Tariffs have been the most important news story so far this year. The president has caused investors a lot of uncertainty with rapid-fire announcements affecting global trade and the flow of capital. The market has responded with extreme volatility.
Investors can try to identify stocks that will successfully navigate the turmoil. Or they could simply adopt a wait-and-see approach. However, maybe it's time to consider a different asset class altogether.
There's at least one billionaire out there who believes one cryptocurrency has more than 15,000% upside from its price on April 12. Is it time to buy?
Are tariffs good or bad?
There are people on both sides of the tariffs argument. On the pro side are those who see tariffs partly has a way to make other countries negotiate with the U.S. There's also the fact that tariffs can bring additional revenue to the government. Moreover, they can balance trade deficits and support industries domestically that have fallen behind.
On the other hand, critics of tariffs call out the tremendous growth of the global economy over the past few decades, with countries being able to focus on what they're best at producing and monetizing this. These people also argue that tariffs will raise prices, pressure demand, and lead to reduced innovation.
Whatever side of the fence you're on, there's no doubt that uncertain is the best way to characterize the situation these days. Investors are having a hard time figuring out how the companies they invest in will be affected.
This crypto doesn't care about tariffs
Michael Saylor is the billionaire co-founder and executive chairman of Strategy, an enterprise software business formerly known as MicroStrategy that has transformed into a Bitcoin (BTC -0.91%) holding company. Saylor is one of the most bullish people when it comes to this digital asset, which he thinks has more than 15,000% upside over the next 20 years in his base-case scenario.
CRYPTO: BTC
Key Data Points
His outlook is simple and straightforward. By 2045, Saylor believes, 7% of the world's wealth will be held in Bitcoin, leading to a monster $13 million price per unit for the crypto. He sees the crypto gaining more momentum over time as it becomes a bigger portfolio allotment for more parties, whether individuals, institutions, corporations, or governments.
The theory is that the massive amount of fiscal debt, coupled with ongoing growth of the money supply, should encourage people to learn more about and appreciate an asset that has a fixed supply cap of 21 million. Bitcoin scarcity is the most important trait to pay attention to.
Bitcoin is also decentralized, digital, and borderless. With the U.S. going head-to-head with other countries on the flow of goods between them, Bitcoin continues to operate without any hiccups.
It's easy to call out its 10% drawdown this year (as of April 12) as a clear indicator that it's not a good asset to hold during uncertain times. However, it's crucial to zoom out and focus on the longer-term trend. The crypto has skyrocketed 37,220% in the past decade. While forward returns won't resemble the past and might not come close to Saylor's forecast, the digital coin has substantially increased purchasing power over an extended period of time.
It's anyone's guess how the tariff situation will play out. This should place the spotlight on Bitcoin as a compelling investment to add to your portfolio. It's trading well off its peak, providing a buy-the-dip opportunity. And according to Michael Saylor -- whose company is all-in on Bitcoin -- it has huge upside as a more popular store of value.
