Summary

Raoul began his presentation by addressing the current global economic outlook: Covid-19 has accelerated the impending recession, signalled before the pandemic struck by the Fed raising rates, the gradual slowing of global economy, breakages of supply chains fostered by Trump’s economy and h move away from globalisation to an isolationist more domestic approach; all of which set off falling Global GDP growth. With the virus still spreading, global growth will remain below 0 for some time to come. Fiscally, the solutions have not been enough, and are not likely to be enough, with stimulus deadlock in the US and the EU struggling to get through its 750 Billion Euro plan. The only solution has been the use of central bank’s money printers, with 25 trillion dollars - 55% of GDP - in G4 Central bank balance sheets, a figure likely to reach 75-80% by the end of the pandemic and its induced economic crisis. “The whole world is becoming Japan.”\n\nRaoul then contextualised this outlook against the performance of Bitcoin: While equities have done a better job at retaining purchasing power relative to Central Banks balance sheets, gold, bonds and commodities have all underperformed. The only asset that has overperformed and secured purchasing power compared to Central Bank balance sheets is Bitcoin, currently up 6.7 percent, it is about to go to all-time highs. Even the NASDAQ, up 40% this year, is dwarfed by Bitcoin in the Nasdaq/Bitcoin Ratio Chart (see slide 25). “If there is one asset that can save you from the devaluation of money – it’s bitcoin.”\n\nRaoul described Bitcoin as a “Super massive Black Hole” – The most dominant asset at this stage of the economic cycle in history. Since creation it is up 6 million percent with compound annual return of over 200 percent every year since 2009. The supply of bitcoin is reduced by 50% every 3 or 4 years, and we have reached this phase, necessitating the impending price explosion, in turn bringing new participants. There are often big corrections in the price of Bitcoin but these should not phase investors, buy in the dips and add more. Volatility, which has provided an excuse for investors not to enter the Bitcoin space is only likely to decrease, especially with the mass entry of leading hedge funds, family offices, and all types of investors who are diversifying into Bitcoin at a time where there is little or no supply. An ETF is launching, bringing 20 trillion held by US Investment advisors. Bitcoin current market cap of around 400b USD, will become 1 trillion by March. Bitcoin has been the best performing asset this year, over the past 5 years; and over the past 10 years. Even when risk adjusted it’s still the best performing asset YoY.\n\nAddressing regulation, Roaul noted that it is coming, but will be a good thing for Bitcoin, driving greater numbers of investors towards it. Central banks various papers on virtual currencies evidence the movement towards this new style of financial system and operation.\n\nAnother key element, Raoul presented Bitcoin is a pristine, and counter cyclical collateral asset unlike current core collateral assets, such as US treasuries, which devalue in terms purchasing power YoY. Over the life of your Fund this becomes a meaningful loss. Bitcoin, on the other hand has an ultra-fixed supply - we know when more will be mined – we know the exact amount that have been mined – it is the only asset in the world which has this information explicitly available. It is also Immediately transferable, and indefinitely divisible. Furthermore, the blockchain collateral ownership is clear and stops rehypothecation."

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