Trump and Bitcoin: A Match Made in Speculative Heaven

Shah Gilani|November 15, 2024

The world of finance is in the midst of an epic transformation.

At the center of this upheaval is Bitcoin… the digital asset that’s been called a “store of value to rival gold.” Or the “future of money.”

Let’s be honest… Bitcoin neither is a store of value, nor does it have any real intrinsic value.

Then why is everyone from billionaires and BlackRock to the President-elect jumping on the Bitcoin bandwagon?

The answer is simple.

It’s not about what Bitcoin actually is… it’s about what people think it is.

Busting Myths

You likely know Bitcoin’s origin story. A man named Satoshi Nakamoto wanted to create a decentralized currency outside the control of governments and central banks.

A peer-to-peer payment system with a fixed supply.

This meant that unlike fiat currencies – dollars, euros, yen – that can be printed on demand by central banks, Bitcoin would always be capped at 21 million coins. That would create a hedge against inflation and a store of value.

Yet Bitcoin does not have intrinsic value. It’s not backed by anything tangible. It doesn’t generate cash flow or have any kind of yield.

What it has is perceived value based entirely on what people are willing to pay for it at any given moment.

Just like gold, which has no inherent use outside of a few industrial applications, Bitcoin is valued based on a consensus belief that it’s worth something… because others think it’s worth something. And since there’s a limited supply, its value will keep going up.

This is what some economists might call a “greater fool theory.” That’s when the price of an asset is driven by the hope that someone else will pay more for it in the future.

Sure, Bitcoin has a fixed supply, but that doesn’t make it inherently valuable. It just means that scarcity – real or perceived – can create speculative price moves that are no different from any other bubble.

Whether it’s a tulip mania or the dot-com boom, history has shown us that when asset prices get driven by speculation, rather than real or tangible fundamentals, the eventual crash is, well, inevitable.

A Match Made in Speculative Heaven

So why is President-elect Donald Trump hopping on the Bitcoin train? After all, Trump has built his brand on real estate… and has publicly expressed skepticism about cryptocurrency.

Like any savvy investor (or in his case, a self-proclaimed “genius” of financial matters), Trump knows that when the tide turns, you either ride the wave to glory or get swept away.

Trump has recently begun to talk about Bitcoin in the context of future profits. In late July, he told supporters he’d hold onto all the Bitcoin our government holds, which would be the “core of the strategic national bitcoin stockpile.” He recognizes that digital assets could be a lucrative hedge against the fiat currency system he’s so often criticized.

His flirtation with Bitcoin is all about the upside potential.

If he can secure a sizable stake in Bitcoin at a low price, he could end up making a fortune as the speculative wave, a wave he intends to pump up, grows.

Green Light

It’s not hard to imagine that Trump will pressure the SEC to relax its stance on the crypto sector. That could lead to an environment where Bitcoin and other digital assets are treated as legitimate speculative investments, as opposed to the quasi-legal gray area they occupy today.

Trump’s policies, coupled with his public embrace of Bitcoin, would likely set the stage for a massive influx of institutional and retail money into the market.

While this regulatory pivot would have significant implications for crypto’s future, it would also create a long runway for Bitcoin to soar as a speculative asset.

The potential for massive returns will attract a new wave of speculators, day traders, and institutional investors who see Bitcoin as more of a high-stakes bet than a long-term store of value.

Bitcoin could be incredibly profitable, even if it ultimately has no “real” value beyond what people are willing to assign to it.

The truth? Bitcoin’s value may be speculative, but the profit potential is very real.

With Trump signaling a crypto-friendly stance, we could be on the verge of a historic surge in digital assets.

I’ve identified three unique ways to play this opportunity without buying a single Bitcoin – companies perfectly positioned to capitalize on the coming crypto wave.

These aren’t speculative crypto startups, but established businesses with real earnings and massive upside potential.

Want to know which companies are best positioned to profit? Click here to get my latest research.

Note: The last crypto boom turned $1,000 into over $115,000. The next wave could be even bigger. Details here.