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The American Cattle Boom Provides A Clue
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The value of valuing Bitcoin… Standard economic metrics can predict Bitcoin’s price… Bitcoin is better than gold… Barbed wire and refrigeration changed the cattle business… New home buyers getting squeezed out… |
Table of Contents
If you want to maintain your wealth in the next two decades, you must understand how to value Bitcoin.
Everyone, it seems, can understand why gold is valuable.
If I asked you to build a mental model to explain gold’s intrinsic value, you could easily come up with something rational. You’d understand that gold is relatively scarce. You’d understand why it has played a crucial role as a reserve currency for thousands of years. It’s natural money. It’s no one else’s liability. It’s proof of work. It’s relatively easy to transport and to safeguard. It can’t be counterfeited.
But ask someone who is an expert in gold to explain Bitcoin and you’re more likely to end up in an argument than to get a cogent answer.
Even more ironically, if you ask a Bitcoin “expert” to explain its intrinsic value you will get a bunch of nonsense. “It’s going to the moon!” they’ll tell you. “Divide the world by 21 million and that’s the intrinsic value,” they ape from what they read on some website, written by a 14-year old.
All nonsense.
Bitcoin’s price and its intrinsic value are understandable (and predictable) using standard economic metrics. And even if you’ve never understood the first thing about the internet or Bitcoin, you can easily understand (and predict) its price.
That’s the point of today’s Journal.