Why is bitcoin down today? (8/14/25)

00:01 Why is Bitcoin down today? Well, the 00:04 primary reason seems to be that the 00:06 Treasury sec secretary, uh, Scott Basset 00:09 went on, I guess, CNBC or someplace and 00:12 said that he made an off-hand comment 00:15 about the United States not buying more 00:18 Bitcoin for the strategic Bitcoin 00:20 reserve. So, so what? So, what um, 00:25 here's how I think about that. First of 00:27 all, the thesis of Bitcoin was never buy 00:30 it because the US government's going to 00:32 buy some and pump your bags. That was 00:35 never the thesis of Bitcoin. The thesis 00:37 of Bitcoin is that it's the world's best 00:39 money and people need money and 00:42 therefore will eventually gravitate 00:45 toward a money that preserves their 00:47 value better than anything else. A money 00:49 that they can store and hold in their 00:51 own possession that is unconfiscable. 00:54 uh money that they can walk use and walk 00:56 across a border without having it 00:58 confiscated like gold with a metal 01:00 detector or confiscated by thugs at the 01:04 border of a third world country or 01:06 something like that. The power of 01:08 Bitcoin is the fact that no one controls 01:10 it. The fact that it's amazing, the fact 01:12 that it's uh you can transfer a you know 01:15 unlimited amount of value to the other 01:17 side of the world in 10 minutes and 01:19 absolutely no one can stop you. the fact 01:22 that you can preserve your purchasing 01:23 power and if you own one Bitcoin, you 01:26 own 121 millionth of all the Bitcoin 01:29 that will ever exist because there will 01:30 never be more than 21 million Bitcoin 01:32 ever in existence ever in the future of 01:35 humanity. So if you own one Bitcoin, you 01:38 have 121 millionth of that purchasing 01:40 power of everything that Bitcoin could 01:42 ever buy. And if you own half a Bitcoin, 01:45 you have 142 millionth of that. If you 01:48 own 0.1 Bitcoin, you have 1 210 01:52 millionth of all the purchasing power. 01:54 With the US dollar, you don't. With the 01:56 US dollar, if you own $1, you have 122 01:60 trillionth, not millionth or billionth 02:03 trillionth, you have 122 trillionth of 02:06 the purchasing power. And they keep 02:08 making more dollars. So that number, 02:10 that 22 trillion keeps going up and up 02:12 and up and up. And so, you know, that 02:15 number can go up to infinity. So the 02:18 people who need Bitcoin are people who 02:20 are not sitting on a magic money printer 02:24 and need a way of preserving their 02:25 purchasing power in a way that the 02:27 government is not constantly diluting 02:30 and inflating away your purchasing 02:32 power. And for example uh inflation just 02:35 came in hot which me means whatever 02:37 dollars you have that you are storing in 02:40 US dollars uh are now becoming less and 02:43 less valuable meaning you need Bitcoin. 02:46 So, the people who need Bitcoin are the 02:48 people that are the farthest away from 02:50 the magic money printer, not the people 02:52 who are literally sitting on it. So, 02:54 let's go in order. Who who needs Bitcoin 02:56 the most? The people who need Bitcoin 02:58 the most are average people who have a 03:01 net worth below a million dollar. Why do 03:04 I say below $1 million? Because if your 03:07 net worth is more than $1 million, 03:10 excluding your house, you're not allowed 03:12 uh for investing in the United States, 03:14 you're not allowed to count the value or 03:15 equity in your house in your net worth. 03:18 So, you have to have a $1 million net 03:20 worth to invest in anything uh that is 03:23 not publicly traded on the stock market 03:25 or obviously you can buy real estate and 03:27 stuff like that. So, if you have a net 03:29 worth of more than $1 million, you can 03:31 invest in private companies, you can 03:33 invest in deals that are not yet public. 03:35 The average person can't do that. The 03:36 average person in America does not have 03:38 a net worth of above a million dollars 03:41 excluding their house. So those people 03:43 need Bitcoin more. The next people who 03:46 need Bitcoin more are small businesses 03:48 who have a cash reserve and they need 03:49 some way of you know preserving the 03:52 purchasing power of their cash. Um the 03:55 next people are bigger businesses than 03:57 you know even wealthier people who need 03:60 a way of preserving purchasing power 04:01 over time. the the people who need 04:04 Bitcoin the least are the Peter people 04:07 who are literally sitting on a magic 04:08 money printer which is the federal 04:11 government in the United States. Now why 04:13 is that? Because people are like oh but 04:15 you know they're not going to buy 04:16 Bitcoin. It's like seriously they have 04:18 the ability to print out of TW uh of 04:21 thin air trillions of dollars of US 04:24 dollars um their whim and you think 04:28 they're worried about whether they buy a 04:30 little bit more Bitcoin now or later? 04:32 They currently own uh Scott Basset said 04:34 somewhere between 15 and 20 billion 04:36 dollars of Bitcoin and the US 04:38 government's Bitcoin is primarily uh was 04:41 confiscated from the Silk Road back in 04:44 2014, which was a uh you know a website 04:48 that was uh offering uh nonviolent but 04:51 illegal illegal stuff. Uh anyway, and 04:55 Ross Albert uh the person who started it 04:57 was pardoned by Donald Trump earlier 04:59 this year. So he is now out of prison. 05:01 Uh but anyway, the the Bitcoin that the 05:04 US government owes was confiscated from 05:06 that website. And so the US government's 05:08 been selling a bunch of it, but prior to 05:10 Donald Trump, now they are not selling 05:12 any of it. And Scott Bent confirmed that 05:14 they are not selling any of the Bitcoin 05:16 they have. But he made an off-hand 05:18 comment about how they're not buying 05:19 more of it. Now that doesn't mean 05:20 they're never buying more Bitcoin, but 05:23 think about this. Let's assume the 05:24 government has $20 billion of Bitcoin. 05:27 If they want $20 billion more Bitcoin, 05:29 they can buy it today. They can buy it 05:31 tomorrow. They can buy it a year from 05:32 now. They can buy it five years from 05:33 now. Because anytime they want more 05:35 Bitcoin, they can print US dollars out 05:37 of thin air and buy more Bitcoin with 05:39 it. Now, if you own US dollars, you're 05:42 screwed because the dollars they're 05:44 printing out of thin air are diluting 05:46 your purchasing power. But if you're 05:47 sitting on the Bitcoin, then whenever 05:49 the US government gets around to buying 05:52 Bitcoin, the price of Bitcoin shoots up. 05:55 So again, who cares if they're buying it 05:57 now? Who cares if they're buying it 05:58 later? The the thesis of Bitcoin was 06:01 never built on the fact that the US 06:03 government's going to buy it. Now, this 06:04 is similar. The seven highest performing 06:06 companies uh on the stock market right 06:08 now are called the Magnificent Seven, 06:10 which is Amazon, Apple, Google, 06:12 Facebook, 06:14 uh Nvidia, Microsoft, 06:18 and Tesla, I believe. I think that's the 06:21 seven. I think I got them all right. 06:22 Anyway, you should never buy any of 06:25 those based on one thing they might do. 06:28 So, if you're if you're buying Amazon 06:30 and you're like, I'm buying Amazon 06:32 because I think they're about to partner 06:33 with Microsoft. And then you find out, 06:35 oh no, they're not going to partner with 06:37 Microsoft. And you're like, oh no, now 06:39 it's time to sell the stock. That is 06:41 stupid investing. You should never 06:43 invest in something based on the pro 06:46 possibility that one thing might happen 06:49 that is controlled by a small number of 06:50 people or one person and that's it. Like 06:53 that's a stupid way of investing. You 06:55 should invest in Amazon because over 06:57 time you think the world will buy more 06:60 stuff online and that you think Amazon 07:02 will do a better job at winning that 07:05 business than other companies. You 07:07 should invest in Microsoft because you 07:08 think software is a big deal and 07:10 Microsoft is good at it and will be good 07:12 at it for a long time. You should invest 07:13 in Tesla because you think electric 07:15 vehicles are amazing, which they are, 07:18 and you think Elon Musk will continue to 07:19 run circles around everyone with 07:21 electric vehicles, robotics, 07:23 self-driving technology for decades to 07:25 come. That's why you invest in Tesla, 07:27 not because they might or might not 07:30 invest your or announce some partnership 07:32 or they might or might not buy Bitcoin 07:35 or they might or might not do any of 07:37 those things. Same with Nvidia, same 07:38 with Facebook, same with any of those. 07:40 So long-term, who cares if the 07:43 government buys Bitcoin and doesn't buy 07:44 Bitcoin? Now, I've done a video before, 07:46 probably from, I don't know, six months 07:47 ago, talking about the fact that on 07:50 balance, between the US government 07:52 buying more Bitcoin and not buying more 07:54 Bitcoin. Well, let me back up. On 07:56 balance, I definitely prefer the US 07:59 government have a strategic Bitcoin 08:00 reserve, I would rather they view 08:02 Bitcoin as a strategic asset like I do 08:05 in add rather than trying to fight it. 08:07 So, I think the fact that there is a 08:09 strategic Bitcoin reserve is a good 08:11 thing because it means they're not going 08:12 to dump the Bitcoin they have and it 08:14 means that they are sort of they got 08:16 some skin in the game. They're on the 08:17 same page. With regard to acquiring more 08:19 Bitcoin, yeah, I guess slightly on 08:22 average, I would prefer they buy more 08:23 Bitcoin because again, it reaffirms that 08:25 it's a strategic asset. It would likely 08:27 set off a race by other countries uh to 08:30 buy more Bitcoin. But you got to realize 08:32 90% of the world owns zero Bitcoin. So 08:35 if the US government starts buying 08:36 Bitcoin right now, then n the price goes 08:40 way up and as soon as the price goes way 08:42 up in Bitcoin right now, that means 90 08:44 more than somewhere between 90% and 95% 08:47 of the world gets left behind because 08:49 somewhere between 90 and 95% of the 08:51 world owns zero Bitcoin. And the vast 08:54 majority of people who own any Bitcoin 08:56 in the world right now own such a small 08:58 percentage of it as a percentage of 09:00 their net worth that it's irrelevant. 09:03 So, even if you answer a survey by 09:05 saying, "Yes, I owe Bitcoin and your 09:07 total net worth is $10 or $20,000, but 09:10 you own $200 of Bitcoin," does it really 09:13 matter if your $200 of Bitcoin goes to 09:15 400, $800, or $1,000 of Bitcoin? It 09:18 doesn't really matter in the grand 09:19 scheme if that's a tiny tiny tiny part 09:22 of your total assets. So, in a lot of 09:25 ways, it's better. the long the longer 09:27 it takes for the US government to buy 09:28 Bitcoin, the more time for the masses to 09:31 adopt Bitcoin and the more of the 09:33 Bitcoin that ends up in the hands of 09:35 average people instead of the people, 09:37 you know, the fat cats in Washington DC 09:39 sitting on their big magic Federal 09:41 Reserve money printer. Uh, so anyway, do 09:43 I care if the US government buys 09:45 Bitcoin? Not really. What I do care 09:47 about is does Bitcoin continue to be the 09:50 best money in the world and is it 09:52 superior to any other money and will it 09:54 continue to be so for hundreds or 09:56 thousands of years into the future? And 09:58 the answer on that is yes. That is what 10:00 Bitcoin is doing. And today, literally 10:02 today, the same time um Scott Bent is, 10:05 you know, on CNBC announcing that 10:07 they're not buying more Bitcoin right 10:09 now. Um, Jack Dorsey's company Block, 10:12 which uh makes the Bit Key hardware 10:14 wallet, which is by far the best uh way 10:16 to secure your Bitcoin in out of the 10:18 hands of hackers and scammers, they are 10:20 announcing a new Bitcoin mining stuff, 10:23 which does not apply to you or me, but 10:24 for people that are in the Bitcoin 10:26 mining industry, which is a very tough 10:27 industry. You should not invest in it. 10:29 You should not get involved in it. It is 10:31 a tough industry to make any money in. 10:34 There's a bunch of people who who do 10:36 that professionally with massive Bitcoin 10:38 mining facilities all over Texas and all 10:40 over the world. They announced brand new 10:42 Bitcoin mining hardware, brand new 10:44 software, brand new everything like 10:46 literally today, like an hour ago. And 10:49 it's amazing. The stuff they're doing is 10:50 incredible and it'll be transformative 10:52 to further decentralized Bitcoin mining. 10:55 So, is the Bitcoin network better today 10:57 than yesterday? Yes. the announcements 10:60 today out of Block um uh the company 11:03 that that makes all this and makes the 11:05 Bitkey device and all of that are 11:07 incredible and will make the Bitcoin you 11:09 know network more secure and more 11:11 decentralized and better for everyone. 11:13 So that's a huge deal and that's 11:14 happening like right now. Um so more 11:19 wonderful amazing things are happening 11:20 in Bitcoin than not and in the grand 11:23 scheme who cares if it takes the 11:24 government longer to buy some. Everybody 11:26 gets Bitcoin at the price they deserve, 11:27 but apparently the US government 11:29 deserves a much higher price than today. 11:31 So anyway, my advice, which is not 11:33 financial or investment advice, but my 11:36 advice as a friend, uh, you know, is the 11:38 same as always, which is buy as much 11:39 Bitcoin as you can, sit on it for as 11:41 long as conceivably possible. And if you 11:43 were worried that Bitcoin was 123,000 a 11:46 coin, and you're like, "Dang it, I 11:47 should have bought it at 118." Guess 11:49 what? You can buy it at 118 right now. 11:51 Right now. 118,000 just for you right 11:54 now. And guess what? That little dip, it 11:57 washed out a bunch of stupid people 11:58 using uh leverage, borrowed money, and a 12:01 bunch of insanity. So great, those 12:03 people got washed out. They got 12:04 liquidated. They lost their investment. 12:06 And now the Bitcoin network uh has a 12:09 greater ability to climb higher without 12:11 a bunch of leverage in it. And the more 12:13 the more the more the price is supported 12:15 by a bunch of leveraged money uh and 12:18 people that could get liquidated, the 12:20 harder the price corrections come when 12:22 they do come, which they always come at 12:23 some point. you you take these little, 12:25 you know, or medium-sized corrections 12:27 along the way. But a lot of those people 12:28 got washed out because they were 12:30 anticipating uh the price would never go 12:32 back down after it hit a new all-time 12:34 high. Who knows? Nobody knows. Which is 12:36 why you don't use borrowed money to buy 12:38 Bitcoin. Certainly not borrowed money 12:39 that is uh leveraged against an asset 12:42 that can get liquidated like borrowing. 12:43 And what these people were doing who all 12:45 got wiped out in the last 24 hours was 12:47 they were borrowing against their 12:48 Bitcoin to buy more Bitcoin and then 12:50 they got wiped out and lost their 12:52 investment. Uh that's why you shouldn't 12:54 do that. Um I've done a whole video 12:56 about uh whether it makes sense to, you 12:58 know, finance a vehicle or a house and 13:01 buy money, you know, buy Bitcoin instead 13:03 and then pay the house or the vehicle 13:05 off slowly. I'm sitting in a 2026 Tesla 13:08 Model Y that I financed at 6% with 13:10 Trustmark Bank. Um because I didn't want 13:13 to sell most of a Bitcoin to buy it with 13:16 cash, uh which is what I otherwise would 13:18 have done. And my my car payments keep 13:20 getting cheaper. I did this when Bitcoin 13:22 was at 85,000 a coin and my last car 13:26 payment last month was 118,000 a coin 13:28 and this, you know, the one coming up in 13:30 about a week or so, you know, will 13:32 probably be higher than 118,000 a coin. 13:34 Um, so that's a steep steep steep 13:36 discount on that car payment of what it 13:38 would have been when if I had locked in 13:40 the Bitcoin price at 85 instead of 118. 13:43 Um, but again, that's not the sort of 13:44 leverage that gets you in trouble the 13:46 same way. it's borrowing against your 13:48 Bitcoin to buy more Bitcoin and then the 13:50 price dips a tiny amount and especially 13:51 if you're using leverage of like uh 40x 13:54 which a lot of people were uh over the 13:56 last few days a lot of people were 13:57 buying Bitcoin with 40x leverage that 13:59 means they're trying to get 40 times the 14:01 return but that also means if the price 14:03 moves against you by 2 and a half% uh 14:06 that you lose all your investment and so 14:08 that's what happened the price was at 14:09 123 they were betting 40 to1 that it 14:12 would keep going up it only had to go 14:14 down 2.5% to get wiped out and they got 14:17 liquidated because they were stupid and 14:19 you shouldn't do that. And thankfully 14:20 it's you kind of can't do that in the 14:22 United States. The people who are doing 14:23 that are almost all on, you know, weird 14:25 offshore exchanges and stuff like that. 14:27 So anyway, everything is amazing in 14:29 Bitcoin land. Who cares if the US 14:31 government uses their magic printer to 14:33 buy Bitcoin today or tomorrow? What 14:35 matters is is Bitcoin scarce? Yes. Is it 14:38 divisible, durable, portable, 14:39 verifiable, authenticable? Is it all of 14:41 the things that make a great money? And 14:43 is adoption marching on? marching on 14:46 worldwide every day and Bitcoin is doing 14:49 that in spades. So, all is good in 14:53 Bitcoin land and now you have an 14:54 opportunity to buy more Bitcoin at 14:56 118,000 if you want to. I think you 14:59 should. Have a great day everyone. 15:00 Thanks.