Is Bitcoin Still a Good Investment? How do you know?

00:01 hey everyone you may be wondering is 00:03 Bitcoin still a good investment which 00:06 you of course could be forgiven for 00:07 asking the question because Bitcoin has 00:09 been mostly trading sideways for the 00:12 past five or so months between mostly 00:15 $55,000 per coin and $70,000 per coin 00:19 okay so I'm going to make an attempt to 00:20 answer is Bitcoin still a good 00:21 investment obviously I think yes I'll 00:24 explain why okay so first of all you've 00:26 got to zoom out uh the answer to all of 00:29 these things is always zoom out so if 00:31 you take the most transformational 00:33 Technologies of all time let's say the 00:35 automobile the internal combustion 00:37 engine the um you know the internet uh I 00:42 don't know you know electricity all of 00:43 those things if you uh if you take all 00:46 of those things over time and then you 00:48 zoom in to any 6 months or 12 months or 00:51 anything you can find periods of time 00:53 where it looked like the adoption of 00:55 that technology was not actually going 00:57 to happen so if you go look in the early 00:59 days of of you know the Model T Ford 01:02 with Ford I haven't done this but I I 01:04 know this is the case for sort of just 01:05 macro uh you know macro investing um if 01:08 you zoom in on Amazon or Apple or Google 01:11 or Microsoft or um any of The 01:14 Magnificent Seven stocks which are the 01:16 seven highest performing stocks uh in 01:18 recent years um anyway if you zoom in on 01:21 any of those or the major technological 01:23 changes over time um you will see 01:26 exactly the sort of thing you see in 01:28 Bitcoin right now so let's go back to 01:30 the uh let's say the automobile just to 01:33 pick a random example so uh the internal 01:37 combustion engine is invented uh 01:39 automobiles come around but no 01:41 technology is adopted uniformly with any 01:45 technology you end up with early 01:47 adopters that jump on board quickly then 01:49 there's sort of a lag where people are 01:51 trying to figure out hey is this real 01:52 and it just it takes time for the next 01:55 wave of people and people tend to adopt 01:57 Technologies in waves right they just 01:60 it's not this linear thing so let's 02:02 assume you had you know invested heavily 02:05 in the automobile and for five or 6 02:08 months the sales of automobiles let's 02:11 call it the Model T Ford or whatever 02:12 let's just assume that those are sort of 02:14 going sideways so you may lead that may 02:17 lead you to question your thesis which 02:19 is hey maybe people are not actually 02:22 going to adopt automobiles maybe we're 02:24 just going to stick with the horse and 02:26 buggy indefinitely okay so what do you 02:28 do in that situation well the thing you 02:30 don't do is just go look at the price or 02:32 go look at automobile sales because if 02:35 you zoom in on any of that it's not 02:37 going to tell you what is going to 02:39 happen long term because again if you go 02:41 to any of the highest performing assets 02:44 or most transformational Technologies of 02:46 all time and you zoom in you can find 6 02:49 months or 12 months or 18 months at a 02:51 time where it looks like apple the 02:54 company is not going to make it or it 02:56 looks like maybe the internet will never 02:57 be adopted or whatever um so 03:00 uh let's go back to the automobile so 03:03 the best thing to do is to go back to 03:04 just first principles which is okay 03:07 you're heavily invested in automobiles 03:09 it's the early 1900s and you're 03:12 concerned that because you know adoption 03:14 of automobiles have temporarily 03:17 stagnated that maybe your investment is 03:19 you know is a bad one because maybe the 03:21 world is not going to use automobiles 03:23 okay again if all you do is just look at 03:25 the automobile sales numbers that can be 03:27 misleading because you can get a 03:29 flatline or 03:30 something which is called range bound 03:32 which is you know it's bouncing around 03:33 between I don't know 5,000 and you know 03:36 5,500 and 7,000 automobiles sold a month 03:40 and maybe it gets stuck there for like 03:42 six months just like the price of 03:43 Bitcoin seems mostly between you know at 03:45 a zero mostly between you know 50 uh 03:49 55,000 and 70,000 so you can get sort of 03:52 stuck there for you know potentially 03:54 extended periods of time so if you look 03:55 at that you could conclude hey maybe 03:57 we're just not going to adopt 03:58 automobiles so the right thing to do is 04:00 to look at the underlying asset to say 04:03 okay what does an automobile do people 04:05 are using horses and Buggies and 04:07 Automobiles for transportation now is an 04:10 automobile a better means of 04:12 transportation than a horse and buggy 04:14 and you just go one by one and just say 04:16 Okay can it go faster or will it 04:18 eventually go faster yes does it require 04:21 all the maintenance and upkeep uh you 04:23 know of the care and feeding of physical 04:26 live animals the answer is no um does it 04:29 this does it that you go through the top 04:31 five or 10 attributes that make for a 04:34 great means of transportation and you 04:36 would quickly conclude that automobiles 04:39 are better than horses and Buggies they 04:41 just are which means you could conclude 04:45 okay that means eventually the you know 04:47 sale of automobiles will kick back in 04:50 and people will buy and you know move 04:52 over to automobiles again same with 04:54 electricity if you had 6 months where 04:57 the adoption of electricity instead of 04:58 kerosene uh just sort of you know the 05:01 adoptions seem to be stagnated you you'd 05:03 sit back and you say okay let's talk 05:05 about this let's think about this is 05:07 electricity and the electric light bulb 05:09 better than a kerosene lamp yes it 05:12 doesn't make smoke it does not you know 05:15 it it you know it has the ability to 05:16 Glow brighter you know you go through 05:18 all the attributes for why somebody 05:20 might use electricity rather than 05:23 kerosene for lighting or heating or 05:25 whatever it is and you would conclude 05:26 that yeah maybe we seem sort of stuck in 05:29 the adoption of electricity 05:30 but electricity is going to get adopted 05:33 because it's fundamentally better uh so 05:35 same is same is true for the printing 05:37 press same is true for you know anything 05:40 is you can just you can go to the 05:41 fundamentals so what does someone like 05:44 me do when the price of Bitcoin has been 05:46 mostly in the same range for five you 05:48 know five months well first thing I do 05:50 is I go look at the historical price of 05:52 Bitcoin and realize that this has 05:53 happened a bunch of times before that it 05:55 is totally normal for the price to get 05:58 you know stuck in a range for you know 6 05:60 or 12 months or even to go down for you 06:02 know 6 or 12 months and that does not 06:04 mean bitcoin's broken it means that in 06:06 the natural adoption Cy cycle of any 06:09 technology and again you go back and 06:11 look at the Magnificent Seven stocks and 06:13 look at the first you know 16 years 06:15 since since Bitcoin is 16 years old go 06:18 look at the you know Magnificent Seven 06:19 stocks in the first 16 years of their 06:21 lives and you can zoom in and you can 06:23 find periods where they're sideways for 06:25 six months in their stock price or they 06:27 go down for six months or 12 months or 06:29 18 months 06:30 um it just happens it's e even with 06:33 Technologies and companies that 06:34 ultimately be are transformative if you 06:36 zoom in you can find periods of time 06:38 where they're behaving uh just like 06:40 Bitcoin is behaving today and it does 06:42 not mean anything's wrong with that 06:44 company or technology or with Bitcoin it 06:47 just means that temporarily you know 06:49 market adoption is what it is and 06:51 there's a lot of Dynamics in play for 06:52 reasons people would adopt automobiles 06:54 reasons they would adopt electricity 06:56 reasons they would adopt the internet 06:58 and all that sort of stuff and that's 06:60 just totally normal so as it relates to 07:03 bitcoin you know if the price seems 07:05 stuck I go back to okay let's go to the 07:08 most fundamental questions we can ask 07:11 about Bitcoin what are the most 07:12 fundamental questions one is the concept 07:15 of money a technology that is valuable 07:18 to humans yes it is okay we're not going 07:21 to go back to barter so yes money is 07:23 valuable okay number two do I believe 07:26 politicians are going to suddenly be 07:28 super responsible and that fiant 07:30 currencies are going to stop losing 07:31 value every year no I've been in the I 07:34 served for eight years in the House of 07:35 Representatives I've been in and around 07:37 politics for you know the better part of 07:40 two decades nothing inside me believes 07:43 politicians are going to suddenly be 07:44 responsible with money and nothing about 07:46 human history would lead anyone to 07:49 conclude all the way back to Roman 07:51 duckets and all this sort of stuff 07:53 nothing nobody would ever conclude that 07:55 a currency that can be de debased by 07:58 humans will not be debased by humans so 08:01 if something starts out 100% gold coin 08:03 then it goes to 95 90% 70% 65% you know 08:08 52% like they're just going to dilute it 08:10 like if humans can mess with the money 08:12 they will mess with the money and so 08:14 okay so so money is a valuable 08:16 technology we're not going to stop using 08:18 money politicians are not going to be 08:20 responsible uh we're not going back to 08:22 Gold again I've done enough work uh to 08:24 feel confident that I know we're not 08:26 going to go back to gold as the uh as 08:28 the money that we use uh as a nation uh 08:31 one it already got taken away between 08:33 1933 and 1976 all of the the gold that 08:36 could be used as money was confiscated 08:38 by the federal government of the United 08:40 States so one it's not going to it's not 08:42 going to work his money because it 08:43 already got taken away one time and if 08:45 they took it away once they can take it 08:46 away again uh second which you know they 08:49 can't with Bitcoin uh second gold is not 08:52 divisible it's not it doesn't have the 08:55 uh monetary properties that Bitcoin has 08:58 as far as divisibility authenticated 08:60 ability the ability to send it over time 09:02 and space and gold is you know they're 09:05 digging about 2% more gold out of the 09:07 ground every year which means every 36 09:09 years the total amount of gold in 09:12 circulation doubles well as population 09:15 growth starts to uh fall off which it is 09:18 uh you know expectations are somewhere 09:20 between 9 billion and 10 billion people 09:21 in the world uh population growth will 09:24 will go sideways and there will not be 09:25 population growth but the total amount 09:27 of gold in the world uh getting dug out 09:29 of ground is going to keep going up you 09:31 know 2% a year so uh just on the 09:34 fundamentals of its monetary properties 09:36 Bitcoin is better than gold so we're not 09:39 going to stop using money as a 09:40 technology politicians are not going to 09:42 be start being 09:43 responsible uh we're not going back to 09:46 gold which means we are going to use 09:48 some form of money that works and cannot 09:50 be debased and Bitcoin obviously is I 09:53 believe that money so I go through the 09:55 fundamentals of okay is Bitcoin durable 09:57 is it divisible is it authenticatable 09:59 does have every single element of what a 10:03 perfect monetary system would have in 10:05 the world and the answer is yes can I 10:07 buy Stu with Bitcoin yes with the 10:09 Bitcoin uh coinbase debit card I can go 10:11 buy anything with a debit card and for 10:13 larger purchases I can use the actual 10:14 just Bitcoin Network so you know 10:17 recently I guess it was earlier this 10:19 week or late last week um I was paying 10:21 somebody and uh they sent me a Bitcoin 10:23 invoice and I you know pasted it over 10:26 into a Bitcoin wallet and it said hey do 10:29 you want to pay pay this person you know 10:31 this amount of money and I clicked yes 10:33 and it said done and it was done and it 10:35 was amazing and we did not have to worry 10:38 about uh you know which whether we were 10:40 on venmo or PayPal or zel or any of the 10:44 different apps we didn't have to be on 10:45 the same app um we didn't have to 10:48 interact with anyone that could freeze 10:49 accounts suspend accounts require 10:52 authentication it's just hey I can 10:55 transmit value as easily as I can send 10:57 an email to anyone in the world as easy 10:59 as I can send an email I can transmit 11:01 value with Bitcoin and it works 11:03 incredibly well and it's just amazing 11:05 technology so every time I use Bitcoin 11:07 uh that like native Bitcoin I'm like 11:10 this is just amazing technology again 11:12 similar to you flip a switch and a light 11:14 bulb turns on or you get in a Model T 11:17 Ford and you drive around and you think 11:20 I really really really think everybody's 11:21 going to use this instead of a horse and 11:23 buggy like maybe temporarily it's 11:25 they're sort of not but when you 11:28 experience the technology yourself and 11:29 you're like 11:30 I'm just really really really certain 11:32 that this is the future and that's how I 11:34 feel about Bitcoin every time I use 11:35 Bitcoin I'm like this there's just no 11:38 possible way this is not the future 11:39 monetary system of the world it checks 11:41 every box so again I don't look at any 11:44 investment as it's a good investment 11:46 because the number's going up in fact 11:48 often you know Investments that people 11:50 buy only because the numbers are going 11:52 up but they don't actually understand 11:54 you know the underlying technology ends 11:56 up being an investment where the number 11:57 ultimately goes down so um so I don't 11:60 buy things because I think the numbers 12:02 you know is going up I buy things 12:04 because I think they have an incredibly 12:06 High underlying fundamental value and 12:09 that that underlying fundamental value 12:12 will eventually be represented in their 12:14 price uh that may be represented in the 12:16 price today it may be represented in the 12:18 price in the future but it always 12:20 eventually gets represented in the price 12:22 So eventually people did adopt 12:25 Automobiles and eventually the you know 12:28 the automobile companies that were 12:29 successful in the automobile Marketplace 12:31 made money eventually people uh adopt 12:34 electricity and the companies that were 12:36 built on uh the adoption of electricity 12:40 made a lot of a lot of people a lot of 12:42 money eventually people did adopt the 12:44 internet uh and that made a lot of 12:46 people a lot of money so the same is 12:48 true on bitcoin bitcoin's fundamentals 12:50 are the most solid investment of 12:53 anything I've ever owned and every time 12:56 I use it I research it which is 12:57 constantly I spend you know hours every 12:59 single day reading about researching and 13:02 following Bitcoin bitcoin news Bitcoin 13:04 research Bitcoin you know technological 13:07 developments and every aspect of that 13:11 leads me to conclude the same thing 13:12 which is the underlying investment is 13:15 Rock Solid because of the fundamentals 13:17 and if the fundamentals are solid then 13:19 does it really matter that the price has 13:21 been mostly sideways for the last five 13:23 months and the answer is no I mean I 13:25 would love it to be higher because then 13:27 everything I buy with my coinbase debit 13:29 cards even cheaper as compared to the 13:31 price I paid for the you know the 13:33 original Bitcoin um but you know what 13:36 I'm always buying more Bitcoin too so 13:38 I've got direct deposit you know all of 13:40 my income streams de direct deposit to 13:42 coinbase and are autoc converted into 13:44 Bitcoin so if the price is cheap one day 13:46 well guess what if I get a you know 13:48 direct deposit that day I'm buying 13:50 cheaper Bitcoin so so let me recap here 13:54 uh the recap is money is an important 13:56 technology politicians are not going to 13:58 solve that problem uh we're not going 14:00 back to Gold we are going to use a 14:03 Digital hard money in the future nothing 14:06 is going to replace Bitcoin for all of 14:09 the things I've covered in previous 14:10 videos about you know if you try to 14:12 improve on Bitcoin in some way you have 14:14 to make it worse in some other way and 14:16 Bitcoin chose to be the most secure the 14:17 most decentralized uh digital asset and 14:21 for the base layer of the monetary 14:22 system uh those are characteristics that 14:25 cannot be improved upon uh without 14:27 making a sacrifice that uh people are 14:29 unwilling to make so for all those 14:32 reasons I think Bitcoin is a fantastic 14:34 investment uh as with the previous video 14:36 and every video I ever do this is not 14:38 investment advice or accounting advice 14:40 or legal advice this is just my personal 14:42 opinion and uh anyway but I think 14:45 Bitcoin is a fantastic investment at 14:48 $57,000 per coin and frankly I think 14:50 it's a fantastic investment at any price 14:53 under under $75,000 per coin and since 14:56 the price has never been above $75,000 14:59 per coin I don't believe there's been 15:01 any time in the last 16 years where 15:03 Bitcoin was not a great investment so uh 15:06 happy to answer any questions uh my 15:08 conviction um of of Bitcoin remains at 15:12 100 out of 100 all the news headlines 15:14 are positive uh with regard to bitcoin 15:17 and it is only a matter of time until 15:19 that is reflected in the price of 15:20 Bitcoin at which point everyone will 15:22 wish they had bought a whole lot more 15:24 which is what always happens as the 15:26 price goes up everyone wishes they had 15:27 bought more and that has been the 15:29 consistent theme for the last 16 years 15:32 so hopefully it all helps I'm here for 15:33 anything you need as always thanks and 15:35 have a great day