To The Moon

• Gold is definitely driven by geopolitics says Florian Grummes, as well as de-dollarization.
• Ryan Wilday on Bitcoin's price action.
• Silver hasn't shown up to the party.
• Bitcoin ETFs like BITO.
• Crypto and precious metals - don't overestimate the importance of US elections.

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Gold is definitely driven by geopolitics says Florian Grummes, as well as de-dollarization (1:10). Ryan Wilday on Bitcoin's price action (3:25). Silver hasn't shown up to the party (5:45). Why gold bars (11:50)? Ideal ways to get into crypto and precious metals (16:35). Bitcoin ETFs like (BITO) (20:30). Crypto and precious metals - don't overestimate the importance of US elections (24:05). Watch the full interview here.

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Transcript

Julie Morgan: Thanks so much for joining us today. I'm joined today by Florian and Ryan. Let's jump right in. Florian, we're going to start with you.

A chart in one of your articles published in August shows that gold spiked during the Obama administration, but was lower during the Trump administration. And then it starts to tick up again based on geopolitical events.

That same article specifically mentions October 6th as the day the price of gold started to increase. Now we already know what happened on October 7th. We won't talk about that. But tell me, is that chart telling us that those events had a direct correlation to the subsequent increase in gold?

Florian Grummes: Thanks for having me, first of all.

And yes, I think it's definitely driven by geopolitical events or by the escalation. Basically, the invasion of Russia in 2021 triggered the gold price. And then of course, last October was another big event. And since then gold is running relentlessly higher basically.

And I think you can also make the case that gold is of course driven by the de-dollarization. It's no secret that the Chinese have been the main demand basically in the gold market since last summer when the premiums in Shanghai started to rise. And only now in spring as of this year, the Western investors slowly, but surely coming back to the gold market.

Gold is a safe haven. Gold is an anchor also against the dollar, of course, for many countries in the world that are not or that want to move away from the dollar.

The sanctions against Russia have made clear that it's difficult to trust America anymore. Your assets as a central bank, as a country could be seized overnight without any legal procedure anymore. And I think that's definitely driving the gold price. So geopolitical events, escalation driving gold higher for sure.

JM: Now Ryan, I know you're not a political guy, but crypto has definitely seeped into the world of politics. And as election day approaches, the candidates have had either a tight lip or a loose tongue about cryptocurrency.

In your opinion, where do you think crypto will be after the election and how should we adjust our thinking about crypto?

RW: Well, I think it's fair to say about me that I have my political opinions, but I try to avoid how I invest, I don't base my opinions. I'm very much a price action person and look at price structurally.

And from that standpoint, I'm looking at Bitcoin price action is very bullish as long as it's over the August 5th low. We had a spike low on that day, and that low came after a long consolidation. It's all very bullish in terms of price action, as long as that level holds. I think it's around 49,600 or so. And right now we're going up to the top of the range, which has been in place for 6 months.

And so, who's going to win the election? I couldn't predict that. However, with price action so bullish, I see a run to 100K right now as long as that low holds. I've been cautious.

I think everyone that knows me on Seeking Alpha says I've been cautious, knows I've been cautious. However, with us going back to the top of range, I see the market sticking higher.

JM: Florian, same question for you, but in terms of gold and other precious metals.

FG: Well, gold had a big run up, and I think it's already ahead in the cycle in comparison to Bitcoin. So gold broke out of this large, or let's say very large cup and handle pattern last year in December and then really started the rally since basically end of February.

And so it's a step ahead. I think Bitcoin is working as well on the cup and handle pattern and it's going to break out very soon, most likely. So I'm also bullish on Bitcoin, but gold has been running already for more than 12 months now.

It’s overbought. So I think the upside is probably limited, but still I see it going to let's say $3,100 very likely over the next few weeks. I think we are in a spike in the gold rush. It could even run until maybe spring next year and then we might see $3,500. But it's overbought already.

So the risk reward is not that ideal anymore. While I think Bitcoin is actually just getting started. It doesn't take much more to break through this all-time high around 74,000.

And then I would agree with Ryan, I think 100,000 is very likely.

JM: What about other precious metals? You focused a lot about gold, but what about other precious metals? We had questions about silver as well.

FG: Silver the little brother, it still has to do a lot of catch up here. Still trading far below its 1980 high at $50. But I think we're going to $50 in this bull run. So silver has not really shown up to the party yet.

It doesn't take much more, I guess. I think there's a very high likelihood that we will see silver at $50 until next spring, maybe earlier. And yeah, and that would be the third time silver tasting the $50.

I guess we will see some form of a pullback at those price ranges, or that's a strong resistance obviously, but in the very long run I'm definitely in the three-digit silver camp.

JM: Let's talk about what is Bitcoin's place in terms of long-term investment.

RW: My opinion is that, it behooves everyone to have at least have a little bit of Bitcoin in your portfolio. I mean, it's one of the the highest beta asset class in the entire investment world of crypto in general, but Bitcoin, if you think of it as now a standard institutional asset.

So if you have in your portfolio having a little bit versus a lot, but who is good for people that say are retiring soon or just have, or were concerned about crisis in their life in general, people that are younger could possibly have a lot more. I'm so comfortable with crypto. I swing trade it, I day trade it, I trade it long term. So my holding in crypto are substantial, but I'm also risk managing that as I go and definitely stopping out if I need to.

So it really depends on the type of investor you are, but I don't think anyone should leave it out of their portfolio, in my opinion. Again, I know that's not literally financial advice. That's not my role, but it's my general opinion.

JM: What about other cryptocurrency? How do you feel about that?

RW: I think of all other cryptos as trade personally. I have, you know, I've been in the space since 2012. I have, for example, I've even owned Ether since 2016, but I'm starting to not like the price action. So I cut it out of my portfolio extensively.

Is that the wrong move? I've enjoyed returns in it for a long time. There are other cryptos that I made immense profit on in say 2017, and they're pretty much junk in terms of price action. So I always ask subscribers, be cautious on everything else as a long-term asset except for Bitcoin. And then the other ones are absolutely fabulous -- trading -- basically trading vehicles.

JM: Okay, Florian, what about you? You mentioned long-term investment as far as gold is concerned. Any other comments about gold’s place in your portfolio long-term?

FG: Well, I think everybody should have an allocation in gold, preferably physical gold in your own hands or in your own vault. That means not in the form of an ETF, but something that is outside of the financial system. I mean, that's the idea of gold in the end of the day. It doesn't have a counterparty risk if you hold it in your own hands.

While if you have an ETF, yeah, you can use it as a trading vehicle for the short to midterm, I would say. So let's, if you do what I just said, like gold is going to $3,100, you buy it for the next few months. That's easily done with an ETF, but it is not a safe haven asset, right? It's speculation in that case.

And for the very long term, I believe in physical gold and silver. I believe that everyone should have a allocation between 10% and 25%. It is something that will give you good sleep. It will always be a liquid asset. You can always get back into the system if you want. And history has shown that gold has always survived any financial system, any dictatorship, any whatever.

And I think it will do the same for the next 50 years. And much further, none of us can actually think and plan anyway.

Let me add something to Ryan, I totally agree with him. I'm also since 2012 in Bitcoin, and you have to be very careful with all these smaller altcoins, so to speak. It's a very risky, very speculative sector.

And basically none of them are for the long term. Bitcoin is, but even there you have to withstand huge drawdowns. So in the last bear market, Bitcoin came back 75% from its top. So this is something that you have to consider and you have to be aware.

And one thing that I would add, because that was also your question, I like Solana in this cycle. I believe Bitcoin is breaking out. I believe that will pull the number 3 Solana higher as well.

If we compare the last 2 cycles, or let's say if we compare the price action of Bitcoin, when it first reached a thousand dollars, it went to I think $1,250 or something. Ethereum the first time went to $1,350. So I'm thinking that Solana has a very good chance to go to at least $1000 within this cycle.

That's actually my favorite altcoin allocation here because I believe the risk reward is dramatically good. So, but it's not a long-term investment.

RW: Solana, I've been in ETHER's DeFi space for a long, long time. And there's no doubt about it. Solana is a way better experience. You can raise questions about security of the network and all of that. However, I have a price target of 400 for it for this cycle. That may change. I'm a person that adapts. That certainly could change, but 400 looks good. And then we'll see.

Again, I do expect a bear market in Bitcoin at 100 to 125. And if Solana is at 400, that would be very telling to me because that means our targets are playing out. And then we'll see where the bear market takes us. A lot of times it happens in altcoins is that, you know, we talk long-term, it really depends on what happens during the next bear cycle, whether they survive for the following cycle or not.

It really isn't the bull market that says anything about its long-term viability. It really is the bear market. And when they get taken out price action wise, they don't come back.

JM: All right, so let's now talk a little bit about something that may seem a little elementary, but Florian, why gold bars? You mentioned having actual gold in your hand.

Now I understand having a tangible asset and purchasing that asset from a company or a place that you trust. I've been hearing a lot about this in Costco, but will those who invest in gold in this way really be able to get a higher return on their investment?

FG: No, the return will be the same most likely. I mean, maybe you even save yourself a percentage if you buy an ETF because you don't have storage to pay and you don't have premiums on the bars or the coins to pay, but you have an asset outside of the financial system and that's actually the real story of gold.

I mean, you want to be outside of the financial system, you want to hedge yourself because I see a lot of risks and we all know that, the money printing has been going on for decades and it's one of the reasons why we had high inflation numbers and we know that there's a huge derivatives bubble.

We know that there's lots of bubbles in the system and so you want to have something outside of the system that you just can keep and store and hold on for the next 10, 20 years. And it will always be money, it will always be liquid, and you can always get back into the system if you need so.

So I'm a strong believer that you want to have a part of your assets. We're not talking about 100% allocation here, but let's say 5% to 10% of your net worth holding in physical bullion outside of the system, I think is a very smart way to hedge yourself against whatever can happen, you know.

JM: Here's another question from the audience that was previously submitted. It says with other crypto coins having implementation like LTC, would that impact the long-term growth of Bitcoin?

And how do you see LTC as also an alternative to retention of value like gold rather than BTC alone? Ryan, do you want to take that question?

RW: Assuming they mean Litecoin, I'm actually bearish. I do not like the price action. I mean, this was one of the big gainers for me in 2017. I mean, just enormous gains. But the price action since then has largely been range bound for 6 years.

And even now, well, the last I looked at it, it was at the lower end of that range. I haven't looked at it in probably a month or so, I'm guessing. Basically, subscribers request it every once in a while and I look at it, but it hasn't been one that I've been trading actively for that reason. And I certainly don't own any.

It might be like some dust in my Coinbase account, like $0.50 worth of Litecoin, because that happens to you when you trade crypto. You get dust sitting around as we call it. But you can't get out of it, it's not big enough to get out of it.

JM: Florian, what about the dust that you have?

FG: Yeah. Well, if it's Litecoin, I remember I had also some good trades with Litecoin many years ago. But as Ryan mentioned, I mean, this is like a coin that was exciting in like 7 years ago, like 2 cycles back. And that's what happens with most of these coins that in the next cycle, they're out of fashion and there's lots of new stuff happening and the sector is evolving so fast.

It seems like this time it's much more about meme coins and these old dinosaurs like Litecoin, I think it's probably not a good investment anymore. I mean, they might go up a little bit, of course, but I don't think I have even Litecoin sitting in my dust.

RW: One point, I want to make for people out there is a very simple exercise for looking at whether judging Bitcoin or getting involved in altcoin is simply pull up a pair chart so you can easily, in trading view, do Bitcoin versus Litecoin or Bitcoin versus Ripple. Very easy to create.

And just look at it and look if it's up trending or down trending. So if you did a Solana versus Bitcoin, it was up trending versus Bitcoin. It had higher beta and it was pushing higher.

That doesn't mean it's a long-term investment, but at least means while the trend is up, it's advantageous to be in Solana versus Bitcoin. Now, I never sell all my Bitcoin to buy any altcoin, but for because I have Bitcoin that's in a cold wallet and will never get sold unless I need it in emergency.

However, it's like it's I have gold coins, too. I liken my cold wallet Bitcoin to my gold coins that are in my safe. But if you don't do that exercise, you basically are not capturing the bull market in Bitcoin. You're basically giving, you’re sort of, you’re getting the idea of a speculative assets going to produce more than Bitcoin.

And if you don't look at that pair, you may be into something that's going to leave you underperforming Bitcoin by the end of the bullish cycle. And Litecoin was one of those, this cycle where again, like I said, Solana was, was, an outperformer versus Bitcoin at least for a period during the cycle.

JM: What would you say are the ideal ways for investors to get into crypto and precious metals?

FG: It really depends on your time frame.

So what we've been discussing before if you want to speculate on that current cycle if you assume yes, Bitcoin is going to break out and maybe run towards 130,000 until next spring, maybe it's better to just buy an ETF because you're much more flexible and you can easily move in and out.

But if you want to hold Bitcoin for the long term, I strongly suggest you move it towards a cold wallet, towards your ledger or whatever you have, and not store it on a crypto exchange and also don't buy it via an ETF because you introduce counterparty risk and the idea of Bitcoin again was also initially that it is something outside of the financial system, an alternative basically.

And if you keep it on an exchange, yeah, I mean, we've seen it numerous times over the last 14 years that exchange went belly up like last big example, of course, was FTX and people having a hard time to get even $0.10 for that dollar that they were holding on these platforms. So you have to be aware of those risks.

But if you say I want to just trade to breakout really towards $130,000, maybe yeah, you could do an ETF for a few months, but long-term definitely cold-wallet, off the exchange. And again, the same is true for gold. I mean, buy it physically, store it in a safe place, in a vault ideally. And if you own a lot of gold, I would even suggest to diversify in terms of jurisdictions.

So maybe not keeping everything in your home country, but diversifying over continents, ideally. So, I would think of Singapore, Zurich, New York, and a few other places where you could hold large amounts of gold and diversify yourself in terms of jurisdiction.

JM: Ryan?

RW: So in crypto, I come from a person that I day trade crypto futures during the day. I swing trade it. So I have coins that are on a centralized exchange. I play with DeFi.

And then again, like I said, I've got cold wallet. So again, like Florian said, how do you want to engage the market? What timeframe do you want to work on? I do think the ETF now gives someone who just has a brokerage account and wants to jump in tomorrow, they have an opportunity to at least get some of that volatility in their portfolio.

But I always try to, over time, if someone's interested in the long term, to push them towards the very secure method of holding it within a cold wallet. Otherwise, you don't have - the big advantage of this asset class, which is just like gold, a little bit off the grid.

And at the same time, if you have a crisis and our bank accounts are hindered in some regard, we can have access to our Bitcoin. And you might say that no one takes Bitcoin for coffee or whatever, but that is very easy to spin up if we have a crisis. A coffee shop or wherever, there are vendors out there, they help them quickly spin up Bitcoin payments.

So it is going to be a very good asset class, at least for transactions in a financial crisis.

I'm not going to say it's not going to crash or reduce in value during a financial crisis, but at least if our financial system is hindered in some way, you can use Bitcoin as long as you have it in your own possession with your own keys.

And so it's a long road for most people to get there, especially if they're not tech. I came from a tech environment before I was investing, so it was very easy for me to get into that world. It's a little harder for some people, but I always try to push them, lots of resources to help people get there.

JM: Any comment on (BITO)?

RW: We're saying it's a futures ETF. It came out because it was futures for some odd reason that SEC decided it was okay a lot earlier. Personally, so since it puts out a dividend of futures - so it trades futures every month.

And if it rolls out profit, it pays that out as a dividend. That dividend is immense. I've seen a lot of people that think that dividend is free money. It's not. Basically, it reduces the Bitcoin per share of the fund every time you roll that dividend out. So you got to reinvest it to actually match Bitcoin returns. So it's a lot of work. It also is a cap gain every month if you roll those dividends out.

So, if you want to trade long-term, buy the new ETFs that are out there spot based so that you don't have that rolling capital gains tax every month. And if you're in your retirement account, it doesn't matter. But then you got to reinvest it to match Bitcoin returns.

There's a little trick I know when you have a crash in Bitcoin because futures go from - this is maybe too much information, but go from what's called contango to backwardation. It's better to buy BITO in a crash in Bitcoin because it's actually undervalued for a brief period of time.

And then the next day you sell it and you buy the regular ETF because that basically the futures will flip back. Little trick I know it's also one of my bottom signals, but it's probably too much information for most people out there.

JM: I have to remember that so we can talk about that over another time.

RW: No problem.

JM: So KS is asking, any thoughts on RNDR?

RW: I don't trade it, but a lot of my subscribers do. I give them a chart, any chart that anyone's trading that I'm not, I'll give them a chart upon request. I don't remember because I don't trade it. There's, I don't remember what the reason was, but it's not in my portfolio.

No, that's not a comment, whether good or bad. I have some level, I work by levels. So I've got some level where I'm bearish probably if I'm not bearish already, and I've got a target if it's bullish. So I just don't know it by memory.

FG: I learned over the last 3 cycles that I have seen in the crypto world that you want to focus on very few coins. Usually people start spreading out their money and there comes one hot idea after another, but that's what I said in the beginning.

My eyes are on Bitcoin and for the long-term investment and for the trading and rather short to midterm, I think Solana has a very good chance to go to a thousand dollars from here. And that's we're trading, I think around 175-ish at the moment. So at least it’s a 4x from here, which I think is a very good return for many people. And that's my main thesis for this cycle. I don't want to overcomplicate it. And that's where my focus is.

RW: That's well said. I mean, we cover a lot of coins, but I put a group in my weekly reports that I'm focused on trading. I always tell people, like my altcoin trades are probably 0.5% of my portfolio compared like on one trade. My philosophy in altcoin is you either lose it, I mean, if it goes to 0, you're not crying, and if it does what altcoin can do, you can get a 10x, 20x out of it, but it's not worth chasing that 10x, 20x for a lot of things that just go to zero.

It just isn't worth it. I'm good with it. I do this regularly, but for most people, make it easy. Buy Bitcoin. Most people are there and they want to get rich quick. Well, good luck. It's a lot of hard work to follow all these coins and try to take trades and then stop out of them if they're not going well. We regularly stop out of a lot of trades that are not going in our favor. That's the nature of it.

JM: Final words on the election and how to trade your investments. What do you say? 30 seconds.

FG: Yeah, thanks again for having me. It's been a pleasure. And yeah, I think we should not overvalue the effect of the elections. I think that the gold price certainly has a war premium at the moment priced in.

If Trump would win, I assume that he would start to de-escalate the situation with Russia. If he will be successful, I have no clue, but I think the market would start pricing in something. So that could mean a pullback in gold. While at the same time, he's been very opportunistic trying to get all the crypto fans behind him.

So I think it will be bullish for Bitcoin. And I think all markets are in a melt up situation right now. So I'm bullish basically, stock market, Bitcoin, gold until the year end, at least.

JM: Ryan?

RW: Yeah, great attending this and great chance to talk. I would say, don't forget that Bitcoin and gold as well are not - America is not the center of the gold and Bitcoin world. It's a big world out there. And so the election is, you know, it's our world in America, but it is not going to impact these assets as much as we think they will. Yeah, sure. It has a play. But yeah, Bitcoin has been on a raging bull market.

It's been a strong uptrend. Maybe caution is warranted, but I do believe there's a little more to go. Bitcoin's setting up for run. I mean, right now. Can that run break down? For sure, there's false breakdowns in markets, but it's setting up for run.

Again, I don't want to tell anyone who, how much to own what's owned, but at least do consider, do your research and think of it as a good part of your portfolio.

Because I know people are still shy about it as an asset class. I think it has a place in every portfolio. And so you just need to do your work, do the research and make sure it works for you.

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