Bitcoin's Volatility Is Gone — And That's A GOOD Thing

0:29Hello everyone, we've got a lot to discuss today. investors in the world have been thinking about volatility for decades. Charlie Munger once said, volatility is not a risk we care about. What we care about is avoiding the permanent loss of capital. Peter Lynch said, the key to making money in stocks is not to get scared out of them. And Peter Drucker said, the greatest danger in times of turbulence is not the turbulence itself, it is to act with yesterday's logic. Even Sun Tzu got in the game when he said, in the midst of chaos, there is also opportunity. It is volatility that ultimately separates investors into two different buckets, those who seek volatility and those who try to hide from it.

1:03There is no greater filter to understand how someone invests, what their goals are, and ultimately what their portfolio looks like. Bitcoin has been the epitome of volatility since inception in 2009. The digital currency has appreciated more than approximately 1 million percent over the last decade and a half. The compound annual growth rate during that time, nearly 100 percent. Doubling your money annually for 15 years is just insane. But those returns were littered with multiple drops in price of at least 80%. Bitcoin has not been for the faint of heart. But here's the thing. Bitcoin's volatility has been drastically reduced in the last year.

1:37Bloomberg's Eric Bauchunas shows that the ratio of IBIT's 60-day volatility compared to the S &P. It was 5.7x more volatile a year ago, and now it's barely over 1, meaning it has the same volatility as U.S. stocks. Now, the hardcore Bitcoiners, they don't like this. They want the volatility. Many of them would rather have massive moves up followed by drastic moves down. The chaos is a feature, not a bug in their mind. But Beltunas poses an interesting question. Here's a thought experiment for the moon boys. Would you rather have god candles in both directions to get the occasional adrenaline hit?

2:09Or would you rather a slow climb with decreasing volatility that attracts big fish money and gives Bitcoin a fighting chance to be used as a mainstream currency one day? Now this question is worth thinking about because we are watching the transformation of Bitcoin. The asset is evolving from a contrarian asset to a consensus asset right before our eyes. It is the only asset that I personally know of that becomes less risky as it grows in market cap. The largest pools of capital can now allocate to Bitcoin, both because it has reached critical mass and the volatility has subsidized to a level that doesn't scare investors looking to protect their assets.

2:44Remember, there are two types of investors here, those who seek volatility and those who hide from it. Bitcoin has crossed into a middle ground that is attractive to both groups in a very weird way. Just like Goldilocks, Bitcoin is not too volatile, it's not too static, it's just right. And that means we will see Bitcoin continue to push higher as it sucks more capital into the digital black hole it created by creating the newest store of value on the block. As much fun as the volatility of the past has been, Bitcoin is growing up. The adults of finance are knocking on the door because the asset has achieved certain properties that fit their criteria.

3:16And the Bitcoin holders who showed up for the volatility, well, they just have to live with slightly lower returns moving forward. But before you start crying, remember, Bitcoin's lower volatility still is going to outperform all of the archaic assets of traditional Wall Street. General Cain is the current chairman of the Joint Chiefs of Staff, and he recently told an absolutely electric story about how the United States prepared for the recent elimination of Iran's nuclear capability. This story highlights what is possible when a small group of people, in this case, only two men, are able to accomplish when they dedicate themselves to obsessively solving a problem over a very long period of time.

3:54Hearing what these two men did for the last 15 years will inspire you to not only be better at whatever you choose to pursue in life, but it'll actually want you to take action and try to accomplish something meaningful. Take a listen to what General Cain had to say here. Now let me next move to a walkthrough of the GBU-57 massive ordnance penetrator weapon and share a little bit about the planners who did this and their work on the weapon. First, let me set the stage for you. There's an organization in the U.S. called the Defense Threat Reduction Agency, DITRA. DITRA does a lot of things for our nation, but DITRA is the world's leading expert on deeply buried underground targets.

4:41In 2009, a Defense Threat Reduction Agency officer was brought into a vault at an undisclosed location and briefed on something going on in Iran. For security purposes, I'm not going to share his name. He was shown some photos and some highly classified intelligence of what looked like a major construction project in the mountains of Iran. He was tasked to study this facility, work with the intelligence community to understand it, and he was soon joined by an additional teammate. For more than 15 years, this officer and his teammate lived and breathed this single target, Fordow, a critical element of Iran's covert nuclear weapons program.

5:27He studied the geology. He watched the Iranians dig it out. He watched the construction, the weather, the discard material, the geology, the construction materials, where the materials came from. He looked at the vent shaft, the exhaust shaft, the electrical systems, the environmental control systems, every nook, every crater, every piece of equipment going in and every piece of equipment going out. They literally dreamed about this target at night when they slept. They thought about it driving back and forth to work, and they knew from the very first days what this was for. You do not build a multi-layered underground bunker complex with centrifuges and other equipment in a mountain for any peaceful purpose.

6:14They weren't able to discuss this with their family, their wives, their kids, their friends, but they just kept grinding it out. And along the way, they realized we did not have a weapon that could adequately strike and kill this target. So they began a journey to work with industry and other tacticians to develop the GBU-57. They tested it over and over again, tried different options, tried more after that. They accomplished hundreds of test shots and dropped many full-scale weapons against extremely realistic targets. for a single purpose, kill this target at the time and place of our nation's choosing.

6:59And then, on a day in June of 2025, more than 15 years after they started their life's work, the phone rang and the President of the United States ordered the B-2 force that you've supported to go strike and kill this target. Yesterday, I had the incredible honor and privilege of spending time with these two Defense Threat Reduction Agency officers. who've given so much. One of them said, quote, I can't even get my head around this. My heart is so filled with the pride of being a part of this team. I am so honored to be a part of this. To you both, thank you and thank you to your families. Now, I got to say, listening to that story is absolutely incredible.

7:43Having two individuals who obsessively tried to figure out a problem that most people thought was impossible, but not only did they figure it out, Not only were they able to get the intelligence, but they were actually able to use that intelligence to create action. Now, again, I usually spend most of our time on this show talking about money and finance, people who are allocating capital or people who are building companies. But you can find excellence all over the world when you're looking for it. And seeing these two men, who we don't even know their name, and see what they were able to achieve, that should inspire you to be just as excellent in the future as well.

8:18The US government is taking money from young people to give to old people. And now we have proof. Let me explain. See, here's what the government's doing. They're using state tax, income tax, and payroll tax to go after young people who are trying to start families, take money from them, and then they're turning around and they're handing it back to wealthy retirees using things like social security, healthcare, and other benefits. Now, of course, there's two different stories here. If you're a young person, this probably pisses you off. You wanna actually be able to keep the money that you're working hard for so that you can use it not only to consume things in the society, but also to help build your family and create a life of financial security.

8:53At the same time, elderly people are saying to themselves, well, I was promised certain benefits. I was promised a certain quality of life and therefore the government needs to pay me that. Both things can be true at the same time. But what we know for sure is that the way that we are funding all of these things around social security, healthcare, and other benefits is that we're taking money from young people and we're giving it to old people. And I bet there's a lot of people who don't like it. Now, one thing that you can go back to and look at is that actually on the social security front, maybe Doge, the Department of Government Efficiency, actually has had a bigger impact than we previously thought.

9:25We just got data that suggests the biggest monthly drop in social security handouts in history happened in the month of May. That means that all those people who were getting fraudulent payments or the wasteful spending of social security, as that gets taken away, we actually get more people who need the social security, who deserve it, the people who should be receiving the money, they're still getting it. But as we eliminate waste and fraud and all that abuse, now all of a sudden, social security handouts are coming down. And naturally, that is good for the government. It's good for our citizens.

9:57It's good for the national debt. And hopefully, that means that we can create some breathing room. Hopefully, we have an administration with the courage to cut taxes so that those young working families, they can actually get more money in their pocket. They can use it to improve their lives, not simply hand it to the government that's got a track record of being a horrible capital allocator. That's it for today's show. I hope you guys are enjoying this. I'm having a blast putting it together. This was a great week. And it's all because you guys tune in every single day. Please make sure that you're watching on X and also make sure that you're subscribed on YouTube.

10:27I'll see you guys on Monday, live from the desk of Anthony Pompliano.