The Great Reset and the Rise of Bitcoin
Just all of these ads that were promoting bitcoinhave been straight off banned by the government. They have put pressure on commercial banks as wellto block transfers from UK citizens, UK bank accounts to crypto exchangesso that they cannot basically leave the British pounds and buy bitcoin instead. So not only are they scared, but they’re actually taking actionto later implement their own central bank digital currencies. If you don’t have bitcoin, they give you this alternative. Well, you go for this alternative.
You have no choice. The reason they want to ban bitcoin is because they know the power that it has, and they know that it would take this power away from governments. As long as governments control the money, they can make decisionsthat citizens don’t agree with or don’t realizewill have an impact on them, whether direct or indirect. As long as governments control the money, they can continue their monopoly on violence. Bitcoin was created twelve years ago after the global financial crisisas a solution to the financial problemsthat exist in our economy and to eliminate entirelythe abuse people can have on our monetary system.
Saifedean Ammous says it -It’s important to understand that the fiat system was not a carefully, consciouslyor deliberately designed financial operating system like bitcoin. Rather, it evolved through a complex process of compromisebetween political constraints and expedience. Bitcoin is a real asset, and it is here to stay. And its maximum cap of 21 million makes it the scarcestasset on Earth and ultimately the most attractive asset. Listen to all the money managers that praise it.
If we’re right and companies continue to diversify their cashinto something like bitcoin and institutions,institutional investors start allocating 5% of their funds. We believe that the price will be ten fold of where it is today. So instead of 45,000, over 500,000. I think it’s an asset that should be in every investor’s portfolioThe number one thing that I would recommend to people ishave some defensive things in there. I personally think bitcoin is a long term hold.
I have a certain amount of money in bitcoin. It’s a small percentage of that which I have it in gold,which is a relatively small percentage of what I have in my other asset classes and so on. And I think that that has the merit. I like bitcoin as a portfolio diversifier. Everyone always asked me – What should I do with my portfolio?My employees say, I say, OK, listen, the only thing that I know for certainis I want to have 5% in gold, 5% in bitcoin,5% in cash, 5% in commodities at this point in time.
I don’t know what I want to do with the other 80%. I do own some of it, it’s gone up a lot since I bought it. Obviously, the tone of this asset class is changing. Well, I think it’s worth considering all the alternativesto cash and all the alternatives to some of the financial assets . And so bitcoin has, is a possibility.
We had 26% more dollars in circulation than over the past 244 years. If you put the whole stimulus in, which it will happen,that’s another 16% more dollar formation. So you’ve got a 40% increase in dollar volumethat’s going to show up in asset prices. I started my professional career in 1981The peso was at 20:1, today we are at 20,000:1Don’t tell me about itAnd this is here in Mexico but if we do it in Venezuelaor in Argentina or Zimbabwe, numbers loose all proportionsSo, the fraud of fiat is an inherent thing to the systemAnd we are seeing it happen right now in the USA. The monetary emission is gone to the moon, you understand?The US dollar as hard money is a jokeWhen facts change, I change.
I mean, you know, I’m an investor. The environment is changing. And what really turned me was moves made by regulators in Switzerland,where I’m an investor. France, Germany, England and then Canada opened up. They now have seven different financial instrumentstrading on their exchanges that holds cryptoas the underlying, which is a complete reversal of what’s occurred.
If you really understand bitcoin, you’ll recognizewhy places like Morgan Stanley are coming into the space. It’s a scarce asset, and as we were talking about last time, I was on the showthat supply demand imbalance, plus the impregnability of the blockchain is going to make that asset very attractive in a worldprinting money like this. It’s an amazing accomplishment to have brought it from where that programing occurredto where it is and take the test of time. They’ve done this unbelievable marketing job, it’s been around 13 yearsand particularly younger millennials, look at it the way I’ve always looked at gold. I like bitcoin, right?Bitcon is math and math has been around for thousands of years, and two plus two is going to equal four and it will for the next 2000 years.
So I like the idea of investing in something that’s reliable,consistent, honest and 100% certain. For me, the finite of Bitcoin, the 21 millionIs the key to the whole topic. That’s why I was saying this about Ethereumbecause as long as they don’t have a finite amount of emission,I don’t trust them. They can emit more and your asset depreciates. So bitcoin has appealed to me because it’s a way for me to invest in certainty.
There’s countries that use Bitcoin. There’s regions in Switzerland where you can pay for your taxes in bitcoin. There’s just this, all of this adoption and acceptancethat is happening around the world now, even by governments,which just changes the rules and makes it more and more robust,the community makes it aliveregardless of political, geopolitical and so on situations. The fact that governments are themselvesallowing the use of this in whatever form or wayconfirms it. My name is Nayib Bukele and I’m the President of El Salvador.
Great ideas are beautiful and have great power. But like most beautiful things, they can also be more fragile than we think. When I was a kid, we thought about the futureand we were delighted by it’s possibilities. We couldn’t wait for it to happen and be part of its creation. But now ask almost anyone what they think about the future,and they will say something along the lines of nuclear war,climate catastrophe, hunger, pestilence, the death of life.
We didn’t took care of the beautiful idea that we create our own future,that we, as humanity can do almost anything that we imagine. Our ingenuity. What separates us from other species. In El Salvador, we are trying to rescue this idea and have started the design of a countryfor the future using the best ingredients that makes us who we are. While using sensibility to find the best examples of ideas from history and around the world.
I believe bitcoin could be one of these ideas. That is why next week I will send to Congress a billthat will make bitcoin a legal tender in El Salvador. In the short term, this will generate jobs and help provide financial inclusion to thousands outside the formal economy. Lawmakers in El Salvador broke into applauseafter voting to approve bitcoin as legal tender on Wednesday,making the Central American country the first in the world to fully adopt the cryptocurrency. Bitcoiners around the world,the time has come.
We are ready. This is an important step for our country,a step for technology, a step into the futureto bring us financial inclusion, investment, tourism, innovationand economic development to our country. Buchele has even more ambitious plans for bitcoin,saying later on Wednesday that he wanted to use renewable energyfrom the country’s volcanoes to offer bitcoin mining facilities,which generate new units of the cryptocurrency and instructedstate owned geothermal energy firm LaGeo to come up with a planto make it happen. The objective seems to be making using bitcoin as a actual mediumof payment, medium of exchange, much more frictionless in the country,eliminating all capital gains taxes, which is, you know, of course,a big impediment to actually using this thing as a currency,you know, potentially in service of making, you know,bitcoin based remittances cheaper and less frictional, for instance. So that seems to be sort of the main thrust of the law.
What can we extrapolate then, as far as what the future holds beyond El Salvador here?Do you think we’ll see other, I guess, legitimate countrieslike El Salvador embrace this and other larger countries?We know that bitcoin cryptocurrency stablecoinshave very high penetration in places like Colombia and Argentina. You know, Latin America is certainly no stranger to sovereign defaultsor, you know, periods of high inflation or monetary repression. So we see high penetration there. There’s certainly a class of policymakersthat see an opportunity to gain favor by signaling their affinity. And, you know, we’ll see what happens.
But this is the first. El Salvador is the first non pariah state to really legitimizeand legalize bitcoin usage in sort of its intended way. So, you know, it seems like a big sea change, frankly. Banks as opposed to governments, banks are businesses,they sure have their own personal interest at hand,but they will adapt to what their customers need. They’re adapting now, actually.
They realize that they need to be able to offer some new financial servicesthat will be around crypto because they’re going to be left behind completelybecause a guy like me, a person like you, just won’t need their services anymore,because all of this already existsin a completely decentralized and uncontrolled way. According to crypto firm NYDIG, hundreds of U.S. banks are asking for bitcoin planning to allow customers to buy, hold and sell the digital currencythrough their existing accounts as soon as this year. For more details, let’s bring in CNBC.com banking reporter Hugh Son. Hugh, what had to happen behind the scenes in orderfor people to be able to access bitcoin in their banks?Hey Kelly, nice to be with you.
So there’s a company called FIS,and so FIS is one of these back end providers to banksthey actually have about 300 millionchecking accounts through their thousands of bank clients. And so they’re a tech vendor that serves a bunch of banks. And then there’s also a crypto, a bitcoin custody company called NYDIG. And they’re one of companies like sort of a Galaxy, so, NYDIG has a dealwith Morgan Stanley, for instance, to offer institutional fundsto their wealthy clients, so you have some nascent playersjoining some established tech vendors, you know,FIS is a $95 billion company, market cap. And they basically said, you know, we’re going to make it easy for people to actually own bitcoin.
It is, after all, a financial asset and they want,they’ve done studies that said, basically, if people have the ability to own bitcoin through their existingfinancial relationships, through the portal that they dealwith their other money, you know, their fiat money,if they’re able to do that, you’re going to have greater adoption. So basically, what they’re going to have isas they turn this on, you’re going to have access tothe clients, the customers of these community and regional banks that sign on for this;They’re going to be able to go there via their bank app and actually look inside their bank app and see cryptoright next to their other deposits and their savings. Well, we want to be in the middle of any movement of funds,and we don’t try to decide what’s going to take off or not take offand we don’t pick winners and losers. We just get ready to enable whatever could possibly happen. And I think crypto is an exciting trend.
There’s crypto currencies, which are kind of the digital gold. Think of bitcoin and there what we’re trying to do is create utility, which first of all, making sure that ourvisa cards are used to be able to purchase bitcoin. And then when somebody wants to convert their bitcoin into a fiat currency,to use a visa credential, to go shop at our 70 million merchants around the world,so we’re trying to create that utility. So we’re working with 35 of the biggest crypto walletsaround the world, making sure that these various digital currencies can be convertedinto a fiat currency, and that money can then be spentfrom a visa card in a wallet,again at any one of our 70 million merchants around around the world. We’re at a point where markets are at all time highs.
Any kind of ratio is screaming that we’re at the top of our cycle. We have companies that are failing even now starting in China. And what happens is that all of this money will have to exitthe financial market, where there’s huge amounts of money now, way more moneydigitally in these assets than existsin the pockets of every single person in the world, right. So this money, what tends to happen when there is a, you know,top in the market and the market is going to drop,of course, there is loss of value. So all of these investors, they need to get their money out, right?They always do that because they don’t want to lose money.
Their job and their mandate towards their clients is to bring profits, not losses. So they’re going to get their money out of the financial markets. This, of course, will lead to an even sharper drop but this is standard, it happens at every cycle. Now what tends to happen, though, is that most investorsat that point will get into bonds, which are government obligations,and these have interest rates that are paid by the governments. But these interest rates follow the interest rates that are set by the central bank, right?So nowadays, a lot of these bonds are negative yielding,which means that if me as an investor, I want to have a certain returnper year, even call it 1%, today if I buy a bond, a European bond,I will not have that because it’s had a negative interest rate.
So in fact, it costs me to buy this bond, which until now was a secureposition for my money, but would at least bring me some returns. Now, even this fact isn’t there, right? So in a scenario where the money is pulled out,it cannot go to bonds because it is notlogical for it to be there because there’s just this trustthat is gone from this value that governments used to be ableto hold in the long term. With this being gone, this money, where is it going to go?Right? It can go into gold, but gold we’ve just seen,can be controlled by government, has been controlled by governmentand in the past ten years hasn’t increased in price, it’s at the same price as ten years ago. So, sure some money will go into gold because it’s atypical kind of protection asset and money will transfer into gold. But there is this entire new financial marketthat is being built at the same time that is led by bitcoin.
But all of these other cryptocurrencies as well. Bitcoin is the first time ever in history of finance,That an asset reaches this level of valuation so quickly. On top of that, it is the technologythat is the most quickly adopted in the world. So before that, it was the internet that was adopted. Just, I mean, we’ve never seen anything adopted so fastin terms of adoption of technological progress.
Right now, the world of bitcoin and cryptocurrencies is acceleratingat a faster rate than the internet, which I think makes sensebecause it speaks to so many people, particularly younger generationsand rather than the people that are in power that are of older generations. And so this market of bitcoin and cryptocurrenciesand I want to really emphasize bitcoin here because bitcoin isthe safe one that has all of these applicationsthat are being built by other cryptocurrenciesnow also built on the bitcoin network, meaning that for all of these fundsthat have serious money and long term objectives,buying bitcoin is one of the best trades that they can have. And given the volatility that it has and the hedging options thatthey can have represents a lower risk for them than the traditional assets that they’re used to. So this is why I think and I’m not the only one in thinking so,bitcoin will be the black hole that will swallow a big partof all of this money that will be escaping the traditional marketsbecause there will just be no more value there. No other assets like this one has ever existed before,that marries our technological progress with our financial systems.
It is time for people to have a currencythat is as open and anonymous as the internet. With bitcoin, the control of money is taken awayfrom governments and given back to the people. This removes huge power from governments and their leadersthat have had countless issues with corruption, abuse of poweror limiting our freedom. We’ve seen that our financial system needs a reset. And the only solution governments have is to print trillions more.
Devaluating our currencies in the process. Along the way, they will continue to make peoplemore dependent on governments because welfare spending hasto increase to cover their irresponsible money management. This provides governments with a snowball effect loop of inflation,leading to a poorer population, leading to more welfare spending,leading to increased government control. Bitcoin is the way out of their controlled systemthat favors only the wealthy and the elite. It is also the first time due to incentivesthese people have for bitcoin to never succeed as a currency,that average people can front run them and growtheir personal wealth first before these peoplethat consider themselves the elite have a chance to do so.
Bitcoin is slowly taking over the world and will absorba large amount of the money currently stuck in our legacy financial system. Do you really want to be left behind with them?