Bitcoin is crashing and everyone is wondering what the hell is going on. Let’s take a look at the data and everyone calm down. First bitcoin is down about 12 over the last 24 hours. Of course that has people concerned, but everything is down. Stocks are down and various other assets as well: gold, silver euro, yen, running b oil.
Everything is down. Of course. Everyone is also scared that the fed’s interest rate decisions are going to force asset prices lower, and so naturally, just as people go and start buying inflation. Hedge assets, when they think inflation is on the horizon same thing here is people sell assets when they think that the fed is going to make future interest rate decisions, so all assets are down materially. If we go ahead and we look at bitcoin specifically, it is still above a 700 billion dollar market cap.
The inflation rate is unchanged. 1.77 bitcoin’s monetary policy does not care. What is going on in the world. Doesn’t care about global pandemics.
It doesn’t care about the federal reserve and it sure, as hell, doesn’t care who’s buying and selling it over 90 of it’s been issued, but still it is being used at an incredible pace, over 12 billion dollars of settlement on chain in the last 24 hours. Bitcoin miners were paid 35 million dollars over the last 24 hours as well to continue to secure the network. Even though bitcoin’s price has gone down, the bitcoin miners are still securing the most secure most powerful computer network in the world. They don’t care either. Then, if we continue, when we look over the last one, two, three four five, six, seven, eight nine ten years – guess what it’s all up.
Baby minus gold gold’s been down one percent over the last year. My favorite part of this statistic is that if you bought bitcoin last year and just held it now for 12 months, you’re up 20 percent. If you bought gold a decade ago, literally, your bitcoin purchased from a year ago doubled your gold performance from 10 years ago, and so ultimately, that ends up being incredible. Also, true is that if you bought bitcoin two years ago and held it to today, you outperformed the s p 500 over the last decade. That is what asymmetry does so then, if we go and we look at bitcoin in the price closing history, what we see is that for 290 days ever in the history of this asset, it has been higher than it is today about six percent of the time Which means 94 of all days since bitcoin has been created.
It has never been higher than today, which is important to pay attention to you’re, not going to make a different investment decision because of that, but you are going to understand what’s going on then. If we go ahead and we look at bitcoin gold s, p, 500, nasdaq ntlt part of my favorite thing here is bitcoin outperformed, all of them over the last year. Also, those assets are absolutely poop in the bed when it comes to the compound annual growth rate. Over the last decade, bitcoin, even though the price is down, has still compounded annually for a decade at 140 percent. It is absolutely bonkers.
The sharpe ratio over the last five years absolutely destroying the other assets as well, but even though the price is volatile, even though bitcoin has gone up, it’s gone down, it’s gone up. It’S gone down last year, bitcoin had more than six different times where it dropped. 20 or more, it had three times where it dropped 30 or more, and it also went down more than 50 percent one time. It also went down more than 50 in 2018 in 2020 in 2021. None of this stuff is new.
Everyone calmed the hell down now. Why is that important? Because guess what the plebs, the bitcoiners they’re, still stacking sats? They don’t care. We just hit a brand new all-time high for bitcoin addresses with a bitcoin balance of at least 0.
1 bitcoin. Even though the price is super, volatile bitcoiners keep stacking sats. You know why it’s because wall street has tried to financialize this asset, and so when we went from 10 000 to sixty four thousand dollars at the end of 2020 to the uh beginning of 2021, from 10 00 to 64 000, the bitcoiners were selling their bitcoin To wall street wall street was gobbling it up now, as we’ve gone from 69 000 down to 38 wall, street’s panic selling, they’re panic, selling and they’re selling their bitcoin back to the bitcoiners and so bitcoiners stay winning, while wall street keeps buying the bags at the Top and selling them on the way down because they, my friends, are short-term thinkers. Also the bitcoin miners. They don’t care about this either bitcoin’s hash rate continues to hit all-time highs.
Countries try to take them out. Nobody cares. The price goes down. Nobody cares. Bitcoin mining continues to hit all-time highs and also the number of bitcoin addresses on chain with a .
1 bitcoin balance or higher all-time high bitcoiners do not care because the underlying fundamentals are stronger than they’ve ever been. What do you guys think about all this? It’S a bunch of nonsense. Everyone’S complaining just chill zoom out. Don’T worry!
That’S my that’s my advice in january of 2021 on the way up. At 38 000, everyone was freaking out they’re like whoa to the moon. Now we hit 38 000. I was like it’s gon na end. Life is over it’s all over.
It’S 38 000. Both ways don’t get too excited and don’t get too down, and if you can just keep control of your emotions by the way, who knows maybe it goes lower. Maybe it goes higher, i don’t know, but if bitcoin goes to a dollar i’m buying it all so like, if you think about it in the sense of if it goes down, bitcoin’s thesis is still intact. If it goes up, bitcoin’s thesis is still intact and i think what people are going to get a crash course here in is taking timeless investing principles like buy a great asset and hold it forever. Warren buffett, charlie munger, all the value, investing all that timeless investing principles.
Ultimately, price ends up being able to get people over excited or get them over fearful. But if you just look at the underlying fundamentals, i’m not selling my bitcoin and i’m buying more