6/12 ANDY HOFFMAN (CryptoGoldCentral.com): My Bitcoin Genesis, And What CGC is About

In January 2016, while still Marketing Director of Miles Franklin Precious Metals, I wrote my first article; with Bitcoin at $425; discussing why it had the potential to be a new monetary alternative, in a world where fiat currency was rapidly wearing out its welcome. It was still a nascent technology, but I put my money where my mouth was, whilst still holding my entire Precious Metal position. Here’s one such example, from April 2016, where I wrote the following.

“Take a look at the chart of that ‘other alternative currency’ – Bitcoin; which as I write, is on the verge of a major technical breakout above $450. Gee, its chart looks a lot like gold’s from 1979-2004, just before it surged fivefold – only compressed into a mere 2½ years!

Initially, my thought was that Bitcoin would help Precious Metals escape the Gold Cartel’s paper-diluting clutches; which was the premise of my signature piece on the topic, May 2016’s “Precious Metals and Bitcoin – Twin Destroyers of the Fiat Regime” - in which I wrote, with the price at $460…

“…as I have been suggesting for some time now, Bitcoin is starting to take on Precious Metal-like monetary properties – sans 5,000 years of monetary history, of course. And given that we are now living in a Digital Age – in which gold and silvers’ allure is more powerful than ever, but the ability to store value with the click of a mouse equally irresistible, it’s difficult to believe Bitcoin won’t become the “money of choice” for tens of millions with limited means – as all one needs to own it is a bank account and a computer. Not to mention, multi-millionaires, billionaires, and institutions – particularly those in nations with existing or pending capital controls, like China. And particularly those in nations where gold, silver, and platinum purchases are not logistically possible – like, for instance, the vast majority of South America.”

My belief in Bitcoin grew stronger throughout 2016, but it remained highly speculative due to the looming specter of the “scaling debate” that erupted a year later. Still, I continued to accumulate, whilst holding all my gold and silver – as I still believed Bitcoin could help liberate them, per December 2016’s “why Bitcoin will make gold and silver go up,” when Bitcoin was $900.

“In the past year, things in the Bitcoin world have dramatically changed – as have, naturally, my views. Coincident with it finally re-taking the $300 level in November 2015, many of the things I had initially feared about Bitcoin started to dissipate. For one, it has clearly started to build a “track record” as a storage of value. Secondly, it’s utility as a transactional currency is growing exponentially. Third, most investors are growing savvy to the issues related to investing in, and storing, Bitcoin. Fourth, the understanding that Bitcoin’s “monetary policy” is in fact irreversibly programmed – i.e, there is NO WAY more than 21 million Bitcoins will ever exist – is becoming universally understood.”

In the first week of 2017, the price reached the $1,150 Mt Gox high from December 2013, and immediately governments started attacking it – starting with China, which temporarily banned Bitcoin withdrawals from exchanges. In March, the SEC nixed the Winklevoss Bitcoin ETF, and the “scaling debate” erupted when Roger Ver’s “Bitcoin Unlimited” threatened to split Bitcoin with a hard fork. In June, things got really crazy when Bitmain, the largest Bitcoin miner, threatened the “UAHF” hard fork…with “SegWit 2x” offered as a temporary truce; though it, too, promised a late 2017 hard fork.

During the summer, the U.S. government seized the BTC-e exchange due to alleged money laundering; Jamie Dimon called Bitcoin tulip-mania; and China banned cryptocurrency exchanges - all as the scaling debate raged on. My Bitcoin position slowly grew; gingerly so, due to the clear and present danger the scaling debate presented. And still, I believed in Precious Metals, despite the fact that they were trading at all-time lows in inflation-adjusted terms.

Then, when the scaling debate was convincingly, and shockingly, won in July, I sold all my silver and bought Bitcoin with the proceeds. I couldn’t say that in my Miles Franklin commentaries; but for those reading my nearly daily Bitcoin-focused articles, it couldn’t be clearer that I was losing interest in Precious Metals. A month later, in August, the “big one” hit…when I was fired after this podcast with the SGT Report - when its principal betrayed me after six years of giving him free, high quality content - by butchering the editing job to make me look bad. That said, when listening in hindsight, I think I did an amazing job fending off his propaganda – with my only “sin” being that a handful of curmudgeonly Precious Metal clients were angry that I spoke positively of Bitcoin; whilst gold and silver – which I continued to speak positively of – simply wouldn’t go up. Ironically, amidst an environment of nearly all-time low U.S. Mint Precious Metal sales, have a look at what the Miles Franklin blog published last week.

When I started CGC in early September 2017, the price was $3,500. My goal with the blog was no different than at Miles Franklin – only this time, my focus was different, and I didn’t have a product to “sell”…or bosses telling me how to sell it. As you can see by the name, CryptoGoldCentral.com, I believed strongly in gold at the time; but, per this signature article, silver no more.

However, as the Fall moved on, and Bitcoin continued rising whilst gold remained dead in the water; with physical Precious Metal sales continuing to plunge; I started selling my gold for more Bitcoin…until finally, in February of this year, I sold my last gold ounce. As of then, I lost all belief in Precious Metals; deeming silver for all intents and purposes, a glorified, manipulated base metal…and gold, an “inflation-adjusted savings account, with no material downside (due to the cost of production) and a call option on crisis.”

Back to my writing, just as the Miles Franklin blog was used to educate potential investors; and keep current investors informed; of the virtues of Precious Metals, the CGC blog was, and is, intended to educate the public about the (far less understood) world of Bitcoin and cryptocurrency. I never purported to be a trader, as I never have been; and aside from early on, believing Litecoin had some merit as “silver to Bitcoin’s gold,” never said a single positive thing about an altcoin…other than BRhodium – which has yet to be launched; which I helped numerous CGC subscribers claim for FREE. In fact, I only held my modest 10% or so position in Litecoin until the Fall, when I very vocally exchanged it for Bitcoin due to my belief LTC has little chance of outperforming BTC over the long-term.

In other words, all I have done at CGC is write about the virtues of owning Bitcoin; holding one’s own private keys; and avoiding altcoins unless you are willing to take the gargantuan risks associated with them - which personally, I would never do. I don’t trade Bitcoin, recommend anyone trade it, or recommend any strategy other than owning Bitcoin – and have exhaustively utilized my deep background in the topic; and three decades of fundamental analysis experience; to make my points…to help YOU, the readers, make informed investment decisions.

When the price rose to $20,000 three months after CGC’s inception, no one was more surprised, or pleased. Still, I didn’t change my investment strategy, or “recommendations” – other than very vocally selling my gold, which is something that had been a long-time coming after so many years of misery…and clearly, was set in motion last summer, when I threw in the towel on silver.

As the crypto sector started declining at year-end, I wasn’t surprised either – particularly regarding altcoins, which in my view, was a bubble at least as large as the dotcoms. As for Bitcoin, the final blow-off stage, too, was frothy – but not a “bubble,” in my view, because it was caused by genuine fundamental achievements…like winning the scaling debate; surviving the BCash (and other) hard forks; significant technological advancement – like the Lightning Network; increased mining decentralization; lower fees and transaction times; and increased institutional support, when it crossed the $100 billion market cap barrier.

Where would it (will it) “settle down” before rising anew, I had no idea. However, given the aforementioned financial analysis, which I have presented to you each day, my “best guess” is the “bottom” would be far higher than previous lows – particularly because February’s $6,000 bottom was caused by the Mt Gox Trustee panic-selling 8,000 Bitcoin for non-fundamental reasons.

Four months later, the fallout from the epic, Wall Street-catalyzed Bitcoin mini-bubble (and altcoin mega-bubble) has not subsided; and thus, despite numerous fits and starts, said “bottom” has not yet been determined. That said, whilst few altcoins have accomplished anything substantial from a fundamental standpoint; and cumulatively, are being endangered by falling hash power amidst bear market trading conditions; Bitcoin has advanced as rapidly, and powerfully, then ever…frankly, far more so than I anticipated. Thus, I continue to HODL personally – as not only do I believe the ASSET CLASS Bitcoin is highly undervalued, but cannot imagine paying huge capital gains taxes for the privilege of holding hyperinflating dollars.

Only you can decide what’s best for you – but as for me, I’m going to patiently HODL, just as I did during all of the REAL FUD-catalyzing issues of 2016 and 2017…as in 2018, I fear NOTHING, given my view that Bitcoin has achieved a strong enough critical mass to fend off any and every type of attack on its network, be it internal or external to (from) the cryptocurrency community.