This week’s Beaver Bulletin is brought to you by Shravan Jhangiani. Before becoming a Bitcoin Evangelist, Shravan spent 14 years at Google. He lives in Toronto with his wife.
Digital gold is a helpful analogy for understanding Bitcoin, but it doesn’t end there.
Even a small Bitcoin allocation will change your life.
Why?
Because if Bitcoin really is digital gold, it will be worth 10x as much as it is today.
Yet that’s the conservative case.
Bitcoin is much bigger than digital gold. Its total addressable market is far larger than just gold alone. And once it catches gold, it’s going to keep going.
Bitcoin as Digital Gold
For over a decade, Bitcoin has been described as “digital gold.” The analogy is simple and intuitive:
- Gold was a preferred store of value for thousands of years based on its superior monetary properties. It is scarce, portable and divisible. Gold was good money.
- Bitcoin is just like gold—it’s divisible, portable, and absolutely scarce. Except it’s digital. Bitcoin is gold on steroids.
So if Bitcoin captures gold’s role as a store of value, it should be worth roughly the same as gold in aggregate.
The market cap of gold today is about US$22 trillion. Bitcoin’s is roughly US$2.3 trillion.
When Bitcoin catches gold, a single bitcoin will be worth approximately US$1M.
Paul Tudor Jones, one of the most respected hedge fund managers in the world, made headlines in 2020 when he said:
“The fastest horse in the race is clearly Bitcoin.”
He wasn’t exaggerating. Jones sees Bitcoin as the single best way to protect wealth against inflation, beating out bonds, equities, and even gold.
Ray Dalio, founder of Bridgewater Associates, put it more carefully but still drew the comparison:
“… it is like a younger generation’s alternative to gold.”
The math is straightforward: if Bitcoin matches gold’s US$22 trillion market cap, divide $22T by 21 million bitcoins to get a price of $1M per BTC (or CA$1.38M).
Most assets can’t dream of that upside. But with Bitcoin, this is the base case.
Bitcoin is Bigger Than Gold
Gold is static. It sits in vaults. It doesn’t move, it doesn’t adapt. Its value is primarily tied to its scarcity and serving well as a store of value.
Bitcoin eats gold for breakfast.
It’s not only more scarce, portable and divisible and a better store of value, it’s a permissionless, incorruptible monetary network. It’s money born of the internet, for the entire world.
Every new participant strengthens it. Every new holder, every business, every developer who builds on it—they all add to its value.
Gold can’t be teleported across borders in minutes. Bitcoin can.
Gold can’t settle global transactions near-instantly, 24/7. Bitcoin can.
Gold can’t layer new capabilities on top of itself. Bitcoin can.
That’s why “digital gold” undersells the truth. Gold is a $22 trillion market. The market Bitcoin is targeting is orders of magnitude larger: the base layer of value transfer for the entire digital economy.
The better analogy? Digital real estate.
But not just any real estate.
21 Million Blocks of Digital Manhattan
Picture Bitcoin as the Manhattan of Cyberspace. 21 million prime blocks of the most desirable land in the digital world.
Each bitcoin is one block and there will never be more than 21 million.
When Manhattan was farmland in the 1700s, no one imagined what it would become. Over time, commerce, finance, and culture transformed it into one of the most valuable pieces of real estate on Earth. Today, a single square foot in Midtown can sell for over $1,500, and Manhattan’s supply is still growing (upward).
Bitcoin is Manhattan with a hard cap. These blocks can’t be created, expanded, or diluted. They can only change hands.
Now imagine over the coming years Bitcoin is increasingly recognized as the best place to store value. The result will be a reallocation from all inferior store of value assets, not just fiat money and gold. Value will flow into Bitcoin from stocks, bonds and real estate, too.
The total value of those markets? $1000 trillion.
The reason is simple. We’ve had to buy stocks, bonds and real estate to store the value of our earnings because our money is broken. If we don’t protect ourselves, we get robbed by inflation.
Yet most of these things are mediocre stores of value at best.
Consider physical real estate. You’re dealing with tenants, property tax, property managers, insurance, repairs, flooding, renovations.
The property isn’t portable and it’s not liquid. It’s a lot of work and a lot can go wrong.
Alternatively, if you’d just bought and held bitcoin five years ago you wouldn’t have had any of the real estate burdens and instead experienced an average yearly return of 50-60%.
If you understand, the choice is obvious:
Bitcoin has more upside and less headaches.
And by upside I mean, you’re buying a share of the future monetary base layer of the human race.
We’re Still Early
In Manhattan, scarcity of the land drove prices up even when the land was only available to a small fraction of people in the US. Bitcoin’s scarcity operates on a global scale. Take note:
- Most of the world still doesn’t own Bitcoin.
- Most institutions, pensions, sovereign wealth funds, insurance companies have no allocation.
- Governments are only beginning to grasp its strategic value.
But they’re catching on.
What happens when 1% of $1000T of global wealth wants Bitcoin? What about 5%? 10%?
The rush for scarce digital land will make past real estate booms look like rounding errors.
Just How Early?
We’re still in the dirt road phase of Bitcoin Manhattan. A few buildings and businesses are up. The USA is establishing their Strategic Bitcoin Reserve, El Salvador has made it legal tender, public companies are adding bitcoin to their balance sheets, spot ETFs are drawing billions, but the skyline is empty compared to what’s coming.
Why Most Will Miss It
Most people won’t act. They already think they missed the boat.
It’s classic adoption curve psychology. The majority waits because change is uncomfortable. Then to rationalize their inaction they attach themselves to a negative outcome they heard on TV:
“Governments will ban it, surely.”
If this is you, keep learning and buy a small amount of bitcoin directly into a Bitcoin wallet of your own.
The Bigger Picture
Calling Bitcoin “digital gold” works because it helps people grasp its scarcity and monetary properties. But it’s too small a frame.
- Gold was the store of value for the industrial age. It was beat out by paper.
- Bitcoin is the store of value and the base layer for all economic activity, for the digital age.
- The internet had domain names. Real estate had desirable land. Bitcoin allows you to own a share of the future monetary protocol for the entire world.
- There will only ever be 21 million bitcoin and it’s estimated that anywhere from 3-4 million are permanently lost.
And most of the world doesn’t know any of this, yet.
But if you do know, you stop thinking about it as a speculative bet and start seeing it for what it is: a protocol upgrade to money, redefining how we store and transfer value from the ground up, with an addressable market far larger than just gold.
This moment in time for Bitcoin is still Manhattan before there was a building more than 3 stories. The streets aren’t paved, the towers aren’t built, the city isn’t bustling. But if you know what’s coming, you know what to do.
Beaver is here to support you.
Whether you’re an individual or operate a small to medium sized business, Beaver is a Bitcoin company for Canadians who want to add Bitcoin to their personal holdings or business balance sheet the right way.
- Beaver is Bitcoin-only: We believe Bitcoin is among the most important innovations of our time. There’s too much at stake for distractions and we firmly believe all “altcoins” will trend to zero against bitcoin.
- Beaver is compliant: Beaver is a registered MSB and regulated under FINTRAC. As a non-custodial Bitcoin exchange Beaver is able to offer streamlined onboarding. Sign up and make your first bitcoin purchase in minutes.
- Our team is experienced: We’ll help your business design a responsible Bitcoin treasury plan that aligns with your goals, cash flow, and risk tolerance.
- We are Bitcoiners: We’ll walk you through a simple Bitcoin wallet setup or more, depending on your needs.
- We have the tools: Beaver offers instant buys up to $20,000 via etransfer and buys up to $100K via bill payment or wire. For buying more than $100K there’s our OTC service, Beaver Plaid.
- We care about doing things the right way: Most importantly, we’ll ensure you actually own your bitcoin. No third-party custodial risk, no IOUs. Just bitcoin in a wallet only you control.
If you have questions or to get started, schedule a call with us today.
If you’re new to Beaver, create an account and complete your first bitcoin purchase today.
Stay humble,
Shravan
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