00:01 I got this comment on one of my Facebook
00:03 post posts that I wanted to critique. It
00:06 said, “Bitcoin is too high right now.
00:08 Could go to zero tomorrow. Buy cash
00:11 flowing assets.” I want to take apart
00:14 that comment piece by piece critique by
00:16 critique for each of those three items.
00:18 One, he spelled uh Bitcoin as bit
00:21 spacecoin. Uh for the record, it’s one
00:23 word. Bi t o i n. One word. And then he
00:26 said bitcoin is too high right now. to
00:29 obviously that should be to o so too
00:31 high right now. Anyway, that being said,
00:35 uh let’s let’s go line by line. Bitcoin
00:38 is too high right now. Clearly, this
00:40 individual is stuck comparing Bitcoin to
00:42 the past. But that’s not what you should
00:44 ever compare Bitcoin to because Bitcoin
00:46 has always been too high right now
00:48 compared to every price in the past. You
00:51 know, as long as you’re looking back,
00:53 you know, three or four years, it’s
00:54 always been higher. And so comparing it
00:57 to the past doesn’t make any sense
00:58 because by that definition, Bitcoin was
01:00 expensive when it was a penny because
01:02 prior to a penny, it was worth zero. And
01:04 when it was worth 10 cents, it was
01:06 expensive compared to a penny. So past
01:08 comparisons make no sense. What you
01:10 should compare it to, for example, is a
01:12 forward comparison like gold. Well, all
01:15 the gold in the world is worth $24
01:17 trillion and all the Bitcoin in the
01:19 world is worth $2 trillion. So, Bitcoin
01:22 can go up by a factor of 10 before it’s
01:25 expensive compared to gold. Until then,
01:28 it is cheap compared to gold. And gold’s
01:31 value is predominantly driven by its
01:33 monetary properties, not its industrial
01:36 or decorative uh jewelry uses, for
01:39 example. And so, the right way to
01:42 compare Bitcoin is what is the value of
01:44 a neutral reserve asset? meaning an
01:47 asset that anyone in the world can own,
01:48 any government, any person, any company,
01:50 that nobody else can make more of that
01:53 has perfect monetary uh properties and
01:55 qualities. What is that value? Well, we
01:58 can debate. Is it the value of all the
01:59 gold in the world? That’s sort of an
02:01 easy threshold. If so, that’s more than
02:04 10 times as big as its current price. If
02:06 it’s the value of half of all of the
02:09 assets that are currently used uh as a
02:12 store of value, then you’re looking at
02:15 10 or $20 million per Bitcoin. And if
02:18 it’s half of all the assets in the
02:19 world, because half of the assets are
02:21 used as stores of value, you’re looking
02:23 at like $43 million per coin. I have no
02:26 idea what the right number is, but
02:29 115,000
02:30 is not expensive by any measure. It’s
02:33 not expensive unless you are only
02:35 looking backwards. Uh the next critique
02:37 is it could go to zero tomorrow. No, it
02:40 can’t go to zero tomorrow because it has
02:42 monetary properties. The same way gold
02:45 will not go to zero tomorrow because
02:47 gold has monetary properties. So
02:50 monetary properties include something
02:51 being divisible, durable, portable,
02:54 fungeible, verifiable, authenticable,
02:57 identifiable, and most importantly
02:60 scarce. So depending on who you ask,
03:02 there is somewhere between five and
03:04 eight common properties that are
03:07 considered monetary properties of an
03:09 asset. And Bitcoin is better in all of
03:12 those categories than anything else that
03:14 exists in the world. Gold is pretty
03:16 good, although gold is not sufficiently
03:19 divisible and not sufficiently portable
03:22 and not sufficiently scarce, believe it
03:24 or not. Um, so Bitcoin is superior to
03:27 gold and other every other monetary
03:29 asset. So, Bitcoin will not go to zero
03:32 unless its monetary properties go to
03:34 zero. If its monetary properties go to
03:37 zero, then of course it would not have
03:39 monetary value and it would not be
03:41 valuable. But that’s not going to happen
03:43 for all of the reasons I’ve talked about
03:44 in numerous videos for the security, the
03:47 decentralization,
03:49 um, and all of that of the Bitcoin
03:51 network. Bitcoin has ideal monetary
03:54 properties that will not go to zero
03:56 tomorrow. Therefore, its value will not
03:58 go to zero tomorrow. And its current
04:00 value of $115,000 per coin reflect the
04:03 fact that it has those monetary
04:05 properties. And that’s not going to
04:07 change. It will not suddenly stop having
04:10 21 million bitcoin tomorrow morning. And
04:13 as long as there’s only 21 million
04:14 bitcoin tomorrow morning, the value is
04:16 not going to zero. So, uh the third
04:18 critique was by uh the individual posted
04:22 buy cash flowing assets. What he means
04:24 is buy real estate, you know, where
04:26 somebody a tenant pays rent or buy a
04:29 stock that has a dividend or something
04:31 like that. But there’s a problem with
04:33 that strategy, which is that every cash
04:36 flowing asset right now is ridiculously
04:39 expensive. So real estate, stocks,
04:42 everything you could put your money
04:43 right now in, I would argue, is
04:46 ridiculously expensive as compared to
04:48 the kind of return you would expect.
04:51 Now, that’s measured with something
04:52 called a price earnings ratio, which is
04:54 what is the price for every $1 of
04:58 earnings that can be expected from that
05:00 asset. So, if a stock has a price
05:03 earnings ratio of 5050, that means you
05:06 have to pay $50 for every $1 of profit.
05:09 Another way of looking at that is it’s
05:11 the equivalent of a 2% uh yield. 150th
05:15 is a 2% yield. uh meaning you’re
05:18 expecting a 2% return on your
05:20 investment. Well, stocks right now are
05:22 ridiculously
05:24 high priced with regard to price
05:26 earnings ratios and everybody is saying
05:28 that well that’s sustainable because
05:30 stocks will just go up forever and every
05:32 technology you know company in the
05:34 Magnificent 7 is going to be worth you
05:38 know immeasurably new trillions of
05:40 dollars every year and that’s just
05:42 objectively not the case. So
05:44 historically through the stock market,
05:46 anytime stocks have gotten way out of
05:49 whack compared to their price historical
05:52 price earnings ratios, eventually they
05:54 revert to the mean. That’s why people
05:56 say markets are mean reverting. What
05:59 does that mean? Mean reverting. Mean
06:01 meaning being meaning the average. So
06:03 mean reverting means average reverting.
06:06 Which means if the average price
06:08 earnings ratio for the stock market in
06:10 the past is 16, you know, times earnings
06:14 or something like that, I don’t know
06:15 what it is, but whatever it is, it’s a
06:17 whole lot higher than that right now.
06:19 And most analysts who look at the stock
06:22 market right now say, “Hey, these price
06:24 earnings ratios are not sustainable.”
06:26 And so this individual is recommending
06:28 people buy cash flowing assets. But I
06:30 would argue there is not any cash
06:33 flowing assets that make sense to buy
06:35 right now because in my opinion real
06:37 estate is significantly overvalued. Uh
06:39 stocks are significantly overvalued. I’m
06:42 not aware of any asset that is on sale
06:45 right now and would be a good investment
06:47 other than Bitcoin, which is why I have
06:50 100% of my assets in Bitcoin because
06:52 everything else that I look at in the
06:54 entire world that I could invest in uh
06:57 makes less sense than Bitcoin. And so
07:00 anyway, to recap, this individual says
07:04 Bitcoin is too expensive. That is not
07:06 true. They say it could go to zero
07:08 tomorrow. That is not true. and they
07:10 should say you should buy cash flowing
07:12 assets. Again, in my opinion, also not
07:14 true. Uh but I thought it would make
07:16 sense to critique this individual’s
07:18 comment uh step by step. And there you
07:20 go. Have a great night.
