Source: "When Shift Happens" podcast

Compiled by: Felix, PANews

Cryptocurrency strategist Mark Moss recently appeared on the podcast "When Shift Happens," where he discussed the 50-year technological revolution cycle, value storage baskets, and the geopolitics of de-dollarization, suggesting that Bitcoin will reach $45 million by 2050. If it replaces the US dollar as the globally accepted unit of account and becomes a neutral reserve asset, its value could even reach $500 million.

This prediction sounds pretty crazy, and Moss also provided his analytical basis. PANews has compiled the highlights of the conversation.

Host: Every newcomer to Bitcoin asks themselves a question: How can I get rich with Bitcoin without relying on luck or falling into various scams? People always have a mentality of wanting to "get rich overnight".

Mark Moss: I think this is a flaw in the fiat currency system. The debt system keeps stealing your wealth, while real wage growth can't keep up with rising costs. Therefore, people are forced to take more extreme measures, to take further risks, in an attempt to offset this loss. Lenin once told Keynes, the father of Keynesian economics, that the best way to destroy capitalism is to devalue the currency. Through a series of inflations, they can steal wealth at will, and continue to steal until all wealth is gone. And the best way to get rich will be gambling and theft. That's where we are now. Look at our current situation; the best way to get rich today is considered to be gambling. For example, "YOLO" (Live Once), putting all your money into memes, or going to Las Vegas to gamble. This is what people perceive as the best way to get rich today. Or it's theft; unfortunately, whether it's fraud on Wall Street or robbery on the street, theft is rampant.

While we live in this environment, I don't believe it's the best way to get rich. Sometimes you might get lucky, but the fact is, 75% of lottery winners go bankrupt in less than five years. This proves that relying on luck, taking a gamble, and profiting isn't the path to wealth. Musicians and professional athletes who have earned tens or hundreds of millions, even hundreds of millions of dollars, have ultimately gone bankrupt. So, you might certainly stumble upon some meme stock or crypto token, but the chances of holding onto that wealth are extremely slim. In many cases, it can even ruin their lives because we must develop the ability to hold onto wealth. Although nobody wants to hear it, part of the unavoidable experience is that you have to make money and then lose it 100%. You need to constantly experience gains and losses. That's how you learn to cherish it. Only when you lose it will you understand its value. Then you'll tell yourself you can never make the same mistake again. If you only make money by luck once, you'll eventually lose it and won't know how to make it back.

Host: This is underestimated. There is no such thing as a "get rich quick" shortcut. Cryptocurrency or Bitcoin is only a slow path to wealth, or even a strategy for quick bankruptcy.

Mark Moss: I'd like to slightly refute that idea. If you want to think of it this way, consider it a strategy for gradual wealth accumulation. The best way to accumulate wealth in the world has always been the stock market. Of course, the best way to accumulate wealth is to start a business. As a creator, solve problems and provide value to the world. The world's richest people, like Musk, Bezos, and Bill Gates, all built companies that solved problems; this is the best way to get rich. After that, we invest the money we earn in real estate or the stock market to double our wealth. The real estate market and the S&P 500 have created most of the world's richest people. If you look at their returns over 30 years, it's roughly 7% to 8% per year. The world's richest people, like Buffett and Ray Dalio, became wealthy in these markets with returns of 7% to 8%.

Host: And Bitcoin is growing every year now. Buffett had about $1 million when he was 31 or 32, which shows that even so, you can still become a billionaire after 60 years.

Mark Moss: But I must point out one thing about Buffett and Dalio. I see many people entering this field, wanting to quit their jobs and become full-time investors, thinking that this will make them as rich as they are. But I want to remind everyone that Buffett didn't just get rich through investing; he built a company called Berkshire Hathaway, and he used to work there every day. Ray Dalio did the same; he built a company called Bridgewater Associates and went to work there every day. So they are not only investors, but also entrepreneurs, and we need to consider both aspects.

Returning to the previous point, they accumulated wealth in the real estate and S&P 500 markets, which offer annual returns of 7-8%. Bitcoin, on the other hand, has yielded an annualized return of 85% over the past five years and an average of 60% annually over the past three years. So when we say this is a "slow and steady wins the race," other markets only offer 8% returns, while Bitcoin offers 65%—how can that be slow? People are simply in an extremely frenzied gambler's mentality, hoping to get everything in three weeks or three days. Everyone really needs to calm down. They've lost their proper understanding of life and have no basic concept of what wealth truly is. I often hear people complaining that Bitcoin is too slow and that they need something that can triple their money in 30 days.

Host: Just like you said, don't expect a steady return of 3 to 5 times; you'll often end up losing 99%. This kind of overly speculative gambling mentality is truly pathetic. Some call it "financial suicide."

Mark Moss: Yes, as Michael Saylor said, everyone should generally keep some risk margin in their portfolio. This goes back to the hierarchy of needs: first, lay a solid foundation to ensure the safety of your capital; if you want to gamble with a portion of your money, that's fine, but you need to diversify it and only use a small portion of your funds. Professional investors understand that we always think from the perspective of risk-adjusted returns. The higher the risk, the higher the potential return, so we invest less money in it. The lower the risk, the more money we invest. We don't distribute our money evenly. So if you want to chase those hundredfold returns and seek excitement, that's fine, but you must only use a small portion of your portfolio to do so.

Host: Why do people think that the price of Bitcoin will stop at 1 million?

Mark Moss: This is just the next big integer hurdle, but there's no reason for it to stop there. The Congressional Budget Office (CBO) projects the global value basket will reach $1600 trillion in 2030, $3800 trillion in 2040, and around $8000 trillion in 2050. I think the actual numbers could be even higher. At Bitcoin's current growth rate, the compound annual growth rate could average around 30% over the next decade. By 2040, Bitcoin will account for about 8% of this value basket. In comparison, Uber and Airbnb gained 10% market share in 10 years. Once it reaches 8%, Bitcoin's price will reach $14 million. By 2050, it could account for about 20% of the basket, which would push Bitcoin's price to a staggering $45 million.

Host: That sounds crazy. But I interviewed David Bailey a few days ago, and he said it's entirely possible that Bitcoin could reach $50 million to $100 million someday.

Mark Moss: That's entirely possible. I've done a lot of cycle research, including 4-year, 8-year, 50-year cycles. A technological revolution happens every 50 years, and we're currently in the sixth. Bitcoin and AI fall right into this cycle. This includes four distinct phases. We can look at the diffusion of this innovation cycle using an S-curve. We're currently in the parabolic phase, and widespread adoption should occur around 2050. Furthermore, for thousands of years, money has typically started as a "collectible." If people believe in it, it becomes a store of value. Only when it possesses attributes like portability and durability can it become "money." If enough people use it, it becomes a unit of account—that's the final stage. Overlaying these four stages onto a 50-year cycle chart, I believe that by 2050, Bitcoin could become the world's unit of account.

From a geopolitical perspective, the US dollar has depreciated by 99% over the past 110 years. What truly pushed the world to the brink was NATO's decision a few years ago to freeze Russia's bank accounts. The fact that the funds of a nuclear-armed superpower could be confiscated sent a warning to the world. Therefore, the BRICS countries are attempting to issue their own currencies, and China is cooperating to advance its central bank digital currency (CBDC). Everyone is looking for solutions to break free from the dollar. In a new world of tariff wars and distrust, countries are seeking ways to move away from the fiat currency system. The only way for the world to continue functioning is to find a neutral reserve asset, like the gold standard of the past. Bitcoin perfectly meets this requirement.

Based on the technological curve and the geopolitical landscape, I believe that by 2050-2060, Bitcoin will become the global unit of account. This means that the basket of value, originally worth $850 trillion, will no longer be denominated in US dollars, but in Bitcoin. If we divide this $860 trillion by 21 million Bitcoins, each Bitcoin will be worth $400 to $500 million.

Host: Hearing this, even the camera crew looked like they were saying, "Oh no, I need to go buy some Bitcoin right away."

Mark Moss: I know this sounds crazy, but Bitcoin is programmed to always appreciate. This is because the real wealth (goods and services) in human society is always growing; we are constantly inventing new things and solving new problems. Fiat currency dilutes your share of the world's wealth by printing money, but the total supply of Bitcoin remains constant, so you will never be diluted. As long as I own 1 Bitcoin, I will always own 1/21 millionth of the world's wealth, and as the total amount of world wealth continues to rise, Bitcoin's purchasing power will never be diluted.

Host: You once said that once you buy Bitcoin, your life will change. Why?

Mark Moss: There are many reasons why Bitcoin will change your life, but ultimately it will begin to change your entire mindset, broadening your perspective on the long term. The purpose of the fiat currency system is to turn us into consumers, encouraging us to consume continuously. One reason governments create inflation is to stimulate spending to boost the economy, when people should actually be incentivized to save. For example, during the pandemic, people stayed home and saved money, which severely impacted the economy, so governments injected trillions of dollars in stimulus to get people back to spending. Our money depreciates too quickly, which also prompts us to keep consuming because things will become more expensive if we wait. However, once we own Bitcoin, we realize that our money can actually buy more goods and services in the future. Under the Bitcoin system, you feel that things will be cheaper in the future. When Bitcoin appreciates at a rate of 50% or 60% per year, this changes your cost of capital. You start to think: Do I really need that vacation? Do I really need that new house or new car? Because I can simply keep that money in Bitcoin. If Bitcoin, worth tens of thousands of dollars today, were to become $1 million in 5 years and $15 million in 15 years, would I be willing to spend $100,000 today and sacrifice $15 million in the future? Of course, if it were to buy a beach villa for my children, I would absolutely be willing; I would be willing to exchange all the money in the world for wonderful experiences with my children. But this makes you examine all your decisions with an extra layer of scrutiny: "Do I really need this?" This changes our value system; Bitcoin makes you more cautious and discerning, which is a good thing.

Host: You mentioned that "my money depreciates very quickly." So just how quickly does the money in your bank account depreciate?

Mark Moss: It's much faster than people think. The government reports to us the Consumer Price Index (CPI), which tracks the rate of increase in the price of a basket of goods, and the official target is usually around 2%. Federal Reserve Chairman Powell has even hinted that they will abandon this absolute target and let inflation rise moderately. But the CPI is just a result. What really represents the rate at which the money in your bank account is depreciating is the rate of increase in the money supply. Inflation is like inflating a balloon, increasing the volume of money in circulation. Over the past five years, the global M2 money supply has grown by about 8% annually, and even faster in the United States. So, you are probably suffering a loss of 8% to 10% of purchasing power each year. If you add, say, a 2% risk premium, then your loss is probably around 10% to 12%. This means that any investment I make must have an annual return of more than 10%. Once you realize that you have to outpace this 10% inflation barrier, all your business and investment decisions become incredibly clear. If you have 17 assets to invest in, you'll find that 15 of them won't outpace this 10%. So naturally you'll only focus on the two things you can outperform: Nasdaq tech stocks and Bitcoin.

Host: Even if the government only aims to steal 2% of our wealth each year, it may not sound like much, but over several years, that 2% adds up to a large sum. If it's compounded at 10% to 15%, your money will shrink by 40% to 50% over several years, which is astonishing.

Mark Moss: Exactly, that's the power of compound interest. We often think linearly and overlook the power of compound interest. If we make a slight change in our financial mindset, even just saving an extra 10% of our income and investing it for 20 years, that's enough wealth to change the course of our lives. People often look down on saving a few thousand dollars now, thinking it's not worth the time to consider, because they ignore the enormous power that money can unleash when properly preserved and compounded.

Related reading: Interview with Arthur Hayes: AI triggers deflation, oil prices foreshadow war, 90% of assets are still BTC