The NASDAQ has made about 24% annualized, so tech stocks have helped but crypto is the one that really offsets this and allows you to generate a lot of wealth.
Every single asset on Earth versus Bitcoin since 2012 is down 99.9%.
So listen, what’s going on is the same story that’s been on for a while.
We are in the crypto macro spring to Summer transition; that is when liquidity starts coming into the system.
It happens to correspond with the US election cycle because obviously politicians can’t help but give out candy around election time.
Yes, of course, it’s also the Bitcoin halving time.
So Bitcoin halving reduces the supply, and then there was the ETF.
So basically we’ve got a perfect setup of liquidity plus new demand plus reduced supply, and so the rest of the year should play out the same way.
I mean, I continue to be very bullish this year and very bullish for most of next year because Bitcoin is basically a share of a network.
The more people who join the network, the more value goes up.
So as the ETF brings people in, as people start fearing the governments and their deficits, they start looking for different solutions.
One of the reasons gold has been rallying is the same.
So what we’re seeing is this was the most successful launch of any ETF in all history, which tells you it’s not just an ETF, it’s that the idea of Bitcoin itself is resonating with people.
They kind of know they’re getting screwed somewhere by the system, and this feels like a way of getting higher returns with more volatility but it kind of saves them from what is going on.
So let’s assume that this is the largest ETF launch in history and a lot of newbies have come in.
Well, it’s happening at a magic time.
The magic time is what’s known as the Bitcoin halving.
So new Bitcoin comes onto the market via miners.
Bitcoin miners undergo huge kinds of mathematical calculations to produce a Bitcoin.
There is a fixed number of Bitcoins that can be produced each year, so it’s a competition to produce them.
So you need a lot of computing power, and then every 4 years the algorithm of Bitcoin itself halves the number.
So if there were 100 Bitcoin being produced by miners every day, whatever the number is, right now after April 20th it goes to 50.
So there’s more people coming into the market, which is new demand, and new supply is shrinking.
So all the time the only suppliers really, sellers of Bitcoin who hold Bitcoin right now, but Bitcoin is one of these weird assets where 80% of all holders just hoard it like you and I, we just don’t do anything with it, we just hold it.
And so there’s really only 20% that’s available for trading.
So that mechanism is driving the valuation up of Bitcoin over time.
Now it also means that people start to see this asset going up because there’s less supply and lots of demand, and it joins more and more people because this asset is the best-performing asset in all recorded human history.
Bitcoin itself has done 20 million percent since 2012; it has produced 150% annualized returns since 2012.
Ethereum, which is another cryptocurrency, is about 170%, and Solana 190% or 200%.
So this asset is by far and away the greatest performing asset in all of humanity.
The real reason, forget all of the complexity of the technology, forget all of that.
Think of why most people have bought gold.
It’s to protect themselves from the actions of central banks.
It has proven itself over several thousand years to be a way of having a store of value.
Bitcoin is that for a digital age.
Okay, most people know that story; they don’t understand the other side of the story is why does nobody feel as wealthy as they thought they should be?
You know, particularly if you’re a bit older, you’re like, why are my savings not as much as I thought they would be or I can’t afford as much, right?
That’s the big conundrum.
And the fact is, particularly since 2008 when we broke the world because of debt, we have been using the printing of money to try to paper over the cracks because economic growth from an aging population is slower, we don’t have much productivity because people are retiring, and we’ve got too much debt, so people have to service the debt.
So the central banks have been doing a bit of magic, which is printing of money.
At one point it was called quantitative easing; now they don’t do that as much anymore because everyone knows that game, because that’s the money printer go burr.
So what they do is they inject liquidity into the system, whether through all these weird things you hear about like reverse repo market stuff like that it’s to hide the printing of money, putting it into the system.
When you look at that on a globalized level, see, everybody’s doing it, you’re debasing the level of fit currency, and what that means is your dollar today buys you fewer assets tomorrow.
Now why do we buy assets?
We buy assets to save money for future consumption.
So if I were to buy gold today, it’s because I want to release it in the future and I want its purchasing power protector for it to go up.
Now when you look at what’s happening with the debasement of currency, they’re debasing currency by about 8% on year on average amongst all the global central banks.
Add in about 3 to 4% global inflation, you have a 12% hurdle rate on your assets before you actually make any money.
So your savings, you need to be making 12%.
Now over the last since 2012, the S&P 500 has made 12% annualized, the NASDAQ has made about 24% annualized, so tech stocks have helped, but crypto is the one that really offsets this and allows you to generate a lot of wealth.
So if you’re in your 50s like me or your 60s and you’re thinking I just don’t know if my retirement savings are enough, then a small allocation to an asset that does 150% a year will compound massively and will help you in having purchasing power in your retirement because nobody wants to be broke when they’re 85 years old, that’s everybody’s biggest fear.
Inflation is not the only one that only captures a small part.
It’s the actual debasement of currency that makes assets look like they’re going up.
So the Venezuelan stock market, if you ever see a chart, looks like it goes vertical, looks like the best-performing stock market in the world, right?
Of course, when you put it in Venezuelan bolivars, it’s down 90%, right?
It’s because they’ve been devaluing the bolivar.
Thank you for joining us today on this insightful journey into the world of crypto and investing.
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