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HEALTH, WEALTH, AND HAPPINESS

April 27, 2022

"The biggest obstacle to wealth is fear. People are afraid to think big, but if you think small, you'll only achieve small things."

- T. Harv Eker

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Key facts

Like El Salvador (which used U.S. dollars), the Central African Republic does not have its own fiat currency, controlled by its own central bank. 

This is a huge problem for the nation's government. In the U.S. and many other jurisdictions, when the government has a problem and it needs more money, it can direct the central bank to print some currency. 

This causes inflation and hurts those who are holding their savings in the currency, but in the short-term, it gives the government the money it needs.

This doesn't work if your nation uses a currency controlled by another country. When the country that has control of the currency creates more, your nation doesn't get any of that extra cash, you just get the inflation and lose the value of the currency you are holding. 

• According to the CIA World Factbook, the Central African Republic has sizable mineral deposits, uranium reserves, crude oil, gold, diamonds, cobalt, lumber, hydropower and large quantities of good farmland. Despite this, it is one of the poorest countries in the world.
• The republic is one of the 14 countries where the official currency is the CFA franc. The CFA franc is backed by the French Treasury, and in return, France controls half of the foreign exchange reserves of these 14 nations. 
• The CFA franc was originally pegged to the French franc when it was created in 1945. It's now pegged to the euro, where one euro equals 655.96 CFA francs.
• One stated purpose of the bill is to establish a favorable environment for the financial sector that meets the needs of the profession and all economic actors.
• Another purpose of the bill is to put in place a legal structure to regulate cryptocurrency and crypto-related businesses. 
• Minister of Digital Economy Gourna Zacko highlighted the economic independence the country and individuals can now experience for the first time: 

“With crypto-currency, there is no more control of the Central Bank. You have your money, you send to an investor for a business, you receive it in any currency, you can dispose with it in Dollar, Euro, CFA, or Naira.”

Investor's take

Another nation-state has adopted bitcoin as legal tender. It's time to double down on the digital currency. 

In the short-term, as the Federal Reserve raises benchmark rates to fight inflation, I expect neutral or negative bitcoin price action, something I believe will likely continue for the rest of 2022 and at least some of 2023.

In the long-term, given our current world's macroeconomics and geopolitics, my take is extremely simple:

1. Bitcoin significantly outperformed all asset classes over the past decade.
2. I expect bitcoin to substantially outperform all asset classes over the next decade.

In other words, 2022 is a great time to purchase bitcoin and buy as much as you can, whether you use dollar-cost averaging or opt to invest a lump sum. 

In the risky world of investments where nothing is certain, this is as close to a certainty as you can get.

Sincerely, 

Alexandre Lores

Opportunity Analyst

Bitcoin Market Journal is a daily newsletter that makes you a better crypto investor. It is created by Evamarie Augustine, Charles Bovaird, Mati Greenspan, John Hargrave, and Alexandre Lores.

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