Bitcoin miners have better things to do than mine Bitcoin.
The Great Repricing
Michael Green AKA Professor Plum on X, has a fascinating post on the future of Bitcoin.
Please consider The Great Re-Pricing: When the “Digital Gold” Bill Came Due
In April 2025, I asked a simple question in my note, “What is Gold?”:
“If the $1.7 trillion now sitting in bitcoin had flowed into bullion instead, what would the yellow metal trade at?”
My models suggested that bitcoin acted as a “shadow discount” on Gold, depressing its price by 30–50% by diverting monetary flows into a faster, digital horse. I argued that if those flows ever reversed—if the “Passive Bid” for bitcoin evaporated—Gold would violently re-rate to where it belonged.
Eight months later, we have our answer. In 2025, bitcoin and Gold flows became negatively correlated.
Now, this is not a STRONG relationship, and I’m not remotely going to suggest that the only source of gold flows is coming from bitcoin. But it IS happening. And as I noted last week, it’s an indication of what I believe is the most significant asset rotation of the second half of the 2020s — not a “rotation” from Tech to Value, but a rotation from Energy Consumers to Energy Conservers/Producers.
The bitcoin “Store of Value” trade has fundamentally broken in two. Unlike gold, which is mined with energy, but then remains “gold” regardless of how much mining energy is expended, bitcoin requires continual energy expenditure to maintain the bitcoin network. The mining stops and bitcoin stops; the mining slows, and the bitcoin network’s “safety” and performance degrade.
The “Jaws of Death” (bitcoin’s insolvency)
To understand why Gold is soaring, you first have to understand why bitcoin is bleeding.
In the “Post-Capitalist” era of zero interest rates and surplus energy, we believed we could solve financial problems with code. We ignored the Second Law of Thermodynamics: entropy. Maintaining a digital ledger requires a constant injection of ordered energy.
This chart is the receipt for that entropy [Lead Chart]
I have noted this relationship in many discussions of bitcoin. It’s important to remember what “bitcoin” actually is — the token issued to miners (accountants) for maintaining the network. If the price of bitcoin falls, miners receive less compensation for doing the work.
- The Divergence: Since October 2025, bitcoin’s price has crashed ~27%.
- The Stickiness: The network Hashrate (the cost to maintain the bitcoin network) has only dropped ~5-8%.
The miners are currently doing the same amount of work for 27% less revenue. They have billions in sunk capex, and as long as bitcoin remains above the marginal cash cost of mining (~$85K), they will keep mining. This, in itself, is nothing new. It has always been the case that mining has periods of unprofitability. With an “all in” (including depreciation cost) of roughly $130K, the average public miner is now deeply unprofitable and selling everything they mine to generate cash. All else equal, the hashrate must fall, and miners must move to lower cost regions as equipment depreciates and existing power purchase agreements (PPAs) roll off into new, higher pricing.
The difference this time is that bitcoin miners are no longer using “surplus” energy (debates about renewable sources have notably disappeared), and are now bidding against Microsoft and Amazon for “Machine Food” (electricity). This is not a “dip”; it is a squeeze. The marginal miner is underwater, burning treasury (selling bitcoin) to keep the lights on, hoping for a bailout that isn’t coming. While bitcoin survived previous drawdowns because “true believer” miners had no competing use for their power connections, today AI datacenters pay 3-4x the revenue per kilowatt as bitcoin mining — and the miners are switching.
The resulting decline in hash rate won’t slow the supply of new bitcoin as the network difficulty adjustment will fall. But if the price remains elevated and the hashrate falls, the network becomes increasingly vulnerable to attacks from the remaining miners. Chinese concentration in 2021 has given way to US concentration. And US concentration, in a region where financial crimes are at least nominally punishable (e.g. FTX), is now giving way to a migration to Africa — where miners are perhaps “less incentivized” towards good behavior. If you really believe that the global store of value will be maintained by African hydro, and that once in place, those energy connections do not face the same AI arbitrage by adding high-speed data connections, I’m not really sure how to help you.
And all of this is occurring as the entire bitcoin network faces rising security risks from the emergence of quantum computing and another “halving” in 2028 (which will reduce revenue per hash by 50% unless the bitcoin price increases by 100%). A major capex boom to replace existing mining equipment while miners are barely hanging on and increasingly drawn to AI substitution ahead of a 50% revenue reduction in two years? Unlikely (but admittedly possible).
The “Passive Bid” Has Diminished
At the same time that network risks are rising, the demand side is diminishing. Bitcoin is not temporarily flow-driven. It is necessarily flow-driven. In the absence of endogenous cash generation, price discovery collapses to a reflexive equilibrium governed by marginal buyer demand and balance-sheet constraints.
For two years, the ETF complex provided a mindless, price-agnostic bid for bitcoin. That tap has slowed radically, and now bitcoin must find a new untapped bid. My hunch is that 2026 will start with “value” buyers, rebalancers, and tax-loss harvesting from 2025 returning to bitcoin ETFs and driving prices higher for a time.
All else equal, this would drive bitcoin’s price close to $110K and “complete” the distribution pattern that has been in play for most of 2025 as we transitioned from believers to return seekers. For most bitcoin holders, we’ve shifted from “faith” to “show me the money.” You don’t hold bitcoin as an ETF because you believe the world will collapse, AND you need an insurance policy. ETF buyers want returns. Absent endogenous cash flows (e.g. earnings, transaction fee share, dividends), bitcoin has no stabilizing feedback loop—only reflexive ones. Further declines do not summon value buyers; they merely test the resilience of belief. And while long-term holders may not SELL, they are no longer the marginal price setters; and as prices fall, their reduced balance-sheet capacity leaves them with less ammunition to buy, especially for leveraged balance-sheet buyers (e.g., MicroStrategy).
The Gold Restoration (The “Zero-Maintenance” Arbitrage)
While Western retail investors are paralyzed by their crypto drawdowns, Central Banks and the Global South are buying Gold at a record pace. Why?
Because existing Gold does not eat.
In a world of “Scarcity Economics”—where energy is rivalrous and expensive—the “Cost to Carry” an asset matters.
Bitcoin: Requires a massive, continuous calorie burn (electricity) just to prevent the network from collapsing. As energy prices rise (thanks to AI and the exhaustion of the 2010s surplus), the cost to maintain your “digital gold” rises.
Gold: Is chemically inert. It sits in a vault. Its maintenance cost is effectively zero and largely unaffected by existing value.
Bitcoin was the “marginal buyer” of energy in an era of surplus. That energy has finally found a “structural buyer” in AI. As the “Pig” (demographic demand) enters the “Python” (limited infrastructure), bitcoin is a luxury being squeezed out of the grid. The market has begun to realize that you cannot store generational wealth in an asset that competes with AI for power. You store it in the asset that exists outside the energy grid.
The Shadow Lifts
The hypothesis I made in April 2025 — that bitcoin was artificially suppressing Gold — is being validated in real-time. The capital fleeing the “Risk-On” speculation of crypto is not going to cash; it is going to the “Risk-Off” insurance of Gold.
We are seeing the removal of the “Shadow Discount.” The 30–50% premium that Bitcoin stole is flowing back to the King of Metals. In the “Electron War” of 2026-2030, the winner is the rock that does nothing.
That’s a well thought out post and one of the best I have ever seen on Bitcoin.
That does not mean he is right, but so far the thesis fits.
Ten Key Points
- The bitcoin “Store of Value” trade has fundamentally broken in two. Unlike gold, which is mined with energy, but then remains “gold” regardless of how much mining energy is expended, bitcoin requires continual energy expenditure to maintain the bitcoin network.
- Maintaining a digital ledger requires a constant injection of ordered energy.
- The miners are currently doing the same amount of work for 27% less revenue. They have billions in sunk capex, and as long as bitcoin remains above the marginal cash cost of mining (~$85K), they will keep mining. This, in itself, is nothing new. It has always been the case that mining has periods of unprofitability.
- The difference this time is that bitcoin miners are no longer using “surplus” energy.
- AI datacenters pay 3-4x the revenue per kilowatt as bitcoin mining — and the miners are switching.
- Another “halving” in 2028 will reduce revenue per hash by 50% unless the bitcoin price increases by 100%.
- The “Passive Bid” Has Diminished. For two years, the ETF complex provided a mindless, price-agnostic bid for bitcoin. That tap has slowed radically, and now bitcoin must find a new untapped bid.
- Absent endogenous cash flows (e.g. earnings, transaction fee share, dividends), bitcoin has no stabilizing feedback loop—only reflexive ones. Further declines do not summon value buyers; they merely test the resilience of belief.
- Bitcoin requires a massive, continuous calorie burn (electricity) just to prevent the network from collapsing. As energy prices rise (thanks to AI and the exhaustion of the 2010s surplus), the cost to maintain your “digital gold” rises.
- Gold is chemically inert. It sits in a vault. Its maintenance cost is effectively zero and largely unaffected by existing value.
Halving – Point Number 6
The last Bitcoin halving occurred on April 19, 2024, reducing the block reward for miners from 6.25 BTC to 3.125 BTC, marking the fourth halving event in Bitcoin’s history and decreasing the supply of new bitcoins
The next Bitcoin halving is projected for mid-2028, around April 17-29, when the block reward for miners will be cut from 3.125 BTC to 1.5625 BTC.
The next halving will reduce revenue per hash by 50% unless the bitcoin price increases by 100 percent.
The Bitcoin belief is twofold (price follows the hash rate, and the hash rate always goes up).
That’s not always true. But over the long haul, it’s generally been true. Regardless, in an energy sensitive environment with demand coming from AI, halving isn’t what it used to be.
Meanwhile, if miners have better things to do with their energy than mine Bitcoin, the hash rate only has one way to go.
Bitcoin vs Hash Rate
For other time frames see Blockchain Bitcoin Hash Rate.
America’s Biggest Bitcoin Miners Are Pivoting to AI
Wired reports America’s Biggest Bitcoin Miners Are Pivoting to AI
In the face of a profitability crisis, industrial-scale bitcoin miners are transforming their data centers into AI factories.
Across the US, an identical pattern is playing out at bitcoin mining facilities owned by a variety of operators. In the last 18 months, at least eight other publicly traded bitcoin mining companies—Bitfarms, Core Scientific, Riot, IREN, TeraWulf, CleanSpark, Bit Digital, MARA Holdings, and Cipher Mining—have announced plans to pivot either partly or wholly to AI.
The change reflects rabid demand among AI companies for data centers equipped to handle the energy-intensive workloads required to train their models. Ironically, as the AI arms race intensifies, large-scale bitcoin mining firms—which contributed to the AI boom by pouring billions of dollars into data center infrastructure—are being forced to reinvent themselves.
“Bitcoin mining created the blueprint for the AI compute boom and the modern data center,” says Meltem Demirors, general partner at the VC firm Crucible Capital, which invests in companies in the crypto, compute, and energy sectors. “They have found that their cost of capital is much lower if they go into the AI narrative. They have the powered shell, they’re ripping out the [mining machines], and their tenant is bringing the GPUs.”
A Perfect Storm
In the last few years, with advances in hardware, the amount of competition on the bitcoin network has increased at an exponential rate, meaning that winning a bitcoin reward has required ever more compute. In 2024, meanwhile, the size of that reward fell by half—as happens roughly every four years—to 3.125 bitcoin. Against that backdrop, the recent decline in the price of bitcoin to around $85,000—a 30 percent drop from its 2025 peak—has created a perfect storm that threatens the profitability of all but the most cost-efficient mines.
“The economics are terrible today,” says Charles Chong, VP of strategy at the crypto advisory firm BlockSpaceForce and former director of strategy at the bitcoin mining company Foundry. “If I buy a bitcoin mining machine today, I don’t know if I can make the money back.”
As of mid-November, a tiny minority of the largest publicly traded bitcoin mining companies stood to remain profitable at the current bitcoin price, according to research from the crypto investment firm CoinShares.
By comparison, the AI market promises superior margins and predictable revenues, codified in multiyear contracts with major tech firms. In the last few months, publicly traded bitcoin mining companies have announced more than $43 billion worth of AI and HPC contracts, CoinShares found.
“Bitcoin mining is still profitable,” claims Ben Gagnon, CEO at bitcoin mining company Bitfarms, which recently announced it would switch wholly to AI and HPC by 2027. “It’s that HPC creates so much more value per unit of energy and does so predictably for years into the future that the company can’t justify further investment into bitcoin mining.”
Bitcoin mining is still profitable … maybe … for now. It depends on the cost of energy and the price of Bitcoin.
But desirability to mine Bitcoin also depends on other offers, notably servers for AI rather than mining.
Michael Green addressed this point made by Wired.
A dramatic drop in bitcoin mining activity could increase the feasibility of what’s known as a 51 percent attack, whereby somebody hijacks bitcoin transactions by controlling the majority of the computing power directed at the network. For now, such an attack remains prohibitively expensive. But as the reward for bitcoin mining continues to fall every four years, the fear is that mining will no longer be economical. “It’s definitely a threat—and a serious one,” claims Chong, the BlockSpaceForce executive. “But how soon is an open question.”
Others are betting that bitcoin mining will become the sole preserve of sovereign states—like Bhutan, El Salvador, and the US—that cannot abide any threat to the value of the national bitcoin stockpiles they have accumulated. “Maybe people will mine at a loss,” says Demirors, “because it’s a matter of national security.”
MSTR Strategy Inc
Corporate Strategy
Grok AI: MicroStrategy (now rebranded as Strategy, but still trading as MSTR) has positioned itself as a pioneer among public companies in adopting Bitcoin as a primary treasury reserve asset.
The core approach involves aggressively accumulating Bitcoin through various financing methods, treating it as a long-term store of value rather than a short-term trading asset. As of January 5, 2026, Strategy holds approximately 673,783 BTC, acquired at an average cost of about $74,000 per coin, representing over 3% of the total Bitcoin supply that will ever exist and making it the largest corporate holder.
This leveraged approach amplifies Bitcoin exposure. The company continues to double down, viewing Bitcoin dips as buying opportunities, and has influenced other firms to adopt similar “crypto treasury” strategies.
Liquidity and Debt Obligations: Aggressive capital raises have raised concerns about dilution (e.g., issuing more shares erodes existing shareholders’ value) and liquidity squeezes.
As of early January 2026, mNAV hovered around 1.02, meaning the stock is barely worth more than the underlying Bitcoin.
In summary, Strategy’s Bitcoin play is a high-conviction bet on long-term crypto adoption, but it exposes the company to amplified market risks, making MSTR a volatile investment vehicle rather than a stable tech stock.
Liquidation Threat
Strategy does not have any collateralized loans or margin calls tied to its Bitcoin holdings as of January 2026. The company repaid its previous Bitcoin-backed loan (from Silvergate in 2022) and currently holds its ~674,000 BTC unencumbered. Its debt consists primarily of convertible senior notes totaling around $8.2 billion, with no maturities until 2028.
There are no specific debt covenants that force liquidation at a particular Bitcoin price. That said, a prolonged severe drop in Bitcoin’s price could strain the company’s ability to service its ~$854 million in annual fixed obligations (mostly preferred stock dividends and minimal interest).
With a $2.25 billion cash reserve providing 2.5+ years of coverage, short-term dips—even below the $75,000 average cost basis—are manageable without selling Bitcoin.
However, if Bitcoin falls below approximately $13,000 (where the value of holdings roughly equals outstanding debt), the company could face insolvency risks, potentially leading to forced asset liquidation in a bankruptcy scenario. This figure assumes no additional capital raises, which Strategy has historically used to navigate downturns.
Dip Buying
Strategy has demonstrated a pattern of using available liquidity — including portions of its cash reserve — to aggressively buy Bitcoin during price dips, even as the reserve was initially positioned to cover fixed obligations like preferred dividends and debt interest. The company most recently exemplified this in late December 2025 and early January 2026, purchasing ~1,286 BTC for $116 million (at an average ~$90,391) while Bitcoin hovered in the high $80k–low $90k range, funded partly through concurrent equity sales that also bolstered the USD reserve to $2.25 billion as of January 4, 2026.
Strategy already reported a $17.4 billion unrealized loss in Q4 2025 from a ~25% quarterly drop. A deeper crash would amplify paper losses but wouldn’t immediately force action, as holdings are unencumbered (no collateralized loans or margin calls).
Strategy funds buys via equity ATM sales and convertibles. If stock trades at a discount to NAV and Bitcoin stays low, new issuances become dilutive or impossible without eroding shareholder value further. This breaks the “infinite money glitch” of raising capital accretively.
True forced liquidation isn’t triggered until Bitcoin falls to ~$12,000–13,000 (where holdings value ≈ total debt + preferred obligations of ~$15–16 billion). This is an 85–90% crash from current ~$90,000 levels — severe but within historical precedent (e.g., 2022’s 77% drop).
Strategy’s strategy has been to buy the dip. If one of these dip buys goes very sour, and investors refuse to buy additional convertible notes, the stock price is going to hell even if MSTR survives a genuine liquidity event.
What About the Whales?
That’s a very pertinent “whatabout” question. The term whale means huge holders of Bitcoin.
If whales take heed to what Green has said, there could be a massive “head for the hills” exit.
Regardless, someone has to hold every bitcoin ever mined (minus lost keys) all the way up and all the way down.
If whales believe the above, for any reason (even if it’s fundamentally flawed), Bitcoin will crash.
Technical Pattern
Green noted a potential Head and Shoulders top (with the right shoulder not fully formed).
I note a rising wedge. Both are bearish patterns.
In this case, the technicals and the fundamentals are aligned.
Bitcoin Weekly Chart
Dashed lines show support levels.
Bitcoin is on support now. There is support below at 75,000 at 55,000 and 40,000. If those break, you are looking at 25,000.
If support breaks things could get interesting. A 75 percent drop from the top, very routine with Bitcoin, would take the prices down to the low 30,000 range.
I prefer gold and silver.
The Debasement Trade
Gold and silver and even stocks are acting as part of the debasement trade. Bitcoin has diverged, for reasons above (or some other reason I don’t readily see).
Gold vs Faith in Central Banks
I created similar charts years ago and periodically update them. That above chart is recent enough to not type all those anecdotes again.
Faith in the Fed and Congress is a much better explanation for moves in gold than fluctuations in the dollar.
Gold vs. Faith in Central Banks Major Timeline
August 15, 1971: Nixon ended convertibility of gold at the then fixed price of $35.00 per ounce. Nixon’s actions allowed the Fed and Congress to inflate at will.
January 21, 1980: Gold spiked to a then high of $850 per ounce in the wake of Nixon shock.
March 1980: Volcker restored faith in central banks by jacking up interest rates to 20 percent. Volcker was followed by Alan Greenspan, labeled the “Great Maestro” for keeping inflation under control.
May 7, 1999: Brown’s Bottom! On the BOE announced plans to dump gold for other assets. Gold was $282. The notice drove the price to $252. The event is named after Gordon Brown, then the UK Chancellor of the Exchequer.
August 23, 2011: Gold hit a then record high of $1923 with a European debt Crisis.
July 26, 2012: ECB president Mario Draghi made his famous “Whatever it Takes” speech. “Within our mandate, the ECB will do whatever it takes to preserve the Euro, and believe me it will be enough.” What did Draghi do? Curiously, nothing at all. However, his statement calmed the bond markets and equity markets. Gold was clobbered.
December 17, 2015: Gold bottoms as faith in central banks peaks again.
What followed was QE to absurd levels, three rounds of massive free money fiscal stimulus during Covid, and the Fed misjudging the ensuing inflation.
Now we have insane tariff policy by Trump, a Fed that still does not understand inflation, and Trump pressure on the Fed to cut rates.
Gold and Silver Surge to New Record Highs
On December 22, 2025, I addressed the question Gold and Silver Surge to New Record Highs, What’s Going On?
Debt and Deficits
All the Trump administration bragging about addressing the deficit is nonsense. Gold doesn’t believe that story will last and neither do I.
And to that we can add Trump Seeks a $500 Billion Increase in Defense Spending
That’s a 5.8 trillion increase in debt over 10 years factoring in interest.
And we need to factor in the US promising to “Run Venezuela”. To which I ask What Are the Odds that the US Can Successfully Run Venezuela?
Finally, we need to consider Trump proposes to Take Greenland the ‘Easy Way’ or the ‘Hard Way’ by Force
Trump wants Greenland. So he will take it.
A Word About Faith
Gold does not believe the Fed is under control, Congress is under control, budget deficits are under control, or Trump is under control.
Neither do I. But with all that debasement and global uncertainty, only true gold is shining.
Whatever regarding digital gold and bitcoin. Real gold is #4,618 and silver crossed above $85 today. The miners are the play.
Bitcoin is useless. There are better alternatives that have actual value like Tron and Solana. Crypto will survive but Bitcoin will go to zero.
Latest Genocide in GAZA for 27 months now. Nobody is helping.
To stop genocide EVERT SOCIAL MEDIA are our weapons.
Repeat the following:
Every first Sunday on every month
March for FREE PALESTINE.
Don’t thumb up but repeat yourself on every social media.
THE problem for GAZA is they follow a man made religion or cult that is based on death, control and hate —not love freedom and life. They practice terrorism for the rest of the world—They answer the question would the world be better off without them or with them.
Bitcoin “Digital Gold” – Has Always Been ‘Fool’s Gold’?
Keep Everyone Out Of The “Metals’ Market.!
Now You Know Why?? – ‘Silver’ In “Extreme’ Shortage.!
Correct!
Remember you can’t INVEST in gold. Gold is a commodity. Therefore if you buy it in the hope it will increase in value you are speculating.
If you buy a Mutual Fund then you are INVESTING.
That doesn’t mean that it isn’t fun watching the game from the sidelines,
You appear to be operating with an unusual definition of “investing” vs. “speculating”.
Ben Graham’s conventional definition is: “An investment operation is one which, upon thorough analysis, promises security of principal and a reasonable rate of return. Operations not meeting these requirements are speculative.”
At this point, if you buy a mutual fund at historically unprecedented price/earnings ratios, at a time of record earnings/GDP, you are speculating. Just like the dot-com bubble in 2000, the stock market at this moment offers neither security of principal nor a reasonable 10-year expected rate of return.
As for gold, it is more like an insurance policy against the loss of value of government-sponsored currencies.
Own both the shield (gold) and the sword (BTC) in the demise of the petrodollar. The last 3 years btc 6x vs gold 3x
It is true that BTC has falled 27% since October.
But Mish doesn’t have the intellectual fortitude to include a big bold disclaimer stating how much BTC has gone up since he started predicting its demise.
Has it been about 10 years now Mish?
Trump will bail them out for a donation. Well the top guys anyway
bitcoin was developed by DARPA so CIA could move funds around the planet to pay off black ops and warlords.
And the proof is?
It might have been developed by DARPA. Then, again. it might have been Satoshi.
Like most DARPA projects, their work is rated at or near black.
this is your best post in years Mish. please keep up this. i remember you nailed the crash in r/e way back machine. gold has always outperformed all assets over the centuries, after tax. after gov confiscations due to warfare, or dictatorships. nothing comes close. i’m a life long stock trader but i know reality of what is best. gold is money all the rest is not. including farmland and timber land…….and houses. those can be taxed away or taken by force of many different means. a million dollars of gold fits in little briefcase. most smart folks keep gold in a few different countries. all the “robber baron billionaires” sent there gold to toronto vaults when FDR made it illegal to hold gold for amerikan citizens in 1933. this is an old story over the thousands of years.
Very interesting and thought-provoking article.
Bitcoin is training people to “Own nothing and be happy”
But if you ask Chat GPT, AI is true believer of cryptocurrencies.
But I just hold gold. I’m true believer of gold.
I believe government will never officially recognise as legal cos crypto can’t be printed.
I assume a typo. It is gold that can’t be printed,,, Crypto is always digital clicks with infinite potential supply.
trump recommends it.
Bitcoin and crypto were doomed the moment that the Orange Jesus embraced it as another criminal grifting opportunity. One thing you can count on: whatever Trump embraces turns to $hit. Including this country unfortunately.
the empire was shit already. he just exposed it as an obvious fact for the more innocent and naive in pax dumbfuckistan.
The debasement trade certainly benefits gold and silver. I would expect a lesser role, if any, for Bitcoin because its pricing structure is essentially speculative.
As for support levels for a highly speculative ‘asset,’ I suspect all bets are off. If it drops past $50k, then confidence is lost, and it goes to zero
More interesting IMHO, is to consider the role of precious metals in the derivatives market. When the cracks become visible (as they are starting to), hedging will collapse. I suspect risk will run rampant, to put it mildly.
Bitcoin value proposition vs. Gold:
– fixed supply
– easily verified
– highly portable
– low storage cost
– fast centralized settlement
– completely transparent
– global access
– 24/7 liquidity
Go ahead and argue adoption and mining all you want, just remember mining efficiency has improved to under 10 J/TH. I wish Mish would post the actual X link, many excellent rebuttals to the “Professor’s” claims. Also, Green is not a Crypto permabear or a no-coiner. In fact, he’s a fan of L1 blockchains like Solana and their capabilities. He just simply hates Bitcoin.
This is a solid statement for the shift in market sentiment:
The hypothesis I made in April 2025 – that bitcoin was artificially suppressing Gold – is being validated in real-time. The capital fleeing the “Risk-On” speculation of crypto is not going to cash; it is going to the “Risk-Off” insurance of Gold.
We are seeing the removal of the “Shadow Discount.” The 30-50%
premium that Bitcoin stole is flowing back to the King of Metals. In the
“Electron War” of 2026-2030, the winner is the rock that does nothing.
Love it! “The winner is the rock that does nothing”
All one has to do is look at the parabolic rate of US debt and deficit spending and you can see that this corresponding parabolic rate of gold appreciation is only a function of faith in the fiat system and Federal Reserve/administration.
I suppose I wish I had more physical gold and silver as this is playing out.
i learned early in life, if you weren’t born a billionaire you did something wrong. if you ain’t a billionaire by 35 you are just a loser. if you don’t give a fuck about being a thousandaire or millionaire of billionaire, you can lead a content life. and live better than a billionaire.
If you look long and hard at one of your gold and silver coins, sometimes it will smile back at you.
??😄??
But only if they’re proof coins 🙂
Unfortunately it is hard to see them in that safe deposit box. OK a couple of ties per year I get to see them…
Wish there were more!
Because existing Gold does not eat.
In a world of “Scarcity Economics”—where energy is rivalrous and expensive—the “Cost to Carry” an asset matters.
FUNDAMENTAL FLAW – it makes the quoted article appear ridiculous
Cost to carry what does it cost to store insure a quantity of gold
and then to sell – where and how does the average person sell their
gold or silver coin – on the internet ? How ??
though some good points are made
THE CORE CONCERN OF BITCOIN as fewer coins are available to mine the fewer incentive for miners to ‘ stay alive ‘ ‘ re invest ‘ and continue with no proven concensus on earnings (no coins to mine where is the proven money in it ) – they have to charge transaction fees
Leading to
the core concern in the long-term debate about Bitcoin’s security model: a smaller number of highly efficient miners (or more concentrated hash rate) could make it easier (and cheaper relative to the network’s value) for a single entity—or a coordinated group—to approach or achieve 51% control of the hash rate, enabling a 51% attack. This would allow them to double-spend coins, censor transactions, or rewrite recent blockchain history, potentially eroding trust and causing the network to “collapse” in a practical sense (e.g., exchanges halting trading, value plummeting).
Pretty easy and liquid to buy the Sprot Physically backed ETF or a gold mining stock.
Easy transfers both directions from Dollars, Yen, Euros or any currency you want.
Gold can be pretty liquid and even traded in your Roth.
😉
in the physical metals around the globe including pax amerika, nobody pays tax on gold appreciation. also many folks will discount prices for things like pool cleaning or construction if you pay them in copper, silver or gold. has been this way for centuries. this is just some good old fashioned wisdom. if you ever lived in a country or a hood with ethnic groups who have been wiped out economically from war or tyrants……….this factor is much bigger. i’ve been told that even mexican men will do quality work for less if payed in plata or oro. versus cash or a check. i wouldn’t know this personally as that would be against the law of the nazi land. just heard about this. also so many gold stackers have boating accidents. so sad to lose it all.
Never place all of your gold and silver holdings on a single boat.
HA HA. too bad i keep making that mistake. i should know better. i grew up sailing and fishing on the water. my better half is an archaelogist. some of her pals are treasure hunters. gold and silver hauls from ships sunk over the centuries areound the globe.
I found a silver coin on the beach in Florida once after a hurricane. It was a piece of eight from some Spanish wreck.
apparently few understand the dynamic ( I received a downvote )
WHAT HAPPENS WHEN YOU NEAR THE LAST COIN TO BE MINED
as fewer and fewer coins are available to MINE you lose miners
and then you get to 100 then 50 10 1 COIN LEFT to mine then NONE
BUT YOU NEED THE MINERS TO STAY ALIVE because Bitcoin Transactions Depend On MINERS HASH RATE – with No Miners No Transactions
So even after the last coin is mined HASH RATE IS REQUIRED to keep the coin alive
Miners revenue is now from transaction fees only – not the coins
HASH RATE NOT COIN VALUE a 51% control of the hash rate, enabling what they call a 51% attack. – You do NOT need to control coin value – ONLY coin HASH RATE – after the last coin is mined if 10% 20% 30% of the miners WHOEVER HAS A PERCENT OF HASH RATE come to gether and have 51% or more of the HASH RATE they control the coin
Thank You!
Great article. I wonder whether the Gold market has gotten some “crypto” mentality lately. As for BTC, I have some coffee money there (tiny) which I plan to extract the minute it earns even 10% or so. I have no stomach for it.
Lottery tickets will have about the same risk-return profile as Bitcoin over time.
Yeah, it feels like a casino.
This is fascinating. Really in-depth analysis of all the forces at work. A little thermodynamics lesson thrown in too. Awesome! Never been a BTC fan. Still not.
All meaningless, for in a few short years AI will take over. Then the need for money disappears forever when everything is provided for free.
Satanist Frankist zionist bot
Hey! I didn’t say the AI would be Jewish?
everybody is a jooooo or a rag head to nazis in amerikan empire……….evil empire 101. 9.11.01 was the beginning of the end of the empire. the response to 9.11 made the world just LOL. including the thinking amerikans. this is an old story. trump is our nero. clintons and bush and obama and bidens and rayguns our claudius……….same old shit. war and hate and war and hate.
“9.11.01 was the beginning of the end of the empire”
Most Haven’t Figured That Out Yet.!
Patriot Acts + NDAA = No Constitution.!
The Only Growth In The Economy Right Now Is The Building
Of The ‘Digital’ Prison – Billionaires Dragging Everyone Into
‘AI Skynet’ – Total Surveillance – Digital ID.!
The growth industry will be psychology/psychiatry, and related drugs to deal with AI-phobia
Another Frankist subversive bot
Psychology might be the most important science there is today and maybe the only chance we have of understanding ourselves and sustaining life without endless wars, famine, etc. Then there are psychologists who believe war is necessary for mankind to progress long term. Who knows…
Weak minded people will be sent to the Soylent Green tanks until there are none left. So no, psychiatry will not be a growth industry.
There will always be a black market for precious materials, especially for vices. And if society or technology breaks down where electrons are no longer trustworthy, raw materials will carry the day while the rest of us will barter and trade. Don’t think it can’t happen. We are all very dependent on the network in the 1st world. Even if it’s decentralized, large swaths of it can be taken down for prolonged periods of time. We’ve spent a lot more time building the network out than physically securing it.
You are missing the important point that “everything will be free”!
And what are YOU going to do with raw materials? Sell it to the AI and its robot workers?
Great blog post! It is very interesting that the capitalistic forces are playing on the Bitcoin miners and what challenges this poses for the network and the price of Bitcoin.
(MSTR) “to aggressively buy Bitcoin during price dips,”
This is not correct, it’s actually the exact opposite. It tends to pay high bitcoin prices because what counts is the EV to Bitcoin that gets their buying fired up. And the share premium to bitcoin tends to be high to very high when bitcoin is running, not falling. And if MSTR sells $2 worth of stock to buying $1 of bitcoin this is permanently locked in. It raised the net book value of the EV.
Many just have this company wrong, it’s a closed end fund and works on the same math. Except no CEF EVER see’s 200%+ premiums. MSTR could be buying toasters or bitcoin, its the model that is important.
Excellent analysis Mish! Thank you! Reinforces my thinking on bitcoin. I have been contemplating an Ethereum investment with the move to DEFI but with the current linkage to bitcoin from a mostly psychological perspective have been holding back.
An appalling waste of perfectly good electrons.
World War 3 is winding up… it’s not unthinkable that a huge chunk of infrastructure supporting the network could suddenly and permanently go offline, enabling some other country to take over the ledger.
Bitcoin is pretty early tech… I haven’t really looked at crypto for a few years, but it seemed like they had solved a lot of the problems with energy requirements with Ethereum.
Blockchain is interesting tech. Hopefully it’ll find more applications than separating fools from their money.
Etherium only allows it’s largest holders to mine coins unlike Bitcoin. Bitcoin is one million miners mining the same hole. And Bitmain (the chinese firm making 90% of Bitcoin miners) comes up with a new machine every few months. Mining is just a flawed because because the machine deprecation is very real. The machines are junk in a few years and the cost of energy speeds up this real depreciation. The only guys surviving were ones selling stock endlessly. They all knew it was a scam.
Now take the above discussion and apply this to AI data centers and you will see what Michael Burry is talking about. Once you start in the Tech hardware game get ready to pour endless cash down the drain in cap ex.. The pigheaded, ego driven ones will eventually use up all their free cash flow and start having to sell shares IMHO. It’s just what happens.
The history of gold mining reveals that more money is made in supplying the equipment, food, energy etc. until economies of scale set in.
What is better than roses on the piano?
Tulips on the organ?
Excellent work Mish thanks for bringing this together.
This crypto will be renamed one day to BitCON…
Nah…..gold bugs hate bitcoin, of course.Its competition for the same pool of money. It’s not, or will ever replace Fiat, just as gold has not. It’s just a “thing” we can put money in. Today billions have been invested in the infrastructure, marketing, etc. So those investing all that money have a solid reason to make sure it’s always got a bid.
It’s not going away.
Gold has thousands of years of trust, bitcoin is decades. Trust means value.
I am agnostic on bitcoin. I own it from years ago. What may make it far more valuable in the future is it’s ability to be “sound collateral”. Especially for cross-boarder transactions. Then bitcoin can look like gold or mortages, fees collected means leverage can begin. So “paper bitcoin” like “paper gold” creates a market 4-5x what actually is physically there. If you consider the above, then MSTR is actually a very low levered banks that can create huge future cash flow by lending it’s coins out.
Peter Schiff hates Bitcoin
I don’t care – I find it amusing.
I suspect many “god bugs” agree.
And there are also many who like both.
So I think your generalization is wrong.
I’m a hybrid with understanding of some of the rationale for both.
But I have 50x more in gold or mining stocks than Bitcoin or other tokens.
The Not Discussed problem with Bitcoin is
WHAT HAPPENS WHEN the last 1000 500 100 10 then 1 coins are available to be mined = what mining company is going to stay open ONLY to get revenue from transaction fees =
What will the transactions fees be ? the MINERS will then set the fees because if you want a quick transaction YOU HAVE TO PAY MORE you have to pay the miner with hashrate
and you have to hope the miners with hashrate are honest and do not combine to destroy the coin
Read my posts above for a better understanding
I like gold (miners) and I like the concept of Bitcoin & crypto’s in general as alternatives to a global basket of fiat currencies that are of infinite supply.
You can do both just like you can like some Red & some Blue political positions of each party.
Regardless of thermodynamics, there are other factors that predestine Bitcoin to fade, and fail.
a) Survival and growth of bitcoin depends on speculation on a virtual ‘asset’–which produces positive (upward) moves over time. Enough downward moves, and it drops precipitously.
b) Bitcoin is ultimately a product, meaning it will have a six-stage product life cycle: development, introduction, growth, maturity, saturation, and decline. Ultimately, a better ‘coin’ will come along. The proliferation of alternate crypt-crap is proof
c) Bitcoin’s primary value is (like all things) founded on perceptions of what is valuable. What might happen to change those perceptions?
d) Inherent risk.
Before you say the internet can’t be shut down–Internet2 and Internet of Military Things (IoMT) cover that contingency.
The value of any currency has always been the perception and belief in its buying power as a medium of exchange.
See point C. It was a generality because what is perceived as valuable can change.
Eg. Your ‘currency’ as a form of money has four primary functions.
If you needed to leave the US, eg. portability/transferability might be critical. How about resistance to counterfeiting? Ability to hide?
Try answering the question… what could change perceptions.
It would depend on the circumstances of the exit. Right now I leave whenever I want and all of my assets with the exception of tangible are essentially available. I can wire money to anyone in the world from my bank or brokerage and carry something like $10,000 in cash without declaring it. I suppose I could carry more if I jumped through a few hoops.
If the world came undone? Who knows why I would leave or where I would go? I sure do not! When the US catches a cold, the world gets the flu. I’m thinking it would be worse elsewhere.
d) Inherent Risk
“Before you say the internet can’t be shut down–Internet2 and
Internet of Military Things”
That’s Not Even Thought About.!
But Several Countries/Nations Have Curtailed Internet/Phone
Services During Riots/Revolts Etc.!
I don’t understand the notion that gold “believes” anything. For me, it’s about what people believe.
“People do not believe the Fed is under control, Congress is under control, budget deficits are under control, or Trump is under control.”
I do see gold as becoming (once again – and not that it ever truly stopped) a global store of value.
My Krugerrands whisper “good night” each night after I tuck them into bed with a kiss.
And the person who breaks into your house can carry them off.
I’ll give him som lead to take with him.
Bitcoin is WORSE than fiat currencies because in addition to being intrinsically worthless (like fiat currencies), it is not backed by any sovereign state or institution that regulates and protects its value as a means of exchange. For example, you can’t go to court and dispute a payment received in dollars because dollars are legal tender by law. This is not true with crypto currencies. Bitcoin is NOT legal tender. Sure, the government is allowing its use as money because obviously they are secretly behind it WITHOUT incurring any liability as is the case with the official dollar. Do you get it now? At any moment of their choosing, the government can issue an edict rendering null and void all transactions in bitcoin. In essence, annihilating any wealth denominated in crypto at will.
Unless they are CIA operatives or some such with ulterior motives, people transacting or saving in crypto are inveterate MORONS.
Green doesn’t mention the ways the Bitcoin rules can be changed to alleviate some of these pressures. The network is not static is it?
I gather about twenty people are perfectly capable of manipulating bitcoin parameters? It’s irrelevant to me anyway as per above.
The network can also STOP in a second–it will in a war, since it exposes a country’s infrastructure to exploitation.
Network servers can detect Bitcoin transactions and quarantine them the same as a virus.
Theoretically correct argument but too many people substantially invested in Bitcoin – non-CIA operatives – will make sure this will never happen. Easy enough to enforce if you know the right people or belong to the club. After a series of mysterious heart attacks the edict project will be scrapped. My take.
You’re funny. You’re saying that bitcoin investors will kill critics in order to defend the bitcoin price. Are you threatening me? 🙂
Garbage. The very typical Bitcoin holder is there for speculation and does not understand the intricacies. Evidence of this is the high percentage of financial illiterates. Race analysis of bitcoin holders is also revealing.
That bitcoin holders lost $$$ by buying a lottery ticket–no one will care, and most will applaud.
> The very typical Bitcoin holder is there for speculation – high percentage of financial illiterates
Quite likely. I was rather thinking of others, and clearly not finally illiterate, just 1 example.
“Tesla – by 2025 estimates suggested it held around 11,500 BTC (roughly over $1 billion at then‑current prices). SpaceX also added Bitcoin to its balance sheet starting in 2021, with analyst estimates placing its holdings at several thousand BTC and a value in the hundreds of millions of dollars..”
What will hurt the AI and bitcoin bubbles is electricity cost. The clown administration has shutdown many “green” projects that were going to provide electricity and now that just won’t be there.
I have been warning about soaring electricity for a while now and we’re about to enter a whole new world of inflation in this area.
https://www.bbc.com/news/articles/c1dz0dz0zkvo
Kristy Hallowell had just lost her job when her energy bill unexpectedly tripled to $1,800 a month. Unable to pay, her gas and electricity were cut off and she, her two children and her mother spent six months of last year relying on a generator to light and heat their house.
The 44-year-old is one of millions of Americans who have fallen behind on their energy bills as prices have soared over the past year.
The electricity is now back on at her home in Greenwood Lake, New York, after a local non-profit helped reach an agreement with the utility to accept a partial payment.
Trump and the GOP own this mess 100%
Wow Mish,
What a fun read! This one will take some time to digest. Especially the “Cost to hold Bitcoin” in energy terms concept related to the halving of its “Block Reward” for mining it which occurs every four years.
A rotation out of mining Bitcoin into AI for those that were mining to avoid stranding infrastructure and contain energy costs? Brilliant!
My take is that the equipment that mines Bitcoin will have to be replaced again with more efficient chipsets in order for the miners to be efficient enough to literally double their yields plus Bitcoin will have to double in price to justify the expenditure in keeping the network fed (with energy).
For a few decades gold critics have pointed out the costs to hold gold and its lack of paying a dividend as negatives. Regardless of how small those costs are (it’s sitting on a shelf or, in a safe deposit box). I think those costs are negligible vs running massive banks of mainframes and maintaining a huge computer network for returns that get cut in half every four years, but perhaps that’s just a few of us.
My alternative to all of this has been to own the best of the mining stocks. Particularly ones that have huge reserves in the ground, pay some dividends and are in stable mining jurisdictions. It is the best of all worlds to me as a relatively conservative investor.
I did not mention one other thing that I think favors gold mining companies at the moment and perhaps Mish could shed some light on how this will affect the valuation of the companies with large underground, proven reserves?
Thi goes for all of the big players but a specific example is Agnico Eagle Gold.
AEM for instance has its 53 million ounces of gold reserves on the books at an average of $1,500 for gold and $20 for silver.
3x low for gold and 4x for silver.
How and when does this get factored into the net asset value of the company?
Thanks in advance.
Do a present value analysis. That book value is likely the cost to mine per ounce. Assume a mine life of x years. Assume a gold price for unrefined gold… It isn’t rocket science.
The higher the gold price relative to cost to mine, the higher will be the asset value of the company. The stock price adjusts accordingly. A gold miners ETF, like GDX, taps this directly.
Eg: from AI
Over the last 10 years, the VanEck Gold Miners ETF (GDX) has achieved an impressive annualized return of approximately 21.48%. This performance significantly outpaces that of the SPDR Gold Trust (GLD), which has an annualized return of about 14.61% during the same period.
The net asset value of the raw resource is quite different than the cash cost to produce or the value of what is in the ground as well as the AISC (All In Sustaining Cost). So tat is not what is referenced.
AEM’s average AISC is under $1,300 for gold, the cash cost is $950 as of Q3 2025.
For the NAV (Net Asset Value) and making decisions on weather to invest in a project, AEM is using their corporate close of 2024’s $20 silver and $1,500 gold as the valuation of the metal in the ground. This has obviously changed to $80 and $4,500 today so the companies underlying inventory has exploded in value.
Regarding the appreciation of GDX (+$21.48) & SPDR (+14.61%?
That is nothing compared to the actual mining stocks. I bought AEM in 2023 for $46 and it is now $191 plus it throws off a 4% dividend on what I have invested. The dividend should be going up soon because at this share price it is less than 1% and the company had no net debt and $2 billion in cash at the end of Q3. They should have no debt and $4 billion in cash at the end of Q4.
I think the actual top tier gold miners are a far better investment than bullion, the bitcoin miners or holding bitcoin.
Also a lot lot of silver is produced by some gold miners as the two are often found together…
True, plus copper, zinc and nickel.
FYI, the cost to insure gold, say $10,000 ‘worth’ of gold is between 0.5% and 2%, say $50 to $200 annually, depending on various factors like security measures and the amount of gold being insured.
😉
The cost to keep it in a nice fireproof safety deposit box at my local bank is $50 per year.
The mining stops and bitcoin stops; the mining slows, and the bitcoin network’s “safety” and performance degrade. [Mike Green]
I never heard that before and he offers no explanation as to why that would be the case. There are a maximum of 21,000,000 BTC and theoretically some day mining comes to an end when the last one is created. And what happens after that? Some built-in doomsday? I doubt it.
Considering how it takes more and more energy to mine them, I wonder if the last one will ever be mined? Could it end up being like unreachable mass-energy boundary, where it would take all the energy in existence to accelerate matter to the speed of light? [or, in this case, hash the last BTC?]
Miners were a thing 16 years ago when BTC were east to mine but not anymore. Now its all about trading existing BTC. Perhaps BTC will be limited to 19,000,000 or so when miners just give up.
Unless Max Keiser’s prediction of $50,000,000 BTC comes true and governments built nuclear reactors to mine the last few. But I suspect inflation will get us to that valuation anyway, without any help from the markets…
This is THE essence of Bitcoin (before everyone and their brother invested in Bitcoin for the bigger-idiot theory).
You can’t buy something with Bitcoin or transfer it to someone else (the only thing giving it some semblance of ‘value’) unless the decentralized system of miners are solving computer puzzles to permanently track these transaction within the blockchain technology.
So the fewer miners or mining, the slower the process for ensuring non-fraudulent transfer of Bitcoin between owners/’investors’.
My understanding is the presence of mining is what keeps the system secure, kinda like a side effect. If mining stops, the system stops being secure. So, energy has to be injected into the system to keep it secure. Sorta like the energy spent in maintaining the alarm systems to a building.
Keep in mind that the job of a Bitcoin miner is NOT creating new Bitcoins. Their job is to create, maintain and validate the ledger of Bitcoin transactions (aka the “Blockchain”.) Without miners, you cannot transfer Bitcoin from one owner to another.
The creation and award of new Bitcoins to the miners is a side-effect of the “mining” activity and is the financial incentive to reward for the effort of maintaining the blockchain.
The “51% attack” revolves around the Bitcoin mining protocol where the “valid” blockchain is whatever the majority of miners say it is. If you have a single entity that controls 51% of all miners, they can declare the blockchain to be anything they please. And at that point, the blockchain can no longer be trusted to be an impartial journal of bitcoin transactions.
My one quibble with this article is the statement that the cost of holding gold in a vault is zero. If you want to keep your gold safe in that vault, you definitely need alarm systems, and people to monitor the alarm system and physically guard the vault. Non-zero costs. Take those away and your vault won’t contain gold for very long at all.
As mentioned elsewhere, you can own gold in many forms. Physical that you keep in a safe deposit box with your important papers. Physical ETF’s mining stocks or the wife’s jewelry?
With todays camera and alarm technology I sure would not want to be a criminal trying to find and steal gold. People hide that shit all over the place.
People also get shot and/or caught and imprisoned trying to steal.
had an old pal. his step dad, a wonderful old ww2 doctor. when he croaked on his ranch in central florida. my pal had the gold and silver map. but after awhile he got a metal detector. he found a fortune good ole doc left buried in his horse pastures, in his private plane hangar. in the ceiling joists……………my childhood buddy was calling me everyday for weeks with the tally of the days find. oh what fun and joy he got with that tax free inheritance for him………
I don’t know — I’ve been following bitcoin as a news item since the first pizza was bought for 10,000 of em way back when. I never heard of mining accomplishing anything other than solving equations to release bitcoins. As far as I knew, I presumed a transaction added energy to the system in order to update the ledger. No transactions, no ledger. But I defer to others’ better information on this.
Still, the main question remains: what happens to the ledger & the system when mining comes to an end?
Or is that the whole purpse of halving: to keep energy in the system by making it harder to mine the last few?
Excellent article. Can you try to get Lynn Alden to respond to it? I’d be interested in hearing her opinion.
i bet those tulips in Netherlands 400 years ago were beautiful!!
I blame Suleiman the Magnificent. He had a killer tulip garden, and everyone thought it was the thing to have after that.
Suleiman the Magnificent, was the Ottoman sultan from 1520 to 1566.
The major Tulip acceleration started in 1634 and then dramatically collapsed in February 1637.
100 years later…
What caused tulip mania?
… the introduction of tulips to Europe ( note: Tulips were introduced to Europe from Turkey shortly after 1550) but it took rising wealth among the Dutch middle class, and a growing fascination with rare and exotic flowers. This led to speculative trading…
It reads like Bitcoin.
popular delusions and the madness of crowds. a must read for any investor or citizen.
gold is gold. was, is and WILL BE !!!!!
=====
bitcoiins, sh11itcoins, whatevercoins is just other form of speculation.
it is in human nature to try get something w/out hard work!
i dont blame, it is a just a fact.
=====
i bet those tulips in Netherlands 400 years ago were beautiful!!
alx
What no one talks about with regards to tulips is that they are a $1 billion dollar money making machine of the Netherlands and it’s growing. That’ doesn’t include all the money from tourism.
https://www.dutchnews.nl/2024/04/bulb-industry-continues-to-expand-tulips-dominate-production/
The export of bulbs has also gone up over 30% over the past five years and in 2022 almost seven billion were exported to other countries, generating sales of over €1 billion.
The bulb fields of the Netherlands are also becoming an increasingly popular tourist draw, attracting thousands of people and organised tours.
CBDC or Similar Trojan Horse
“they” let if live, as its 100% everything “they” said it wasnt
and quite useless during power and or internet outages
just like my ATM card , Credit Card , Bank Account , etc
and yes I have some (or did), via an ETF as its easier to deal with
will consider buying the next time its below 50K
Everything changes when the power goes out.
And the birthrate goes up 9 months later…
😉
the 1977 blackout in nyc was quite a sight to see. the burning and looting that followed was epic. amerika peaked 1945 to 65 imho. lbj defaulting on the silver coins was the tell of peak. guns and butter since.
I couldn’t follow everything, but this is quite a thought-provoking article.
Reasonably good discussion on Bitcoin. Most don’t understand Bitcoin at all but Michael Green at least knows the basics.
I definitely agree that gold reflects faith and trust in the dollar and the government, at least in the United States. I have no trust at the moment.
Democrats were passively bad but Trump and Republicans are actively bad. Active bad produces poor outcomes much quicker.
This might not factor in to this scenario at all so if not, my apologies. But what would be the impact to the financial environment and Bitcoin, Gold and Silver dynamics if Trump drove interest rates to near zero and China monetized Silver?
KA BOOOM!
The parabolic increase in US debt is actually happening ~ so Gold, Silver, Platinum, Palladium and Bitcoin all have that as a strong support.
There has been a long-running price-volume divergence since the 2019 bottom. Price kept going UP while volume decreased. This is bearish indicator.
On a shorter time frame, the new 40 day Hurst cycle started around January 1. Since the trendline formed by the previous 40 day cycle lows has not been broken, the general trend continues UP. With the price remaining close to that trendline, investors should be cautious of the price falling below it. There may be another multi day rally to complete an elliot wave triangle before the present 40 day Hurst cycle bottoms in 4 weeks.
Speaking about electricity, does someone has an idea about this https://www.reddit.com/r/CryptoCurrency/comments/1pocs75/my_utility_created_an_option_called_green_happy/?
Great article, never thought of btc from that perspective. BTW I assume this is written by Micheal Green from Simplify Asset Management. Smart guy. Simplify has one of wall streets best options strategists, Harley Bassman. He runs their MTBA fund which yields around 5.5% without any duration risk plus govt guaranteed bonds. A great alternative to the now low yielding t bills,
I bought a Bitcoin Bitmain Antminer a few years ago before the halving, Bitcoin was around 25k at the time. The whole purpose of buying it was free heat in the Winter. I live on an acreage in rural Ontario so my house is heated by propane. It’s a large 2400sq ft 2 Story, I have a Mini Split heat pump on the main floor for heating in Winter and Air Conditioning in Summer and I run the Antminer upstairs In Winter. The localy Electric utility has different tiered rate options you can sign up for depending on what suits you best. I chose the one Ultra Low Overnight rate which since I bought my Miner has averaged around 3.2 cents per kw/hr ( about 2.3 cents usd) between the hours of 11pm to 7am 7 days a week. Because of this super cheap rate I run my mini split and the miner exclusively between those hours, my furnace never turns on.
I wake up in the morning and my upstairs is nice and warm thanks to the heat generated by the 3000 watts my Antminer is using. At this rate I’m still making money after my electricity cost and I get free heat plus save money on my propane costs. Last Winter my Propane heating cost was about 600 dollars CAD for the year.
I have more than paid for my Antminer but for this to continue the price needs to stay up and once the next halving occurs, if the price doesn’t go up accordingly it would most likely start losing money. You definitely need really cheap electricity for this to work though.
> Ultra Low Overnight rate 3.2 cents per kw/hr
Unimaginable this side of the pond in Germany with household rates in the 30-40 c/kWh range and expected average rate of 10-15 c/kWh in 2026 for industry customers (the past years in the 5c range), multiplied by 1.17 – current USD-EUR exchange rate. No wonder this failed vassal state is economically doomed. Many thanks to our US “friends” and protectors gearing the continent up into an insane war against Russia through the captured gone criminal setup called Brussels and mind controlled “coalition of the killing” heads of state. All under control from you_know_whom.
Good read. But. This is written from the point of view of someone living in a benign inflation environment. I wonder about a high nflation environment, somewhere, and bitcoin goes viral. Its transactability over time and space is superior to gold. I’d prefer tokenized gold but bitcoin would suffice. Governments with out of control fiat based spending habits seems like a sure bet globally.
Living in the United States, nearly all of my transactions are with US corporations, none of which accept payment in bitcoin or gold. Nor is that likely to change, even in a high inflation environment.
What is the basis for your last statement? Have you lived in an environment with 100% inflation per year?
Put this ptompt into Grok
Are there any countries with high inflation where bitcoin is getting traction?
Cryptos are for anonymity and bypassing Sanctions etc.They become a nuisance during power failure etc.Gold preserves ones wealth.