Bitcoin objection: “Price is volatile”

The second most cited reason people have an objection to Bitcoin is the price volatility. Is Bitcoin volatile? Yes, the price is volatile. The underlying technology is not volatile, but the price is volatile. And the price is only volatile because we’re early. Every new invention, every new technology is volatile. There is no such thing as a high upside asset that is not volatile in the early adoption stages. That is the case for every you know, ultra-high-performing internet stock. That’s the case for literally anything. And that volatility is there because in the early days, not that many people are using it. People are figuring out what it is. People are figuring out if they can trust it. Figuring People are figuring out how it works. People are speculating. Even if I told you if I showed up and said, “I have a new asset class, and the only thing I can tell you is that it’s going to be worth 100 times what it is today in the future.” Immediately, the price of that asset would be volatile because people would not know the certainty that that would happen. Is there a 100% certainty? 50%? 1%? 0%? The certainty that it’s going to become 100x and the time frame that it’s going to become 100x. So, immediately, the price is going to spike when everybody thinks it’s going to be worth 100x tomorrow, then it’s going to crash when people lose trust that it’s going to be worth anything at all, then the price is going to spike when people are going to say, “Well, it won’t be 100x tomorrow, but maybe next week.” The price is going to be all over the place until it becomes clear over the long term how long it’s going to take to be worth 100x its current value. Bitcoin is on track to be worth more than 10 times its current value, more than a million dollars per coin in the next 5 or 10 years. But, nobody knows if that’s 5 years, nobody knows if that’s 10 years, nobody knows the certainty with which that will happen in any given time frame, and therefore everybody is speculating on when it might happen. Is it right around the corner? Is it going to take a really long time? All of those things make every asset that it’s in its early days stages of adoption volatile. If you want a high upside asset, you have to stomach the volatility. There’s no There’s no way to get high upside without volatility. That asset does not exist in the world. Bitcoin has the best ratio of upside to volatility that exists in the world. Meaning, when you’re balancing between how much volatility do I have to stomach in order to get this huge upside, Bitcoin has a better ratio than any other asset in the world because it has a huge upside combined with, you know, medium to high volatility. It’s It’s actually less volatile than a lot of other assets, but people don’t know that. But, it’s less volatile than some of the highest, you know, performing stocks and things like that. So, it has upside that exceeds the highest performing stocks, and the volatility is slightly less than some of the highest performing stocks. So, but the the volatility back then. And if you don’t want the volatility, you have to give away some of the upside. So, for example, the company MicroStrategy, which is now called Strategy, MSTR, they still trade on the ticker symbol MSTR, which stood for MicroStrategy, MSTR, before they rebranded to just Strategy, but the ticker symbol is still MSTR. They will take away the volatility of Bitcoin for you, but in doing so, they also take away the upside. So, they have an a security. It’s like a stock that trades on the stock market under STRC. It’s four of the letters of the word stretch, STRC. Stretch will pay you an 11.5% dividend in perpetuity in exchange for taking away the upside of the up the remaining upside of Bitcoin. Effectively, what they do is when you buy stretch, they convert it to Bitcoin. They absorb all of the volatility for you, and give you 11% 11.5% upside in exchange for them taking all the downside and all the volatility, they give you 11.5% upside. But, that also means you don’t get any upside above 11.5%. You have to give up the upside above 11.5% in order to not have the downside and the volatility. Now, there’s no guarantee it’s 100% certain. It’s a relatively new instrument. It’s only been trading on the market for 8 months now. Uh the business model is rock solid, but that you know, nothing in the stock market is rock solid. Um it’s not a commodity like Bitcoin that has its own fundamental, you know, properties. Um but, so there are companies like Strategy, and they have $62 billion of Bitcoin. So, it’s pretty solid. Um and they again, they will trade you the volatility if you give them the upside above 11.5%. Sometimes that means you’re up 11.5% per year and they’re way down. Sometimes it means they’re up 30% and you only get 11.5% every year regardless. So, they’ll take your upside above 11.5% and eliminate, or at least attempt to eliminate, your downside and your volatility. But again, that means you’re giving up all of the upside every single year above 11.5%. If you want all the upside of Bitcoin, there’s no way to get it other than to stomach the volatility and ride it out. That is the price you pay for owning the highest performing asset in the world. Those two always go together. Volatility is vitality. When something stops being volatile, it starts to die. And or it starts to be you lose the upside, I should say. It doesn’t necessarily die, but like the the more you lose the volatility, the less vibrant upside you have as as the reward for holding the asset. Bitcoin has a lot of volatility because you’re early and because there’s still a ton of upside.