bitcoin and crypto
gold but better, orange man/orange coin thesis, crypto just better and such
Here is a four-part essay, structured as follows.
1. Bitcoin
2. And
3. Crypto
4. Bitcoin and Crypto
Bitcoin
My most basic belief is that a single bitcoin will be worth $1 million before 2030.
It is the easiest 10x of a generation, the Gen-Z version of going to college for $100 or buying a house for $25K -- opportunities that existed for our parents, but not for us. If you fast forward 30 years, kids will be gasping in disbelief at how lucky we are for being able to afford .1 BTC after only saving for a year. This is just how the world goes.
I have two reasons for why bitcoin will continue to rise:
Part One…
of the thesis is that BTC is comparable to gold in that it is obviously better. The supply of Bitcoin is capped. It is easier to hold, buy, and sell than gold. Governments cannot control it as easily (as most of the supply is already mined and not owned by the government, unlike gold). Bitcoin is digitally native. The world is only in the first inning of being online. Native internet existence is only going to trend up as the years go by. Fading Bitcoin, the best internet money, as the internet moves from infancy to youth, is the dumbest trade you can make.
The million dollar BTC number is rooted in gold’s valuation of roughly $10T. Poetically, when Bitcoin reaches a market cap of $10T in parity with gold, a single BTC will be around $900K. $1M bitcoin gets bonus points for memetic value in a memetic world (tis so ridiculous it has to become true). Memes win and orange coin good; only 21 million bitcoins exist; money printer goes brrr; Bitcoin not blockchain; etc etc.
Part Two…
of the thesis is that I think the US government is going to do two things:
buy bitcoin and create a strategic reserve
print more money.
Both will be good for the price of bitcoin, with the strategic reserve likely being pushed ahead by Elon Musk, who holds Bitcoin personally and on the balance sheet of both Tesla and SpaceX. The government is just his next company and it makes sense that he will add crypto’s gold to the balance sheet. Trump himself also seems to be pushing forward with crypto favoritism. Having already launched a DeFi app, he is rumored to be looking at the purchase of a crypto exchange (Bakkt). He also hinted that “all bitcoins will be made in america” earlier this year at a crypto conference (what a meme!). Orange man like orange coin, so it appears.
On the printing side of things and government stuff, it’s just a matter of time, as explained by Arthur Hayes (to be clear, this is a bit pie in the sky to get debt/gdp ratio this low. If u want something more realistic as a mental model, just think about whether the government will or will not print more dollars in future and whether u want to hold an inflating currency during this time period):
“It took $4 trillion to decrease the debt-to-nominal GDP ratio from 132% to 115%. Let’s say the US reduces it further to 70%, which is where the ratio was in September 2008. Just using a linear extrapolation equates to $10.5 trillion of credit that must be created to accomplish this deleveraging. This is how Bitcoin goes to $1 million, because prices are set on the margin. As the freely traded supply of Bitcoin dwindles, the most fiat money in history will be chasing a safe haven from not just Americans but Chinese, Japanese, and Western Europeans. Get long, and stay long. If you doubt my analysis of the impact of QE for poor people, just read up on the Chinese economic history of the past thirty years, and you will understand why I call the new economic system of Pax Americana, “American Capitalism with Chinese Characteristics.”” -- Arthur Hayes
Again, that’s just a basic thesis.
Far more boring ideas are written down elsewhere that have things to do with network strength, austrian economics, more trump, and BTC as the reserve currency of DeFi, DeFi on Bitcoin, but those are essays for another day and another audience.
And
Overall, crypto is about to explode. Bitcoin is now a $2 trillion asset and the 8th largest asset in the world, surpassing silver just two weeks ago. Crypto itself is a $3 trillion asset class and will be closer to $4T by the time you finish reading this essay.
There are just so many damn use-cases that make crypto better than what exists in the “real world” -- that stodgy place of bankers and middlemen and fintech platforms, the soul sucking stuff that the anti-crypto crowd accidentally champions because they are scared of something new.
(side note: anti-crypto is an addiction to what is, stopping you from excitement about what could be. Remember that the next time you scoff at Bitcoin: a scoff at crypto is the same as cheering for JP Morgan, which is just weird as hell.)
On crypto being better than what exists in the real world. Stablecoins like USDC let you send money in the world without needing a bank. Lending markets like Aave let you take out loans without asking for anyone’s permission. Swapping projects like Uniswap lets me trade tokens, any tokens, 24/7, 365. NFTs allow you to buy digital art, which makes more sense than physical art. Onchain you can buy shitcoins, monetizing your own attention by speculating on the very memes that you’re scrolling through. Anyone can launch a token. Anyone can build a project. You can use all of this stuff without asking your government or banker. Money moves whenever and wherever, with far, far fewer intermediaries. It is a magical experience, using crypto, if you just sit down for an hour to experiment.
Of course, the best crypto experience for the average person at the moment is Polymarket, a betting app that showcased the power of crypto by calling the election before any mainstream media organization could blink.
“In the past week, Polymarket has been a very effective source of information about the US election. Not only did Polymarket predict Trump would win with 60/40 odds while other sources predicted 50/50 (not too impressive by itself), it also showed other virtues: when the results were coming out, while many pundits and news sources kept stringing viewers along with hope of some kind of favorable news for Kamala, Polymarket showed the direct truth: Trump had a greater than 95% chance of victory, and a greater than 90% chance of seizing control of all branches of government at the same time.” -- Vitalik
Crypto
It’s really time to stop making fun of crypto and start to experiment.
It is not IF, it is not WHEN, it is HOW.
Much of the crypto content that makes it out into the real world is still messy. It is still tied to 2018-2021 events. My normie friends think crypto is for speculation. My grandparents think it’s a scary internet thing for criminals. My parents’ friends think crypto is a scam. These are all ok reactions to crypto -- fixable. My normie friends will try it out to speculate. My grandparents will not be affected by ignoring crypto, they had many other money making events (shoutout internet bubble). My parents’ friends still trust mainstream media too much. They say they don’t, but, hell, there is a lot of inertia to turning on the TV to the news to check out what’s going on.
The less fixable problem is that a lot of the smartest people in my life still feel aloof to crypto. I’m talking about the professors, consultants, and tech bros that I get drinks with outside of my crypto bubble. I can’t quite put my finger on the exact right description of how they think about crypto, but the essence of their disbelief in crypto usually sounds like this Matt Levine article from 2018:
“We talk a lot around here about the blockchain for banking, and one obvious thing about the blockchain for banking is that it goes pew-pew. You can bring senior executives into a room and tell them that you’re upgrading the infrastructure that you use to reconcile trade settlement data with counterparties, and their eyes will glaze over and they will start nodding off, and you can shout “blockchain! blockchain! blockchain blockchain blockchain!” and they will perk up and hand you a stack of money. The blockchain is exciting in ways that improving database architecture is not.” -- Matt Levine
Crypto is still “pew-pew” for these people. Too small or too scammy or too hard to use is the common complaint.
And that’s just wrong in 2024.
Crypto is an industry of tens of thousands at this point, with 100s of real companies, creating products that are actually not hard to use and obviously better than what exists.
Phantom wallet is comparable to Venmo now. Taking a loan on Aave requires far less clicks and time than going to the bank. Robinhood Wallet is literally using Uniswap (and other DEXs (for the crypto natives…it uses an aggregator)) on the backend to power swaps -- so Uniswap is just as easy to use as Robinhood because it is powering Robinhood. Coinbase is slick as hell, making onboarding a breeze even for millenials. There are ETFs for the boomers to pick up and other funds from teams like Bitwise and Grayscale that can get accredited investors exposure to crypto assets. I can get paid in stablecoins in 8 seconds anywhere in the world for less than $.01-- while wires take days and $10. I cannot pay Venmo dollars to someone with CashApp, I can use any crypto to pay anyone, anywhere, across platforms.
Not to mention that tokenization is here. PayPal USD is a stablecoin created by PayPal that exists on both Ethereum and Solana (two different blockchains). It can be moved without a bank! BlackRock has created a tokenized fund called BUIDL that is on Ethereum. Franklin Templeton’s BENJI is on multiple chains and Franklin to the Templeton has over $300M secured onchain via smart contracts. This is real and it is now.
Bitcoin and Crypto
If you are not paying attention to crypto, you should be ashamed of yourself.
The time is now to build better systems. Not taking crypto seriously is the same as taking our current banking system seriously, which is ridiculous. It is 2024 and banks close on weekends and I cannot trade stocks on holidays. Like, I am using an AI bot to edit this article but Wells Fargo can’t figure out how to settle my weekend transactions in real-time? Build better.
And crypto is building better. Systems that are automated, onchain, and rely on no intermediaries: that is the endgame and the endgame is here.
Buckle up, put on a hoodie, and buy digital assets.
The intangible future is tangible in that it’s just a few clicks away on an app you can download right now. Exit the system that is inflating your assets without your permission and start experimenting with crypto -- a system that respects your sovereignty and intellect enough to make finance open source, rather than opaque and full of guardrails.
Get onchain. Live a little. The time to do so was three years ago, but, at the very worst, the time is now.
And while you’re at it, it is 2024: go heavy on AI (pay for your chat GPT subscription), go long Bitcoin (duh), try to live forever (longevity research is here), try to live on mars (shoutout the new space age), and try to live without using fossil fuels (nuclear renaissance).
- kram