Why we should care about this war over the future of money
gizmodo.com
gizmodo.com
It's about the financial wisdom of:
1. Buy some BitCoin.
2. Valuate that BitCoin as an asset at well over 100% in value,
because the market lets you.
3. Issue stock against your supposed new valuation.
4. GOTO 1
It doesn't matter if BitCoin is the future, this is still going to end in tears.
It wouldn't matter what the asset is or how valuable or useful it is... if the market is bonkers enough to value something $YOU buy at 200% of what you paid, simply because $YOU bought it (it's not like the actually become any more valuable when purchased by this company, it's not like an acquisition where there could be synergy of some kind), and then you repeatedly turn that overvaluation into leverage to buy more, the scheme will eventually collapse when the market returns to even a sane 100% valuation.
The only thing relevant about BitCoin is that it's on the short list of assets that a good chunk of buyers is willing to valuate at well over 100% just because someone bought it. A number of people are getting in on this game now too and that's going to further dilute this play.
(Not that I'm defending Microstrategy that's obviously insane.)
Living with this can be painful though. I don't think anyone has serious solutions either other than just waiting for quantitative people to get better at sucking arbitrage out.
If you believe bitcoin is going to $1m/coin, Saylor buying it at 100k and it being valued at $200k because you can now buy it indirectly through your 401k and safeguard the next 40 years of your savings and your retirement, it is a no brainer. Especially when you compare to what the rest of the markets are doing with the monopoly money that is the US dollar and the US financial policies.
If you believed Bitcoin was under valued, you would just buy Bitcoin and not pay a 100% premium to buy shares in their company.
Also being inflationary is a feature of the US dollar, not a downside. It feels like crypto shills never discuss why inflation is intentional and good and rely on the financially illiterate to be shocked by those 93% and 1/5th numbers
Bitcoin just happens to be the medium the problem is manifesting on but it doesn't matter what it is. The failure is the market valuating acquisitions at grotesquely more than their market value, and especially for a commodity that has such an absolutely clear market value.
In a way, you're sort of demonstrating the problem. You're so stuck on Bitcoin and going gaga over it that you didn't even understand the actual problem. They're using the brightness of Bitcoin to cover over their dark schemes where you can't see it. It's people like you powering this market failure. Sorry, that's a bit direct, but it's actually healthy for you to hear this. You should understand how you're being jerked around so you can make better future decisions.
(Note that replying with more enthusiastic pitching of the future of Bitcoin would really, really prove my point.)
But there are other non-bitcoin examples.
Berkshire Hathaway is a corporate wrapper around a bunch of assets that are expected to increase in value over time. Berkshire's market value is much greater than the sum of the market values of the assets it wraps.
You might argue that Berkshire is different because the assets it wraps are productive and produce reliable profits for the holding company, while bitcoin just sits there and doesn't do anything.
I'd suggest that producing profits is the attribute that gives Berkshire's assets value, while bitcoin has other attributes that make it valuable. The difference in the source of value shouldn't matter when asking why the wrapper is worth more than the assets it wraps.
Reasonable minds can differ about the sources of value for the underlying assets, but there are many real-world examples where the wrapper around valuable assets is worth a multiple of the assets themselves, and this premium can persist for decades.
We can make the exact same reasoning if we do those steps but instead of buying bitcoin we buy other company's stock. In fact, this did happen, it was called the merger-mania and happened in the 70s (or 80s? Someone correct me). At the time companies were valued as a multiple of revenue growth, so companies figured they can grow revenue by acquiring other companies. So they would announce they would do it, their stock would jump, then they would acquire by issuing the now-higher value stock. Keep repeating.
The world of crypto is reinventing all the scams that were first invented in the real world. It's not even a hypothetical lol
If you wanna get even more meta, you could imagine the sole point of bitcoin is someone thinking "I'd like to scam people, but the people who are into stocks are already too literate these days. However, if we could invent an entirely new asset class..."
https://www.bloomberg.com/news/audio/2025-06-30/odd-lots-jim...
If you like a digestible discussion of markets and economics, I highly recommend this episode and all their podcasts.
When isn't it?
> they’ll say this is just the beginning of a financial revolution.
Any decade now.
> between two of the biggest names in finance.
Oh, well, now I definitely don't care.
"Money? No, not money, just dollars, and specifically dollars because that's all that are at stake here.
The bitcoin bubble could burst tomorrow and the rest of the world, and their currencies, which are backed by their nation's economies, will trundle on as happily as they've always done.
The only real losers would be the unlucky crypto gamblers. Wrong bet, wrong time. "
BTW you can borrow my excavator, if you're nearby.
But in 2014, you would have needed 100,000 bitcoins to buy a backhoe. In 2025 you need 1 bitcoin. That should scare you.
Avoid.
The question mostly becomes, how much do you trust the creator of Inspector Gadget and a bit child actor with the guaranteeability of every Tether? The first full-scale run on it that shows an exchange can't be fulfilled in a timely fashion brings the whole enterprise to its knees, right?
The problem has now become that enough people think these instruments are legitimate that, like most questionable financial vehicles, when they collapse, some government entity will be required to bail the bad guys out and shift the cost onto anyone who was unlucky enough to be within the blast radius of the whole thing. Which is pretty much all of us at this point, either directly or indirectly.
What a32z has trademarked as “Web 4.0”.
QuantumCoins (qoins) relies on a novel disproof of error algorithm to establish ownership. Somehow, a single qoin captures a unique position of the qubit matrix's superposition.
tbh, I don't really understand the maths.
I do know the quantum supreme race requires ever more qubits. Smart money is already investing in legendary earth minerals, needed for the superconducting cooling vessels.
Using nation-backed currencies, inflation can speed up rapidly — and often does. Money becomes cheaper, and it can lead to economic growth if done well, or economic destruction if done poorly.
In a Bitcoin-dominated world, the supply rate slows down as programmed, so it ends up being deflationary and winners take all.
So the only factor that decides if Bitcoin is a bubble is whether we take policy action to ban it as an investment product and method of exchange, or we let it replace money on a macro level.
To the Americans here: given recent inflation and increasing deficits, the time to decide is NOW. In my view, if you care about 1) national sovereignty or 2) income inequality, the answer is clear that we must take a much stronger step towards censoring Bitcoin on a banking and financial sector level.
Inflation is also a silent, invisible tax on the poor. It quietly eats away at their savings and buying power and ensures they will always be poor.
Bitcoin is also the solution to perpetual war. The only reason that WW2 was able to go on for so long was due to all the Western countries leaving the gold standard, and it is the reason that we have perpetual wars in the modern world. Governments just issue more bonds and when those don't sell, they just ask the central banks to buy their bonds. Bitcoin forces countries back into sane policies.
As a former bitcoiner, I challenge any pro-crypto person to start imaging ways it could all go wrong.
Or at least make a list of three possible downsides?