Absence Makes the Heart Grow Fonder

Hi guys, long time no see as we might say. Over three weeks without a post is the longest I have been in 40 years since QL and CB were first launched. It is a strange feeling. The main reason is an orgy of sport, Wimbledon, the Euros, the Open Golf and coming up my favourite, the Olympics.

The political scene has been on a roller coaster with Kier Starmer arriving with a massive majority but relatively low expectations giving him a chance to shine. Is Farage a serious contender? We shall see. Like Trump, he polarises the vote but adds excitement to the lives of nations.

Kamala Harris, I suspect is seriously boring but that is what they thought about Harry Truman so who knows?

Whatever happens, I am sure that US stocks will march onward and upwards. We have a pause at the moment in the AI superstock arena but no shares go up every day.

Bitcoin Bubbles

Meanwhile, I am keeping a close eye on Bitcoin.

The chart remains positive. I think it is most likely that the next big move will be up not down. If it is up the following investments will do well. Also exciting is that an investment in Bitcoin, a speculation if you prefer, is asymmetric in its results. If it works out you can multiply your money manyfold, especially on a tax-free leveraged bet. If it fails, the worst is a total write-off, i.e., a 100pc loss.

IBIT invests in Bitcoin so buying shares in this ETF is like buying Bitcoin. It lends itself to an averaging program to exploit Bitcoin’s volatility.

Microstrategy started buying Bitcoin in 2020 and owns around 1pc of all Bitcoin. It will either be a good idea or a bad idea but so far it is working well after extreme volatility initially.

Another way to invest in Bitcoin is to buy shares in Coinbase, a platform for all things crypto. Microstrategy and Coinbase tend to outperform Bitcoin and IBIT but this is not guaranteed.

I can speculate as fancifully as the next man on where the Bitcoin price may be going. The latest target I read is $2.9m by 2050 – one for longer-term investors. It is a wild one, that is for sure. What would happen if every investor decided to have Bitcoin in their portfolio, every corporation wanted some in their treasury and every government some in their reserves. God alone knows! Maybe $2.9m!

We don’t have a new buy signal for Bitcoin although an important chart breakout is not far away. There is an excellent case for exposure – just in case the bullish crazies are right. Whoever would have predicted what has already happened.

Strategy – Have a Bitcoin Flutter

Augustus Caesar became emperor of Rome in 27BC and ruled for 41 years until AD14. Donald Trump was first inaugurated as president of the US empire on 20 January 2017. If he wins to become president again in January 2025 and he is still the bookies’ favourite though odds on Kamala Harris have shortened dramatically he too could be launching a dynasty.

Vice President, J.D. Vance, has an Abe Lincoln back story and is only 39 years old. He was reportedly the choice of Trump’s sons so who is to say that if he runs successfully for president in 2029 he won’t repay the favour by making one of them vice president and so it goes on.

America is always leaning towards being an imperial system. Witness the Roosevelts, the Kennedys, the Bushes, the Clintons and the talk of Michelle Obama being urged to run against Trump. What a head-to-head that would be, a fight for the soul of America! Worldwide, how many countries are run by impossible-to-dislodge families – too many, including Azarbaijan, I have learned. Incredibly my son went to a party in a mansion in London’s uber-exclusive Boltons district invited by a youthful family member who was at The Lycee with him.

Obama might not want to be involved but if the alternative is Trump, Trump lookalikes and Trump descendants for the foreseeable future she may feel it is her duty. Already the Trump brand speaks louder than the Republican brand in presidential politics. If that is repeated at the congressional and state level how much power will this family have?

Think Gaullism in France and Peronistas in Argentina.

This may be a weakness of the US separation of powers system where you have the president, congress, the judiciary and individual states all having their fiefdoms and supposedly preventing tyranny in the same way as is achieved by allowing every American to go through life armed to the teeth. This makes the presidency vulnerable to being hijacked by a prominent family. It is hard to imagine any family taking control of a UK party; or is it? Farage has the characteristics but not the family but in the US family control of the presidency looks like an accident waiting to happen.

In The UK Starmer and friends are an unknown quantity but if they try to raise taxes even higher from current levels by say introducing wealth taxes wealth protection will rocket up the agenda for many families adding to the attractions of invisible, indestructable, super portable, appreciating Bitcoin.

This is even more the case because of dictators’ penchant for wars and bread and circuses. The easiest way to fund these things is to do what so many of us do, spend the money and hope something will turn up. If a flood of freshly minted money appears mostly in appreciating asset prices who will complain?

Peace is an Impossible Dream

Young people imagine that the world’s problems could be resolved with a little goodwill. It is good they think that but it is a triumph of hope over experience. Homo Sapiens is hard-wired to fight for territory, like chimps and much of the animal kingdom. Meet most Iranians and I am sure you would like them. They are exactly like us but at the national level, because religious zealots (think Oliver Cromwell) run their country and most of the West is liberal and secular, we are fighting a proxy war on the Gaza strip with horrendous brutalities being committed, especially by Hamas, who, it should be remembered, in the words of the great Stallone movie, took First Blood.

Not much about Bitcoin in all the above. The key point is that Bitcoin is an appealing refuge in a troubled world and looks technically poised for an explosive upward move. Don’t ask me when but it could be any time and with ETFs now in place there is a perfect vehicle for new money to flood into the market.

This possibility makes me think of Blackrock which launched the hugely successful iShares Bitcoin Trust (IBIT), which already has $22bn under management. The long-term chart looks great so here is yet another way to play the Bitcoin market. Blackrock is the largest fund manager in the world with trillions under management.

Share Recommendations

Bitcoin. BTCUSD. Buy @ $67,442

iShares Bitcoin Trust. IBIT. Buy @ $38.42

Microstrategy. MSTR. Buy @ $1685

Coinbase Global. COIN. Buy @ $242

Blackrock Inc. BLK. Buy @ $844