Oh, What we could buy with all that Bitcoin money!

See the list!

Note: since I started editing this article, Bitcoin has fallen from high in early March of $73,083.50 on March 13th, to about $65,000 when I started writing, to $57,693.65 as of 3:46 Mountain time on May 1.

Bitcoin- total “value” of $130,000,000,000,000- 1.3 trillion – As of April 20, 2024.

Your bitcoin is made up of lines of code. There is no actual coin (no collector value.)  This $1.3 trillion is the value placed on those lines of code. You own all or part of a string of code on a computer. This code is assigned a value based on the demand for that line of code. Currently about $65,000.

The only potential value Bitcoin has is the hope that people will continue to buy it for higher and higher prices.

What value does Bitcoin bring to the world? The 1.3 trillion produces no income or profits. It employs no one. You will never know a “fair value” for Bitcoin.

Easy Money. Put the $1.3 trillion in 13 wk treasuries. At 5% that is $65 billion/year in interest. They could be paid out in cash to each bitcoin. Not knowing who owns it and how much they own kills it. It would be about $3,500 a year in cash in your pocket for one Bitcoin.

If "they"had accurate figures it could work. The problem? There is no "they" in bitcoin. 

I propose that at some point people will stop buying “a thing” that does little, and creates no profit or income. So, I ask this question: What else could you buy with those 1.3 trillion dollars? Billion=1,000 x a million. Trillion=1,000 x a billion!  The cost of all the Bitcoin is 1.3 trillion or 1,300 billion. If you had $1.3 billion just 1/1300 of all bitcoin the 3 month treasury bill at 5.25% you would make over $80 million a year in interest. That is $178,000 per day in income per day.

Let’s see what we could buy instead:

Annual dividends from these assets: You will have about $20 billion in extra cash

Employees-

Your new purchases employs 2,204,000 people who in turn use that money for living, pumping it back in the economy. And best of all, they pay taxes.

MGM    83,000

Bellagio  3,000

Starbucks 136,000

Costco 220,000

McDonald’s 1.7 million

Pebble Beach   1,600

Netflix 11,000

Intel 27,000

Apartments 20,000

---

There is little downstream benefit from BTC. This being other industries that are derivative of BTC. Like Coinbase. Or miners, who, btw, take $20 billion of BTC off the market for fees each year. Bitcoin stores. Bitcoin casinos.

If only there was a way to make Bitcoin less volatile!  Let’s say that happened. Where the upside and downside was limited to 15% a year. You could make up to 15% or lose up to 15%. Sound good? No, we were told it would be a million dollars within 5 years! That is the only way we can retire! We can’t make it on 15% returns assuming all good years. No one would buy it. The story is gone. So, it will always be a volatile “thing” (I can’t bear to call it an “investment” or “asset,” because it is not. So, that is a huge problem.

Next time: The mysterious founder and the story behind him, or them. (No, that is not me being sensitive and using preferred pronouns.) Many think this was an invention of a group. The narrative that was built in advance to start the sales process. Why it will never be a world or US currency.

See you soon,

Craig