Chief Investment Strategist, The Freeport Society
President Trump is going all-in on Bitcoin…
On Friday, his Nasdaq-listed Trump Media & Technology Group (DJT) announced it was raising $2.4 billion from investors to buy Bitcoin.
It’s one of the largest Bitcoin buying deals for any public company.
And it will make Trump Media one of the top Bitcoin holders among publicly traded U.S. firms.
Of course, he’s not the first founder to effectively bet his company’s future on Bitcoin.
Michael Saylor’s software company Strategy (formerly MicroStrategy) owns about $60 billion worth of Bitcoin. For all intents and purposes, Saylor tossed his enterprise software business aside and converted his company into a leveraged Bitcoin hedge fund.
GameStop followed his lead and did the same thing this year. Rather than wait for its legacy retail business to suffer a death by 1,000 cuts, it turned itself into a Bitcoin investment vehicle.
And now you can add the world’s most powerful man to the list of Bitcoin backers.
Maybe the president is a Freeport Society reader. We’ve been urging all our readers to own Bitcoin since we launched in December 2023.
Since then, it’s up 150%.
And with Trump piling in, it’s worth remembering why Bitcoin is so popular.
We’ll get into that today. I’ll also repeat my recommendation to make sure you own some as part of a diversified portfolio.
Natural Dollar Hedge
A big part of Bitcoin’s value is its rarity.
Its supply is limited to 21 million coins. And new supply tapers off over time (a process known as the “halving”).
This makes it a natural hedge against the dollar, a currency the Federal Reserve has had no qualms about printing at will.
That’s why Strategy and other large companies are interested in holding bitcoin on their balance sheets.
Bitcoin is insurance against an incompetent Fed, a fiscally incontinent Congress, and the resulting debasement of the dollar.
You wouldn’t want to own a home without insurance. The same goes for your dollar savings – insuring against the demise of the dollar is basic self-preservation.
You saw what happened to Elon Musk’s DOGE. It made a lot of noise. But as we predicted in these pages, it didn’t put a dent in the federal budget.
The national debt stands at $36 trillion. That’s already a five-alarm fire. And the President’s “big, beautiful” bill will add another roughly $4 trillion to that tally.
We’re with Elon on this one: A bill can be big, or it can be beautiful, but we don’t know if it can be both.
And it’s not just companies that are loading up on bitcoin. Governments are also getting in on the action.
In March, Trump created a new national Strategic Bitcoin Reserve by executive order.
For now, it’s funded with bitcoins the government has seized via criminal and civil asset forfeiture. Today it’s worth about $20 billion. But this is just the beginning.
Trump has authorized the Secretaries of Treasury and Commerce to develop budget-neutral strategies for buying bitcoins. Meaning the government can buy more bitcoins as long as it doesn’t add to the deficit.
And who knows… After making a $2.4 billion bet on Bitcoin through Trump Media, maybe the president will be more open to other ways of funding the reserve.
Follow This Bitcoin Buying Rule of Thumb
If you already own Bitcoin, kudos. You’re ahead of the crowd.
And if you don’t already own bitcoin, now is a great time to change that.
Just make sure you’re smart about it…
You don’t want to bet the farm on Bitcoin – it’s one of the most volatile assets out there.
A standard rule of thumb is to allocate 1-2% of your portfolio in Bitcoin. I think it’s reasonable to go a decent bit higher than that, but the higher your allocation the more disciplined you must be in managing your risk.
Whatever that number is for you, manage your position by rebalancing every year.
If you’re targeting a 2% allocation, and it shoots up to a 10% allocation, sell some Bitcoin until you’re back down to where you’re comfortable.
If it drops to say, 1% of your allocation, don’t be afraid to buy more.
This way, you’re always selling into strength and buying into weakness, rather than the other way around.
The key is that you’re keeping your insurance in place. As Congress and the Fed continue to inflate away the value of the dollar, you’re keeping a portion of your wealth outside of the system.
To life, liberty, and the pursuit of wealth.