Summary
➡ Every 50 years, a cluster of technologies emerges that changes humanity’s course. We’re now entering the 6th wave, transitioning from the industrial age to the information age. However, our financial systems are outdated, still using methods from centuries ago. To succeed in this new economy, we need to understand and adapt to these changes, moving away from traditional assets and embracing new ones like Bitcoin.
➡ The article discusses the challenges of storing wealth in various financial assets due to inflation and other factors. It highlights the depreciation of the Argentine peso and the US dollar, the inflation of US Treasuries, and the decline of the S&P 500 index when adjusted for monetary inflation. The article also mentions the costs associated with physical assets like silver, gold, and real estate. It concludes by stating that if your investments aren’t making at least 15%, you’re actually losing money due to the real rate of inflation and risk premiums.
➡ The article discusses the potential of Bitcoin as a future asset class, comparing it to other assets like real estate, gold, and the Nasdaq. It argues that Bitcoin has outperformed these assets, especially since the start of 2020, and suggests that it could continue to grow in value. The article also highlights that Bitcoin is a digital asset that can’t be diluted or taken away, making it a potentially safer investment. However, it also raises the question of whether it’s too late to invest in Bitcoin, suggesting that its future value could still be significantly higher than its current worth.
➡ This talk discusses the potential growth of Bitcoin as a global asset. The speaker suggests that if Bitcoin can capture even a small percentage of the global asset market, its value could significantly increase. They also discuss the concept of ‘dematerializing assets’, using Bitcoin as a more portable and secure store of value compared to traditional assets like gold. Finally, they propose that the next 50 years will see a shift in investment focus towards new technologies like Bitcoin and AI, which could drive financial markets.
➡ Sam Altman predicts that small companies, even single-person ones, will soon be worth billions. Bitcoin, a decentralized and personless currency, allows machines to have their own accounts, which could revolutionize AI and autonomous vehicles. To create wealth, one should start a business, optimize it using new tools, and use real estate for tax efficiency and cash flow. Bitcoin is suggested as a store of value, outperforming traditional assets, and is recommended for saving rather than investing.
Transcript
So join me as I’m going to break down how much money you’re likely losing every year by sticking to these outdated systems. Why this is crippling the economy and our wealth accumulation, why bitcoin is not just a better store of value, but it’s a way to multiply your wealth faster than any traditional investment. And we’re going to break down the future price projections for bitcoin. And even more importantly, I’m going to show you how you can structure a portfolio with specific allocations to position yourself for long term success in the new economy. Now, by the end of this video, you’re gonna have the knowledge, you’re gonna have the strategy you need to protect and grow your wealth and potentially set yourself up for life changing gains.
Now, real quick, if you’re new to the channel, my name is Mark Moss. I’ve been making financial education for about seven years. I’m coaching investors. I run a bitcoin focused vc hedge fund. Also, I do wanna say that this video was inspired by Michael Saylor’s presentation at this year’s Bitcoin conference in Nashville. I was also a speaker at the event. I presented on the main stage right before Donald Trump was on. And I’ve used some of the slides from Saylor’s presentation. Now, if you want to watch his whole talk, which I recommend, I’m going to put a link to it in the description down below.
But otherwise, let’s just jump right into it. Thank you for that. Thank you for that, my new best friend. All right, so before we get into the meat of this here, let’s just break down a couple things. So let me tell you a story. Anybody ever heard of Albert Einstein? A few of you like one of the smartest guys that ever lived, right? So a lot of you maybe remember him from being like an inventor, discovering things, but he was actually a university professor back when universities kind of were useful and helped people. So he was this university professor.
And of course, as a professor, he had an assistant, and every year he would give out this test to his students. But what happened is each year he gave out the same test, like the exact same test with the exact same questions. This is Einstein. I mean, he’s super smart, but his assistant’s like, does he know what he’s doing? Because, like, these are the same questions that were on the test last year. So, sheepishly, the assistant goes up to Einstein and tugs at him and says, hey, you know, I know you’re super smart and I’m not.
So I hate to say this, but do you realize that you gave out the exact same test that you gave out last year? And Einstein replies, yeah, of course, to which the assistant was puzzled and says, but what do you mean of course? Like, don’t you think that the students from last year have the answers and they’re going to give them to these students and then they’re going to have all the answers? And Einstein’s yeah. He says, yeah, but the answers have changed. And what that means is that we make the best decisions that we can with the information that we have at that time.
But when new information comes, we have to be willing to change our mind. And things that we think were a certain way can become something different. But when we’re stuck in this old paradigm, constantly using old answers and old questions to define our future, we lose sight of the opportunities that are right in front of us. And so when we think about the way the economy works and the way the markets work and the way money works and all of these things, that is true and that is factual and that’s how it works or it worked in the past, but it doesn’t mean that it’s always going to be that way in the future.
So I tell you that story only to hopefully open up your mind a little bit. It’s very difficult to be an existing system and try to imagine a new system at the same time. But if you want to have success in the world, we have to put ourselves in that set mindset because markets at the end of the day are forward looking. They’re betting mechanisms, discounting mechanisms, right. We are trying to position ourselves into an asset that we think will be more expensive in the future, hopefully, or if we’re shorting, hopefully cheaper in the future. So we’re always trying to guess that.
And so you need to be open minded. Okay, so we’re going to talk about that. Make sense. Okay, so we’re going to talk about the new economy, blueprint not the old economy. We’re going to talk about the new economy blueprint. How we can utilize bitcoin technology to build lasting wealth. Does that sound good? Like generational wealth. All right. I am at a point in my life where, you know, just like you, my. The things I focus on have changed. My kids are getting older now. So I’m starting to think about how do I pass down wealth.
We’ve recently set up a trust. I set up a family constitution and I’ve set up protective measures to make sure even my great grandkids can’t sell stuff. It’s another topic. But we’re talking about building lasting wealth. Okay, so we are in the 21st century economy. Things are happening fast, if you haven’t noticed. We got AI and large language models and we can now have one person businesses that can do the work of many people. No longer are the days where we need these giant corporations and these big equipment. We can just now grab a laptop and hop on a plane to playa del Carmen and start a business.
So we’re in the 21st century economy but the problem is that we’re still held back by old ideas. And so we’re trying to build this future world but with old tools. Now it’s easy to see the old world because we’re looking backwards on it. It’s much harder to imagine the future. But we can see that the old world had this old economy. And this old economy was built on 19th century technology. As a matter of fact, the entire economy and government structure that we have today was built for a world that’s no longer here. If you look back to thousands of years of history you’ll see it’s always technology that changes the world.
It changes the way that we communicate changes the way that we organize. And an example of that technology can be either centralizing or it can be decentralizing. So in the industrial revolution we all of a sudden had mechanized machines that could do the work of 5000 men. No longer do we need 5000 men in the field. Let’s bring all those men and put them into a factory. Very centralizing. And then as that mechanized that industrial revolution world continued on then it wasn’t enough to just be in a city. You needed to be in America. You had to be in Chicago or New York.
Then we had mass production. Henry Ford created mass production with the automobile. And then everybody went into factories. And now we had everybody working on an assembly line. Smart and dumb people were evil, even equal on an assembly line. So now we had the masses working so we had to come up with a new management structure to manage the masses. But then we had to come up with a government structure to manage the mass managers of the mass production. But today, we’re no longer in that world. I’ll break down the world that we are. But to give you an example, in the industrial age, we had the technological revolution, so we had the loom.
Now, when the loom came out, people used to make tapestries by hand. Then the loom, the power loom made it much easier. The Luddites, they hated that. You ever heard of the Luddites? Anybody heard that term? The Luddites were a group of people that were afraid of the power loom, because the power loom was going to put a whole bunch of people out of work. Oh, no. What will all these people do? Turns out they do higher value tasks like, you know, science and medicine, things like that that were important. We had the original railroad, the steam engine.
All of a sudden now, this revolution, we could move stuff across continents. We could never do that before. Of course, we had the automobile, but those were all from the industrial age. And the way this works is about every 50 years, we have what’s called a quantum leap forward. A quantum quantum wave, as I like to call it. Maybe you’ve heard of it as a conjoitive wave, a k wave. But about every 50 years, we have this big technological leap, leap forward. And it’s not one technology, but it’s a cluster of technologies that happen at the same time.
And they do two very important things for our conversation today. Number one, they changed the course of humanity, for all of humanity. All of humanity. We walked, and now we had automobiles that was massive. It was a big shift, and we couldn’t imagine all the things that would happen by having automobiles, like having self driving cars that are hooked to something called the cloud, using something called social media. And we could have never imagined that because we didn’t have a car. But we do now. We can see that we’ve had about five of these so far, and we are now entering the 6th.
So if you want to know where the world’s going, and you want to invest properly and you want your money to grow, and you want to be successful and prosperous, you have to understand this map and understand there’s a new economy being built. Okay, so we’re going into the 6th one right now, and we’re leaving. And this is the key piece. We’ve left the industrial age. If you haven’t been aware, we’re now in what’s called the information age. And the reason why this is important is we don’t need big factories. As I said before, now a kid with a laptop or now a kid with an Instagram account can make 100 grand a month, no problem.
It’s a different world. And again, we are in a new world with new building blocks, with new tools to go build new things. But we’re still operating with the tools of the past, like our assets, for example. All of our financial assets. The way that we build wealth, the way that we store wealth, the way that we transact wealth, is from a world that’s no longer relevant today. What do I mean by that? What do I mean by that? We have technology that’s completely revolutionized, like I said, autonomous vehicles driving around on something called a cloud.
But yet we’re using old assets, like the ledger that was created in the 15 hundreds by Luco Pagliali in Venice, Italy. And it was a breakthrough in technology, and it was called the ledger and double entry accounting. You see, up until that point, they used gold for money. If I had the gold, everyone knew I had the gold. And if I gave the gold to you, everybody knew you had the gold. But the problem gold was very slow to move around the world. Very heavy, very clunky. I could get robbed. I could lose it in the ocean.
Who knows? Whatever. And so we had a better way. How about you give all the gold to this person, and he’ll just keep a ledger, and he’ll just say, oh, take it off Mark’s tally and put it on your tally. It seems pretty archaic, looking backwards on it, and it should be, because it was created in the 15 hundreds. We didn’t have a computer to do this. It is by hand. But yet that’s the same thing we’re using today. We’re still using ledger money. We’re still relying on a person to keep track of what’s in my account and what’s in your account.
Same thing as we’ve always done. So we’ve had all this progress for 600 years. We can have instant transaction time anywhere on the globe. But yet our money system is still using a system from 1500 ago. 1500? Okay, that seems like a problem. What about other assets? Well, did you guys know that equities stock? The stock market was created in the 17th century, so most of you. Well, probably not in this room. We have more of a smarter room. Business owners, real estate, entrepreneurs. But the majority of the world has their paycheck direct deposited every two weeks, and it goes into an S and P 500 index going into the same 17th technology that we had hundreds of years ago.
It’s no wonder that people that are invested into the s and P 500 every single day thinking that one day they’ll retire, find themselves unable to retiree. It’s no wonder that half of the homeless population today are baby boomers. Half. Cause they’re investing their money and using a system from five or 600 years ago, not realizing that there’s this whole new world. Unlike Einstein, they don’t realize the answers have changed. Now let’s talk about the new future, and we’ll talk about some of these problems and solutions that we have. This is sort of representative of all the global assets in the world.
About $900 trillion. It’s a big number. We get numbed by these numbers these days. I don’t even know what that means anymore. 900 trillion. That’s a big number. About 330 trillion in real estate. Where’s my real estate investors? All right, most of you guys good? 330 trillion. It’s the biggest sector, as you can see. Bond. The bond market. The bond market is sort of the global asset market. That’s where governments and nations hold their wealth. In the bond market, 300 trillion. Real estate’s bigger money. Currencies, dollars, et cetera. About 120 trillion. Equities. The stock market, public markets.
Right. 115 trillion. Cars, collectibles. A lot of rich people store their wealth in collectibles. Fine art, things like that. Jewelry, about 6 trillion art. 18 trillion. Gold, about 16 trillion. Any gold bugs out there? I used to be a gold bug. Now I consider myself a sound money advocate. We’ll come back to that. About 16 trillion in gold. And there’s this little tiny little beast all the way in the top left hand corner. You can barely see it. And that’s bitcoin, the little asset that could 1 trillion right there. When you compare it to the rest of the world, it is just nothing.
It’s like a spec. It’s not even a drop in the ocean. Now, if we break this down, we understand that we can really separate these global assets, the store of value, into two different sectors. So we can really break this down between assets that are being held for utility, such as your home, such as the warehouse for your business. Of course you need that. There’s utility there. But then we also. There’s about 450 trillion in those types of assets for utility. But then we have assets that all they do is hold wealth. Most people, I’m sure everybody in this room is smart enough to know that you don’t hold your life savings in dollars in the bank.
You put them into real estate or stocks or all those assets that we’ve seen. So about half, about 450 trillion is what we call long term capital, or Sov, store of value. So what we want to talk about is not the utility, of course we’re always going to need a warehouse, and we’re always going to need a house. Of course we’re always going to need those things. But the 450 trillion, that’s long term capital. We can put that wherever we want. And what I learned early on in my investing career that served me very well is the saying that money goes where it’s treated best.
So sure, I certainly need my utility like my home. I didn’t buy my home as a financial decision. I wanted that house for my kids. I don’t care about the price of that home, but for long term storage of capital, I care. I care about what I want to make sure it’s treated best. And treated best might mean where it gets the best rate of return, where it’s the safest, where it can’t be diluted, where I could move it if I want, where it has tax advantages. Things like that will break this down. But the problem that we have right now, and you’ve been up here hopefully probably bored to death listening to a bunch of these speakers explaining the inner spaghetti workings of this financial system.
What the heck is all this? And this plumbing? And this means that and what the system has gotten so complex over time that George Gammon is one of the most knowledgeable people of the inner workings and the plumbing of the financial system. Maybe he could go toe to toe with Zoltan Pozar. And there’s maybe half a dozen people in the world that understand it. Not even Biden’s economic advisor can tell you how money gets made. Do you guys see that video? And the economy today is struggling because of this. We have this modern economy with revolutionary technology and almost spaceships.
I got my wife this new navigator. It drives by itself. I have these seat heaters and it massages me while I’m driving. I feel like, man, I kind of made it. I don’t know what kind of. We have this. We have this amazing world and this economy, but it’s being held back because we have imperfect money and assets, because we’re using a system from 600 years ago. You would think it would catch up right again. Back in the old days, things were slow. Like I had to get in my wagon. I had to go 3 hours to town to get something but today I push a button on Amazon.
I have instant transaction. But the settlement of that transaction still today, takes at least three days to get money in my account. But ultimately, that money could be clawed back six months from now. So there’s no final settlement. Six months. I could get in a horse and buggy and drive my gold to New York faster than that. So let’s talk about the financial assets that we use to store our wealth. We’re not talking about utility, we’re talking about store value assets. So we have different assets that we might use. Let’s just run through a few. I’m going to have to probably go a little bit quick here.
I don’t know how long this talk’s gonna be. So, in Argentina, you guys are probably aware of what’s going on down there. Massive amounts of inflation. They’ve been having triple digit inflation for a couple of years. If you choose to store your wealth in the argentine peso, with the rate of inflation, you will lose half of your money in 3.6 months. Now, when I say half of your money, if I put 100,000 in argentine pesos, in three and a half months, I’ll still have 100,000 argentine pesos. They just buy me half as much. Right? You follow me on that? Okay.
It’s not that I’m losing the pesos, the volume, the amount of currency. It’s the power, the purchasing power of that. So, in Argentina, I’ll put 100,000 in Argentina pesos. In three and a half months. It buys me $50,000 worth of goods and services. That sucks. I wouldn’t want that. What about the us dollar? The US dollar has been inflating at 7% a year for the last hundred years. Since 2019, it’s been debasing or inflating at 10% since 2019. That means if I put $100,000 in into the bank, in us dollars, in six and a half years, it buys me $50,000 worth of goods and services.
That’s not very good. What about US Treasuries? That’s the reserve asset of the world. It’s the bedrock of the entire global financial system. Every country in the world, when you have hundreds of billions of dollars, you put them into us treasuries, but yet again, they’re inflating at 10% per year. So these governments that are putting hundreds of billions of dollars in, in now 19 years, they’ve lost half their wealth. 19 years, you’ve lost half your wealth. That means in 30 years, you’ve lost it all. But it’s even worse than that. It’s not like on year 30, it’s gone.
It’s being lost all along the way. Now, we can see this, the S and P 500. We can just direct deposit in the S and P 500 index. And it looks like nominally on paper, the SPX is at all time highs. Oh, my gosh, I’m so rich, but I feel poor. And the reason why is when you adjust it for the monetary inflation, we can see that the S and P 500 is actually down 22% since the 2000 dot bubble. That means that your S and P 500 index account, though it looks like you’ve made a lot of money, hasn’t actually ever even reclaimed its high that it was in the year 2000.
Which is why, on paper, it looks like you should be getting rich. But it’s also why 50% of the homeless population is baby boomers now. Inflation is just the start. Every time that money moves, you pay, you pay taxes. Every time that money moves, you’re paying tariffs on stuff that comes in the country, tolls and transfers. You got to pay for insurance. We’re going to get the gold, don’t worry. But you got to pay for storage. I got vat tax, excise, you name it. Dividend taxes, inheritance, property taxes. Everywhere I twist and turn, they’re taking money from me.
Now, what about physical assets? Let’s take a look. Now, physical assets degrade from the laws of entropy. The law of entropy says that anything left alone will fall apart, basically. So it takes effort, energy, to force order. Otherwise, like you built a house, you leave it alone 50 years, the house falls apart. If you don’t diet and exercise, you get out of shape, right? That’s the law of entropy. So, we can look at silver. Now, when we look at physical metals, we have something called a stock to flow ratio. The stock, the existing supply to the flow, the new incoming supply.
So, gold and silver, they’re constantly bringing gold and silver out of the ground, right? So the stock to flow on silver is 22, which means it’s inflating at a rate of 4.5% per year. 4.5% more new supplies coming to the market every year. What does that mean? That means that silver has a half life of 22 years. That means if you put $100,000 into silver in 22 years, it buys you $50,000 worth of silver. Gold stock to flow ratio of 62. It’s the hardest asset until bitcoin just had its having last year. And now bitcoin’s harder we’ll come back to that.
Gold’s 1.6, which means it gives you a 40 year half life. But what about my real estate, Mark, homes? You guys are real estate investors. I don’t have to tell you this. You probably know it’s about 6% a year for your property taxes, your insurance, your maintenance, your repairs, your whatever. 6% gives you a half life of about 17 years. But, mark, you don’t understand that case. Shiller index says I’m at all time highs. Yeah, we’ll come back to that. What about warehouses? Well, again, we need warehouses. But about every 40, 50 years, they have to be rebuilt.
So you start to see when we look at assets that we would store wealth and not in utility assets, but in store value assets, we don’t actually have a whole lot of good options. It seems like no matter where I put my money, it’s losing money faster than I’m making it almost. And it gets worse. Sorry. It’s going to get better. You guys want to get better? Okay, but we got to get worse first. Okay, so here’s the problem. All of you guys are being lied to by your government. Do you know that what they’ve done is they’ve changed the definition of the word inflation.
You see, up until the 1950s, inflation meant like a balloon. I inflate the volume, the volume of air increases in a balloon. Inflation used to be when I increased the money supply, the supply of money. But what they did in the 1950s, they changed it to CPI, consumer price inflation. So now, supposedly inflation means the price of goods going up. But I don’t know, Mark, because, you know, tvs and electronics have gotten cheaper, but, you know, health has gotten more expensive. There’s no rhyme or reason why these different prices are moving differently. We don’t, we don’t know what the cause of an inflation is.
That’s why they changed it. The problem with that is that most people are using the CPI adjusted number. So you look at. We’ll come back to it. So the real number that we need to beat is not CPI. Anybody know what a hurdle rate is? Any business owners know what a hurdle rate is? Okay. Hurdle rate is if I borrow money from my business to buy a new piece of equipment or buy a new building for my business, I have to borrow that money. I’m paying an interest rate. I’m paying 6%. I have to make more than the 6% to make that worth it.
That’s the hurdle rate that makes sense. So the hurdle rate is the cost of the capital plus you have to attach a risk premium. What if that piece of equipment doesn’t work out? What if my business goes down and now I’m stuck with this building? So you have to add the weighted average cost of capital plus a risk premium. That’s the number we have to beat. So, in our own investing, in our own life, financial life, what’s our hurdle rate? Well, the government wants to tell you it’s the CPI, about 3%, but that’s a lie. The real hurdle rate is the rate of real inflation, which is monetary debasement or monetary expansion.
So, what we have here is a chart on the right of the m two money supply. And you can see since July of 2019, it’s going up like a. Not quite a hockey stick. I’m not sure what that shape is. It’s averaging 10%. So we want to attach 10% plus the 3% of cost of goods going up. Plus, remember, we have to add a risk premium. I’m putting 2%. It’s probably much higher than that. We’re in a pretty risky time right now, so let’s say it’s 15%. So what this means is if your investments aren’t making at least 15%, you’re actually losing money.
Anybody ever seen that number before? What you’ve been told is you can park it in us treasuries at 5%. Inflation is 3%. You have a 2% spread. You’re doing great. It’s not true. Sorry to break it to you, but it gets worse. Now, if we look at real estate, everyone’s like, oh, real estate’s in this big bubble. It’s a bigger bubble than it was in 2008. It’s ready to crash. Oh, my gosh. No, it’s not. It’s not in a bubble at all. The bubble is in the denominator. The bubble is not the price of the home.
The bubble is in the us dollars. It’s priced in. So what we have right here is a chart. The red line is the case Shiller index for the median us real estate. The blue line is the m two money supply. You can see in 2008, there was a price bubble, right? You can see that clearly. What does it look like we’re in today? Does that look like a bubble? Home prices are nowhere near where they were when you adjust it for the real hurdle rate of the rate of debasement, let’s look at it from another way.
Since 1968. Anybody know why I go back to 1968? Anybody? Come on. Huh? What? The gold standard. We got off the gold standard. In 1971. Right? So we have to go back previous to that date. So since 1968, us median home prices are up 2000%. Woohoo. Except for when I adjust it for inflation or CPI, it’s only up 135%. That’s what the government tells us. But remember, that’s the wrong number. When I adjust it for the monetary expansion, real inflation, home prices are down 45%. I know, it’s terrible. It’s terrible. You just can’t win in this game.
The game is rigged against you. What are we going to do? Don’t worry. We got good news, but more bad news first. When we look at all the financial assets classes in the world over the last 14 years, we got bitcoin at the top. Nasdaq S and P. We got gold. Okay, the best performing asset class. Class, not individual stock, but best asset class. Nvidia has been a great performing stock, but it’s not an asset class on its own. It’s part of the Nasdaq. Now, the best performing asset class has been bitcoin. Over the last 14 years, it’s averaged about 150%.
Pretty good. The Nasdaq is number two, and it’s averaged 17.4%. That beat the hurdle rate. So if I would have owned the Nasdaq, I would have beat the hurdle rate, and I would be looking pretty good. The bad news is every other asset was less than the hurdle rate. Every other one, gold 2%. Now, in all fairness, gold’s popped over the last year, so this chart should probably be re advised. Gold’s a little bit higher than that today, but you can see the SPX is 12.5%. The SPX moves up at the rate of monetary expansion. That’s the SP 500.
So then you would ask yourself a question, why would I build a diversified portfolio and diversify into a whole bunch of things that are losing to the hurdle rate? That doesn’t seem like that’d be the smartest decision. So there’s two asset classes that have beat the hurdle rate. Number one, we have bitcoin. It’s the number one asset. I’ve gone back to the start of 2020 here, and I don’t want to say that I’m cherry picking data. I could go back two when bitcoin was founded, but it was so explosive in the beginning, and it sort of distorts it, in my opinion.
I want to be a little bit more intellectually honest with you guys. So I’ve chosen a four year period, which is a pretty big period. If we go back to the start of 2020. And that was also when the pandemic happened, the world reset. And what we can see is that bitcoin is up 900% in four years. Now, the second best performing asset is the Nasdaq, and it’s up 98% in the same period. Pretty good. It’s beating the rate of monetary expansion. But here’s where it gets interesting, right? Everything is a trade. So I price a home in us dollars.
I could also price a home in how many barrels of oil, how many ounces of gold, how many bitcoin, how many tons of rice, right? I could. Everything’s a trade. So if I compare what is the Nasdaq priced in bitcoin terms, it’s down 80%. So my second best option to store my wealth, the only two that are beating the hurdle rate, the second best one is actually down 80% when priced in the first one. So what we know is that bitcoin is this new monetary capital, this new digital capital for the future. It’s immaterial, right? We’re in a digital world.
We’ve immaterialized everything. Books, music, movies, they’re all immaterial. We don’t have those physical. I mean, sure, there’s physical, but most of it’s digital today, right? It’s immortal. It can last forever. Unlike that warehouse that has to be built in 40 years or my home that needs the required maintenance. It’s immutable. No one can change it. No one can take it. No one can dilute it. And so now the question that maybe a lot of you guys are asking, that I get asked all the time, is, Mark, isn’t it too late, though? I mean, you just said it yourself, Mark, that you didn’t go back to the old data because then it makes the returns look too crazy.
Those returns are crazy. There’s no way we can ever expect that in the future. Right? I should probably go find some dog meme coin that’s going to do more, because there’s no way bitcoin is going to go up. It’s too late. You just showed me that. Let’s take a look at that. So, compared to what, right now, we can see again, since 2020, bitcoin has been averaging, since 2020, 55% returns every single year in the same time period, s and P 500 is up 13%. Nasdaq gold and the reserve asset of the world bonds is down 5%.
So is it too late to put your money where it’s treated best and get the best return in the world? Is it too late for that? Doesn’t appear so. But a better question I would ask is, what’s it worth? Because, as George Gammon would always say, george and I were good friends. We love to go back and forth. As George Gammon would say, is it cheap or expensive? We don’t know if it’s the bottom or the top. So what we ask ourselves is, is it cheap or is it expensive? But humans are compare. Our brains are comparing mechanisms.
If I asked you, is this heavy? Heavy compared to what? Right, we have to compare it to something. So, is it cheap or expensive? Well, compared to what? Well, is it cheap compared to where it’s going to be in the future? Well, where is it going to be in the future, Mark? Well, let’s take a look. Run through a little thought exercise. Robert. I’ll keep you awake. Don’t worry. Okay, here we go. So remember, about 450 trillion is in utility assets. So we’re going to park that on side. Let’s look at the 450 trillion of just money that’s just parked just for the sake of preserving it.
Okay, we have 450 trillion. Now, I showed you all the different types of assets, from currencies to bonds to precious metals to real estate, and they all beat. They’re all diluted every year, right? They all have a rate of dilution, inflation, maintenance, etcetera. Now, I showed you most of those are pretty aggressive numbers for being conservative. I put 3%, I showed you the actual numbers. They’re much higher. But let’s just say we have $450 trillion of assets that are losing 3% or being diluted by 3% a year. That’s $13.5 trillion every single year. That’s a big number.
Now, the stock market is trading at about 20 times pe. So if we take the 13, shoot, typo, not zero point, 813.5 times 20 pe, that gives us about $270 trillion a year of enterprise value that bitcoin could be worth. Remember, it’s worth one. Today. It’s worth one. One to 270 seems like a pretty big growth rate to me. Anybody think that their real estate is going to go up by that number? What about the bonds? What about the S and P 500? Okay, now, remember, bitcoin is just this tiny little drop in a big ocean right here.
You can’t even see it. So the question then becomes, so I’ve been a venture capital investor for about a decade. I have a VC fund. And the way that we value a venture capital company is, we say, what is this company? And what do we think it could be worth? In the future. And how do we determine how much we think it could be worth in the future? Well, we look at the markets it’s disrupting, and we try to calculate what percentage of that market we think it could acquire. So if I was pitching you on Uber in silicon Valley, whatever, a dozen years ago, I’d say, hey, I got this idea for this app.
You’re like, okay, what is it? Well, it’s cool. You can get a car, and it’ll pick you up and take you somewhere, and you’re like. You mean like a taxi? Yeah, yeah, it’s kind of like a taxi, but it’s, like a black car, and it’s, like, real seamless. It’s kind of cool. Okay, how much is it worth? $100 million. What? $100 million? Where the heck did you get that number? Well, the taxi industry is this big, and the limo industry is this big, and the van share is this big. And if I get 5% from each of those, we get 100 million.
Okay, so that’s the way we approach it from venture capital perspective. So let’s just take a look at that. So the question that we would ask ourselves is if, as I’m saying, bitcoin is a better store of value than all 900 trillion of these assets, what percentage do we think bitcoin could grow against those? Let’s run through a few scenarios. You guys want to see a few scenarios? Yeah. All right. There is no guarantees or certainties in life. There’s only probabilities. But as investors, we better money every day that the future we think will come to pass.
So let’s just look at a couple of what I think are conservative estimates. And does anybody know how many bitcoin there are? And there will never be more. Of 21 million. Perfect. Let’s go to the number 21. So, in 21 years from now, that year will be 2045. Today, in 2024, the price of one bitcoin is $65,000 ish right now. Today, it is 0.1% of global assets. Store of value assets, not utility assets. 1%. The total market cap. The market capitalization is 1.3 trillion. If we could get to 2% of the global assets, that would push the price of bitcoin to $3 million per coin.
Just get into 2%. That would give it a $68 trillion market cap, and that would give us an annual run rate, an ARR. You guys know what that number is? Of 21%, that beats the hurdle rate. It’s double the s and p 500. I don’t think that’s outrageous. I’m not saying it’s going to do 150% like it’s done in the past. I’m saying 21%. Certainly going to outpace the S and P 500. What about a little bit more aggressive? What if it gets to 7% of those assets? That brings it to $280 trillion, or $13 million per bitcoin within 21 years.
That’d give us a 29% rate of return. And then we could say, what if it gets to 20% or 22%? $49 million per bitcoin. Now, as a venture capital investor, this is what we do every day. I think this company could take 10% of market share. Now, I think it will take 100% of gold. I think it will take 5% of art. It will take about 15% of real estate. We can break it up, but combined, maybe it’s 7%, because what we’re doing is we’re dematerializing assets. Do you guys know that there’s pretty much nowhere in the world that you could have put gold 100 years ago and it would still be there today? The US seized it.
All of Europe had wars. Now you could move it. How much does that cost? If you’re running for a true story? Rand Neumer, crypto, ran. His family fled Iran in the seventies, and they were being evacced out. And his family showed up to the helicopter and his dad had melted down all their gold, and it was in this barrel, and they’re getting loaded onto the plane, being evac’d out of the country. And they said, hey, you can’t take that barrel of gold with you. And they’re like, but this is our life savings. I said, sorry, you stay with your gold or you get on the plane.
So they got on the plane, fearing for their lives. They flew to South Africa and they lived in tents for three years because you couldn’t take a barrel of gold with you, but you could just know these twelve words in your head and take it with you anywhere. So it’s a different beast now. I’m not saying it’s going to replace everything. What I’m saying is maybe it could just grow a little bit bigger and gold’s still there, 45 trillion, which is way bigger than today. What do we say? It’s 16 trillion. Gold goes to 45 trillion.
Still great. Real estate’s still there, 1000 trillion. But bitcoin just grows a little bit bigger. It’s not that unreasonable. So now let’s take a look at this new economy blueprint. I might have to speed it up. Cause I got a couple more slides to go. Okay, so, the new economy blueprint. Now that we know this, now we can start to imagine this new economy that maybe we could build with a better asset. So, remember, technology moves in these 50 year cycles, and we’re starting one right here today. Now, the reason why I go back to this chart just for a second before I go to the next one, is because you have to understand, these are 50 year cycles.
And in each of these 50 year cycles, the only place you want to invest is in that cycle. So let’s just go back to 1908. Oil and automobile production. So, we had oil, oil fuels. We had the automobile, and we had mass production that was created. Then. 1971, we had the microprocessor, which led to personal computers, telecom, and the Internet. And now we have one today. Over the last 50 years, what have been the main sectors you’d want to invest into? Telecom, Internet, and computers. What did you want to invest into before that? Ford, GM, ge.
Real estate’s always there. It’s a different topic. We’ll come back to that. But so we know that the next 50 years, not only will the course of humanity change because of technology, but it will drive the financial markets. Now, the next question is, again, is it too late? And what you have to realize is that each of these 50 years rolls out through a very predictive, or I should say, predictable, pattern. So there’s four stages, two main stages, and four phases that this technology is called the diffusion of innovation. And so what happens is, you have the big bang, the eruption.
The technology comes out. The true believers are there, the psychopaths, and then eventually, you start to get the surge, where it starts bringing more people in. Then you get the deployment phase, and you get it. I put the red arrow to illustrate sort of where we’re at today. And the reason why I do that is because what happens is, everybody thinks I missed the boat. It’s too late. I was just talking backstage with somebody, and they were asking me about bitcoin and da da da. And I said, would you believe that I started buying in 2015 when it’s $300? And I believe today is a better risk adjusted entry than it was back then.
Now, it was cheaper back then, but the risk was so high. Today, the risk is gone, but we still have that room in front of us. But more importantly, what we can see is the. The second phase is where the bulk of the returns come from. You can see how much bigger the second phase is than the first phase. Anybody know what an S curve is use an S curve to measure technology adoption. So the time it takes to go from 10% is the same time it takes to go to 90%. So if it took ten years to get to 10%, it takes another ten years to go to 90.
That’s where the growth comes in the second phase. So not only do we have higher returns in front of us, we also have less risk at the same time. Anybody like higher returns and less risk? Oh, yeah, sounds pretty good. I like that too. All right, now I want you to think of this a little bit different. So we have assets or commodities. So like, oil is a commodity, right? It’s an asset. A commodity. And you could certainly buy oil. A lot of you guys probably do. Maybe you put some in your portfolio, you’re buying futures against it, ETF’s, whatever.
And oil for the last 50 years has hovered around $60 a barrel of plus or minus. Yeah, it goes 120, drops down to 40, but about 50, $60 a barrel for the most part. So oil itself hasn’t really moved a whole lot when you look at it over a couple decades. But there’s an oil industry that just happens to be the 8th largest industry in the world, valued at almost $5 trillion. Like who came up with the new drill bit for the horizontal drilling? And who came up with the new pressure relief system for the oil pipelines? And who came up with the new sonar for the oil tankers to go to the street? There’s an oil industry built around an asset.
There’s gold, an asset, a commodity. And there’s a gold industry, including little pawn shops on my corner selling gold. There’s an industry around it. And when you think about it like that, you start to get your mind expanded to understand what’s going going on here. So really it’s the cluster of technologies that we want to talk about. So remember, it wasn’t just the automobile, it was the automobile. Plus oil and oil futures, fuels, plus mass production that led to the boom. And so right now what we have is bitcoin and AI and the wave of decentralization that are all coming together.
So what does that mean? It means that Sam Altman from, from Chatgpt says that we’re going to see ten person companies with billion dollar valuations and they’re taking bets to see when the first one person, billion dollar company will be. Now, bitcoin is a lot of things. It’s decentralized, immutable, permissionless. One thing about bitcoin that’s also interesting is also person less personless. What that means is that in order to get a bank account, you got to be a person and you got to have a lot of documentation. But bitcoin is person less, meaning a machine can have an account and it can send and receive its own money.
And in the rise of AI and autonomous vehicles and robots, and now online virtual agents and AI agents that could have their own wallet and go do economic transactions on my behalf. None of us are bullish enough on what that means. We’re about to see an explosion that we’ve never imagined. Now, we think about this. Then we have bitcoin instead of oil or gold, and then we have a bitcoin industry being built on the back of that. So, let’s talk about legacy wealth in the new economy. So, now that we know this, we’ve understood a couple things.
Like, for example, the real hurdle rate means most of our assets are worthless. We know that we’re in this 21st 8th century. But as I showed you, we’re using financial tools from the 15 hundreds for some reason. And we know that we are trying to use all types of financial engineering and all this whole Wall street industries built up and all these financial advisors trying to put us in this diversified portfolio of losers. So, what’s a better way? Well, the better way is to create wealth first. You create wealth by, you know, solving problems for people.
So you typically do that through a business. So, number one, create your wealth through a business. You don’t invest your way to wealth. Warren Buffett goes to work at a business every day called Berkshire Hathaway. So, number one, create your wealth in your business. Build a business, but use the new tools. Remember, Sam Altman said, we’ll have the first one person billion dollar company. Now, you may not build a billion dollar company, but could you run your business on one 10th of the staff and make more money? Could you easily build up an AI agent and some LLMs and spin up a content business pretty quickly on your spare time? Yes.
Number two, optimize. Use real estate for tax efficiency and cash flow. So, I use real estate to get rid of most of my taxes, and then I have more after tax income, and I don’t invest it in bitcoin. I save it there, I save it there, and then ultimately, I multiply what my savings by investing into these q wave, this quantum wave assets. Now, I’m gonna go real quick here. I use bitcoin as my store of value, and that means that everything in the world is getting more expensive for all you guys, but everything in the world is getting cheaper for me because I price my thing in a different asset.
So, price of home went down from 664 bitcoin in 2016. Today it’s only six bitcoin. Everything’s getting cheaper for me. I love this world. I can buy more and more of my stuff. So what do you want to do? Let’s just say you’re a hypothetical investor of a million dollars in assets. You make about 200 grand a year. You have a 25% savings rate, so you can save about 50,000 a year. A couple of the allocation strategies that you could do would be to put 10% of an allocation into bitcoin, which might sound like crazy. So try 1%, if that’s better.
10% allocation to bitcoin, and I take 10% of my savings, my excess earning, and I put that into bitcoin. What would happen if I did that? Well, over the 21 years that we looked at earlier, if I was making 200 grand a year and putting 10% of my portfolio in and 10% of my income every year, within seven years, I would have $7 million. If I put more in, it goes up. And we’ll go through the math. I don’t have a lot of time. So let me summarize all this. The old economy is struggling because we’re building a new economy with new 21st age tools and going to a world of automation, robots, AI, technology.
But we’re still using technology for our financial system from the 15 hundreds. We’re still saving our wealth in technology and tools that were built in the 16 hundreds. Technology is always what changes the world, and these technology waves happen in 50 year cycles. Bitcoin is outperforming every traditional asset that’s out there. The real hurdle rate is 15%, not 3.5% like your government tells you. And all we need is for bitcoin to capture 7% of these store value assets to get this to reality. Save in bitcoin, don’t invest into it. And if you want to invest, only invest into the cluster.
Now, I did say use real estate for tax efficiency and cash flow. I don’t have time to go into that. I’m not against it. We use different things for different purposes, but in the. In the realm of saving, preserving wealth, and growing it, this is where we want to be. I know I talked really fast. If you want, I have a whole free ebook on this. It’s completely free. You can download. It explains the entire quantum leap. It explains all the different assets, how it breaks down in predictable cycles. You can get it for free if you want, right there, because I didn’t have time to go through the whole thing, and I’m out of time.
Thanks so much. No, we. Hey, we could do better than that. Was that good or what? There we go. Mark, are you hanging out? Are you hanging out in the lobby at all back here? This is the one session I was like, man, we need, like, you for three sessions. How many guys would like three sessions? I’ll be good. Real quick, what’s your drink of choice? Water. Water. Hey, so tonight at the vip party, Mark’s gonna be there, so get him a nice ice or no ice? Ice. Ice. I’m not a psychopath. He’s not european. There we go.
I love it. Yeah, we appreciate it. So you’re gonna be the vip party tonight? Yep, I’ll be there. I have so many questions. I was back there taking notes, and I was like, oh, man, this is really good. So did you guys enjoy that? All right, Mark, thank you for being here, brother. Did you like that? That was from a live presentation. Maybe a little different than my normal YouTube videos. Now, if you want to know more about how this investing black hole is affecting all your traditional investments and you’re losing money, but you probably don’t realize it, then you might want to watch this video right here.
Otherwise, like this video, if you liked it, thumbs down. If you don’t, that’s okay. At least tell me why in the comments down below. Subscribe if you’re not already subscribed. And that’s what I got. To your success. I’m out.
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