On the right time horizon.
Bitcoin is a call option on all the world’s wealth.
With no time decay.
And a steadily falling strike. Driven first by adoption and growth in global economic output. And post adoption, by growth alone.
#Bitcoin
Here’s a simple, valuation model for Bitcoin.
Assume:
- world GDP growth in real terms is 2% pa forever
- world GDP today is $100t
- real interest rates are 2%
- BTC annual emissions have fallen to near zero
- 18m coins in circulation net of lost
Every year output increases by $2t. This is available to holders of BTC to buy and is in effect a real yield for Bitcoin owners.
Present value of a $2t perpetual annuity discounted at 2% is $100t. Or $5.6m per coin.
Why is this wrong?
#Bitcoin
Here’s a simple, valuation model for Bitcoin.
Assume:
- world GDP growth in real terms is 2% pa forever
- world GDP today is $100t
- real interest rates are 2%
- BTC annual emissions have fallen to near zero
- 18m coins in circulation net of lost
Every year output increases by $2t. This is available to holders of BTC to buy and is in effect a real yield for Bitcoin owners.
Present value of a $2t perpetual annuity discounted at 2% is $100t. Or $5.6m per coin.
Why is this wrong?
On the right time horizon.
Bitcoin is a call option on all the world’s wealth.
With no time decay.
And a steadily falling strike. Driven first by adoption and growth in global economic output. And post adoption, by growth alone.
Headlines aren’t telling that the Norwegian and Swiss CBs are buying BTC via $MSTR.
Completely underreported.
The inevitable just isn’t interesting.
We’re past the point of no return for the political capitulation to Bitcoin’s incentives.
#Bitcoin
One conference talk that carried real conviction came from Harold Lutnik.
Absolutely nothing trivial about this position from the leading wholesalers to the bond market and its adjacencies.
One thing is clear though.
Inevitable state level game theory is absolutely in play.
Don’t expect announcements.
But know the actors are acting.
Most likely starting in the Middle East.
With one or two exceptions the West is too mired in its politics, optics and woke bureaucracy to move with any conviction.
Don’t forget.
The politicians are using Bitcoin and “Bitcoiners”.
Bending and responding to Bitcoin’s incentives.
As it requires everyone to do.
Ignore the noise and carry on.
Bitcoin DGAF. 
Bitcoin requires the Common Knowledge tipping point to be reached to really start the s-curve inflection.
The key idea of common knowledge in dynamic epistemic logic is that for a proposition to be common knowledge among a group of agents, not only must everyone know the proposition, but everyone must also know that everyone knows it, and everyone must know that everyone knows that everyone knows it, and so on ad infinitum.
We are not there yet. But when we get there don’t expect a gradual transition.
nostr:npub14mcddvsjsflnhgw7vxykz0ndfqj0rq04v7cjq5nnc95ftld0pv3shcfrlx
When you decide to visit Zimbabwe to see first hand what a failed monetary system looks like, get in touch. Beer on me.
For how much longer can sane people continue to choose bonds over Bitcoin?
The more one thinks about it, the more it becomes clear that Bitcoin will create tremendous value for the world.
Especially the always developing world that never really makes it to developed status.
Bitcoin DGAF about Zoltan or any other macro celebrity.
Compound interest on absolute scarcity.
For the first time ever we have money that is equally effective SOV, MOE and UOA.
One needs to maintain the idea that they co-exist to provide a temporary veneer of pseudo credibility which the fiat world can use to swallow the 💊.
The innovations that come with Bitcoin:
1. Absolute scarcity
2. Censorship resistance
3. Individual sovereignty over property rights
4. An immutable ledger.
Just one of these is worth trillions of dollars.
For the first time ever all three uses of money combine into one.
Does accounting become triple entry with the 3rd in the Bitcoin ledger.
Price will be set at the margin. And the marginal price is much much higher than $10m per coin.
Most in government don’t believe there is anything that isn’t beyond control and regulation.
It’s the default assumption. The water they swim in.
Until one day it’s not.