All Aboard the "Deplorable's" Investment Train: Bitcoin

I love to consume information and learn. Never before in history has so much information been so readily available to us in so many forms, reshaping the way we think, learn, and make decisions. In particular, I love a mystery that leads you down a rabbit hole of tunnels and mazes while you try to figure out the puzzle. This is what drove me to markets and to consider each day from a systems perspective how the economy will look in the future. I say systems because I believe humans will always try to find and fight for a better future even if it is not obvious at a given moment. Innovation always moves us forward. Right now, the puzzle that dominates my imagination and insatiable desire to learn revolves around how AI and Bitcoin fit into that future.

However, when it comes to Bitcoin, I am not the only one interested. Over the years, X (formerly known as Twitter) has been my primary source of information on Bitcoin. The reason is simple: traditional media covers Bitcoin almost exclusively from a perspective of negativity and lacks imagination regarding its potential importance as part of the next phase of innovation toward a new economic system. Aside from the ETF providers, who have a vested interest, sell-side research firms largely ignore Bitcoin. On X, the debate is a constant battle between naysayers and zealots, with little room for balanced commentary. It feels like watching MSNBC and FOX during a political debate.

To highlight the intensity of this debate, I recently posted a thread on X about why I didn’t think Bitcoin was a bubble as it hit $100k for the first time. Within 24 hours, the post had over a million views. I am very data-driven and unentertainingly boring in my X posts, so it was fascinating to see that a thread attaching data-driven facts to support an opinion could go viral. Bitcoin simply stirs strong emotions on both sides. Some people call it a bubble just to provoke its supporters, much like those who consistently predict bear markets in stocks and recessions to get followers waiting for the world to end. Bitcoin’s advocates, when provoked, respond with the vigor of Swifties when Taylor Swift is attacked. Bitcoin gets clicks, and people on social media know it.

However, as I’ve spent more time gathering content and gauging sentiment through X and Grok, another psychological pattern has become clear. I consider myself a good filterer of honest Bayesian thinkers. It is rare to find people who are willing to change their minds on topics they refuse to investigate. I seek out those who adjust their views as new information comes in. The great thing about X is that you can review someone’s comments over time to track their evolution on a topic. This is where the combination of the recent presidential election and the intense battle over Bitcoin created a spotlight for me. The extreme negativity toward Bitcoin is dominated by the “elite establishment” of the traditional finance world, who dismiss and bully Bitcoin advocates on social media.

This reminds me of the 2016 presidential election. During that campaign, Hillary Clinton famously referred to a segment of Donald Trump’s supporters as a “basket of deplorables,” a comment that sparked widespread backlash and galvanized many of those she sought to dismiss. The term became a rallying cry for Trump’s base, symbolizing their defiance of political and media elites.

Today, a similar dynamic is playing out in finance with Bitcoin. Much like those labeled as "deplorables," Bitcoin supporters are a ragtag group of rebels ready for a fight. They’ve been marginalized by the financial establishment of the fiat world and now have the controversial Michael Saylor as their symbolic Donald Trump. The world’s most prominent banks, elite investment firms, and self-proclaimed financial “elite” on social media dismiss Bitcoin as a scam or a bubble. Many of these individuals fill my traditional finance X lists for market insights but they turn dismissive when it comes to Bitcoin. Recently, because of MicroStrategy’s growing influence, these voices have only gotten louder.

This negative attention on Bitcoin, amplified by MicroStrategy’s rise, has driven traditional media to cover the story, putting Bitcoin under an even brighter spotlight. Donald Trump’s pro-crypto stance and the inclusion of crypto-friendly individuals in his cabinet have also contributed to the growing attention. Despite this increased focus, it is nearly impossible to find someone who was negative on Bitcoin in 2020 and is positive about it today.

This resistance to change must be psychological. Perhaps it stems from anger, jealousy or a subconscious fear of the end of the system they know and have benefited from for years. I can’t understand how someone can call Bitcoin a scam while believing in the fractional reserve banking system, where governments and central banks create money out of thin air. From the signing of the U.S. Declaration of Independence to the release of the Bitcoin Whitepaper, the U.S. accumulated about $8 trillion in debt. Since then, in just 16 years, that figure has skyrocketed to $36 trillion. Quantitative Easing (QE) enabled the Federal Reserve to then expand its balance sheet from $1 trillion to $9 trillion through purchases of the debt. This helped the total household net worth in the U.S. grow to almost $170 trillion, supported by just $2.3 trillion in hard currency and $22 trillion in M2 money supply. Bitcoin is an odd-lot in comparison at just $2 trillion in market cap and, as a global asset, the ownership is spread around the globe. Why would people who benefit the most and own the $170 trillion of propped-up net worth have so much emotion about this little asset and believe in one that sounds much more like a scam?

Then there is the argument as to looking at it in the same lens as you would a traditional asset and throw out the fact that it is Bitcoin. How can something that has existed for just 16 years, endured multiple crashes of over 80%, and still reached new all-time highs while growing its user base at a pace comparable to the early days of the internet, not be embraced by the financial elite? All this while being attacked by governments and regulated in a way to try and stop it. Stan Druckenmiller says it is a brand. Ray Dalio and Paul Tudor Jones publicly say it should be owned. The incoming administration is vowing support for it and choosing people who already support it. In most cases, such resilience, growth, and sponsorship by respected macro investors and the U.S. government would be celebrated. A Bitcoin ETF—now the fastest-growing ETF ever—is already on the market. Any other asset would be embraced, yet the financial establishment, much like traditional media, continues to dismiss Bitcoin. Private wealth manager platforms are still trying to avoid investors getting involved. The same banks and investment firms that eagerly pushed dot-com IPOs that never made money onto retail investors during the 2000 bubble now position themselves as protectors of the public against what they claim is a scam. The more plausible explanation? They’re missing the train.

Independent voices on social media recognize Bitcoin’s transformative potential, but the investment elite’s refusal to acknowledge it looks less like caution and more like a desperate attempt to maintain control over a narrative that is slipping away. I haven’t read an economic or strategy piece since the pandemic because they’ve been a waste of time. Prominent strategists and economists have repeatedly predicted recessions and stock market collapses while simultaneously calling Bitcoin a scam. How wrong do “smart” people need to be before they reconsider their views?

When Bitcoin falls 4%—a volatility equivalent to a 75-basis-point drop in the S&P 500—Bloomberg describes it with words like “crashes” or “plummets.” When Bill Dudley or Larry Summers writes an op-ed against a strategic Bitcoin reserve, it becomes headline news. When Bitcoin finally breaks through $100k, 60 Minutes brings out a long-time Bitcoin skeptic, former SEC official John Reed Stark, who claims, “Crypto is a scourge. It’s not something that you want in your society. It has no utility. It’s just pure speculation. Remember, there’s no balance sheet to crypto. There’s no financial statements.” Comments like these and others from Warren Buffett, Charlie Munger, Jamie Dimon, and even Larry Fink and Donald Trump in the past paint a clear picture: the establishment’s resistance to Bitcoin isn’t about its legitimacy. It’s about control.

Even the spokesperson for Bitcoin and the new villain in its manipulated rise, Michael Saylor, in 2013 tweeted, “Bitcoin days are numbered. It seems like just a matter of time before it suffers the same fate as online gambling.” I mentioned at the beginning how I love Bayesian people who are able to have a strong view on something, take in new information through extensive research, and change their mind. In 2020, just after Michael Saylor got board approval for MicroStrategy’s first purchase, I started digging deeper into how Bitcoin may fit in the macro world. After that research and many conversations with institutions that were investing in it, I wrote a paper in December titled, "2020: THE YEAR OF SPEED CHESS & THE BIRTH OF BITCOIN AS AN ASSET." In this paper, at a time when people were still scared about deflation, I went through why, as the FT put it, “Giving elected representatives the keys to the printing press is the equivalent of giving a gambling addict the keys to the casino.” This was the beginning of my belief in it as an asset and that a new system was coming soon.

However, it was a few months after the ChatGPT release in 2022, which as a reminder ironically enough was only two weeks after the collapse of FTX, that I started to see how it fit in the future of a world of abundance. The importance of ChatGPT and the democratization of AI was driving me to do deep research on how this would accelerate the technological innovation movement at a faster pace. Peter Diamandis and Elon Musk have both talked about how in the next 10 years we will see the equivalent of the prior 100 years of innovation. During the research on this, I eventually ended up with one of the best visionaries in tech, Marc Andreessen.

Andreessen had written the iconic op-ed "Why Software Is Eating the World," which was published on August 20, 2011, in The Wall Street Journal. In this article, Andreessen outlined how software was transforming industries across the economy, driving innovation, and becoming a dominant force in business and technology. It remains a seminal piece in understanding the shift toward a software-driven world and was effectively a prediction of the MAG7 and the fact that software would allow companies to scale globally to break down the country borders of the world. Less than three years later, he wrote “Why Bitcoin Matters," which was published on January 21, 2014, in The New York Times. In this article, Andreessen laid out a compelling case for Bitcoin, highlighting its potential to transform the financial system, enable new types of digital innovation, and provide a global, decentralized foundation for trust. It became one of the early, influential pieces advocating for Bitcoin's significance and long-term value.

In this article, when Bitcoin was under a price of $1,000, he wrote:

“A mysterious new technology emerges, seemingly out of nowhere, but actually the result of two decades of intense research and development by nearly anonymous researchers. Political idealists project visions of liberation and revolution onto it; establishment elites heap contempt and scorn on it. On the other hand, technologists — nerds — are transfixed by it. They see within it enormous potential and spend their nights and weekends tinkering with it. Eventually, mainstream products, companies, and industries emerge to commercialize it; its effects become profound; and later, many people wonder why its powerful promise wasn’t more obvious from the start. What technology am I talking about? Personal computers in 1975, the Internet in 1993, and — I believe — Bitcoin in 2014.”

He followed that up in a Washington Post article in May 2014 titled “In 20 years, we’ll talk about Bitcoin like we talk about the Internet today.” In that article, he said:

“I have a lot of friends who are programmers. The programmers have always gone like, 'Those [Bitcoin] guys are crazy.' And then, almost 100 percent of the time, they sit down, read the paper, read the code — it takes them a couple weeks — and they come out the other side. And they're like: 'Oh my god, this is it. This is the big breakthrough. This is the thing we've been waiting for. He solved all the problems. Whoever he is should get the Nobel prize — he's a genius. This is the thing! This is the distributed trust network that the Internet always needed and never had.'”

Just like with "Why Software is Eating the World," if we had listened to Marc in January 2014 when Bitcoin was under $1,000, we would have made 100x our investment. Despite the greatest macro investors saying buy it, technology visionaries like Marc Andreessen, Elon Musk, and Peter Diamandis saying buy it, and it continuing to make new highs 16 years after the Whitepaper release despite being attacked, regulated, and having extreme volatility, it is still regularly being called a bubble and being viewed by the self-proclaimed “investment and media elite” as a scam.

So here is my summary of my own Bitcoin journey as a macro investor who is open to being wrong or changing my mind based on new information. Bitcoin is the end game in the battle between the deflationary forces of technological innovation, which have finally reached exponential speed, causing the governments to speed up their inflationary debasement to offset the distribution of wealth issue associated with the exponential destruction. Each dollar that is printed to avoid a deflationary spiral from innovation leads to greater distribution of wealth issues and anger by the people. Joseph Schumpeter's theory of creative destruction describes how innovation disrupts existing industries, replacing outdated businesses and technologies with new ones. This process drives economic progress, as entrepreneurs and technological advancements continually reshape markets. Add in the exponential pace, and the government needs to offset this deflationary destruction. Eventually, the voters want the system to change. Welcome to the new crypto government.

Things started moving fast in 1994 as the internet was born and information was democratized. Users grew, and most of the “elite” doubted its economic value. Commerce was eventually built on top of it, which led to the internet bubble. It continued to move forward despite the bubble unwind, and in 2007 we democratized access to the internet and communication with the ability to transact with technology through mobile. Mobile users grew despite many in tech originally doubting the importance of the smartphone.

In 2008, the Bitcoin Whitepaper was released and, as Jack Dorsey of Square said on a Lex Fridman podcast: “One of the most seminal works of computer science in the last 20-30 years.” It allowed for digital money, which had failed for decades. None other than Milton Friedman said in 1999:

“I think that the Internet is going to be one of the major forces for reducing the role of government. The one thing that’s missing but will soon be developed is a reliable e-cash: a method whereby on the Internet you can transfer funds from A to B without A knowing B or B knowing A — the way in which I can take a $20 bill and hand it over to you, and there’s no record of where it came from.”

The digital ecosystem was working, but it still depended on the traditional finance world. Now, with the Bitcoin Whitepaper, there was the needed financial technology for the next growth phase. In 2022, ChatGPT was launched, which will now turbocharge the exponential growth of the digital ecosystem expansion through AI agents and digital robots transacting with each other. The value for the internet is simply the companies on top of it that were able to secure moats around the MAG7 in the fiat system.

Now fueled by AI, those same visionaries in tech are saying that due to the rapid rise of AI, the next 10 years of innovation will equal the prior 100 years. Something moving at that speed will mean no moats due to extreme instantaneous competition and the end of scarcity and the reality of abundance. Ideas will be replicated too fast to get a moat. As Eric Schmidt said this year at Stanford, you will be able to say this prompt to a bot:

"Make me a copy of TikTok, steal all the users, steal all the music, put my preferences in it, produce this program in the next 30 seconds, release it, and in one hour, if it's not viral ... ."

We have reached the point where the normal deflation rate measured through productivity and efficiency has led us to a place where we can see abundance like when Dorothy saw the Emerald City. It is a place filled with robots doing the work for us and an ability to recreate things in minutes, driving the costs of things to zero, which means eliminating, as Jeff Bezos said, “your margin is my opportunity.” In abundance, there is no margin, so no opportunity.

Remember, in 2008 and after SVB, when we lost trust in the banking system, people moved their money into the big “safe” banks. Bitcoin is the big “safe” bank in the digital economy, and to replace that is possible, but given the Whitepaper was the start and it is being adopted globally by everyone and, as Stan Druckenmiller says, it is a brand, it seems like a long time before it will lose its OG status. It is the safe place people go who feel left out of the system. On podcasts, I have said people are driven to Bitcoin in a similar way they were driven to America looking for a better system. You don’t have to agree with that choice, but continuing to call it a scam and calling the supporters condescending names on X after all these years seems psychologically like sour grapes.

This year, Donald Trump was named Time Person of the Year for surviving and continuing to move forward regardless of your political views. In 2025, I think many elites will be forced to admit to themselves they need to buy Bitcoin due to FOMO, although just like with the election polls, I think many will not admit publicly they own it. As Steve Jobs famously said, “Here's to the crazy ones. The misfits, the rebels, the troublemakers, the round pegs in the square holes, the ones who see things differently. They're not fond of rules, and they have no respect for the status quo.” The only word he was missing was the Deplorables. All aboard!

Happy Holidays, see you in 2025.