Bitcoin Investment Theses - Part 2 - The Macro

Remember our last chat about the revolutionary aspect of Bitcoin? Today, let's dive into the second Bitcoin investment thesis: the macro. As you guide clients through their financial journeys, understanding this macro perspective can be invaluable. So, pull up a chair and let's break it down.

Bitcoin Investment Thesis 2: The Macro

Zoom out and think about Bitcoin from a global value perspective. Let's talk numbers for a second: the maximum supply cap for Bitcoin is 21 million. As of now, around 19.5 million Bitcoins have been mined. The remaining 1.5 million will trickle out slowly until 2140.

Now, juxtapose this against the backdrop of an ever-increasing supply of fiat currencies like dollars, euros, and yen. When you've got a fiat currency with an essentially unlimited supply and Bitcoin's fixed cap, there's an inherent value proposition in holding assets in a limited-supply avenue like Bitcoin.

In the past, the coveted asset was gold. Many have stashed their wealth in dollars as an inflation buffer. But with today's rising interest rates and an unprecedented influx of dollars, there's inflation in the horizon. Enter Bitcoin. Unlike fiat, Bitcoin isn't inflating. In fact, the number of new Bitcoins introduced is diminishing.

Now, if you believe your future expenses are going to surge (thanks, inflation!), you'd want to steer clear of solely holding onto dollars. Why? Because they'll likely buy you fewer goods and services down the road. So, you'd naturally gravitate towards assets with limited supplies, akin to the tangible things you'd purchase. Historically, that safe haven was gold.

But here's the hitch with gold: it's cumbersome. Storing, owning, transporting, or even using gold for everyday transactions? Impractical. Bitcoin, on the other hand, can be split into eight decimal places, stored on a handy digital wallet, and used for transactions anytime.

Prominent macro hedge fund managers like Paul Tudor Jones, Bill Miller, and Stanley Druckenmiller have voiced similar sentiments. Their choice of assets against future inflation? Gold and Bitcoin. That's the macro investment thesis in a nutshell.

Although the number of fiat currencies has grown exponentially over the years, Bitcoin's growth is deliberate and slow. Thus, when thinking long-term (and we're not talking just a couple of years here), Bitcoin stands out as an asset poised to retain its value better than traditional fiat currencies.

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In a Nutshell:

In the current global economic climate, the macro investment thesis for Bitcoin offers an enticing proposition. While it doesn't promise immediate results with every inflation spike, in the grand scheme of things, Bitcoin emerges as a more robust, long-term store of value compared to most assets. As advisors, this knowledge equips us to craft strategies that not only address short-term goals but also ensure long-term value preservation for our clients.

Next up: A microscopic look at Bitcoin. Until then, stay invested in learning!

Warmly,

Adam