Bitcoin Value In Credit Default Swaps

I reference my thesis on the intrinsic value of bitcoin in this piece, originally published in Bitcoin Magazine in April 2021. It represents my view on the value of BTC as the anti fiat, fiat is the Ponzi, and how everyone needs insurance against the Ponzi collapsing. As Voltaire famously said, “Paper money eventually returns to its intrinsic value — zero.”

As Charlie Munger famously said, bitcoin “is rat poison squared.” Well, Charlie, have your pill, because fiat is the rat.

The basis of my paper is that BTC is insurance on the decaying credit quality of fiat-issuing sovereign nations. As such, it is credit protection on a basket of fiats. When you own insurance, you own volatility. Similarly, when you are long credit, you are short volatility. Most assets/investment mandates are short volatility. Accordingly, the investing world is short volatility, and it desperately needs to offset that risk with insurance (or being long volatility).