Your Ignorance of Bitcoin Doesn't Actually Change What's Happening

Bitcoin is on a mission to becoming the primary global store of value in the Information Age

Jan 10, 2024

First a little bit of housekeeping….“Bearly Learning” is rebrand of ‘New Money’, the Bitcoin newsletter most of you started reading in 2019/2020. I have not published in over two years, as I’ve stopped managing money for Bitcoin and began operating Mountain Meadow Mushroom Farm, an Organic Specialty Mushroom Farm in Southern California. Over this time, I have remained invested and steadfastly supportive of Bitcoin only and don’t see that ever changing. I have however broadened my interests and passions around tools and topics that I believe empower people and improve the human experience: Mushrooms, Health/Wellness, Biohacking/Longevity, Food/Nutrition, Personal Growth/Consciousness and Psychedelics and will incorporate all of the above in to future posts. Read on if you are interested, unsubscribe if that’s not your thing. You can learn more about my plans to explore the mind, mental models and systems I believe are good for people in my first post “‘New Money' is now 'Bearly Learning'.”

BITCOIN IS….

free speech money
the hardest money ever created
will go down as the greatest technological invention of our lifetime
is being added as a Global Asset class to the Modern Portfolio
here to stay forever ♾️

For 15 years you’ve had the ability to front run institutional investment in BITCOIN, an asset that has gone from $90 when I started buying it in 2013 to $47,000 currently and likely somewhere between $1mm - $10mm per Bitcoin over the next decade. The ability to front run a new asset and one that is still early in the adoption curve is unheard of for retail investors and for some reason most individuals simply have ignored Bitcoin because its too hard to understand or too high priced(which is totally a myth - Read “Is the Price of Bitcoin Too Damn High?”. If you do not own Bitcoin nor have taken the time to understand it over the past 15 years, I honestly feel sorry for you.

The incoming approval of the Bitcoin ETF will unlock the ability for $60-$100 Trillion dollars of wealth to buy Bitcoin with the press of a button. Bitcoin today at $47,000 is still the ABSOLUTE best risk adjusted opportunity you will ever see in your lifetime.

I GUA-RAN-F*CKING-TEE IT.

In this edition of ‘Bearly Learning’, I’ll be focusing on my first love, Bitcoin and why now more then ever you need to take it seriously and spend the time, learning, understanding and eventually investing a portion of your hard earned dollars(or CuckBucks as Bitcoiners like to call them) into Bitcoin as our Uni-Party Government and Federal Reserve continue to spend money, rack up deb and print them away, debasing the value of the dollar and stealing your hard earned money from you through taxation and inflation.

I’ve broken this edition of “Bearly Learning’ into 5 parts:

The Fall of Fiat Hegemony
Trillions in Global Capital Meet Scarcity
Bitcoin is the 16th Ranked Currency in the World
Bitcoin is Generational Wealth
Bitcoin is a Black Belt. A Black Belt is Someone Who Gets Hit & Doesn’t Care

The Fall of Fiat Hegemony

The US Dollar is losing its status as the world's reserve currency. This is no longer conjecture, this is happening in real time and it’s happening faster than ever thought possible. The rest of the world is moving away from the settlement of trade in oil, goods and services in dollars as the primary currency.

The rise of the BRICS nations, originally an informal acronym of emerging economies (Brazil, Russia, India, China, South Africa). This group has become a formal coalition of countries sick of taking directions from the post-WW2 world order dominated by the United States of America. On January 1st, five new members joined the BRICS: Iran, Saudi Arabia, Egypt, UAE, Ethiopia bringing the total to 10. These 10 countries have a combines population of 3.5billion people (45% of worlds population) and combined economy of $31.5 Trillion (31% of world GDP). Just recently, the BRICS nations surpassed the G7 nations in GDP. ...

Up until recently the BRICS like almost every nation on planet Earth, had been settling trade in US Dollars. Because of this, BRICS nations were stuck with USD on their balance sheet and forced to buy Treasuries with USD Foreign reserves. This create a natural buyer of USD Denominated debt, allowing the U.S. to balloon its balance sheet with a perpetual buyer of US Treasuries and forcing the world to live under the weight and influence of U.S. Policy and a total imbalance of global power. BRICS nations have needed a reason to break free from the status quo and in early 2022, the US froze Russia's foreign currency reserves & cut them off from the SWIFT banking system. This was like dropping a nuke on the monetary world order and a major wake up call for the rest of the world. As a result, BRICS nations announced in 2023 that they would be pursuing their own currency.

Why is this such a big problem?

The US Debt stands at $34 Trillion. Humans do many stupid things, but racking up debt while printing money has to be one of the stupidest. Man steals from prudent savers and rewards imprudent politicians - widening the gap between rich and poor, undermining the stability of society. Purchasing power stolen is used to fund fake crises, propaganda, and worst of all, war. Printing money distorts price signals, causing a misallocation of capital, incentivizing producers to deceive consumers (by lowering product quality rather than raising prices) Although we can’t fix stupid, we can fix much of this self-inflicted harm with Bitcoin.

Republicans and Democrats have long been equally as stupid spending money we don't have, consequences be damned. The below chart is brutally bipartisan.

Debt increased under Republican presidents and Democratic presidents. It increased under Democratic congresses and Republican congresses. When George W. Bush left office, the federal debt was a staggering $10 trillion. When Obama left, it was $19.5 trillion. As I write this, we are now $33,959,867,588,389 in the red.

In 2007 US Debt-to-GDP was 62%. Today it's 129%.

In war and in peace, in boom times and in busts, after tax hikes and tax cuts, the White Halls of Washington have been painted over with red ink. Politicians love to jawbone about sustainability, ye they ignore one of the greatest threats to our future: rapidly ballooning national debt that puts the future stability of our country and way of life at risk. Political insiders absolutely fleeced the country over the past 23 years. While you are gaslit and told it's your patriotic duty to pay taxes and pay off this debt, remember this: ass the bombs dropped overseas and the infrastructure crumbled at home, Central Bankers suppressed interest rates and enabled political grift and a looting of assets around the country while health and education standards fell.

Instead of looking up at our leaders or down at your pockets being emptied by inflation and taxes, you’ve been tormented and manipulated by the media propagandists to fight with your neighbors and friends to the left and right based on how you look or feel, our politicians were voting on legislation by day, and managing 7, 8, and 9 figure portfolios by night on their $200,000 to $300,000 government salaries.

So today the debt bill sits at $34 Trillion. It’s an abomination of reckless behavior and debt obligations that we can never pay back without currency debasement and full monetization of the money supply. The plutocrats have gotten theirs, and now they're going to stick the rest of us with the bill.

You can hang on to your dollars that will continue to be worth less or worthless in years to come or you can do something about it. From here on out, all roads lead to Bitcoin.

Trillions in Global Capital Meet Scarcity

First, lets talk scarcity. There are only 21mm units of Bitcoin that will ever be available. 19.6mm have been issued with another 1.4mm to be issued over the next 100 years. It is said that closed to 3mm Bitcoin are lost from early years of no one knowing how to store or managed Bitcoin, which is a difficult task for the common man.

Two-thirds of ALL Bitcoin has not moved in over a year, an all-time high. Think about that for a moment. If we accept that 2mm have been lost, that means the number is closer o 75% have not moved in over a year. These people, called HODLers, owned bitcoin when FTX blew up and it traded down to $16,000 and DID NOT SELL. They saw bitcoin rise more than 100% this year, and DID NOT SELL.

If you drill down even further, 88% of Bitcoin supply hasn't moved in at least 3 months. 12% of available supply is all that’s left for $60-$100 Trillion of wealth that is about to be unlocked. Good luck fighting for the 12% that's left. Do you expect them to sell now, before a bitcoin ETF is approved? Going to need to offer a much higher USD conversion rate over the next few years to get any more than that.

One of the big reasons why the Bitcoin ETF cannot possibly be priced in is because Wealth Managers and Instituions need two things to move capital at scale:

Vehicle
Mandate

The ETF is the vehicle and mandate. And no matter how much of the 100% move over the past year feels like retail front running the ETF, the amount of money that has flowed into Bitcoin cannot match the sheer firepower of capital coming from Institutions. Be prepared because the next 1-5 years are going to be explosive.

The AUM of Blackrock + Fidelity + Franklin is $20 Trillion. All three of these firms are going to launch their own Bitcoin ETF. There is now a clear path from the asset classes of the last 20 years: bonds and large cap stock indices into the asset class of the future: Bitcoin. It won't happen overnight, but the path will be cleared for asset flows starting over the next few days.

As of today, the Market Cap of Bitcoin is at $900b, with the price at $46k. From a stock-to-flow relationship, an inflow of $10b doesn’t mean an increase of $10b in the market cap of Bitcoin. Every time that there is more buying pressure than sell pressure, the price of each Bitcoin increases and to calculate the market cap it is multiplied by the amount of new Bitcoin mined. That is why an “A” inflow of money on Bitcoin it corresponds to “B” increase on Bitcoin market cap. B = A*X. The multiplier (X) is not always the same and not easy to predict.

Many people like to quote the multiplier X of 118:1 from BofA. You can read the full report here. I think that number is probably high but for the sake of providing an example of how the multiplier works lets just use a round number of 100:1. Assuming X=100, and there is an inflow of $100b of capital into Bitcoin in 2024 (A), the market cap will increase by $10T: $10T = $100b * 100. It means that Bitcoin price would increase by $500k from its current price of $46k. While the muliplier effect can be debated, $100b inflow the first couple years of the Bitcoin spot ETF being active in the US Stock Market are not that unrealistic.

Now lets look at bigger pools of wealth. Globally there are $60T in pension funds, and $250T in private retirement savings. Funds put around 3% of that into gold, and 20% into alternative assets. (23%) Crypto has a 1:0.12 value to cash ratio currently. If even 0.5% of the 23% went into Bitcoin that would mean $1.5 Trillion of capital flows into. Using the multiplier effect above of 100:1 and well,….uhhhh my brain begins to break with the math because the numbers get so big I can’t even write them and take myself seriously. You get the point, yeah?

Bored yet?…lets take a quick break and inject some humor into this rag.

Watch comedian JP Sears give the best 5 minutes on Bitcoin you’ll see today.

Before we keeping, I’d love to take a poll of where you stand on Bitcoin.

Bitcoin is the 16th Ranked Currency in the World

There are 160 fiat currencies in the world today. And after only 15 years of existence, Bitcoin is already the 16th largest currency in the world by market cap. Think about that. What used to be dismissed as "magic internet money" or "money with no intrinsic value" or "rat poison squared" is now on its way to the top of the list of global currencies. Only the following countries have currencies with a larger market cap than Bitcoin. They are:

Chinese Yuan
US Dollar
Euro
Japanese Yen
Pound Sterling
South Korean Won
Indian Rupee
Canadian Dollar
Hong Kong Dollar
Brazilian Real
Australian Dollar
New Taiwan Dollar
Swiss Franc
Russian Ruble
Mexican Peso
Bitcoin

The exponential adoption curve of Bitcoin explained in one simple chart:

Bitcoin is Generational Wealth

I’m not gonna tell you what to do, but I believe you’d benefit from watching the following short 14 minute film. It will change how you think about history, money, Bitcoin and the future.

Bitcoin is a Black Belt

This last section is recommended reading from Ross Steven's Bitcoin section in his annual Stone Ridge investor letter. The full excerpt is 2 pages and is simply too good not to share, just click the link below and head to pages 10 & 11.

A BLACK BELT IS SOMEONE WHO GETS HIT AND DOESN’T CARE

Here are two excerpt I found particulary special:

The first is in response to Senator Elizabeth Warren who’s crusade against Bitcoin will go down as one of the dumbest and misplaced policies in American History. Bitcoin should be a national asset that secures our grid and backs our dollars but many of our policians who pretend to work for ‘We the People’ are simply agents of the matrix and wolfs dressed in sheeps clothing.

“If I buy bitcoin…are you buying air? No underlying asset backs it up, it’s simply a matter of belief.” — Elizabeth Warren, 2023

Bitcoin’s security is enforced by far more power than most entire countries produce. That’s not a matter of belief. Buying bitcoin is buying what bitcoin is backed by: an almost incomprehensibly vast amount of stored energy in its blockchain, more than a decade of 24/7, decentralized, Proof of Belief Work. Not air. Right now, that’s about $900B of bitcoin. Reality doesn’t care if you believe in it. Fiat is credit. Bitcoin is money.

In a world of State money increasingly debased, censored, and surveilled, bitcoin represents optimism, fairness, justice, truth, and beauty. As the People’s money, bitcoin is unstoppable by borders, devaluation, censorship, or mass surveillance. “Privacy is necessary for an open society in the electronic age,” once wrote a very wise man. Please re-read that sentence a few times. Better yet, read the whole essay, increase your resolution on why Church, Money and State must be separate, and the reason for the first rule of bitcoin then becomes obvious. I don’t mind if you come to bitcoin for the price. I just hope you stay for the principles.

As I wrap up my first post in Bitcoin in over two years, I’d like recommend reading the following two posts from me and Nic Carter. They were written in 2019 and 2020 and what was written then holds even more weight today.