Many are experiencing a mental block, unable to process the rise of Bitcoin. But the biggest block may be a flawed understanding of Bitcoin's place among all available assets.
The spectrum of assets appears differently to everyone. The color red might look like blue if you saw it through my eyes. I'm not even sure there is a fixed number of asset categories. My categories look something like this:
-Business ownership (active or passive via stock ownership)
-Real estate (active or passive via investment vehicles)
-Commodities (gold, oil, cattle, etc.)
-Currencies and fixed income (bonds, CDs, etc.)
-Futures and financial contracts
-Collectibles (automobiles, guns, art, antiques, comics, sports/gaming cards, digital objects, etc.)
If stocks are your favorite asset, your Bitcoin objection might be: “It doesn't have earnings.”
If gold is your favorite asset, your Bitcoin objection might be: “It isn't as certain to always be in demand like gold is.”
If sports cards are your favorite asset, your Bitcoin objection might be: “It is just piece of code on the internet that I can't see, touch, or hold.”
If CDs are your favorite asset, your Bitcoin objection might be: “It is too volatile.”
Five years ago, Bitcoin seemed to me like a johnny-come-lately internet company from the late '90's that was doomed to crash. It was like the company that went public with no actual product or service – just a stated ambition to disintegrate objects into molecules and send them over the internet to then be reassembled at their destination. All hype, no substance.
Here are two important things I believe now that I didn't then:
-Bitcoin is truly a new asset class, made possible by the internet. Its unique combination of strengths and risks require a completely new asset category.
-Bitcoin is solving real problems and addressing real pain points in a way no other asset class has been able to do. People don't understand how Bitcoin can go from less than $.01 at inception to $56000 today. But that increase in dollar value is the nuclear power achieved by a combination of deflationary engineering, decentralization, liquidity and pure ownership via private keys.
In 2009, when Bitcoin was launched, only computer geeks wanted it. A few years later, retail investors wanted it. Today rich people and corporations are buying it. More retail investors, rich people, and corporations are coming. A few governments want to acquire it too.
We might be underestimating how important Bitcoin will be five or ten years from now. I'll leave you with a few of my favorite quotes:
“It's not a rally. It's not a bubble. It's a chain reaction spreading like a wildfire in cyberspace.” “It's better than owning all of Manhattan. It's better than owning the center city blocks of the greatest cities in the world. This is like Manhattan in cyberspace. One day, a billion people will live there.” “Bitcoin is the apex property of the human race.” “…Bitcoin is a masterpiece of monetary engineering." – Michael Saylor
“You can now buy a Tesla with Bitcoin.” “Tesla is using only internal and open source software & operates Bitcoin nodes directly. Bitcoin paid to Tesla will be retained as Bitcoin, not converted to fiat currency.” – Elon Musk