Yeah, yeah, yeah… I know… as a US resident you probably aren’t searching for yet another “store of value”. Things are pretty stable here. The US Dollar isn’t going away, and no corrupt government official is going to steal the title to your house by changing the ownership records at the court house. You’ve probably never even considered the possibility of either scenario.

Many places in the rest of the world aren’t so fortunate. Take a country like Argentina for example, not all of its people are poor, yet the government has defaulted on debts in the past. The result was that anyone saving in the Argentinian currency lost everything. All the money in their saving account became worthless because faith in the government backed currency was gone. All currency values, whether fiat or Bitcoin, ultimately depend on faith. Faith that it does indeed have worth. When people lose faith, the currency fails. Say what you will about “Bitcoin people” but they HAVE faith.

Stop thinking of Bitcoin from only the perspective of an investor in a stable country. Bitcoin is an emerging markets investment. Bitcoin is a global store of value independent of government backed “guarantees”, which means that for this store of value you don’t need to trust a government to pay its bills.

An Asset for Emerging Markets

Some of the least interesting conversations about Bitcoin revolve around the idea that Bitcoin is some kind of play on global anarchy. If that was true then it’s a terrible investment… buy bullets or something you can eat!

Somehow I don’t think Jim Chanos would ever buy Bitcoin, crisis or not…and that is where we disagree.

BITCOIN IS A PLAY ON GLOBAL GROWTH NOT GLOBAL CRISIS.

What Bitcoin needs to be adopted as an alternative investment already exists. A world with high government debt levels and a sense of eroding currency value (i.e. quantitative easing). So when the global economy is IMPROVING in the face of rising debt levels (and thus investor concern for fiat currency) that is the perfect setup for Bitcoin.

When you have more wealth to store yet are losing faith in your native currency THEN you will look for alternatives. That may not happen in the United States but it already has happened in emerging markets.

Emerging Markets in 2018

The World Bank believes emerging markets will drive global growth in 2018.

Don’t like the work of “academics” playing finance?

Some well respected financial experts are also bullish on emerging markets. Mark Mobius sees tremendous opportunity in emerging markets like India.

Summary

The sweet spot for Bitcoin is an improving global economy WITH continued rising government debt levels. We don’t see that scenario changing.

No one wants a crisis, and a crisis is unlikely given growth projections.

A counter argument would say that gold or land is the better alternative investment to Bitcoin given the same dynamics. We offer these points of rebuttal:

Land is increasingly a less sure store of value in the face of climate change. Back to the Argentinian example, it’s hard to “save” your wealth in land when it’s raining less and less in the Andes. You might end up with a desert lot. Gold is too soft to use as a bullet, costly to store, not edible… and when was the last time you walked around with little bits of gold in your pockets to transact with? Now that’s truly ridiculous.

Invest Savagely.