#289: Bitcoin is about to surpass the British Pound with Matthew Mežinskis
12/1/2021 · 123 min · transcript via mlx
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Key topics
— Bitcoin ranks sixth largest base money globally, with Q3 2021 update showing it approaches the British pound (£1 trillion) and could surpass it in Q4 2021 at ~$68,000 USD.
— Global monetary base grew 12.8% annually since 1970, doubling every 5.7 years; 30% of all cash ever printed occurred in the last two years due to COVID stimulus.
— Central banks remain opaque despite claims of transparency—the Bank of England discloses only 90% of its balance sheet by value, making Bitcoin's fully transparent ledger a stark contrast.
— Compound annual growth rates reveal weaker fiat currencies (Australia +184% YoY, Canada previously +300%) experiencing rapid devaluation while Bitcoin's supply growth has slowed to 1.8% YoY post-halving.
— Rising authoritarianism and monetary debasement across multiple currencies (Turkey 44.5% annually, Argentina/Brazil >100%, Lebanon in hyperinflation) illustrate why Bitcoin offers a non-debasable alternative.
— Supply-side analysis of monetary bases avoids the political manipulation of CPI indices and reveals empirical evidence of currency devaluation that demand-focused metrics cannot capture.
Market & price signals
— Bitcoin at ~$1.3 trillion USD equivalent in Q3 2021 (down from $65k–$68k when thread posted); passes silver (174% of above-ground non-industrialized stock) for first time this year but trails gold (12% of ~$10 trillion gold stock). Global monetary base: $29 trillion across top 30 floating fiat currencies. US dollar monetary base 9.3% CAGR over 50 years (7.8-year doubling); euro, yen, yuan comprise "big four" above Bitcoin. Australia's monetary base +184% YoY (Sep 2020–Sep 2021); Canada retreated from ~300% to −8% as tapering begins. Bitcoin supply growth 1.77% annually post-2020 halving (versus 1.8% gold, 1.5% silver) and will average ~0.1% for next 120 years until issuance ends.
Actionable insights
— Demand-side inflation metrics (CPI) are politically manipulated; monitor monetary base growth instead—12.8% global CAGR means wealth halves every 5.7 years in nominal terms, requiring yield significantly above that rate to preserve capital.
— Bitcoin's fixed supply schedule and 700-year doubling time offer the only major monetary asset not subject to erosion by central bank printing; compare holdings against assets with doubling times measured in years or decades, not centuries.
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