Bitcoin 💸
The best investment of the last decade and the next
Bitcoin (BTC) has outperformed every asset over the last 10 years and it will outperform every asset over the next 10 years. I have been studying Bitcoin since 2013 and have never been more bullish on it than right now.
To understand Bitcoin and the entire ecosystem would take hundreds of hours and I encourage everyone to spend the time like I have. In the interest of brevity, I will stay out of the weeds and simply share my high-level investment thesis as well as why now is a good time to invest in it, as I am doing.
Investment thesis founded on use cases that drive >US$100T market cap potential (>US$5M per BTC)
Digital Property - Bitcoin allows for universal ownership with no discrimination, maintenance costs, agency costs, degradation, confiscation, manipulation, and predatory taxation.
Safe Haven Asset - Entities and individuals with excess cash can park it in Bitcoin and earn yield rather than in negative or very low yielding government treasuries.
Global Reserve Currency - Currently all reserve currencies are fiat currencies with infinite supply and precarious monetary policies that are used to progress national strategic interests. A currency that is apolitical, independent, finite, and has a predictable monetary policy would supersede the existing regime.
Digital Gold - Bitcoin is a store of value like Gold. But is is much better than Gold in that it has a finite supply, has a predictable and infallible inflation rate, is infinitely divisible, has close to zero storage, transportation, and transaction costs, is indestructible and unconfiscatable, and is digital.
Legal Tender - Countries are adopting BTC as legal tender, meaning citizens can pay taxes and all businesses and institutions must accept BTC as payment. Countries are incentivizing citizens to use BTC by giving it away and partnering with telecommunication networks to provide free internet and BTC wallets to citizens. So far El Salvador had adopted it as legal tender and the following are planing on doing the same: Paraguay, Panama, Brazil, Argentina, Nicaragua, Mexico, and Tonga.
Payments - Bitcoin can be used as a settlement layer for all monetary transactions and micropayments with the Lightning Network. The Lightning Network enables limitless zero-cost and instant transactions on the Bitcoin Network.
Energy Storage and Monetization - Excess energy can be stored by miners in the form of BTC by mining and HODLing. Additionally, miners can monetize excess energy by mining and selling BTC. This is a new paradigm in energy storage and monetization as it unlocks remote and excess energy and efficiently stores energy without loss, cost, or time limitation.
Near-term catalysts to propel bullish sentiment and drive demand and price
Mining rig migration from China to the US alleviates security concerns, bolsters decentralization of the Bitcoin Network, and lowers Bitcoin’s emissions from electricity generation.
ESG related FUD is fading as global mining increasingly becomes greener and with renewed validation from Elon Musk.
On-chain metrics have never been better - strong holders adding, addresses growing, hash rate recovering, and transactions growing.
Miners are not selling, they are accumulating.
Fear & Greed Index, which measures sentiment, is bouncing off the lowest point since the COVID-19 crash of March 2020.
Square is planning to build on and for Bitcoin and Twitter is planning to integrate Bitcoin into existing products and services.
Corporations adding to balance sheets with Elon announcing that in addition to him and Tesla, SpaceX also holds BTC and he has no investments outside of his companies, BTC, ETH, and a small amount of DOGE.
Institutional investors are continuing to increase their exposure to BTC.
BTC rewards credit cards rolling out with BlockFi, Fold, Gemini, Coinbase, Visa, and many others announcing BTC rewards programs.
Global ETF creation will satiate unmet demand for BTC exposure by removing obstacles and facilitating seamless portfolio allocation.
Historical price cycles point to a massive bull run through year-end.
All of this leads to massive new demand for BTC, while new supply is limited to 900 BTC per day in block rewards. But miners are not selling this supply so all the new demand must be met by weak hands selling. And the number of weak hands has been decreasing as they are replaced by diamond hands.
Less than 1% of the world’s population has any meaningful exposure to BTC and sentiment is very low right now. Bitcoin adoption has been compared to the internet in the late 1990s and is growing faster than internet adoption did.
Bitcoin fundamentals have never been better and all the bullish momentum will soon be reflected in the price. BTC can not go to zero but it can increase infinitely as priced in fiat currencies. In the next 5 months price could increase by >20x as it did in 2013. My price target for the next year is >US$300K per BTC and I plan to HODL and add to my position using Gemini Pro and Coinbase Pro and earn yield and rewards with BlockFi and Celsius.
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Best,
Andrew
Disclaimer
The content of this letter is for informational and entertainment purposes, and should not be construed as personal investment advice.
Congrats on the first newsletter! This is well written, concise, and informative! Bravo 🙌🏻