So I remember during Covid, you know, I was out on Long Island in the North Fork basically living there. And I would come back to the city every Tuesday to visit my mother. And so I would drive to the city, there would be no traffic, and it would take me about two hours. So I listened to podcasts. What else are you gonna do? Right? I even listened to this podcast every now and then.
But one of the group of podcasts that I listened to were the so-called experts on Bitcoin. And there are always two questions that I had. Number one, why is Bitcoin a currency? And number two, okay, it's a currency, but how should it trade? Now on every single podcast, they completely skipped over the, "why is it a currency issue?" that was just a given <laugh> and that's not a given to me. We can get back to that.
But it wasn't given. The second part of the story about how should bitcoin act, they all had the same opinion, which was as fiat currency, which is government issued currency, has been terribly debased because of all the deficits that all these countries have issued. But it's very hard to short fiat your currency because they all trade relative to one another. So if you short the dollar, your problem is that in a basketball team where everybody's five four, the dollar is five 11. So it's hard to short the dollar. Because it's taller than the other currencies, even though, quote unquote, it's been debased. So therefore you should buy Bitcoin as a hedge against the debasement of all currencies.
Okay. So let's accept that theory for a second. If that's the case, then Bitcoin should go up when people are nervous and rates are going up and Bitcoin should go down when rates are going down everybody feels good. And the problem was it actually did the opposite. Right? It would go up with everything else speculative. And it would go down with everything else speculative. So what was the point? So, you know, Bitcoin is up a lot this year because it's up a lot with everything else speculative. Now you can't have a currency that moves 25% every six months. That's not a currency. That's a speculation. And the thing I don't understand about Bitcoin is what problem is it solving? You know, is there a problem with currencies? I mean, the last time you went to the store and you, you pulled out a $20 bill you paid with your credit card. Did the store owners say, oh no, I don't take dollars. I mean, it's not even an issue. And by the way, the currency markets are the most liquid markets in the world, you know, I like to say, how long does it take to buy dollar euro done? A billion dollars? Done. That's how quickly it is. So I, I don't understand what Bitcoin solves and I don't understand the purpose of owning it other than it's another form of speculation
The fact that Bitcoin so closely to your typical tech stock -- just look at it against QQQs -- continues to undermine the claim that it's got distinct anti fear, or hedging properties. Maybe one day it will diverge. But for now? No.
