A case for bitcoin

Letter 11

This letter covers the importance of silence (something we should all actively seek), a case for Bitcoin and key news items.

Enjoy.


Combine your focus with silence

Silence provides an empty page for us to doodle. It gives an artist an opportunity to compose in their mind before they produce the song. An attorney her opportunity to argue before winning the case. A surgeon her vision before performing the surgery. An athlete her play before hitting the game winning shot. And so on.

Combine the focus with some quiet time. We must make an effort to minimize distractions, limit the inputs that enter our inbox. Create time to actually… create. We’ll find these moments early in the morning or late at night. 

Whether you have a passion to write, compose, start a business, etc; whatever the reasoning, in order to achieve something great we need to combine our focus with silence. 

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A case for bitcoin (BTC)

File:Bitcoin logo.svg - Wikimedia Commons

A few weeks ago, I made my first investment in BTC. I was not a first mover when it came to investing in cryptocurrencies, but over the last few weeks I’ve started studying them aiming to understand their characteristics, future use cases, and overall adoption.

I have strong conviction that cryptocurrencies will soon become a major asset class. To some extent, it’s unrelated to macro events. It’s the 21st century version of digital gold. The challenge with the application of BTC, for example, is that people don’t know whether it’s a commodity (i.e. digital gold) or whether it’s simply a currency (i.e. USD). It’s technically both. And on a long enough time horizon, every sovereign nation will have a form of digital currency that would be controlled by their Federal Reserve and we will have internet currencies like Libra backed by Facebook. BTC will emerge as the most valuable cryptocurrency and be the benchmark.

Lastly, I believe that BTC is a great storage of value for the long run. It hedges against macro events like public health emergencies, political uncertainty, quantitative easing by the Fed, etc. Fiat currency isn’t a great store of value; it depreciates against inflation annually. 

Over the coming years, we will see and hear about many notable investors allocating their capital to BTC. We will also see large corporations and central banks store value in Bitcoin. 

Chamath Palihapitiya, CEO of Social Capital, has often encouraged people to invest 1% of their net worth in Bitcoin. How much you want to invest is up to you, but it’s definitely worth looking into.

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Links worth sharing

  • The higher education bubble. Link

  • Uber and Lyft threatening to suspend services in California. Link

  • Tesla announcing 5-1 stock split. Link

    • Stock splits are designed to provide more ownership for retail investors. When a stock does fairly well, it becomes expensive and reduces market participation from retail investors. It shouldn’t surprise us if Amazon, Alphabet and others pursue a similar strategy.

  • Fortnite suing Apple and Google is sort of a big thing. Link

    • It’s not necessarily David vs. Goliath. Fortnite is a giant in its own category. Many developers have complained about Apple’s monopolistic behavior regarding app store platform rules. Epic Games, parent company of Fortnite, even created a perfect parody to Apple’s popular 1984 ad.

  • US job claims finally dropped below 1M and the market isn’t celebrating. Link

  • What Biden and Harris combo means for the economy (if elected). Link

  • Airbnb plans to file for IPO in August. Link

  • Lebron = Investor. You can see the list of athletes that have succeeded as investors. Link