📉🔮📈 Asymmetric bets

As central bankers root for bitcoin's demise, their fiat currencies force the population into riskier investments just to keep up with inflation. Bitcoin fixes this.

Many bitcoiners claim they don't care about its price. However, this claim is mainly superficial. On closer inspection, bitcoiners are unfazed about today's price because they believe bitcoin will command a significant amount of purchasing power in the future. Why?

One framework for explaining their conviction is viewing bitcoin as an asymmetric bet, where the upside of investment exceeds the downside. Currently, bitcoin's dollar price is $16,899.60.

Given its dollar price, what are the downsides?

  • Since bitcoin's supply is fixed, supply doesn't affect price.

  • Therefore, bitcoin's downside is a decrease in demand that will negatively affect its purchasing power.

What's the upside? The bet is simple.

  • The world is on a broken fiat standard.

  • Bitcoin is the best form of money ever invented, fully capable of replacing fiat.

  • Bitcoin's competition, namely, gold, cbdcs, and "cryptos," will not succeed in a meaningful way.

  • Supply and demand. As the world adopts a bitcoin standard, its fixed supply ensures near-infinite increases in purchasing power. The increasing value of all economic goods and services will be divided by 21 million on a bitcoin standard.

Therein lies the asymmetry. Given the upside, it makes sense for anyone to buy bitcoin since purchasing some today could lead to limitless returns in the future.

Fortunately, many have yet to take notice. The information asymmetry between those who understand bitcoin and those stuck in the fiat world presents a unique opportunity to stack sats today at a tremendous discount.

NEWS

🚨 BIS warns pension funds and others have trillions in hidden debt

The central bank of the central banks, known as the Bank of International Settlements, warned this week of $80 trillion in off-the-books debt held by non-U.S. financial institutions. These large off-balance sheet obligations make combatting future financial crises difficult, as policymakers won't be able to determine where theres a shortage of dollars and how to fill it.

The complexities of fiat and money created without an associated cost bring about levels of financial instability that are difficult to comprehend. Bitcoin's transparent, predictable and limited nature provides a solution to this.

🌍 The first Africa Bitcoin Conference is underway

The Africa Bitcoin Conference kicked off this week, running from December 5-7th. The conference included many different panels and presentations discussing how bitcoin can be the solution to under-banked populations on the continent. Nigerian Bitcoin Core contributor Abubakar Khalil was quoted on stage saying'Working with #bitcoin is the best long-term career path in Africa, because at the end of the day, bitcoin is the tool that will lead us to financial freedom on the continent.'

Popular speakers also included Jack Dorsey, Ray Youssef and Alex Gladstein. Bitcoin is the world's money!

🔌 Block invests in bitcoin mining firm that provides cheap electricity to rural African communities

Gridless, a bitcoin mining company backed by Jack Dorsey,raised a $2 million seed round this week from Block and venture capital firm Stillmark. The company builds bitcoin mining farms in East Africa where excess sources of energy go unused, in turn tapping into new sources of energy for the communities.

Bitcoin mining unlocks otherwise unused energy resources by creating a demand for them, leading to more energy abundant regions. Texas has been a good example of this.

👀 Ledger's new hardware wallet drops, looks sleek

Self custody appears to have just been upgraded. Popular hardware wallet company Ledger introduced their newest product, Ledger Stax, and we must say the touchscreen interface looks like a wallet deserving of your private keys. Which actually makes sense when you find out who designed it - the creator of the iPod, Tony Fadell.

While the reception to the design has been overwhelmingly positive, bitcoiners have also expressed concern regarding its closed source nature and security. We don't make any recommendations for wallets and encourage our users to do their own research (verify don't trust), but it is great to see the self custody arena leveling up.

BITCOIN ADOPTION CONTINUES

Payments giant Stripe launches fiat to bitcoin (and crypto) product for its users.

Brazilian kids were seen buying fruit with bitcoin in school and El Salvadoran kids turning coins into bitcoin.

Popular Fox News host Tucker Carlson pictured holding a Bitcoin "grenade" on his show, saying he's "big into bitcoin." The host interviewed prominent bitcoiner Max Keiser this week.

Strike launched remittances and money transfers to Africa via the Bitcoin Lightning Network.

Samsung Asset Management has applied for a Bitcoin futures ETF in Hong Kong which will allow investors to buy or sell bitcoin through the fund.

Brazil continues record bitcoin adoption, as the tax authority reports 42,000 companies in the country have purchased bitcoin or digital assets during October.

HOW BITCOIN WORKS

Learn one key idea about bitcoin each week. This week: Bitcoin is a safe bet. (in a fiat system based on gambling)

In the midst of football season and the World Cup, many fans are enjoying gambling on the nonstop sports action.

Hopefully those partaking are doing so for fun in a responsible manner, of course.

But gambling in a fiat world unfortunately isn’t limited to sports or roulette.

You see, fiat is backed by nothing but the word of the issuing government. Therefore it is limitless. The dollar was originally backed by gold, but when politicians spent more dollars than the gold they had to back it, they simply abolished the gold standard.

As fiat is unpredictable and essentially infinite, market participants are forced to journey further out on the risk curve, just to attempt to preserve their wealth.

What does this mean?

In long periods of record low interest rates combined with high, underreported inflation, if you’re not achieving a certain percentage on your money, you’re falling behind.

A simple equation would look like this:

If I’m offered a 2% interest rate at my bank, but inflation is 8%, I’m down 6% off the bat. And thats just for the year. In order to just keep up, I require an ROI near 10%. I must make riskier investments to potentially achieve double digit returns.

My wealth is perpetually reduced simply by holding the government's currency of choice.

That also doesn’t include the real inflation number, just the official CPI which is manipulated to the downside. See our team’s detailed twitter thread on this concept here.

Bitcoin on the other hand cannot be debased and is completely predictable.

That’s why rather than getting caught up in the current USD value of bitcoin, we encourage users to focus on their amount of bitcoin. The market over a long enough period of time will figure itself out.

What really matters is that 1 bitcoin equals 1 bitcoin. And always will.

We cannot say the same for the ever depreciating dollar.

Despite what may be reported in the mainstream headlines, bitcoin is a savings technology for preservation and growth. A monetary network where your wealth cannot be diluted. And due to its fixed and transparent nature, bitcoin offers a system that doesn't require assuming extra risk just to keep up or get ahead.

Ready to get started with bitcoin? Coinbits is the best option. It's fast, safe, and free to create your account.

COIN CHECK

What is the current annualized bitcoin inflation rate?

  1. 10%

  2. 1.71%

  3. 2.53%

  4. 6.15%

Check your answer at the end of the page.

FROM THE MEME POOL

BITCOIN ROUNDUP PODCAST

If you love our newsletter, you’ll love our podcast, too.

ANSWER

  1. 1.71%

    As only 19 of the 21 million bitcoin have been mined, new bitcoin are still created daily. In 2024, bitcoin's inflation rate will drop to .85% and continue to gradually decline until it it reaches 0. Its easy to see why bitcoin is the most transparent and predictable monetary network the world has ever known.

That’s all for this week, folks! When you signed up for this newsletter, we promised to act as your personal guide and help you understand what’s happening in the world of bitcoin. What did you think of today’s newsletter? Reply to this email and let us know what you’d like to see more of.

Until next week!

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