IS BITCOIN THE FUTURE OF MONEY? ______
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BITCOIN HAS A MEME VALUE AND ‘WALLSTREETBETS’ EFFECT
The rise of Bitcoin fits a pattern of human ingenuity that has spanned millennia. We have used a myriad of creative ways to represent stored value, to transact, and to do business. Throughout history, money has been reimagined or reinvented as nations rise and fall and technology spreads around the globe. Changes to monetary regimes rarely happen more than once in a lifetime and so can seem a permanent and immovable fixture of our lives. As humans, we generally tend to overestimate the short-term impact of new technologies such as electric vehicles, the Internet, and even Bitcoin, but underestimate them in the long term. In the future, money will almost certainly be digital... And Bitcoin has a good chance of winning the battle for the future of money. Alex Tapscott is Managing Director at Ninepoint Partners, which recently launched The Bitcoin Trust on the TSX (BITC.U/BITC.UN). Alex is also the co- author of Blockchain Revolution and co-founder of The Blockchain Research Institute. Alex owns Bitcoin. The information contained herein does not constitute an offer or solicitation by anyone in the United States or in any other jurisdiction in which such an offer or solicitation is not authorized or to any person to whom it is unlawful to make such an offer or solicitation. The information provided is general in nature and is provided with the understanding that it may not be relied upon as, nor considered to be, the rendering or tax, legal, accounting or professional advice. Readers should consult with their own investment advisor, accountant and/or lawyer for advice on the specific circumstances before taking any action.
Recent coordinated efforts by groups of investors in the stock market to marshal many small investors and weaponize memes highlights the power of the Internet to empower self-organized communities, and to tilt advantages toward groups of smaller investors compared to institutional investors. Efforts to boost struggling companies like GameStop or AMC are inevitably destined to fail (as we saw so vividly when the bubble popped in early February). However, communities and the memes they create are a new and incredibly powerful force in markets. In the broader world of digital assets, there are various strong and resilient communities that advocate fiercely for their favorite project. By sheer size, durability, and longevity, nothing comes close to the Bitcoin community. There are millions of people who want it to succeed more than anything. If the GameStop episode revealed a distrust by ordinary investors of big institutions, then Bitcoin is the ultimate expression of economic populism. It gains strength from being dismissed... And every day it exists makes it more likely to succeed. Its ownership base is fiercely protective of it. Few investors feel so strongly about their other holdings. The only thing that comes close in traditional capital markets is Tesla, whose community of investors, boosters, and customers are religious in their devotion. Certainly, central bank digital currencies or corporate stablecoins lack any of this missionary zeal.
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February 2021
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