STRATEGIC BITCOIN RESERVE signed into law! So why is Bitcoin still CHEAP?!?

00:01 Morning everyone. So, a strategic 00:03 Bitcoin reserve was signed into law last 00:06 night. So, why is Bitcoin still cheap? 00:08 Why is it not already gone all the way 00:11 to the moon? Why is the price not way 00:13 way way up? Uh, the short take is 00:15 because financial markets of any kind 00:17 are irrational in the short term. Uh, 00:20 but let's talk through all of it. Okay. 00:21 So, what actually happened? Well, last 00:23 night, Donald Trump signed a strategic 00:26 Bitcoin reserve into law along with 00:29 separately a digital asset stockpile. 00:32 Uh, the strategic Bitcoin reserve will 00:35 hold only Bitcoin, the real Bitcoin, 00:37 BTC, the real Bitcoin that's trading at 00:40 about $90,000 per coin right now. Uh, 00:44 that is the only thing that will be in 00:45 the strategic Bitcoin reserve. Uh it 00:47 states that the US government will not 00:50 ever sell any of the bitcoin in the 00:52 reserve and will only acquire it shall 00:55 find tax uh that the treasury secretary 00:58 and the secretary of commerce shall find 01:01 ways of acquiring more bitcoin that is 01:03 budgetneutral meaning they cannot use 01:06 direct tax dollars to buy bitcoin but 01:09 they can come up with all sorts of 01:10 creative roundabout indirect ways of 01:13 using financial resources of the US 01:15 government to buy more bitcoin. which 01:17 they will do. So, the US government will 01:19 be buying Bitcoin for the strategic 01:21 Bitcoin reserve. So, the strategic 01:23 Bitcoin reserve, the Bitcoin that the US 01:25 government already has, which is about 01:27 200,000 Bitcoin, that goes in the 01:30 strategic reserve, and they only add to 01:32 it by buying more separately. There is a 01:35 digital asset stockpile. All of the 01:37 digital assets other than Bitcoin that 01:38 the US government owns will go in a uh 01:41 digital asset stockpile. The government 01:44 will not buy any more of those assets 01:47 and will only sell those assets, not 01:50 buy. So the Bitcoin never gets sold and 01:52 only bought and everything other than 01:54 Bitcoin only gets sold but never bought. 01:58 So they both get moved sort of 01:60 separately. The Bitcoin goes into a 02:01 strategic reserve. The other stuff goes 02:03 into a digital asset stockpile. The 02:06 reserve only grows. the stockpile only 02:08 shrinks unless they get more of the 02:10 stockpile assets through civil asset 02:12 forfeite or criminal forfeiture of some 02:15 kind. Okay. Uh so huge news and very 02:18 positive for Bitcoin. The upside because 02:20 they're not using directly using 02:23 taxpayer dollars to buy Bitcoin is that 02:25 nobody has a reason to be upset about 02:27 this thing. So even the people who are 02:29 not fans of Bitcoin or even the very 02:32 small shrinking dwindling number of 02:33 people that hate Bitcoin for some 02:35 ridiculous reason have no reason to be 02:37 upset because their tax dollars are not 02:39 directly going to buy Bitcoin. So they 02:41 have nothing to complain about. One 02:45 second. So huge uh huge upside there. 02:48 Nobody can complain that their tax 02:50 dollars are buying Bitcoin when they 02:51 don't want to. The government will 02:53 however buy more Bitcoin. uh they'll 02:56 just do it through creative indirect 02:58 means and uh the bill or the uh 03:00 executive order actually says shall it's 03:03 not may buy more Bitcoin it's shall buy 03:06 more Bitcoin. So anyway um so very 03:08 positive uh as you know I've never been 03:11 a huge fan of the government owning the 03:13 best money in the world. I think the per 03:15 the pros of a strategic Bitcoin reserve 03:17 outweigh the cons. Um, the cons being 03:20 that the government owns more of the 03:22 best money in the world, which means you 03:24 own potentially less of it because the 03:26 more the government owns, the less there 03:28 is for you. So, I'm not a fan of the 03:30 government owning uh Bitcoin at all, but 03:33 if they're going to own it, it's better 03:34 to be in a strategic Bitcoin reserve. 03:36 And obviously, that has a huge huge huge 03:39 positive signaling effect to the 03:41 marketplace. So there even in 2025 where 03:45 it's obvious to everyone that Bitcoin is 03:48 the future of money. Well, not 03:50 everybody. It's obvious to everybody who 03:52 spend at least 100 100 hours studying it 03:54 that Bitcoin is the future of money. 03:56 There's still a huge number of people 03:58 that have not done the work, including 03:60 hedge funds, family offices, Wall Street 04:02 investment bankers, and all all of that 04:05 who are looking for signals from the 04:06 marketplace to say, "Hey, is this asset 04:09 safe? Is it mainstream? Is it something 04:11 that the that's going to be widely 04:13 adopted? Well, the number one most 04:15 powerful largest economy in the world 04:19 just established a strategic Bitcoin 04:21 reserve yesterday. So, if you're on Wall 04:23 Street and you're just not sure if this 04:25 Bitcoin thing is real or if you're just 04:27 not sure if it's sticking around, the 04:29 number one most powerful country in the 04:30 world just adopted a strategic Bitcoin 04:32 reserve. So, if that leaves any doubt in 04:35 anyone's mind, I don't know how that 04:37 even is. Um but anyway, huge news. Uh 04:40 the language of it is very 04:42 wellcraftrafted. The people who crafted 04:44 it clearly knew what they were doing 04:47 differentiating between Bitcoin and the 04:50 other sort of in my opinion junk digital 04:53 assets. They clearly knew what they were 04:55 doing by the way they structured it to 04:57 eliminate any blowback from anyone 04:58 complaining about their tax dollars 04:60 being used to buy Bitcoin, but also the 05:02 way they structured it with a strategic 05:04 asset uh strategic reserve for Bitcoin 05:07 and only an asset stockpile for the 05:09 other stuff and the way they structured 05:11 it where Bitcoin can only be bought and 05:13 the other stuff could only be sold. Um 05:15 anyway, so it's it's really brilliant. 05:16 It's really well written. It's very 05:18 straightforward and it's just beautiful. 05:20 So, um, all right. So, the second 05:22 question is, if this big gamechanging 05:25 worldwide news for Bitcoin just happened 05:28 last night, less than 24 hours ago, how 05:31 is Bitcoin only at $90,000 per coin? The 05:33 answer is because markets are very 05:35 irrational in the near term. First of 05:37 all, Bitcoin and all other assets are 05:40 facing huge headwinds right now with 05:42 global uncertainty. uh bonds in Europe 05:45 are really really really high as people 05:48 are just worried about sort of you know 05:50 massive recessions, massive money 05:52 printing, massive instability. Uh 05:54 China's economy is having all sorts of 05:56 issues. So slowly things are marching 05:58 from huge problems in China now there's 06:00 huge problems in the in Europe and now 06:03 we're seeing some of those cracks and 06:05 problems in the US economy with you know 06:07 companies and governments just uh under 06:10 mountains of debt. And when people get 06:12 that way, they just start selling stuff. 06:14 Even if it makes no sense and it's not 06:16 rational, they just sell stuff because 06:18 they're scared. So, Bitcoin is subject 06:20 to that as long as with all other 06:22 assets. But the other thing too 06:24 is people have an unbelievable ability 06:28 to have expectations higher than any 06:31 reasonable reality. So this happens very 06:34 frequently with financial markets where 06:36 for example Amazon will announce that 06:39 their profits doubled the previous 06:41 quarter but the stock price will 06:43 actually go down because everyone was 06:45 hoping that the the profits would triple 06:47 the previous quarter. So it's almost 06:49 like no matter what you do, it's very 06:52 difficult to impress anyone in financial 06:56 markets, which is why positive news is 06:59 often met with a drop in that assets 07:02 value. Again, it happens all the time 07:04 with Amazon, Tesla, Apple, Microsoft, 07:06 Google, Nvidia, and uh the largest most 07:10 successful companies ever. uh in the 07:12 near term they get a stock drop because 07:14 some new news they announced was 07:17 slightly less amazing than whatever they 07:20 could have hypothetically announced that 07:21 people were hoping. So again this 07:23 happens all the time where companies 07:24 will announce recordings but everybody 07:27 was expecting sort of record plus 07:29 earnings or they instead of doubling 07:31 they were expecting tripling. So, uh, 07:34 apparently when the the announcement 07:35 happened yesterday, there were a bunch 07:37 of short-term traders. These are people 07:39 buying and selling Bitcoin on a daily 07:40 basis, an hourly basis, or even 07:42 minute-by-minute, which virtually 07:44 everyone who tries to do that loses 07:46 money. Like more than 99% of people who 07:49 try to do that with with any asset like 07:51 Bitcoin lose money in the long term. 07:53 Everybody just not everybody, the people 07:55 who try to do it just can't they can't 07:57 help themselves. They're like degenerate 07:59 gamblers. But anyway, so a bunch of 08:01 people had bought Bitcoin thinking that 08:04 when a strategic Bitcoin reserve got 08:05 announced that the US government was 08:07 somehow going to buy like some gazillion 08:09 trillion dollars of it the next day. 08:11 Well, that was never going to happen. 08:13 There's not the political will to do 08:14 that right now. Um because Bitcoin is 08:17 not well known enough among the average 08:19 people for that to be like a huge thing 08:21 that the government's going to do. I 08:22 mean, still a tiny percentage of 08:24 Americans own Bitcoin. A tiny 08:26 percentage. So the government was not 08:28 going to wake up and buy a trillion 08:30 dollars of Bitcoin this morning. That 08:32 was never going to happen no matter 08:33 what. So some of the people who are 08:35 selling Bitcoin right now or last night, 08:38 it's it's mostly recovered. So at 08:40 $90,000, the dip, you know, the 08:43 executive order was signed, the price 08:44 dipped for a matter of hours, and now 08:46 it's basically back to higher than it 08:48 was before the executive order was 08:49 signed. But in that dip, the people who 08:51 were selling Bitcoin were people that 08:53 were disappointed that the government 08:55 was not going to buy insane amounts of 08:57 Bitcoin the very next day, thereby 08:59 making them rich on a 24-hour trade. Um, 09:02 again, all that's stupid. It's high 09:03 school drama. What does this mean? What 09:06 this means in the grand scheme is the 09:08 number one most powerful country in the 09:10 world with the largest economy in the 09:12 world just established the Bitcoin a 09:14 strategic Bitcoin reserve. What does 09:16 that mean? It is now much more likely 09:19 that companies will establish strategic 09:21 Bitcoin reserves, that other countries 09:24 will establish strategic Bitcoin 09:26 reserves, that individuals will acquire 09:29 more Bitcoin. So in the long term, this 09:31 is insanely positive and the upside is 09:34 incredible. In the near term, people 09:37 will be irrational and people will do 09:39 stupid stuff and people will have 09:40 unrealistic expectations and people will 09:43 misread, you know, executive orders and 09:46 it's just humans acting like humans. Uh 09:49 the same thing happened uh last year 09:52 with the exchange traded funds. The 09:54 Bitcoin ETFs, exchange traded funds were 09:57 the most successful ETF launch in all of 09:60 ETF history, which is a huge deal. It 10:02 was one of the most successful thing 10:04 that's ever been released on Wall Street 10:05 was the Bitcoin exchange traded funds 10:07 that let you buy Bitcoin easily within a 10:10 retirement account or a brokerage 10:12 account. So, right after that was 10:15 announced and went live, the price 10:17 temporarily bumped up from like 47,000 10:20 to 49,000. And then over the next couple 10:23 weeks it dipped all the way to under 10:25 40,000 before rebounding and then 10:28 ultimately going up to now 90,000 uh or 10:31 even before uh you know before Donald 10:34 Trump was elected it went as high as 10:36 74,000. Okay. So the price almost 10:39 doubled but in the near term right after 10:41 the ETFs were announced it dipped. Well 10:43 why does it dip? Why did it dip? because 10:45 some short-term traders were expecting 10:46 bit, you know, they were expecting 10:48 literally every person on the planet to 10:50 immediately buy unlimited amounts of 10:52 Bitcoin the same day. Well, that was not 10:54 going to happen. It takes people time to 10:56 understand Bitcoin. It takes them time 10:58 to allocate re, you know, financial 10:60 resources, to move things around, to get 11:02 things set up to buy the Bitcoin they 11:04 want to buy and that takes time. So in 11:07 the week or two after the ETFs were 11:10 approved and started trading, there was 11:12 a dip in the price before it recovered 11:14 and then ultimately the price has has uh 11:16 more than doubled now from that price. 11:19 Um so what was going on there? Well, the 11:21 same thing. Traders had irrational 11:23 expectations and they got, you know, 11:26 screwed out of their Bitcoin and they 11:28 sold and they walked away and then it 11:30 went way up, which is what, you know, 11:31 what happens regularly. So, you may be 11:33 thinking, well, why would I not wait for 11:35 positive news and then the dip after the 11:38 positive news to buy Bitcoin? And the 11:40 answer is because it's erratic because 11:42 people are irrational. So, if you had 11:44 done that on election night on November 11:46 5th of last year, you would have 11:48 completely and totally missed out 11:50 because unlike the Bitcoin ETF launch or 11:53 the strategic Bitcoin reserve 11:54 announcement, there was no dip when 11:57 Donald Trump was elected. Basically, 11:59 Bitcoin went on a tear from 90, what was 12:03 it? 67,000 to 12:05 $109,000. Um, and again, now it's at 90, 12:08 but even if you look at it from today's 12:10 price of 90,000, it went on a tear from 12:12 67,000 to $90,000. That's a massive 12:16 that's a 50% or something like that. Not 12:18 quite. Um, a massive uplift on the 12:21 price. Um, and there was no dip. So, you 12:25 know, sometimes there's a dip after 12:26 positive news because people were 12:28 expecting something even more. Often 12:30 there's not a dip after positive news. 12:32 The price just takes off. There's 12:34 absolutely no way of predicting whether 12:36 the short-term traders that are 12:38 completely irrational, there's no way of 12:40 predicting how irrational or which 12:42 direction irrational they will be. Which 12:45 means all you can do is the same thing 12:47 you can always do, which is buy as much 12:48 Bitcoin as you can and hold on to it as 12:51 long as conceivably possible. One 12:52 second. 12:56 So, was the the news yesterday extremely 12:58 positive? Yes. Did the price dip in the 13:01 few hours after? Yes. For completely 13:04 irrational reasons. Is the price back up 13:06 to above where it was yesterday? Uh, 13:10 yes, it is right now. Now, the stock 13:12 market opens. It's 8:03 a.m. The stock 13:14 market opens in 27 minutes at 9:30 13:17 Eastern time, which is 8:30 Central 13:19 time. So, the stock market opens in 27 13:22 minutes at 8:30 a.m. Central time. And I 13:25 don't know what's going to happen. Uh, 13:27 is everybody on Wall Street going to 13:29 realize that this is a huge deal and, 13:32 you know, buy Bitcoin? I don't know. 13:34 It's probably going to take time. Is are 13:37 the people on Wall Street going to be 13:38 the same as the short-term traders that 13:41 saw the Bitcoin Reserve were hoping that 13:44 the US government was going to buy 13:45 hundreds of billions of dollars 13:46 instantly, and it's not. It's going to 13:49 buy it slowly and in a roundabout way. 13:51 And are people on Wall Street going to 13:53 dump the Bitcoin at 8:30 a.m. this 13:55 morning? I have no idea. It makes no 13:58 sense. These short-term traders are 13:59 completely irrational and do stuff that 14:02 makes just no sense all the time. And 14:04 again, it's not unique to Bitcoin. They 14:05 do this with every asset. So, all that 14:08 matters is the long term. And in the 14:09 long term, this news of a strategic 14:11 Bitcoin reserve that was signed into law 14:13 yesterday is a huge deal. It is a huge 14:16 deal for the long term of Bitcoin, which 14:18 means if I were you, you should do what 14:21 I'm doing, which is buy as much Bitcoin 14:22 as you possibly can and hold it for as 14:24 long as conceivably possible. That's how 14:26 that works. Um, and again, in the long 14:29 term, the the bit Bitcoin exchange 14:32 traded funds, ETFs have been huge for 14:33 Bitcoin. Bitcoin has more than doubled 14:35 in price since the Bitcoin ETFs were 14:37 approved. But it took some time, and the 14:40 same is true here. This is a huge deal. 14:42 It'll take some time. Maybe it won't 14:44 take some time. Maybe we'll just go 14:46 straight up vertically for a while. I 14:48 don't know. Maybe it'll dip. Maybe it'll 14:50 go sideways grind trying to shake 14:53 everybody out for months before it goes 14:55 up. I don't know. But what does matter 14:57 is in the long term, I believe Bitcoin 14:59 will outperform every other asset you 15:00 could possibly own. The news yesterday 15:02 about the strategic Bitcoin reserve was 15:04 very wellcraftrafted. It hit the sweet 15:07 spot in my opinion of good public 15:10 policy, especially for someone like me 15:12 who does not want the US government to 15:14 buy up all the Bitcoin or even a lot of 15:16 the Bitcoin. Um, so it was crafted 15:18 beautifully, very positive. I think it 15:21 it hit the sweet spot. It's just right. 15:23 And uh now most importantly, probably 15:26 the thing I'm most excited about from 15:28 yesterday is it gets the strategic 15:30 Bitcoin reserve out of the way because 15:32 what I really want, as for those who 15:35 have watched all my videos know, what I 15:37 really want is the elimination of 15:39 capital gains tax on Bitcoin. That would 15:42 be a much bigger deal for Bitcoin than a 15:45 strategic Bitcoin reserve. Um, the 15:47 reason for that is the the number one 15:50 thing that is holding Bitcoin back from 15:52 being used as a transactional medium of 15:55 exchange for people buying coffee and 15:57 everything like that. Obviously, there's 15:59 infrastructure that has to be in place 15:60 with point of sale terminals and 16:01 everything that support Bitcoin. Uh, but 16:04 the number one thing from a public 16:05 policy or regulatory or tax perspective 16:08 is capital gains tax on Bitcoin. Now, if 16:10 you're using the Coinbase debit card 16:12 from Coinbase, they keep up with all of 16:13 your taxes, so you don't have to worry 16:15 about it. But if you're using any other 16:17 Bitcoin service, um they all try to keep 16:20 up with your taxes, but you know, it's a 16:21 little hit or miss. A lot of people do 16:24 not want to buy use Bitcoin to buy stuff 16:27 because they're afraid of how they're 16:29 going to have to keep up with and track 16:31 the capital gains on Bitcoin. So, if you 16:33 buy it at 90,000 a coin, you you know, 16:36 you buy a cup of coffee at $110,000 a 16:39 coin, you have a capital gains on that 16:41 $3 cup of coffee, you owe, you know, 16:44 whatever it is, 10 cents of capital 16:46 gains tax or two cents of capital gains 16:48 tax or some microscopic amount. It'd be 16:51 whatever it is you bought it for. Well, 16:53 let me do the math. You bought You 16:55 bought $3 of Bitcoin at 90,000 a coin. 16:58 You bought a $3 and I don't know 30 cent 17:03 something at 100$1 100,000 a coin. Your 17:07 gain was 30 cents. Your tax rate is 20%. 17:11 So you owe 20% of 30 cents and so you 17:15 owe like 6 cents. So but people don't 17:17 want to keep up with that. They're like 17:18 hey I buy I'm buying everything at a 20 17:21 or 30 or even 50% discount on my life or 17:24 in my case even more than that. But, you 17:27 know, that still means when everything's 17:30 massively on sale, there's still some 17:32 tiny amount of that is capital gains 17:33 tax. So, now that the strategic Bitcoin 17:36 reserve is out of the way, it lets all 17:38 of the people that were focused on the 17:40 strategic Bitcoin reserve, the massive 17:42 army of lobbyists and political 17:44 consultants and lawyers and accountants 17:46 and all of those people that are 17:49 representing the cryptocurrency industry 17:51 as a whole. It lets all of those people 17:53 pivot to the elimination of capital 17:56 gains tax on Bitcoin and any other 17:59 cryptocurrencies that are made in 18:01 America. Um, nobody knows where Bitcoin 18:04 was made because nobody knows where 18:05 Satoshi Nakamoto was from even though uh 18:09 almost everybody speculates that he was 18:11 an 18:12 American. Anyway, most most of the 18:14 candidates that could have been Satoshi 18:16 Nakamoto are Americans. Um but anyway, 18:19 uh all of the discussion around that 18:21 involved Bitcoin and any other 18:23 cryptocurrency that's made in America 18:25 being uh exempt from capital gains tax. 18:29 So now the best thing about the 18:31 strategic Bitcoin preserve, literally 18:32 the best thing about it is it lets 18:34 everybody pivot to the elimination of 18:37 capital gains tax on Bitcoin and other 18:41 made in America uh digital assets. um 18:45 which would be a huge deal because it 18:47 would pave the way then for Bitcoin 18:49 being used as a transactional medium of 18:52 exchange for day-to-day purchases 18:54 without having to use something like the 18:55 Coinbase debit card that's going to 18:57 track everything including all the taxes 18:59 on the back end. So that is what I am 19:01 most excited about. I am most excited 19:03 about the strategic Bitcoin reserve to 19:05 get it out of the way so that we can 19:07 focus on the elimination of capital 19:09 gains tax which will then massively 19:12 accelerate the adoption of Bitcoin as 19:15 not only a store of value asset uh and 19:18 that function of money but as a 19:20 transactional day-to-day medium of 19:21 exchange without having to use something 19:23 like the Coinbase debit card uh to keep 19:26 up with all of your taxes and stuff at 19:28 Coinbase on the back end. So huge news 19:30 yesterday. It'll take time for that 19:31 effect to be to play out in the market 19:33 and for the price to reflect it. But 19:36 huge news yesterday with strategic 19:38 Bitcoin reserve. Same advice as always. 19:40 Uh even though this is not financial 19:42 advice, buy as much Bitcoin as you can 19:45 and hold on to it as long as conceivably 19:47 possible. That has never been a bad