If the rise of stablecoins has taught us one thing it's that traditional business models are very rigid in nature and have a hard time adapting. Brick and mortar establishments have high overhead.
The thing about the net profit of a business is that it can and will be negative from time to time, or if the operation is just starting up and bootstrapping itself. There's very little wiggle-room left for anything else. That's why the need for a stable currency is so important. Add a volatile currency into the mix and that's just one more major way in which the company can go bankrupt. Business is a balancing act of countless variables.
It stands to reason if the currency being used was something like Bitcoin the entire fate of the company can rest in the value of Bitcoin. We've all seen what bear markets do to startups in this ecosystem; fresh meat gets completely annihilated every four years. It's not really reasonable to expect a responsible business owner to take that kind of risk with their livelihood.
Michael Saylor is showing the world that not only can businesses be built on top of the Bitcoin network, but also that borrowing wholly irresponsible amounts of Bitcoin on credit absolutely does pay off eventually (4 years max). Will others follow this lead? Just recently Microsoft announced that there will be a vote on this exact topic.
The board recommends shareholders to vote against this proposal, the filing reveals, arguing that Microsoft already “carefully considers this topic.”
This gives us a little taste as to what the future holds. Even if publicly traded companies don't actually want to jump on the Bitcoin Standard bandwagon they'll eventually be forced to do so by their own shareholders... which I find to be one of the funniest and ironic turns of fate ever.
https://x.com/dotkrueger/status/1850335547954258091
None other than Blackrock and Vanguard, of course. Obviously Blackrock will vote yes because obviously. Vanguard has thus far vetoed the idea of offering a BTC ETF so it would stand to reason that they may vote no, but how long until they flip as well? Money talks and the more number goes up the harder Bitcoin is to ignore. A spot price of $200k BTC flips the market cap of every company in the world, and call me crazy but I expect that to happen within 12 months.
Current economic theory operates under the premise that stockpiling assets is a fool's errand. After all if one is stockpiling assets that they don't need at the moment that capital could have been allocated to a more productive area. This applies to fiat currency just as much as any physical product. Money itself is being constantly devalued and the entire ecosystem is a game of hot-potato in which all participants attempt to shuffle the liability of inflation onto someone else.
What happens when business owners realize they can just hold Bitcoin on their balance sheet and that's really the only investment or store of value required? All that's needed is to make it past that one devastating bear market year and it's blue skies from then on out. Of course it would be best to just enter after the bear has occurred, but that's not how market psychology works; most will buy the top, just like Saylor did.
How many angry incels cried out for Michael Saylor's blood when BTC hit $16k in 2022? Oh he's going to get liquidated. He's finished. He's an idiot. Yeah, we don't hear that so much anymore, do we? What happens at the peak of this upcoming cycle? He looks like a genius. Cycle after that he'll look like a god. Everyone will be copying the model, and let's be honest many of them will fail because they simply don't have the stomach for it. That level of conviction is much easier said than done.
Why not some other crypto? Ah well maybe we can have that conversation when there are other cryptocurrencies above a $1T market cap. This is a liquidity issue and a volatility issue. Until something can compete with Bitcoin... well then Bitcoin remains the only option. The risk to reward ratio simply doesn't make sense for any other asset, yet...
It would be possible to make a crypto that was exponentially more stable than BTC if it had elasticity. This means that when demand is high supply is high and when demand is low supply is low. Central banks try to tame the economy in this way with interest rates. A higher rate sucks money out of the economy by making borrowing more difficult, and vice versa. At least that's the theory. The reality is more like the meme above.
The problem with elasticity is that it requires an entity to direct where that money will go. That is the entire reason why Bitcoin was invented in the first place. That level of power becomes instantly corrupted, so until we figure out how to do such a thing on an automated level with crypto we are at an impasse.
It's actually pretty disappointing that not a single crypto in the world has even come close to solving this problem. Bitcoin proves time and time again that simply having no inflation at all is better than letting an elite group of people control it. I'm convinced that one day we'll come up with a solution, but as of right now I'm not seeing it.
How bad does fiat have to get and how good does crypto have to become before it becomes obvious to everyone that a switch needs to happen? Guessing it won't be so easy with 24/7 propaganda being shoved down everyone's throats about why Bitcoin is the devil and fiat is going to fix itself by way of magic.
Slowly, then all at once. The economic systems in place now are strong but crumbling at an accelerated rate. It takes quite a bit of faith to believe in something like Bitcoin... even given it's unicorn track record. But then again it took a lot of faith for people to believe in paper currency back during the gold standard era. Time is the great equalizer in this regard. Once it happens there is no going back.
