rules to force his colleagues into a grueling Super Bowl weekend of votes, as he worked to derail a $95 billion foreign aid bill. "I think we should stay here as long as it takes,” said Paul. “If it takes a week or a month, I’ll force them to stay here to discuss why they think the border of Ukraine is more important than the US border.”

Don't expect a Majority Leader Paul to ditch the filibuster -- he's been a hardy user of the legislative delay tactic. In 2013, he spoke for 13 hours to fight the nomination of John Brennan as CIA director. In 2015, he orated for 10-and-a-half-hours to oppose extension of the Patriot Act

Rand Paul amid his 10 1/2 hour filibuster in 2015

Among the general public, Paul is probably best known as Capitol Hill's chief tormentor of Dr. Anthony Fauci, who was director of the National Institute of Allergy and Infectious Disease during the Covid-19 pandemic. Paul says the evidence indicates the virus emerged from China's Wuhan Institute of Virology. He's accused Fauci and other members of the US government public health apparatus of evading questions about their funding of the Chinese lab's "gain of function" research, which takes natural viruses and morphs them into something more dangerous. Paul has pointedly said that Fauci committed perjury in congressional hearings and that he belongs in jail "without question."   

Musk is neither the only nor the first noteworthy figure to back Paul for party leader. Just hours after McConnell announced his upcoming step-down from leadership, independent 2024 presidential candidate Robert F. Kennedy, Jr voiced his support: 

In a testament to the extent to which the establishment recoils at the libertarian-minded Paul, mainstream media outlets -- which have been quick to report on other developments in the majority leader race -- pretended not to notice that Paul had signaled his interest in the job. More than 24 hours after Paul's test-the-waters tweet-fest began, not a single major outlet had brought it to the attention of their audience. 

That may be his strongest endorsement yet. 

Tyler Durden Sun, 03/10/2024 - 20:25

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Government

The Great Replacement Loophole: Illegal Immigrants Score 5-Year Work Benefit While “Waiting” For Deporation, Asylum

The Great Replacement Loophole: Illegal Immigrants Score 5-Year Work Benefit While "Waiting" For Deporation, Asylum

Over the past several…

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The Great Replacement Loophole: Illegal Immigrants Score 5-Year Work Benefit While "Waiting" For Deporation, Asylum

Over the past several months we've pointed out that there has  been zero job creation for native-born workers since the summer of 2018...

... and that since Joe Biden was sworn into office, most of the post-pandemic job gains the administration continuously brags about have gone foreign-born (read immigrants, mostly illegal ones) workers.

And while the left might find this data almost as verboten as FBI crime statistics - as it directly supports the so-called "great replacement theory" we're not supposed to discuss - it also coincides with record numbers of illegal crossings into the United States under Biden.

In short, the Biden administration opened the floodgates, 10 million illegal immigrants poured into the country, and most of the post-pandemic "jobs recovery" went to foreign-born workers, of which illegal immigrants represent the largest chunk.

Asylum seekers from Venezuela await work permits on June 28, 2023 (via the Chicago Tribune)

'But Tyler, illegal immigrants can't possibly work in the United States whilst awaiting their asylum hearings,' one might hear from the peanut gallery. On the contrary: ever since Biden reversed a key aspect of Trump's labor policies, all illegal immigrants - even those awaiting deportation proceedings - have been given carte blanche to work while awaiting said proceedings for up to five years...

... something which even Elon Musk was shocked to learn.

Which leads us to another question: recall that the primary concern for the Biden admin for much of 2022 and 2023 was soaring prices, i.e., relentless inflation in general, and rising wages in particular, which in turn prompted even Goldman to admit two years ago that the diabolical wage-price spiral had been unleashed in the US (diabolical, because nothing absent a major economic shock, read recession or depression, can short-circuit it once it is in place).

Well, there is one other thing that can break the wage-price spiral loop: a flood of ultra-cheap illegal immigrant workers. But don't take our word for it: here is Fed Chair Jerome Powell himself during his February 60 Minutes interview:

PELLEY: Why was immigration important?

POWELL: Because, you know, immigrants come in, and they tend to work at a rate that is at or above that for non-immigrants. Immigrants who come to the country tend to be in the workforce at a slightly higher level than native Americans do. But that's largely because of the age difference. They tend to skew younger.

PELLEY: Why is immigration so important to the economy?

POWELL: Well, first of all, immigration policy is not the Fed's job. The immigration policy of the United States is really important and really much under discussion right now, and that's none of our business. We don't set immigration policy. We don't comment on it.

I will say, over time, though, the U.S. economy has benefited from immigration. And, frankly, just in the last, year a big part of the story of the labor market coming back into better balance is immigration returning to levels that were more typical of the pre-pandemic era.

PELLEY: The country needed the workers.

POWELL: It did. And so, that's what's been happening.

Translation: Immigrants work hard, and Americans are lazy. But much more importantly, since illegal immigrants will work for any pay, and since Biden's Department of Homeland Security, via its Citizenship and Immigration Services Agency, has made it so illegal immigrants can work in the US perfectly legally for up to 5 years (if not more), one can argue that the flood of illegals through the southern border has been the primary reason why inflation - or rather mostly wage inflation, that all too critical component of the wage-price spiral  - has moderated in in the past year, when the US labor market suddenly found itself flooded with millions of perfectly eligible workers, who just also happen to be illegal immigrants and thus have zero wage bargaining options.

None of this is to suggest that the relentless flood of immigrants into the US is not also driven by voting and census concerns - something Elon Musk has been pounding the table on in recent weeks, and has gone so far to call it "the biggest corruption of American democracy in the 21st century", but in retrospect, one can also argue that the only modest success the Biden admin has had in the past year - namely bringing inflation down from a torrid 9% annual rate to "only" 3% - has also been due to the millions of illegals he's imported into the country.

We would be remiss if we didn't also note that this so often carries catastrophic short-term consequences for the social fabric of the country (the Laken Riley fiasco being only the latest example), not to mention the far more dire long-term consequences for the future of the US - chief among them the trillions of dollars in debt the US will need to incur to pay for all those new illegal immigrants Democrat voters and low-paid workers. This is on top of the labor revolution that will kick in once AI leads to mass layoffs among high-paying, white-collar jobs, after which all those newly laid off native-born workers hoping to trade down to lower paying (if available) jobs will discover that hardened criminals from Honduras or Guatemala have already taken them, all thanks to Joe Biden.

Tyler Durden Sun, 03/10/2024 - 19:15

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