Bitcoin and Tesla
Bitcoin is the nuclear option to monetary debasement. Tesla, Goliath did not meet David.
The monetary system is a hierarchical club. When the top of the hierarchy prints money, those at the bottom suffer - specifically the countries without a reserve currency. Since 2011, emerging market currencies have been suffering tremendous devaluations. The onset of Covid-19 has accelerated the process and is now deteriorating the fiscal balance of EM at an even faster rate.
EM citizens are trapped in a lose-lose situation without easy ways to store wealth. Argentineans, Venezuleans, Turkish, Brasilians, Indians, Mexicans, Colombians, Chileans all have nothing to lose in trying a different monetary network.
Imagine 2 billion people buying from 100 to 1000 USD in Bitcoin over the next 3 years. Imagine thousands of corporations thinking to hedge FX volatility and potential inflation by holding a bit of BTC. And of course, the developed market citizens that understand that bitcoin is a superior monetary network and can invest even more, say from 1000 - 10,000 USD. Even without considering clever institutions, such as GrayScale, GalaxyDigital Holdings, Microstrategy, Stone Ridge, Square, Paypal, and Fidelity among others who have all been anticipating this move and positioning themselves accordingly.
Facebook has 2.234 billion monthly active users
YouTube has a monthly active user count of 2 billion people
WeChat 1.2 billion
Instagram 1 billion monthly
Bitcoin 2 billion users, 10 trillion USD market cap?
The USD has been the platform with the most users in the world, with trillions of dollars traded daily. Bitcoin will not replace the US dollar, but it could be the most successful platform to store wealth.
Necessity is the mother of innovation and adoption of new technologies
BTCTRY, BTCBRL, BTCINR
Money is a social convention. Bitcoin is a new monetary network, one that could coexist with the centralized fiat money network and empower the digital citizens with a very easy and accessible instrument to store wealth for the long term.
Tesla: Goliath did not find his David
The big short is a game of status. To be a hero you need something big to fail. It is a zero sum game. However, unfortunately for the short sellers with Tesla, Goliath has not yet met his David. Tesla’s recent results show the company continues to grow.
On the contrary, a big long is a game of wealth, a win-win game. That is the case of Taiwan Semiconductor (TSM), which forms an intersection for the developments in AI, the Internet of things, Smart Cities and cyber security. A big long is buying what will build the future.
Have a great weekend,
Guillermo Valencia
Director Macrowise
October 23 , 2020
Florianópolis, Brazil