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- Digital Beans #27 Bitcoin is your generational bet
Digital Beans #27 Bitcoin is your generational bet
Digital Beans #27 Bitcoin is your generational bet
Hey there everyone! 👋 This is Shivam. I bring to you the 27th weekly edition of Digital Beans. This is an effort through which I try to share my thoughts on the Digital Assets Industry and Business Models in the space. Your 0 to 1 guide for Digital Assets Industry
Read time - 4 mins
In this edition, the article I explore is titled "Bitcoin is your generational bet" Hope you enjoy it.
Spill the beans (Explain to me like a 5 year old)
Bitcoin is your generational bet, one that preserves your wealth over generations to come
No country can stop inflation. Nobody can stop inflation. It is baked into the system, that's the reality we live in
1} Inflation is a hidden tax, that eats into our wealth let’s look at the current state
Canada: 4.4%
India: 4.25%
Indonesia: 4%
USA: 4%
Brazil: 3.94%
South Korea: 3.3%
Japan: 3.2%
Spain: 3.2%
UAE: 3.05%
Denmark: 2.9%
Saudi Arabia: 2.8%
Russia: 2.5%
Switzerland: 2.2%
Thailand: 0.53%
Niger: 0.2%
China: 0.2%
99% of the countries and companies, they cannot outrun inflation. 99% of the workers, they cannot outrun inflation. So if you are building your wealth, you will ask yourself, what do I do to preserve or grow my wealth? Let’s do a mental exercise to understand this better
2} Imagine you had a million dollars today in your company or in your family
You can invest it in
Cash
Government bonds
Equities
Bitcoin
1} You hold it in cash, in the world reserve currency at a 7% inflation rate (real inflation) Then, in 100 years, you will have in today's dollars $977. You will go from a million to 1000
You'll lose 1000x, it's one divided by two to the 10th. If you hold it in let’s say a currency like INR or Yuan you will probably lose more.
2} If you take all your million dollars and buy government bonds, you're going to have a three and a half percent negative real yield. Carry that for 100 years, you're going to have $31,000 3% of your wealth.
3} If you're going and you invest in the S&P and equities, you're going to have a $ 1 million.
You want the same value, the same wealth in 100 years you have right now, but no more.
4} If you take half of it and invest in bitcoin and the other half of the S&P, you're going to have $512,000,000
And if you go 100% bitcoin...... You're going to be a billionaire (based on Bitcoin returns annualized over 15 years)
All you got to do is flip your million dollars into bitcoin, hold it at 7% real yield for 100 years
That's your money, two raised to the power of 10 times.
Now, there's a winning strategy and there's a losing strategy. Currencies are by design going to steal your economic wealth, Assets are by design going to preserve it or grow it.
Investing in equities or startups is one of the ways to gain financial wealth and leverage. Bitcoin is another and current performance indicates that historically Bitcoin has performed the best, even better than other asset classes like Real Estate and Equities.
Now you may say that the time horizon for Bitcoin has been just 15 years, well agreed! Its a fairly new asset class but at the same time, one that is designed to run via code. Just supply and demand dynamics and that is brilliant.
Bitcoin is a way out.
State of Crypto affairs - A quick look at the market
The global cryptocurrency market cap today: $1.24 Trillion
Weekly change: 12.31% | Yearly change: -23.36%
Bitcoin (BTC) is the largest cryptocurrency with a market cap of $527 Billion.
Bitcoin price today: $30,700
Weekly change: 15.48% | YTD change: 84.82%
Another important metric is Bitcoin dominance which can be used as a rough indicator of the relative strength of Bitcoin versus other cryptocurrencies. A high Bitcoin dominance means that Bitcoin has a large market share and is potentially more influential in the overall cryptocurrency market and vice-versa.
Bitcoin dominance: Current Year: 50.05% | Last year (June 2022): 42.31%
Greed and fear index
The market sentiment has been back to high greed levels now post Bitcoin pumping in the last week as the likes of Blackrock filed for Bitcoin Spot ETF (bullish news)
Note: The data used is based on metrics like Volatility, Surveys, Bitcoin Dominance, Social and Google Trends. Source: Coinstats
Is ETH ultrasound money?
Let's have a look at Ethereum supply changes post its merge to a PoS blockchain from PoW.
The significance of the charts - understand how the supply of Ethereum is decreasing post the merge, which means “deflationary economics” for the Blockchain
Supply change since merge POS -281,432 ETH
The graph highlights POS vs POW issuance since the merge. Impressive numbers, look super bullish for ETH long term given the supply of ETH is not growing as before
What's brewing today? Bringing fresh beans to you:
It Will Get Harder to Detect Deepfakes: Secta Labs CEO While deepfakes are easy to detect today, Marko Jak says, "We're getting into an era where we can no longer believe what we see."
How Gaming, Loyalty and Entertainment Are Adapting to the Rise of NFTs and Web3 The gaming, entertainment and loyalty industries are poised for big changes, thanks to Web3 tech such as NFTs and DAOs. We talk to the experts on how. Plus, Nike and Puma announced new digital partnerships that show Web3 is still kicking.
Coinbase Loses Market Share in Ether Staking as Regulatory Pressure Mounts The exchange’s share in ETH staking dropped to 9.7%, the lowest since May 2021. The SEC sued the company in June for offering unregistered securities.
Whats meme-ing? Better make sure this is fun
And now the funny part,
What did you think of today's edition?
DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research