“STAND CLEAR OF THE CLOSING DOORS…!”
As soon as I heard these words over the PA system, out of habit, I started picking up the pace.
But since I was still at the top of the subway staircase at the time, it meant I started running down, in hopes of shaving off a few seconds (and of course, not tumble down the stairs in the process)…
“STAND CLEAR OF THE CLOSING DOORS…!”
Having lived in New York City for over 15 years now, I knew the subway doors were closing soon. And that I was about to miss the train if I didn’t hustle!
Of course, at the same time, the smarter side of my brain knew it didn’t really matter if I missed any particular train. Because worst case, after a few minutes, another one comes…ready to shuttle me wherever I need to go.
Yet, I still found myself running…!
This time around though, I didn’t get far. Actually, it wasn’t even close.
After just a few steps, I could see down to the platform level. And I saw that the subway train doors had already closed. Since I was (at best) only halfway down the staircase, it meant I had missed the train…
Defeated, I walked down the rest of the stairs. And while waiting on the platform level for the next subway to come, I couldn’t help but laugh at myself for literally running like my life depended on it!
Old habits die hard…
Of course, just like I already knew, it did not matter.
A few minutes later, another N train came and took me to Union Square, where I was getting lunch with an old friend and fellow Dad who was in town for a work trip.
Missing the bitcoin train
During lunch, of course, I asked my friend, Stan, whether he’s into bitcoin.
What Stan told me stood out. And it’s what I want to talk about today.
You see, Stan told me that while he has seen the headlines about bitcoin, he had not seriously considered investing in it yet. A big part of that reason was that he knew prices were near all time highs (for reference, bitcoin all time high was around $73,000 while it was roughly $69,000 at the time that Stan and I caught up over lunch).
Effectively, he felt like he had “missed the train” on bitcoin so it wasn’t even worth studying / researching / investing in anymore.
While I can see where he was coming from, I believe the EXACT OPPOSITE is true.
I believe he is NOT late. If anything, he is still EARLY. Very early.
Let me tell you how I’ve come to this conclusion!
How many people need bitcoin?
Based on my research, if I’m being extra generous, I’d say there are 10 million people around the world who own a non-trivial amount of bitcoin (ie. more than $10,000 USD worth).
On one hand, you might think, that’s a LOT of people already. And that there won’t be that many more people who want / need bitcoin…
On the other hand, when I look at this number, I think, “wow, one day, bitcoin is going to be used by ALL 8 billion people on earth!”
And that means, we’re at 0.1% adoption right now.
So why do I think all 8 billion people on earth will need bitcoin? To explain, I’ll start by zooming in to why I, as a parent, need bitcoin. And then, I’ll zoom out to show why you, and other parents, and ultimately, all 8 billion people need bitcoin too.
Zooming in
Simply put, as a parent with two young kids, I need money for (a) today and (b) tomorrow (ie. the future).
For “today”, I need money to buy things like groceries, diapers, to pay the bills, etc.
But more importantly, I need money for “tomorrow” because I know that the future is uncertain. Maybe something bad happens like losing a job, or someone in the family needing to go to the emergency room, or even something as annoying as the AC unit breaking in the middle of a heat wave…
My point is, these curveballs that life throws my way each come with a price tag. And often, a big price tag too!
Worse, I have no idea when they will happen. But I’m smart enough to know they will come.
So knowing this, I must be ready for whatever and whenever life throws these curveballs at me and my family.
For me, personally, the way I make sure my family won’t feel pain WHEN these things happen is to…have money, of course! (and going forward, I’ll refer to this kind of money needed for the future as an “emergency fund”)
Hopefully, the concept of an emergency fund isn’t controversial to any parent out there!
So now, let’s talk about the problem with emergency funds.
The problem with emergency funds
Even if you are being a responsible parent, and regularly putting away a portion of your hard earned money into an emergency fund each month, you are still getting f*cked.
Why? Because the cost of everything is going up up up.
And what that really means is the money you’ve so diligently put away in your emergency fund to protect your family is actually losing its power over time.
As an example, imagine you have $10,000 in your emergency fund today. If your AC unit were to break today, maybe it would cost $3,000 to fix (30% of your emergency fund).
Now, imagine the AC didn’t break. Instead, a few years pass by, and you still have the same $10,000 in your emergency fund. But because the cost of everything keeps going up, the same AC repair now costs more like $5,000 (or even more). Now, all of a sudden, 50% of your emergency fund is gone.
Do you see how as the cost of everything goes up, the power of your emergency fund (ie. what you can buy with it) goes down?
Again, hopefully there isn’t anything controversial about this.
So now, finally, I’m sure you are wondering how bitcoin fits in? So let’s go there!
Say hello to bitcoin
Bitcoin is a much better tool to put into an emergency fund. That’s because with bitcoin, instead of the power of your emergency fund getting eroded away, you’ll find that the stuff you are able to buy with it (ie. your purchasing power) INCREASES over time.
That means your emergency fund is getting MORE powerful over time. (this is a good thing!)
For context, I wrote more about the idea of life getting easier vs. harder in case you wanted to have a read.
As an example of this in action, when I first bought bitcoin in 2013, it cost $500 per coin. At the time, let’s assume I exchanged $500 from my Bank of America account for 1 bitcoin. And by plopping that 1 bitcoin into my emergency fund (ie. not touching it), now in June 2024, it would be worth over $60,000.
I don’t know about you…but $500 gives me a tiny feeling of safety from future uncertainty. But $60,000 gives me A LOT more of a good feeling that life can throw some major curveballs my way, and yet, my family won’t feel the pain since we know we can pay for it.
That’s why my family owns bitcoin as part of our long term emergency fund!
The longer we hold bitcoin, the more valuable it becomes! And for me, as a parent, that means, over time, I feel less stress about future uncertainties wrecking havoc on my family.
Trust me, this is a good feeling!
Zooming out
I know I’m not the only parent out there with an emergency fund to protect against future uncertainty. Virtually all parents I talk to grasp this concept and many already have an emergency fund in place.
And now, slowly but surely, fellow parents are having their own “ah ha” moment that bitcoin in the emergency fund is a MUCH better way to protect against future uncertainty.
And with it, more bitcoin adoption!
You might be thinking, “I don’t have kids”. Or that your kids have already grown up and moved out of the house. Well guess what, the AC unit doesn’t care. When it breaks, you better have an emergency fund you can use to pay for it. Otherwise, get ready to suffer…
Basically, I believe everyone needs an emergency fund with bitcoin in it because we all need to protect against future uncertainty!
Adoption is increasing
Remember, today, we’re at 0.1% bitcoin adoption.
And while I can’t tell you how much adoption there will be next week, month, or even year…if I zoom out, it’s clear to me that more and more people are coming around on how important it is to own bitcoin to make life easier.
What happens to the price of bitcoin?
Here’s the kicker. There is a fixed supply of bitcoin (21 million). And no one can make or print more of it.
So as demand for bitcoin increases, but there isn’t more supply of it…what happens to price?
There is only one direction it can go.
Up!
To be clear, I’m not saying in the short term that the price of bitcoin is going to be a straight line up. Rather, in the short term, it goes up down up down and up again…
But, zooming out, I’m confident that:
1. as more people adopt bitcoin (because they realize it helps make their lives easier)
+
2. there is only so much bitcoin to go around (ie. it’s scarce)
=
3. in the long term, the price of bitcoin will be higher than where it is today
Conclusion
As of June 2024, you haven’t missed the bitcoin train. Actually, you aren’t late to bitcoin at all. If anything, you are still very early.
And there is still a lot of upside to be had!