Bitcoin surges following the failed Trump assassination … is bullishness back? … keep your eye on soaring bankruptcies … a new picks ‘n shovels way to play AI In the wake of the attempted assassination of former President Trump, one of the biggest moves we've seen in the investment markets came from bitcoin. As we've pointed out here in the Digest, the odds of Trump having a second presidential term have spiked since Saturday. And given Trump's recent pro-crypto stance, the digital currency market is rallying. As you can see below, the grandaddy crypto spiked on the news, retaking $60,000 for the first time since mid-June. As I write Tuesday morning, it's up 10% since last Friday, the day before the shooting (after having touched 13% higher).  | ADVERTISEMENT  Are you prepared for this 2024 election melt up?
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Click here. | Does this mean that the recent pain in the crypto sector is over? To make sure we're all on the same page, bitcoin's fourth halving took place in April. Historically, we typically see a run-up in bitcoin's price leading into the halving, a few months of sideways-to-slightly-down action right around the time of the event itself, then a new, major bull market beginning roughly two months later. But here we are, roughly three months after the halving, and not only hasn't the crypto rally begun, but the sector has been breaking down. From a historical perspective, this is unusual and causing some to wonder whether we'll fail to see a post-halving surge this time. Circling back to the Trump bump, while crypto investors shouldn't put too much weight on a second term driving bitcoin higher (we're months away from the November election and anything can happen), there are other tailwinds behind a crypto resurgence. Let's go to our expert Luke Lango from this weekend's Crypto Investor Network update, before the Trump news broke: Last week, crypto markets finally caught a break. The coast isn't yet clear, but signs of hope are emerging for a potential strong third-quarter rebound… Fundamentally, this rally will be led by a powerful coupling of supply headwinds ending and demand tailwinds building. Mt. Gox liquidation headwinds persist [last] week, accompanied by ongoing concerns that Bitcoin miners will sell as their mining costs exceed the current BTC price. Additionally, renewed fears have emerged about the German state of Saxony potentially unloading a large quantity of Bitcoin seized earlier this year. So, the liquidation headwinds broadly remain front-and-center right now. We do not expect these liquidation headwinds to last much longer. To be clear, no one really knows exactly when all these liquidations will happen or when they will be finished. The current "rumor mill," though, suggests that most of the Mt. Gox liquidations should abate by the end of July. Same with the Saxony liquidations. And the mining-related sell pressure should ease if crypto prices increase — which they should, when the Mt. Gox and Saxony liquidations end. Therefore, based on the rumor mill, the timeline suggests that today's liquidation headwinds will ease significantly by early August. I don't want to spend too much time on crypto in today's issue, so I'll jump straight to Luke's bottom line… Keep exercising caution, but if bitcoin continues firming up and holds its recent retaking of $63,000 as we head into August, then odds favor the post-halving breakout that was originally expected. Here's Luke with what that would look like: The potential demand for cryptos in the next few months could be enormous. If that enormous demand couples with abating supply headwinds in August, BTC could indeed pop to $100,000. The technicals suggest this is a real possibility. Switching gears to the economy, the latest headlines increase the odds of a September rate cut – and a soft landing While Wall Street grows increasingly excited about a potential September interest rate cut from a profit perspective, let's not forget the primary purpose of such a cut – to prevent our economy from buckling. Sunday brought news that likely made it onto the Fed's radar, increasing the odds of a cut. Let's jump to CNN Business: There were 346 companies that filed to either liquidate or re-organize through bankruptcy in the first six months of 2024, the highest half-year level since 2010 when 467 filed, according to data from S&P Global Market Intelligence. Just last month, 75 companies filed for bankruptcy, which was the biggest monthly total since early 2020. The majority of businesses that have gone belly up are considered "consumer discretionary," a broad category of firms that sell goods or services that people don't need every day, such as restaurants, clothing stores and car dealerships. Most of the businesses are also considered small or mid-sized, economists and investors tell CNN. The article goes on to suggest that waning consumer demand is behind much of this. Unlike last summer, U.S. consumers are no longer splurging. However, just this morning, we received the latest retail sales report. Economists polled by Dow Jones predicted a decline of 0.4%, yet the data came in flat. Excluding autos, sales climbed 0.4%, a larger gain than the 0.1% consensus forecast. In a sense, this is the best of both worlds. Together, the data provide the Fed cover to enact a rate cut, yet not because the consumer has completely rolled over. It has the makings of the proverbial "soft landing." We're not out of the woods yet, but we're encouraged. Finally, don’t miss this “picks ‘n shovels” way to play the AI boom Artificial Intelligence has a dirty little secret – it's not profitable. Despite all the excitement about how AI will change our world and simplify our day-to-day lives, at the moment, it's a money pit. From The Wall Street Journal last fall: Tech companies are touting new AI technology that can spit out business memos or computer code. They are still figuring out how those products will generate a profit. Generative artificial-intelligence tools are unproven and expensive to operate, requiring muscular servers with expensive chips that consume lots of power. Microsoft, Google, Adobe and other tech companies investing in AI are experimenting with an array of tactics to make, market and charge for it. Microsoft has lost money on one of its first generative AI products, said a person with knowledge of the figures. Meanwhile, the companies that have been making profits from AI are the so-called "AI enablers." Think Nvidia, which creates the semiconductor chips required for AI technologies to work. Last week, our macro expert Eric Fry pointed toward another "AI enabler" that's poised to generate enormous profits as AI continued gaining steam… Natural gas. Here's Eric to explain: Amidst the buzz and bright lights of the stock market's obsession with artificial intelligence, many investors overlook a crucial factor… The energy sector plays a pivotal role in powering this digital revolution… The spike in electricity demand due to AI will only continue to increase, especially as tech giants like Google pour their resources into creating newer and bigger data centers… Last year, global investment in all forms of energy hit a record-high $2.8 trillion, according to the International Energy Agency (IEA)… By 2030, overall electricity demand is projected to surge up to 20%. AI data centers alone are expected to consume an additional 323-terawatt hours of electricity demand; that's seven times greater than New York City's 48 terawatt hours of electricity demand. This massive uptick is likely going to ignite a natural gas boom. Eric cites research from Wells Fargo suggesting that daily gas demand could surge by a staggering 10 billion cubic feet (bcf) by 2030. That would represent a 28% jump from the current 35 bcf/day used for U.S. electricity generation. And according to the latest Global Energy Perspective by the McKinsey & Co. research group, it's a near lock that global natural gas demand will grow for the next 15 years – possibly the next 30 years. Meanwhile, despite the growing popularity of green energy, crude oil demand is on track to continue growing for at least a decade. Here's Eric with the investment implications: As massive, trillion-dollar investments continue to flow into all forms of energy generation and storage – both renewables and fossil fuels – we investors do not need to "choose sides." We can invest opportunistically in both renewables and fossil fuels. Eric's latest issue of Investment Report out last Friday contained additional research on AI and the other megatrends Eric is following. He also made a new AI-related stock recommendation. If you're a subscriber, click here to log in and read the issue. If you'd like to learn more about joining Eric in Investment Report, click here. If you're more of a do-it-yourselfer and are interested in AI-related natural gas plays, you can begin your research with Cheniere (LNG) – the largest producer of liquified natural gas (LNG) in the United States and the second largest LNG operator in the world. You can also investigate gas-related pipeline stocks such as TC Pipelines (TRP) which pays a 7.15% dividend yield. There are also gas-related MLPs (master limited partnerships) that offer their own hefty dividends. Whatever is best for you, make sure this is on your radar. Demand for natural gas appears poised to ramp up substantially for years to come thanks to AI. This is a no-brainer set-it-and-forget it trade.
Have a good evening, Jeff Remsburg | 
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