Understanding the “Bitcoin Effect”

Mark Jeftovic, Grey Swan Investment Fraternity

The “Bitcoin Effect” is what happens when individuals and corporations start to adopt bitcoin onto their balance sheet. You don’t have to go all-in. You can start with a small allocation.

But over time, bitcoin’s hard-capped nature should allow it to rise indefinitely against any fiat currency.

This bitcoin effect is what Michael Saylor is doing with MicroStrategy (MSTR). He’s turned it into an art form.

In essence, the Bitcoin effect is just publicly traded companies saying, we’re going to take our balance sheet cash and we’re going to hold it in Bitcoin instead of cash.

When companies do that, they get rewarded by the market with multiple expansion and share price boosts just by changing their allocation of their dry powder from fiat cash to Bitcoin.

Currently, 52 publicly traded companies now doing that. And many more privately-held ones. My company isn’t publicly traded, but we did something similar.

However, we didn’t just take our cash and put it in the Bitcoin. We were taking Bitcoin as a payment method. We were the first domain registrar to do that back in 2013, and we just kept stacking it.

That’s how we built our stack, and I think we’re going to see more companies using bitcoin payments to build their position as well.

Bitcoin Vs. Bonds: The Superior Savings Method

It’s the Bitcoin standard at the corporate level, swapping out fiat currencies for bitcoin. If you look at the market value of bonds or the market cap of bonds versus the market cap of bitcoin, because it’s a joke now that bonds were supposed to be the risk-free instrument. And now they call ’em return free risk.

It’s return-free risk and there’s 300 trillion of it of this return free risk. And then during the craziest days of the post GFC and the pandemic, there was even 20 trillion of negative yielding bonds out there.

Investors were paying governments to slowly lose money over and above the impact of inflation!

I don’t know how much there is today, but I think that will come back in the future.

So you’ve got all these bonds that are just losing money either nominally either negative interest rates or in real terms. Then you’ve got, roughly, $300 trillion of this stuff that you can’t use for savings anymore.

What’s going to happen to it? I mean, it’s not going to go to zero, but allocators are going to be looking at this and saying, we can’t keep this. We have to get at least some of it out and we have to get it off of this escalator treadmill going this direction.

We have to get it onto an escalator going the other direction. And that’s where bitcoin comes in. That’s where gold comes in. So even if they put, okay, we’re going to cash out 5% of our bond allocation and we’re going to put 4% of it in gold and 1% of it in bitcoin, I mean, that does amazing things for your return over time.

It’s insane what that does to the numbers, especially with bitcoin at a total market cap of about 1.2 trillion right now. Gold’s at about $15 trillion, but half of that is jewelry, so it’s like seven and a half trillion.

It’s just so asymmetrical that it just blows my mind. But what is interesting is to see publicly traded companies and institutional allocators wake up to this and articulate it and say, yeah, we’re kind of starting to park our allocations over here.

We’re just in the early stages of this “Bitcoin Effect” in action, and it’s an amazing thing to see … and any company or person can do it. The sooner you start, the sooner you’ll see a benefit, and the larger the overall benefit will be to you over time. ~~ Mark Jeftovic, Grey Swan Investment Fraternity

Understanding the “Bitcoin Effect”

Mark Jeftovic, Grey Swan Investment Fraternity

The “Bitcoin Effect” is what happens when individuals and corporations start to adopt bitcoin onto their balance sheet. You don’t have to go all-in. You can start with a small allocation.

But over time, bitcoin’s hard-capped nature should allow it to rise indefinitely against any fiat currency.

This bitcoin effect is what Michael Saylor is doing with MicroStrategy (MSTR). He’s turned it into an art form.

In essence, the Bitcoin effect is just publicly traded companies saying, we’re going to take our balance sheet cash and we’re going to hold it in Bitcoin instead of cash.

When companies do that, they get rewarded by the market with multiple expansion and share price boosts just by changing their allocation of their dry powder from fiat cash to Bitcoin.

Currently, 52 publicly traded companies now doing that. And many more privately-held ones. My company isn’t publicly traded, but we did something similar.

That’s how we built our stack, and I think we’re going to see more companies using bitcoin payments to build their position as well.

Bitcoin Vs. Bonds: The Superior Savings Method

Investors were paying governments to slowly lose money over and above the impact of inflation!

I don’t know how much there is today, but I think that will come back in the future.

As AI clusters demand more light at every layer — from rack to package — Coherent’s share of that energy pathway increases. The startups illustrate what’s possible; Coherent ensures it happens.

As light enters the data center — step by step, layer by layer — Coherent is the most experienced and scaled name in the field. It carries the light forward.

For decades, Moore’s Law — that the number of transistors on a chip doubles every two years — was the quiet metronome of progress. It defined an era. AI just smashed that clock.

Global data center spending will hit $900 billion by 2028, Kobeissi notes. AI servers are growing at a compound rate of +41%, with the overall market expanding +23%.

Just building the facilities, not including chips or servers, now costs $43 billion a year — up 322% in just four years. There are $40 billion worth of U.S. data centers under construction right now, up 400% since 2022.

For the first time in history, the total value of U.S. data centers under construction will soon exceed office buildings.

More than a metaphor, we’re living through a civilizational shift. The upside Grey Swan event, in our opinion, is that the narrative unfolds without any political interruptions or blowouts in the currency and credit markets.

Technology is a double-edged sword. We’re still living in the long tail of a hard money, capitalist society – and reaping new technologies out of it.

But the destruction of the purchasing power of the dollar stands to create a crisis – and drive investors back to safe havens like gold.