October 22, 2018
Bitcoin isn't going away. A parallel financial system is being constructed to bring an end to the distorted financial markets that we see today. If people want to be able to participate but are not technologically savvy enough to avoid losing their private keys or storing them safely, they need an alternative solution that will allow them to participate. An ETF that solves the custody problems and is insured is the perfect solution.
The US should leverage it's current monopoly on the global financial system to allow its citizens to access bitcoin before the US hegemony ends. Other countries are going to eventually stop purchasing our debt, and they will stop allowing our citizens take advantage of their citizens' labor. Bitcoin is the way for the US to maintain its' dominance in the short term.
The greatest transfer of wealth has already begun, and will accelerate during the coming times of financial instability around the globe. The sooner you allow US people to buy bitcoin via an ETF, the better hedged they'll be against the risk of financial melt down.
There's a case to be made as to why bitcoin is the asset that all others will eventually be traded against. Assets should and eventually will be priced in the asset that is the most risk-free or stable. Bitcoin's monetary policy is sound and future expectations of the money supply are clear (inflation halves every four years). The market currently is mispricing bitcoin's risk. It's generally seen as a risk-on asset, but the market will eventually see it as the safe-have asset because of the soundness of it's monetary policy, the fact that it can't be debased, that it can't be censored (transaction immutability) and it cannot be counterfeited. A market that is cognizant of the future money supply can make smarter capital allocations that are far more sustainable long-term. This is better than the current boom-bust system that's currently dictated by the central banks. One decision by the Fed to reverse it's plan sends the entire world market into chaos. Do people really still think central banking is best for the people? We spend 15% of global GDP on the financial sector who produce no REAL goods for the economy. With money that allows citizens to be their own banks doesn't allow for that money to be rehypthecated like the current fractional reserve system, we'll shrink the % of GDP that finance takes from our economy. We still need banks and lending, but fully collateralized and 100% reserved banks. The only end to fractional reserve lending is lower RR and debasement of the money supply. It (the credit) can never mathematically be shrunk without destroying people's lives that were built on this fantasy finance. Please allow your people a way out of bad financial decisions not made by them.
Looking at it's historical Sharpe Ratio you can see that it is the least risky relative to the Year over Year gains. Mises said it best, "there's no way to avoid the final crack-up boom." We're on a credit inflationary path that either ends in a great depression similar to that of the 1920's or a major breakdown in the currency system. Capital has been misallocated for too long and eventually someone has to pay for it.