20 Reasons To Own Bitcoin (Part 2)

More Reasons To Own Bitcoin

May 07, 2024

IN TODAY’S REPORT

What we cover: NONCE SENSE Edition. Reasons #6 through #10.

More Reasons To Own The King Crypto

Today we unpack more reasons to own Bitcoin, the most innovative asset we’ve ever seen. If you missed Part 1, here’s a link. Ok, let’s get to Part 2.

20 Reasons To Own Bitcoin (Part 1)

REKTelligence

March 28, 2024

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|6| Hardest Asset Ever

As most investors know, Gold has long been considered a superior store of value, a hedge against inflation, and a safe haven in times of great national or global distress. Gold’s stock to flow is low, primarily meaning new supply is energy intensive and hard to come by. With its supply therefore being limited, Gold’s scarcity appeals to many in a world drowning in an ocean of fiat. But gold is not all shiny coins and rainbows. Any significant store of gold requires substantial infrastructure and fortification. Additionally, its supply remains solely an estimate, with a precise supply figure truly unknowable. Lastly, don’t attempt to cross a national border with a large amount of gold unless you’re okay with your store of value almost certainly being confiscated. In sharp contrast, Bitcoin is weightless, can be held in one’s mind, and its ultimate supply is precisely known, enforced through code and a distributed ledger. Simply put, Bitcoin — not gold — is the hardest asset ever and the world’s first example of cryptographically-enforced scarcity.

|7| The Ultimate Denominator

If you’ve traded currencies — foreign exchange, or FOREX — you’re already familiar with the concept of pairs such as USD/JPY, GBP/USD, and EUR/AUD. Even if you’ve traded FOREX, you may still think that pairs are limited to the FX market. Gold, Crude Oil, Cotton, Cocoa. These aren’t pairs, right? Wrong. In reality, every market is a pair. This is because every asset has both a numerator and a denominator, and most major markets are priced in dollars, meaning the USD is the denominator. In short, the World’s Reserve Denominator is the U.S. Dollar. As government debt rises and the USD declines, the denominator also declines, pushing up nearly every market sitting on top as numerator (e.g., real estate, gold, bitcoin, etc.). If you hold USD cash, however, you’re essentially putting the denominator in the numerator —USD/USD, or $1.00/$1.00 — and as the USD declines, you don’t notice — at least not right away — because the value doesn’t change. So those putting cash under mattresses are always losing over time. You must own assets, otherwise you’ll be left in the dust.

But now try to find assets which still rise with Bitcoin in the denominator. This is much tougher. If you do succeed in finding an asset which rises when denominated in Bitcoin, congratulations. It’s one of the few assets which has outperformed Bitcoin itself. We don’t know of a single major asset class which has succeeded. As we can see in this monthly chart of the NASDAQ 100 Index (NDX) — an index of tech innovation which has outperformed most other indices in recent years — it displays as a downtrend when denominated in Bitcoin. Bitcoin is the the Ultimate Denominator, and provides immense protection against the debasement of the USD.

|8| Network Adoption & Effects

While Runes, Ordinals, and other non-monetary focused endeavors on the Bitcoin blockchain may not appeal to laser-eyed Maxis, Bitcoin will eventually ossify without continuing adoption and development.

Happily, network adoption continues unabated as we see in this chart of Bitcoin wallets with non-zero assets.

|9| The Ultimate Savings Technology

As fiat cash bleeds value — perniciously stealing time as a result — where & how to save become existentially important questions to answer. Saving money in a fiat world is by definition a shell game of asset acquisition and allocation. Stocks offer one avenue for savings. But no stock has outperformed Bitcoin given a sufficient window of time and no company provides completely open books. Real Estate offers another avenue, but without adequate credit and cash flow to qualify for a mortgage, many are simply shut out of the market. Those who do qualify are still typically borrowing, subjecting them to a variety of debt-based risks. Lastly, the U.S. Case Shiller Home Price Index loses value when denominated in Bitcoin. As I recently heard Alex Gradstein say, Bitcoin is savings technology. Long live Satoshi, the creator of this amazing technological breakthrough.

|10|  Consciously Invented (Not Accidentally Created)

As most know, paper currency was once hard-asset backed, most recently redeemable for something scarce and energy infused: gold. But even before the gold standard was abandoned in its entirety, paper currency-issuing nations had a history of suspending redemption when it proved convenient. That is, in times of war. Fiat currency — money be decree, backed by faith in government debt — was arguably accidentally created, and in a moment of distress. In contrast, Bitcoin was consciously invented with a hard-coded monetary policy designed to be completely outside of the control of any individual or government. Bitcoin was consciously invented, and therefore conscious money.

Look for another stats-based edition soon. Until then, friends…

peace_love_crypto

-DB

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