Not Buying Bitcoin Is Dangerous

SPEAKER_1 (0:00)

You know what I really love?

SPEAKER_2 (0:01)

I love the expression. You know why? Because as soon as the score is open, you know, I can say it now, something you didn't know. Do you know we've been taking out millions of barrels of oil?

Nobody knows, you know.

SPEAKER_1 (0:15)

If you own Bitcoin, send this to someone that you care about, but that doesn't own Bitcoin yet. Not because they need your next trade, not because they need the next signal, because doing nothing with your money is still a financial decision. And for a lot of people, that is the one that they have never examined before. They earn dollars, save their dollars, and leave the long-term money in a system where the rules can change, supply can expand, and purchasing power can shrink. The question is not whether everybody needs to be a Bitcoin maximalist. It's whether owning zero Bitcoin with no plan for scarce assets is a safe choice at this point. People assume that it is, and I don't think so. You can decide for yourself.

Trump came out in a conversation with Time magazine that high interest rates of the Federal Reserve are hurting our country more than inflation. He also adds certain levels of inflation will also pay off debt at a very, very rapid pace. He was discussing growth in an October 1st conversation, interest rates and the debt, not an announcement of an inflation program. It still puts the incentives on the table that inflation changes the real value of the debt to be owed. You have a fixed amount of dollars, and if those dollars buy less and become less valuable, the debt is easier to repay in real terms. The bill does not disappear, rather, it roll over, happens at a higher yield, with a bigger deficit can make refinancing more expensive, not necessarily making it a free lunch. Now, yesterday's fixed rate debt rates can get lighter in real terms while tomorrow's borrowing gets even harder. And who feels the other side? The person holding the cash for the next decade, the average person, the middle and lower class especially that don't own a vast amount of assets. Cash rules everything around us.

Cream get the money, dollar dollar bill y'all. Emergency savings matter. Bills, the repair costs, family emergencies. Nobody is saying empty the savings account to borrow or buy Bitcoin. Cash for emergencies and cash in the entire long-term strategy are two very different things. But if you had $10,000 earning zero interest and inflation is averaging 5% for 10 years, that money can buy just about $6,100 in today's dollars. You still see 10K, but you cannot buy what 10K bought when you started. Not a forecast. This is compounding math. And the person that owns nothing except the cash has no participation in assets that rise in this current monetary environment. People are being punished for doing what they were told and what they were taught. They can avoid every asset if it is a risk. But I would argue that avoiding every asset out there in general is its own risk. And to really conceptualize this, you have to think of the letter K.

One line up and one line down. Owners of businesses, real estate and equities, and scarce assets can participate when values rise. No ownership means wages and cash against higher prices.

And the Federal Reserve's 2022 Survey of Consumer Finances has a very interesting outlook. Including a direct and retirement holdings, 95% of families in the top 10% of usual income own stock against 34% in the bottom half. They do not participate equally when stocks rise. Same income, different exposure levels. One builds assets, one holds cash, because investing feels risky.

That is what is playing in to this letter K explanation. Bitcoin has a property that is hard to ignore when claims expand. Issuance cap to 21 million tokens, and you can own a fraction of this. Self custody is an option with responsibility, and it can move across borders without banks or permission. It's not a business, no dividend, no company cash flow, and you have brutal drawdowns from bull market to bear market as everyone has experienced over the last few cycles. And you also have the aspect that the fixed supply does not force the price to go higher. Demand still matters. So the answer is an allocation, a time horizon, and a custody plan, and not necessarily an impulse trade. No exposure because you've never learned the case is not automatically prudent. It can mean that you took one side of the risk without looking at the other. The incentives for Bitcoin are structural. Before this current administration and after it, governments are going to carry debt. Debt has to be financed, and voters dislike spending cuts, tax rates, and high interest costs. But the central bank sits between the price stability, employment, and financial stress. Simon Dixon argues that these pressures can deepen a K-shaped economy. Owners of the right assets get wealthier, and the people without ownership get pushed into debt while trying to hold on to a standard of living that they're used to.