The coming bitcoin adoption will be a massive reallocation of capital.

Many of the “assets” we have today only have value because our discount rate has been so low for so long. Too many apartment complexes, too many restaurants, too many gyms, too many windmills…too much “entertainment,” too many apps…

This is because for the last 20 years, economic models were run assuming zombie terminal growth rates of 3-5% and discount rates of 6% … capital was allocated to projects that never contemplated a parallel system emerging with a discount rate of 12% … and that’s once we have complete adoption of Bitcoin.

Between now and a “bitcoin standard”, the annual appreciation of bitcoin’s value is going to be much, much higher (50+%). People will sell their stock to buy bitcoin. People will sell their 2nd homes to buy bitcoin. People will downsize their primary home to buy bitcoin. Who will be the buyer of these other assets?

Bitcoiners understand bitcoin is the best asset to hold…for example, will a bitcoiner part with bitcoin for a large mansion with high maintenance costs. No, so the price of the mansion will fall…and fall.

This same dynamic will happen with corporate equities. In order to keep investors, companies will buy bitcoin. But in order to buy bitcoin, they’ll have to sell their non-productive assets.

Yes, adoption of a bitcoin standard will be very disruptive to the status quo of modern “economics”. Yet it is inevitable … good in the long-run but the unwind will be chaotic and there will be losers. A less cynical view of the State is that “it” is merely trying to coordinate a “smooth” transition to our next economic paradigm.

Savings and prudence rather than spending and consumption. The disruption is good for mankind but there will be a period of transition.