Bitcoin is NOT a “tulip bulb”

Bitcoin is not a tulip bulb and it’s not a beanie baby. This is a public service announcement to the morons who keep making that comparison on my Facebook page. Okay, first of all, what are they talking about? First of all, there’s something called speculative manas. A speculative mania is when the uh sort of the animal spirits of crowds take over and they bid the price of an asset up way above its actual, you know, underlying fundamental value. And this did happen in the 1600s with tullet bulbs in the Dutch tulip mania, although primarily that was speculation around futures and futures contracts, options, calls, puts. Anyway, so the the historical uh example is actually misunderstood. Uh but regardless, let’s just let’s take it at face value and assume it’s not historically misunderstood. You know, futures versus, you know, spot price, whatever. Anyway, but Beanie Babies was I mean people were bidding Beanie Babies up and Beanie Babies that should be worth $8 were selling for $800 and all that sort of stuff. So, the reason people bring it up is people who are ignorant and have not done the work to understand what Bitcoin is. They believe that Bitcoin is a speculative mania. And so, every time I post something on Facebook, inevitably somebody’s going to post, “How about some beanie babies? How about some tulip bulbs?” Or, “Would you like a tulip bulb with that?” uh thinking they’re being clever, like thinking they’re making like some smart clever comparison to the Dutch Tulip Mania or the Beanie Baby craze. But here’s the problem. They misunderstand the use case and the underlying values of each of those assets. Bitcoin’s use case is not as a speculative asset like Beanie Babies or Dutch tulip bulbs in the 1600s. Bitcoin’s value is as money. So in order to compare Bitcoin value, you have to compare it to the monetary properties of a good money and in order to understand whether Bitcoin could be comparable to the Dutch tulip mania or to Beanie Babies, you have to compare Beanie Babies and tulip bulbs to those same criteria of what makes a good money. Now before we first do that, it’s important to point out that in Bitcoin’s history, this is Bitcoin’s fifth bare market. The lowest Bitcoin has gotten in this bare market is a uh 53% 53 53% below its all-time high. So, the highest it got last year was 126,000 uh down to 59,000 and change this year. 59,000ish. Okay, so that’s a 53% price correction. Every mania, speculative mania has been one and done. The Dutch tulip mania up, crash. Beanie Babies up, crash. Bitcoin has been through five bare markets. This is the fifth one. In the previous four bare markets, the price went down more than 75% before recovering to new all-time highs. Now, it’s unlikely it would go that low in this case because in this bare market, we have Bitcoin ETFs and a much greater embrace by Wall Street and sovereign nations and all of that. So, every bare market, the draw down has been less than the bare market before. So, the very first bare market, the price went down 94%. The second bare market, it was 93%. Then the third bare market, it was 84% significantly less than 94 down to 84. And the 2022 bare market, the price went down 77.5% from the all-time high. But that was because the all-time high was a huge blowoff top, meaning there was a meteoric rise immediately before the fall, which means the percentage drop is going to be larger. And you know there was a bunch of scams and stupid stuff Sam Bankman freed FTX and all of that that dragged Bitcoin down with it back in 2022 which is not the case today. So for a bunch of reasons including Bitcoin is a much more mature asset now. We don’t have the catalysts like FTX blowing up that would drag it that far down. And uh it’s just you know Bitcoin grows up and every every bare market is lower. But again Beanie Babies did not go through more than one bare market. Beanie Babies, one and done. Dutch tulips, one and done. I mean, there was no like recovering from bare market. So already before we even get to the monetary comparisons, you know, Bitcoin is not just a speculative mania because no speculative mania in history has ever survived four bare markets to set a new all-time high. Now, currently, we’re in the fifth bare market. And guess what’s going to happen after this bare market? It’s going to go set a new all-time high, just like it always does. Speculative mania don’t survive four or five bare markets. Speculative mania don’t even survive one bare market. It’s one and done, which is what Dutch tulip mania and the Beanie Baby craze did. Okay, so let’s move on from that and get to the meat of this, which is the monetary properties. One second. Okay, first of all, there are six properties of a good money. Hey, good money is divisible, portable, durable, authenticatable, fungeible, uh, uh, and one other one I’m missing in there. Divisible, portable, durable, fungeible, authenticatable, and scarce. That’s the six. Okay, we’re going to compare one by one. So, people who compare Bitcoin to a tulip bulb or a Beanie Baby completely miss that Bitcoin’s underlying value is based on its monetary properties. So, let’s compare that. Okay, divisible. Yes, bitcoins are effectively infinitely divisible down to eight decimal points. A tulip bulb is not divisible. If you cut it in half, it doesn’t grow. If you cut a bean beanie baby in half, it doesn’t it it’s not you can’t use like nobody wants to buy half a beanie baby. So beanie babies and tulip bulbs are not divisible. Bitcoin is perfectly divisible down to eight decimal points. Perfect money. Horrible money. Okay, divisible. Portable. If you wanted to carry enough tulip bulbs or enough Beanie Babies to make a multi-million dollar transaction, you’d literally have to fill a plane full of these things. I mean, how many Beanie Babies? So, you’re going to go buy a house with Beanie Babies. No, you’re not. You’d have to buy a U-Haul truck to haul enough Beanie Babies to get a $400,000 house or a $150,000 house or whatever it is. Okay, so they’re not portable. Bitcoin is portable. It can be transmitted anywhere in the world in seconds over the internet with ultimate finality. I mean, Bitcoin is the ultimate portable money. You can cross borders with it, you know. It’s amazing. It’s amazing. You It’s It’s the only way to transfer large amounts of value anywhere in the world in seconds with ultimate uh ultimate finality where nobody can like censor it and stop it and take it away and all that. Okay. Divisible, portable, durable. Uh tulip bulbs rot if you leave them alone and they’re not like preserved in like an airond conditioned humidity controlled things. Beanie babies over time they lose their color. they start to yellow, they start to, you know, a Beanie Baby’s just not going to look brand new 10, 12 years, you know, 20 years from now as compared to today. So, they’re not durable. You can’t use Beanie Babies and tulips as money because not only are they not divisible, they’re not portable and they’re also not durable. Bitcoin is absolutely durable. That’s like, you can’t destroy a Bitcoin. every bitcoin that will ever exist will always always exist and be in the possession of something or at least in the possession of a public address on the Bitcoin blockchain. So divisible, portable, durable. The first three, Bitcoin is perfect money on all three. Tulip bulbs, Beanie Babies, and every other speculative mania fail all three. All right, the fourth, fungeible. Fungeible means all the units are the same. You can’t show up and use a money where like the units are different. That’s why you can’t use diamonds, right? Because you can’t list a price as like one diamond. It’s like, well, all the diamonds are different. Like, what do you mean? Or the price of a, you know, a meal at a restaurant is one Beanie Baby. It’s like, well, which Beanie Baby? There’s a bunch of different ones. So, all Bitcoin is the same. The a unit of Bitcoin is a unit of Bitcoin. It is perfectly fungeible as compared to every tulip bulb is different. Every Beanie Baby is different. So, fungeible, they’re not interchangeable. You can’t use any tulip bulb is equally good as any other tulip bulb. Uh, and same with uh with uh with uh with Beanie Babies. So again, Beanie Babies and uh tulip bulbs fail divisible, portable, durable, funible, they fail all four. Bitcoin is perfect money on all four. Um authenticatable. Number five, authenticatable means can an average person at a quick glance tell if it’s the real thing, you know, and the answer is no. It’s super easy to fake Beanie Babies and put the little TY tag on the ear. Like you could manufacture fake Beanie Babies all day long in China. Not a soul could tell the difference between the real thing unless you have like really advanced equipment and you’re like a Beanie Baby authentication expert and all this sort of stuff. Same with tulip bulbs. How do you know whether this is a super rare, you know, ultra whatever special tulip bulb or is this just a plain Jane tulip bulb like every other tullet bulb? And the answer is the average person can’t tell a tulip bulb from another bulb or they can’t tell tullet bulbs apart. So again on the fifth element fungeability or sorry authenticatability everybody can look at a Bitcoin wallet on River or Coinbase or Bitkey the best one is Bitkey because it’s completely self-custody. You don’t actually have to even trust Coinbase or River or anybody else. If your Bitkey said you receive Bitcoin, you receive Bitcoin. There’s no way for somebody to fake that. There’s no way for them to like head fake you out. Like there’s no way to get fake Bitcoin or fool’s Bitcoin. Like Bitcoin is Bitcoin. You either got it or you don’t. And if you got it, you got it. And it’s that simple. So on the the fifth element, which is authenticability. Bitcoin is perfectly authenticable. Again, tulip bulbs and Beanie Babies are very hard to authenticate. Are they the real thing? Which one is it? Is it a rare tulip bulb? Is it an everyday, you know, Lowe’s or Home Depot tulip bulb? Very hard to do. And the last one is scarcity. The most important monetary characteristic of all the other six, regardless of how you stack rank the value of the other six monetary properties. One second. Regardless of how you stack rank the monetary properties of the other five elements, absolutely positively anyone will tell you that the most important element of a good money is scarcity. Now, tulip bulbs are not scarce. You can literally grow more of them. So, anybody knows that a tulip bulb is not going to retain its value because you can literally plant more. Give it a little time, divide it in two, plant it, you know, you’re going to get more tulip bulbs. Uh same with Beanie Babies. The TY companies behind Beanie Babies can literally make an unlimited supply of them. They have the right to make an unlimited supply of even the ones that are the most rare Beanie Babies. They can crank up the factory and print, you know, make a gazillion more of them. Like all they need is a little bit of raw material. So again, they’re they are not scarce. Bitcoin is scarce. There are only 21 million Bitcoin that will ever exist. They’re divisible up to eight decimal points. If you buy, if you get half a Bitcoin, you have half a Bitcoin. You have half of the 21 million total supply that will ever exist anywhere on planet Earth. Nobody can make more Bitcoin. The US government can’t make Bitcoin. The CIA, the NSA, nobody, you know, there’s no government agency, there’s no company, you know, SpaceX can issue more stock of SpaceX. You know, the US government can issue an unlimited amount of US dollars. everything else in the entire universe. We can either make more of it, we can dig up more of it on the ground, we can plant more of it and harvest more of it, a company can make more of it, somebody can make more of it, or you can find more of it. Bitcoin is the only exception where the absolute scarcity is built in. There will only ever be 21 million. And it’s and that divisibility, as I’ve covered with uh in other videos, because it’s divisible down to eight eight decimal places, it perfectly fits the monetary system required for the world. Satoshi Nakamoto, the inventor of Bitcoin, a pseudonym. We don’t know who, what group or individuals behind the name Satoshi Nakamoto. But whoever they are, they added up all of the currencies of all of the world and determined that if there were 21 Bitcoin and that they were divisible to eight decimal places, that if the then if Bitcoin became the absolute universal money of the world, then the smallest unit of it, which is called the Satoshi, which is 1 100 millionth of a Bitcoin, which is eight decimal places, the smallest unit of it would be equivalent to a US dollar penny. So they they actually ran all of the math and set the limit of the supply with the assumption that Bitcoin would be the monetary system of the world. Now right now the smallest unit of a Bitcoin is significantly less than one penny because Bitcoin is not fully monetized. So the price of Bitcoin needs to go up radically by something like 20x two something like 20x before the price of an individual Satoshi equals the price of a US dollar penny. Again, you can run the math. Basically, they reach parody when Bitcoin is a million dollars per coin. And if Bitcoin is $64,000 per coin, divide a million by 64,000, however many multiples that is, whatever 15, 16, 14, 17, whatever that is, that is the number of multiples Bitcoin needs to come up to reach par. And because the monetary supply of the world has radically increased over the last 17 years, actually it needs to go up significantly more than a billion to reach par. uh that that million-dollar bitcoin US dollar penny parody was back from 2009. So because governments have radically increased the supply of money since then bitcoin needs to be significantly higher than a million dollars per coin before it reaches parody with the penny and it becomes the you know the universal money of the world. I should say at the as bitcoin becomes the universal money of the world each unit even the smallest unit will be worth even more than a penny uh because again the governments of the world have printed a lot more money. So the price of Bitcoin has to be even higher to get that parody. Okay. So when you add up all of that divisible, portable, durable, fungeible, authenticatable, and most importantly, scarce, you compare that to Beanie Babies to tulip bulbs and Bitcoin, you end up with Bitcoin having radically having perfect monetary properties as compared to tulip bulbs and Beanie Babies having horrible monetary properties. So, when you add all of that up, it’s clear why Bitcoin is not a speculative mania because its fundamental underlying value is based on monetary properties that tulip bulbs and Beanie Babies never had and never could have. And it’s based on fundamental underlying properties that no speculative mania in human history has ever had. So add all of that together and what you end up with is perfect money and people on my Facebook page bringing up baby beanie babies or bringing up tulip bulbs totally radically misunderstanding how the whole system works and what gives it value. Okay. So now there are things in the world that have better monetary properties. For example, gold. Gold is much inferior to Bitcoin, but it’s superior to tulip bulbs and to uh and to Beanie Babies. Obviously, Beanie Babies didn’t exist in the 1600, but the reason gold won out as money over tulip bulbs, which did exist in the 1600s, was because gold was more divisible. It’s hard to divide gold, but it’s but it’s possible. It’s durable. Gold is durable. You can’t really destroy gold. Uh it’s not very portable because it’s very heavy in large quantities, but certainly more portable than a than a tulip bulb. Um it’s relatively funible. Every unit of gold, as long as it’s purified, melted down, recoined, all of that, you know, is relatively fungeible. Uh it’s it does have authenticatable problems. The average person cannot tell the difference between gold and fool’s gold. They can’t tell the difference between a 100% pure gold coin and a 91% pure gold coin. It’s easy to mess with gold and for example a gold bar. It’s very hard to figure out if there’s tungsten inside a gold bar because tungsten and gold. The weight per unit of volume of tungsten and gold is very similar. So a lot of people uh get a gold bar, they drill out the middle of it, they they fill the middle of it with tungsten, and then they reseal it with gold. And unless you melt down that gold bar or unless you have a $50,000 spectrometer that can actually pound the bar with wavelengths to determine what’s inside and and what the metallic properties are like inside. Um it’s just very hard to authenticate gold. And then gold is is more scarce certainly than Beanie Babies or tulip bulbs. But it the human, you know, humans have figured out how to dig about 2% more gold out of the earth every uh every year. So, uh, anytime you dig 2% more of something out of the earth every year, you’re going to double the total supply about every 36 years. So, the total amount of gold in circulation that could be used as money in the world. That amount doubles every 36 years. So, it doubles in 36 years and then it doubles again in 36 years and then it doubles again in 36 years and then it doubles again in 36 years. That means there is radically more gold floating around to be used as money than there would have been back in the 1600s or 17 or 18 or even back in 1971 when the US dollar went off the gold standard or the US government went off the gold standard. Um so again with with with gold you’re always losing 2% per year based on the fact that there’s 2% more gold got dug out of the ground. And if the price of gold is high, they can potentially dig out even more gold than that. Or if Elon Musk lands a rocket on a satellite and mines gold on a satellite, then uh you know, it’s going to be, you know, sort of game over for gold. Uh now, silver silver has pretty has pretty bad monetary properties, honestly. Uh gold is radically superior. So on the food chain, the of everything we talked about, the worst monetary properties are probably tullet bulbs. You know, I don’t know, tulip bulbs and beating babies. You could argue which one is worse, but abs they’re absolutely worse. Silver is better than either one of them, but quite bad. Gold is better than silver and tulip bulbs and beanie babies, but again, uh you know, gold is better than silver, but gold is vastly inferior to Bitcoin on monetary properties. And in the end, in the long term, the better money always eventually wins. Again, it takes time, there’s adoption, people have to understand new technologies, all that sort of stuff, but eventually the better money wins. So, every time I do a Facebook post and some hops on there and says, “How about a beanie baby?” Uh, just another tulip bulb mania blah blah blah. It’s these ignorant moronic people that what they should do is they should open Grock or Claude or Chad GPT and say, “I’m about to compare Bitcoin to a tulip, a Dutch tulip mania or a Beanie Baby or whatever. Am I going to look like an idiot?” and chat GPT and Grock and Google and Claude are all going to say, “Don’t do that. You’ll look stupid. You’re going to look like a if you make that comparison because none of those things have monetary properties. Bitcoin has perfect monetary properties.” It is based on that. And as someone just posted, there is no second best. Yes, exactly. There is no second best. Bitcoin is perfect money. And it is slowly with lots of ups and downs on the way because it’s hard for people to understand. Lots of people don’t get Bitcoin. It’s an entirely complete paradigm shift in your human mind. And that makes it hard for people to understand and makes it hard for them to adopt. But as Bitcoin is adopting uh being adopted, the lowest price Bitcoin ever goes keeps rising. Uh in the first bare market, the lowest price that Bitcoin ever got was $2 in 2012. The second bare market in 2014, the lowest price was $92. The third bare market in 2018, the lowest price get bit Bitcoin got was $3,200. The fourth bare market in 2022, the lowest price was $15,500. What do you notice? 2 92 3,200 15,500. Right now in this bare market, the lowest Bitcoin’s ever gotten was 59,000. That doesn’t mean it can’t go somewhat lower than that. It probably won’t. Doesn’t mean it can’t. But regardless, you’ve got this trend. $2, $92, $3,200, $15,500, $59,000. Which way is that going? It’s being monetized, marching, marching, marching ever forward. No money that is a completely new paradigm shifting, blow your mind thing is going to monetize in a smooth line. It’s going to monetize in waves of adoption. And if you want to understand why that is, read VJ Boyaty’s book, The Bullish Case for Bitcoin. Again, VJ Vi J A Y. VJ Boyapati, the bullish case for Bitcoin. Those five words. Go read that book. It’s on audible.com. It’s on Amazon. You will understand why new technologies are adopted in waves and they’re not adopted in a just standard stairstep stairstep linear path up. So read that book and you’ll understand why Bitcoin goes through bare markets. Why why that is inevitable, why there is no way around that and why it just is what it is. And over time, Bitcoin will become fully monetized. It’ll smooth out. It won’t go through, you know, bare and bull markets. It’ll just be the money of the world and it’ll be super boring. And the question is, how much Bitcoin are you going to own before everybody’s using it and it’s super boring? Because right now, Bitcoin is really exciting because it’s brand new technology. But if you showed up and you started a business today and you said somebody said, “What was your secret weapon?” You’re like, “We’re going to embrace the internet.” They’d be like, “What are you even talking about?” Everybody has embraced the internet. Well, the same will be true in the in the future, you know, 20, 30, 40 years from now. If somebody said, “What are you investing in?” And you said, “There’s this amazing new technology called Bitcoin,” they’re going to say, “Of course there is. Everybody uses that as money.” Like, what are you even talking about? So you have the the opportunity now to adopt Bitcoin before the vast majority of the world. You know, more than 90% of the world owns zero Bitcoin. You can be ahead of somewhere between 90 and 95% of everyone in the world buying Bitcoin right now. And if you have a substantial amount of your net worth in Bitcoin, you are ahead of 99% of the world right now. And it is only a matter of time until the monetary properties of Bitcoin out compete everything else. They out compete the US dollar. They out compete the euro, the one, the yen, the the the pound, the whatever Venezuelan boulevard got out competed a long time ago. But Beanie Babies, tulip bulbs, that stuff got out competed hundreds of years ago or, you know, the day Beanie Babies crashed, which was very predictable. Uh, but anyway, Bitcoin, perfect monetary properties. It’s inevitable. It will eventually be the monetary system of the world that will happen in fits and starts. Two steps backward forward, one step back. Two steps forward, one step back. Going to happen. The question is, how much Bitcoin will you own when it does happen? And can you ride the volatility to ultimate worldwide adoption, which is exactly what we’re in right now? Bitcoin is on sale. We’re at or near the very bottom of a Bitcoin bare market. The cheapest you can get it every four years. Fantastic time to buy Bitcoin. The monetary properties haven’t changed. It will out compete everything. And my advice is the same as always. Buy as much Bitcoin as you can. Hold on to it for as long as conceivably possible. That advice has never been wrong since January 3rd of 2009 when Bitcoin was launched, which is now 17.5 years ago. More than 17 years ago, that advice has never been wrong through four bare markets. It’ll be the same with this fifth bare market. And all that matters is were you buying when everyone else was scared? That’s what matters. Were you buying when everyone else was scared? So, same advice as always. Buy as much Bitcoin as you can. Hold on to it for as long as conceivably possible. And every time somebody posts about Bitcoin being a speculative mania or tulip mania or uh Beanie Babies, they’re just too ignorant to Google that or plug it in their favorite AI engine. It would tell them, “Don’t post that because you’re going to look like a