The Commodity of the 21st Century Continues Racing to All-Time Highs

Matthew Carr By Matthew Carr, Emerging Trends Strategist, The Oxford Club

Commodities

2017 has been a record-breaking year for the markets…

The Dow Jones Industrials, S&P 500, Nasdaq and Russell 2000 have all stormed to new all-time highs.

As of Thursday, the Dow Jones was up nearly 5% for 2017, while the surging tech stocks on the Nasdaq had more than doubled that gain.

But the commodity of the 21st century has broken another record… and it’s one I told investors to expect almost a year ago…

Recent market jitters have sparked a surge in this modern-day “safe haven”…

It’s almost tripled the performance of the best traditional commodity, live cattle, up 31% this year.

It’s outpaced palladium, the best-performing metal so far this year, up 11%, by more than sevenfold

And it’s topped the best-performing currency, the euro, by a factor of 16

It’s true: Bitcoin has demolished them all.

Bitcoin’s price has surged 83.4% this year.

On May 18, the world’s favorite cryptocurrency set a new all-time high of $1,875.08.

I saw this coming…

I told Energy & Resources Digest investors in 2016 that bitcoin was poised to rocket higher. That was due to the blockchain reward halving.

Just a quick recap: Bitcoin is finite. There are only 21 million possible bitcoins.

Plus, the available supply tightens every four years.

Bitcoin’s creator, Satoshi Nakamoto, designed bitcoin so it would take 100 years to mine it completely. It takes four years to complete 210,000 blockchains. And for every 210,000 blockchains solved, the number of new bitcoins rewarded is halved.

During the completion of the first 210,000 blockchains, 10.5 million new bitcoins were issued. Back then, miners could receive a maximum of 50 bitcoins per blockchain.

Today, 2.625 million new bitcoins will be issued, as miner rewards are now 12.5 bitcoins per blockchain.

And every four years, this halving takes place, bitcoin becomes more scarce… and the price surges.

Since I originally wrote about this halving, bitcoin is up 182%. The price of bitcoin has surpassed the price of gold for the first time ever. Right now, bitcoin’s price is 33.4% higher than gold’s.

But here’s the deal… There’s even more rocket fuel being added.

Projections are for bitcoin to double from here. We’re talking $3,500 per bitcoin.

That’s because the available new supply is dwindling as demand and interest in bitcoin is surging in China, Russia and Japan.

In fact, Japanese demand is what’s really adding fuel to the fire. Bic Camera, the country’s most influential electronics retailer, began accepting bitcoin as payment.

Even more importantly, at the beginning of April, bitcoin was declared a legal currency in Japan.

In the U.S., bitcoin has been legal since 2013 – however, it is taxed as property… and is classified as a commodity.

In March, the SEC rejected two bitcoin exchange-traded funds (ETFs). But it was only a momentary setback for bitcoin.

This regulatory move in Japan has allowed institutional investors to plow into the market, reigniting momentum.

And since the beginning of April, the cryptocurrency is up 72%.

Year to date, the Bitcoin Investment Trust (OTC: GBTC) has left the SPDR Gold Trust ETF (NYSE: GLD) – and the broader markets – in the dust…

This continues to show that bitcoin is becoming the most sought-after alternative investment.

The Bitcoin Investment Trust is up 76.26% in 2017. And though that’s down from its peak on May 9, it’s charging higher as uncertainty takes the reins in Washington.

Meanwhile, the SPDR Gold Trust ETF is up a little more than 8%… That means bitcoin has outpaced gold by nearly tenfold this year.

Aside from 2014, bitcoin has been the best-performing currency every year since 2010.

I still maintain my bullish outlook for the cryptocurrency. Not only do we have the halving, which automatically cuts mining output, but we have surging demand. And that’s the situation that could easily drive its price higher from here… all the way to $3,500.

You may still be skeptical about this 21st-century commodity. If that’s the case, I urge you: Give bitcoin another look.

Good investing,

Matthew

P.S. I’m excited about this one… The next issue of Oxford Resource Explorer will be hitting inboxes in a little more than a week. Readers will learn about a revolutionary technology that’s on the rise…

It’s not science fiction. In fact, it’s already being used in jaw-dropping ways all around the world. And it’s going to make smart investors a lot of money.

Stay tuned…