Bitcoin: what now, why now, why then

Here is what's going to happen. There are two phases ahead of us. The first one will be of planetary FOMO. The second will be a phase of utility and spending.

I think the next bull run might tear our face off if, say, a good part of the world feels like they're about to miss the boat.

And, then, Bitcoin will be usable in everyday life.

I recently understood why even with the ETFs out, the price of Bitcoin had not gone up wildly. Long time holders were basically rotating from self-sovereign into the paper ETF, taking the opportunity to transition what had become, for them, a proportionally larger amount of money into a more institutional vehicle, like a retirement account. At the cost of paying capital gain taxes, OG Bitcoiners have fed the ETF inflows and morphed their holding into a more normalized, more conventional type of exposure. One that does not include potentially losing all your precious pesetas in a boating accident. A way to get exposed to Bitcoin with less risk of getting maimed for it. This move would have the effect of neutralizing or even depressing the price of Bitcoin because once you put away the money for paying taxes, you can't really buy as much bitcoin as you just sold.

So, now that weaksauce hodlrs have washed their corn, the noise will dissipate. In the next few years, ETF inflows will have meaning. They will be a reflection of interest. The rising price of Bitcoin will be hard to ignore.

I can see a future where the price will be so high that most people will want bitcoin just like most people want to save money. They might not be able to. Countries that have outlawed bitcoin will be having a bad time and their people will be asking wtf. I’m expecting that normies will finally cave and say “you know what, I don’t like this bullshit, I don't understand it but I’m done missing out on the gains”.

So, this is phase 1.

Then, probably another winter. And then...

Phase 2 is when too many people have bitcoin to just HODL. Phase 2 is when daily transactions have reached mass adoption. At this point, Bitcoin isn't just this saving mechanism anymore. It's money you can spend. I suspect that we won't be talking about private keys, public keys, or channels, anymore. We'll just be trusting apps and services that abstract all of this.

This phase will celebrate Bitcoin as not just money to be hoarded, but as money that wants to be spent. Mature grown-up spending on the things that matter in life. Low time preference money.

And the enabling layers for spending will finally be here: taxes will have evolved, apps will make it so you can own and spend small amounts without risking your life or your wallet.

You’ll be able to pay for bread with it. AI agents will pay AI agents with it.

These are my hand-wavy predictions.

And I'm grateful for your attention.

Speaking of, did you pay attention when I suggested DCA-ing into Bitcoin?

(I am not a financial advisor. Don't put in Bitcoin more than you're willing to lose entirely. Do your own research)

(also, I lie in the next few sentences)

In October 2021, when the price was around $54,700, I wrote that the best way to get into Bitcoin was to make dollar-cost average purchases, that is, to make small regular purchases. My friend Jim thought he could save $3 a day by cutting on his soft drink consumption and he made a single weekly purchase of about $21. He had it set up so that $21, less 2% fees, would be spent on purchasing Bitcoin at any price every Wednesday.

Today, he's accumulated 0.103485849 BTC, just a little more than a tenth of a Bitcoin. How much did he spend for it? $3,377.78.

How much is it worth? $7,927.79. That's a return of more than 134%. In 3 years.

Okay, I lied. I don't have a friend who actually did this. Too bad. Yet, the maths don't lie. How do you feel about DCA, now? It's never too late.

PS: there is a rule about using Bitcoin with a capital B for certain scenarios, and bitcoin with a small b for other uses. I forgot that rule.