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Economy , Investing

Crypto is a Transition, Not an Investment

March 25, 2024
crypto is a transition

Crypto is the only topic that is more taboo than politics or religion.

You can discuss church or the latest political event with your friends and family, even though it may come with some raised eyebrows and finger pointing. However, bring up anything about cryptocurrencies and you’ll be met with silence and looks of insanity.

Even when I write anything related to crypto, I always receive enraged emails about how crypto is a Ponzi scheme, a CIA backed project, or a passing fad.

That said, I have never met a person who hasn’t started to buy crypto after they:

  • Read the bitcoin white paper
  • Studied how central banks work
  • Wrapped their head around current US (and foreign) fiscal policy

Yes, it’s a lot to digest. And yes, most people will not take the time to understand what is going on. And that is exactly why you should be paying attention to cryptocurrencies… and just as importantly, starting to make the transition…

The Transition to Crypto

There’s no arguing that many cryptocurrencies have been a once-in-a-lifetime investment for many people. As I write this, bitcoin is up 114,464,195% since its inception.

crypto is a transition - bitcoin performance

It’s tempting to think that you have missed all of the past upside, or that there is much more to come. That’s because crypto, from a traditional investor’s point of view, is all about pricing in relation to fiat currencies.

But what if “investing” in cryptocurrencies was less about value appreciation, and more about a transition to a new monetary system? It just happens that for the early “transitioners” there is enormous upside.

That is how you should be viewing cryptocurrencies right now.

The easiest way to transition is to slowly dollar cost average (DCA). I have mentioned this for years now, and I am going to keep banging this drum. Just buy a tiny amount of crypto everyday.

It’s the most boring and simple wealth preserving suggestion I have every provided. And still, most people won’t do this until it’s too late.

crypto is a transition - saylor

The Alternative is Bleak

It’s a tough pill to swallow, but the reality is that our global monetary system is crumbling. Central banks are losing control of how they can manipulate money while governments are completely unable to balance their budgets. It’s a terrible combination.

Even worse, those who will suffer the most are the ones who have traditionally played by the rules of the current monetary system. The individuals who have responsibly saved and managed their personal finances are going to have their wealth destroyed.

Central banks and governments are not only going to eviscerate the savings and value of individual’s wealth, but they’re also going to saddle entire populations with unsustainable debt.

This isn’t going to happen. This has already happened. Most just don’t know it, yet.

Consider these statistics:

  • The US government currently adds over $1 TRILLION of debt every 100 days. This additional debt is not only above the current GDP that is generated (current debt to GDP ratio is 124%), but it’s also subject to interest that will exponentially raise the total debt.
  • Interest payments on national debt are currently approaching $20,000 per adult, per year (that’s just the interest, not paying off any principal).
  • In the US, there is currently $287,000 of debt for every taxpayer. By 2028, just four years from now, each taxpayer will equate to $333,000 of debt.
  • There is currently $214 TRILLION of unfunded liabilities in the US, representing $636,000 for each citizen, which will surpass $1mm before the end of the decade.

Artificial interest rates, volatile swings in monetary supply, and extreme budget mismanagement have placed the US in a financial crisis that is beyond repair. (Many nations throughout the world face similar situations, or worse.)

The options to escape this dire situation are bleak. Debt jubilees, austerity, rampant inflation, extreme interest rates, limited debt markets, capital controls, and war are all likely outcomes in the coming years.

What Comes Next for Crypto?

To understand where cryptocurrencies are headed, we only need to look at what’s happening in the world.

Ask yourself some of these questions:

  • Are governments and central banks becoming more or less responsible?
  • Is global conflict increasing or decreasing?
  • Is global trade expanding or contracting?
  • Are public and private debts increasing or decreasing?

Your answers to these questions should be enough for you to decide if you’d like to buy some insurance for your wealth.

Although crypto may not be the ultimate solution, it’s a pretty damn attractive option in today’s world.