Bitcoin Price Prediction: Why Bitcoin Could Reach $12.5M by 2031

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1:06So every time they print money, the money gets trapped in what's called a monetary system. But only the rich get richer and the poor and middle class get poor because, you know, temporarily there's inflation. And the inflation is in the asset markets. So Bitcoin went up, real estate goes up, stock market goes up. But I feel for the guys working in my yard because they violate rich dads. Lesson number one, don't work for money. You've got to work for assets. So this is the next thing I'm going to ask you a question on, you see, because as long as you guys are kind of pissing off the central banks here, and they keep printing money, guys like me get richer and richer.

1:51I just borrowed another 160 million bucks. The average guy can't even get a credit card. Well, they got student loans. That's all they can get. And that's why they get poor, because of the school system. But if Bitcoin, you guys keep pissing people off, and we go to FedCoin, you know what's going to happen? What's that? Hyperinflation. Because they're going to give money. It's complete communism at that point. They're going to give money directly to the people via UBI, universal basic income, MMT. It's called welfare. It's also called Social Security. It's also called Medicare. But they're going to, if they go to FedCoin, like China's going to the China coin, if they go to that, that's why you're going to wish you had some Bitcoin, gold, silver, and bullets, because there will be civil unrest.

2:44They're going to steal our wealth. but they're going to pump the money directly into the people. And that's what they did during the Weimar Republic, which brought rise to Adolf Hitler. And Kamala and Adolf had the same values. It's reparations. And that's why Bitcoin guys, I'm riding with you because you are pissing everybody off. The real message I'm trying to get across today is people, we've been conditioned to think inflation is not that big of a deal. and I think when you really consider economics from first principles you'll come to see inflation as it's a coercive thieving and a moral force and it's very simply just the stealing of wealth by those who can print money from those who cannot print money and as the old saying goes inflation is the surest way to fertilize the rich man's field with the sweat of the poor man's brow Amen.

3:43And what a lot of people don't know, when I talk about financial education, I go back to Gresham's Law. And Gresham's Law says when bad money enters, good money goes into hiding. And so this has gone on throughout history. The Romans did it. The Germans did it. Zimbabwe did it. Venezuela is doing it. it's Gresham's law. When you have fake money enter the system, which would happen in 1971 when Nixon took the dollar off the gold standard, Gresham's law took effect. And good money, i.e. gold and silver, went into hiding. And I've been in silver since 1964 and gold since 1972. And I don't save dollars because I support Gresham's law.

4:29Remember, Hitler came to power because of Gresham's law. When in World War I, they messed with the Reichmark, the German currency after World War II. Well, you know, it's funny. You brought up Grusham's Law, which is a very true law that bad money chases good money out of circulation. People are smart. People save good money and they spend bad money, right? It's just incentives. There's another law actually related to bad money itself, and it's related to inflation. So inflation progresses according to the law of accelerating issue and depreciation. And this is a law that works as surely as gravity.

5:06We've seen it happen many times throughout history. So for a monetary authority, it's typically easier to resist the first issuance or the first expansion of the money supply. But once they start engaging in inflation, the second issuance or the second expansion becomes much more difficult to resist. And by the third, fourth, and fifth, it's basically inevitable. They're just going to respond with more and more inflation. So fiat currency itself, it is actually born by borrowing. So systemically, the supply of dollars can never be sufficient to satisfy the debts that it creates. So it's incentivizing the creation of debt from the outset.

5:49And being a CPA, the reason that works is the way they get the money back is via taxation. Yeah, and seniorage, frankly. They're buying government treasuries, right? The Fed's buying government treasuries, so they're paying at this. There's never – the point of the story is there's never enough dollars in the system to satisfy the debt it creates. It's a self-annihilating system. But it's also Triffin's dilemma because you could never, ever fix it. It would always go farther and further and further into debt. Right. So the inflation that accelerates and gets worse over time, you can't put the toothpaste back in the tube, as you might say.

6:31So our discussion today is what is real money? When people say, why business? The point is the idea of building wealth. Put someone on easy mode. And what I mean by that is you can go to work. You can get paid. You can spend less than you make. And then you can go into the stock market and try to pick stocks. It's pretty complex. You have to constantly reevaluate your portfolio. You have to look at what companies are working, what companies aren't, keep up with all of their earnings reports. It's a lot of work to do that. And if you're not doing it full time in a professional, it can be very difficult.

7:02Instead, something like Bitcoin simply allows someone to save. They simply get paid, spend less than they make, put that economic value into Bitcoin, and it's a savings technology. And so if you continue to save in a currency that is going to appreciate over time rather than saving dollars that depreciate, it is kind of this wealth building on easy mode, not because it necessarily means that Bitcoin is guaranteed to work, but because it means that Bitcoin is a simple strategy that people can just replicate week after week after week. And what we found over time is that is a really valuable way for people to be able to build wealth.

7:37Let's just make it dead simple for them to understand what they got to do. Why would the Bitcoin go up in value? Why would it go up? I think the biggest reason is the same reason the stocks go up, which is stocks go up because the dollar gets devalued. Bitcoin goes up because the dollar gets devalued. And so if the politicians and the central bankers could somehow figure out a way to stop spending money, they could figure out a way to not devalue the dollar, which seems impossible. then sure, maybe these asset prices wouldn't go up, but I don't want to bet on politicians waking up and figuring out how to be disciplined monetary capital allocators.

8:17The reason I got interested in Bitcoin was that there's only 21 million. In other words, that to me, when I looked at that plus blockchain, I said 21 million. The closer we get to 21 million, that was number one for me. Number two, it is, you know, it's Bresham's laws. Bad money enters the system. Good money goes into hiding. But Bitcoin follows Metcalfe's law, the power of networks. Bitcoin is a network and it follows Metcalfe's law. But there's a finite number. So I was trying to explain this to her. There's only 21 million. I think we're about 19.5 million today. And demand is going up. In India, as an example, people buy much of gold and they pass it on generation to generation.

9:02And if you're the child who inherits gold and sells it, you're not so popular in the family. When holidays come around, you probably don't want to show up. And so I do think that it's not just a Bitcoin thing. This is a sound money thing. And now Bitcoin is just a digital sound money. And so there's going to be families where they pass the family Bitcoin down over year after year after year. And if you're the kid who sells the Bitcoin, you're not going to be so popular. You're not going to be, you know, invited with a smile to, you know, Christmas or Thanksgiving. And so hopefully that education will help people not, you know, sell, sell the Bitcoin.

9:40What's the main reason Bitcoin is your choice right now? Well, I'd say at a really high level, no matter how you feel about politics, Bitcoin probably helps fix that because the end game for Bitcoin is that it separates money from state control. And by doing that, it reduces a lot of the problems that the state creates in the world, which, you know, it finances itself exclusively through taxation and inflation. And, you know, Bitcoin is just a free market money. It exists outside of the central banking system, whereas central banking is very much a model based on socialism. It's literally the fifth dictate in Marxist playbook to have centralized control of cash and credit.

10:28Bitcoin's a purely capitalist technology. It lives entirely in the free market on its own merits. So I agree 100 % with you because I've been outside the central banking, the Fed, and Bank of Japan, the European Central Bank. I just really don't trust those guys because it's manipulated by the academic and financial elite. But why Bitcoin? Because for a lame person like me, there are so many different coins. You know, like there's five new coins a minute coming out. So why did you come out so strong for Bitcoin? So it's very important to understand Bitcoin from first principles. And to understand it, you first have to understand how money comes into existence.

11:14And at a very basic level, any society that trades amongst its people necessarily produces a most tradable thing, right? Something becomes more tradable than everything else. And whatever that thing is, is money. So like in prisons, you have cigarettes, right? In ancient Africa, we had glass beads. We used salt. We used cattle. We used all these different things as money based on the technological realities of the society shaping money. But what it comes down to are basically five critical properties. So money has to be divisible so it can price things. It has to be durable, which means it lasts over time.

11:52It has to be recognizable, which means people can objectively verify it is what it is. It has to be portable so you can move it across space. And very importantly, it has to be scarce, verifiably scarce. And this protects it from people trying to debase its value over time, as we see central banks doing the fiat currency today. So when you see the Fed right now printing trillions of dollars, what goes through your head relative to Bitcoin? So to get there, we have to answer actually how the Fed came into existence. And so across those five properties, basically, gold became universal money, which everyone understands.

12:30very clearly. But not very few people, I think, understand why, because it was the most divisible, durable, portable, recognizable, and scarce asset. So across those five properties, Bitcoin is superior in every dimension. We can get into that more in a second. But what the Fed is, as a central bank, is they've basically hoarded the free market money, and they've built a scheme on top of it, which I call, I likened to a pyramid scheme. And dollars originally were redeemable for gold, right? So they were actually, because gold is heavy and hard to transport, it was actually resolving the portability and recognizability concerns of gold by issuing a paper redeemable in gold.

13:11But gradually over time, governments removed that redeemability and they pulled off this long game ledger domain where they've got us all thinking in dollars now, but only because it used to be redeemable in gold, right? So it's really, they've kind of like hacked the free market in a sense. And again, central banking today, it's an anti-capitalist function. I can think of free market capitalists in the U.S., but we're absolutely not. Well, it goes back to what we call the fractional reserve, is that you could put$10 in the bank and they could print$10 ,000 off of it. So, but why Bitcoin? Do you know what I mean?

13:45You and Anthony Pompliano, your discussion on the Pomp Show was extremely compelling. I recommend people go and watch that program. It was really worth watching. But again, here I am the layperson, an old guy, and there's five new coins coming out. There's ICOs everywhere and all this. But why Bitcoin? So the real short answer is there's only one analog gold for a reason, right? The value of money is found in its liquidity and its network effects. So for Bitcoin specifically, looking at it again across those five properties, first of all, it was first. It was released into the world at a time when no comparative technology existed, right?

14:30And because it's just pure information, it's basically infinitely divisible because it can be broken down and recombined at near zero cost. It's infinitely durable because information does not decompose. it's infinitely recognizable because it's like the written word right this information is the most easily recognizable thing in the world uh it's infinitely portable because it can move at the speed of light across telecommunication channels and then very importantly satoshi combined basically economics and game theory with thermodynamics to make it absolutely scarce we've never had anything in the world that exhibits absolute scarcity so even with gold for instance if we could flip a switch right now make everyone in the world mine gold we could increase the supply very rapidly.

15:14So everything physical in the world is a function of our time necessary to produce it. But with Bitcoin, for the first time in history, we have a money that you cannot increase the supply of whatsoever. There only will ever be 21 million, and no one can change that. So it's like the three certainties in the world. We used to have death, taxes, and now we have the third, which is 21 million Bitcoin.

15:42The one thing about Bitcoin is so every four years, the new supply of Bitcoin gets cut in half. Now, you know, for your audience, while the world of economics seems very complicated, and it can be, prices just are really the equilibrium of supply and demand. So we just look at the supply and we look at the demand and the imbalance tells us where that price should go. And so assuming that the demand for Bitcoin stays the same and you cut the new supply in half, well, that should theoretically push the price up. And that's exactly what's happened. So what else happened was that the ETF came up. So Wall Street got into the game.

16:21Right. Yeah. So that increased the demand side. So we increased the demand side on a much larger scale. And now we're reducing the supply at the same time, which, of course, back to Economics 101 should be pushing the price up. But just to kind of set everybody up to what they know what this halving is, is that, you know, with the Federal Reserve or any central bank for that matter, we have no idea what the supply of fiat currency will be at any given time. Right. They just change it whenever they want. But what Bitcoin did is Bitcoin came out with a predictable supply issuance. So we know that there will never be more than 21 million, and that will be in 2140 or 116 years from now.

17:03But through that process, every four years, the supply of new Bitcoin coming out gets cut in half. And officially now, Robert, you might like this. Officially now, Bitcoin is the hardest money in the world. Gold has about an inflation rate of about 1.5 % on a stock to flow. That's the stock, the existing supply of gold, and then the new flow. So an inflation rate of about 1.5%. Bitcoin is now verifiably more scarce than gold. So that's pretty cool. So for the old guys like me, what does that mean? I mean, do you just jump in? I mean, there's also Dogecoins, there's Solana, there's Ethereum. I mean, all these guys are printing.

17:48Everybody's in the game. If you're a generation, it's printing more and more of it. So why would I jump in if everybody's making their own? I can make my own Bitcoin. I mean, a friend of mine called me and said, why don't you start the Rich Dad coin? I said, because I stay in my lane. I don't go into other people's business. Well, that's from happening. There's a couple of reasons why. I can tell you it's actually pretty simple. First of all, why should you jump in? Well, historically, supply and demand on the supply shock. So in the 2012 halving, the price of Bitcoin from the day the halving happened to the high point went up 9 ,300%.

18:25The second halving in 2016, it went from the day of halving to the high point was 2 ,900 % increase in price. 2020 from the low point to the, from the halving to the high point was 700 % increase. And so historically, getting in around the halving has been very good for capital appreciation. Now, as to why it shouldn't be Rich Dad Coin or Dogecoin or Ethereum Coin or whatever, one of my favorite analysts, Lynn Alden, says that to conflate Bitcoin and crypto shows that you don't really understand either. So I can just give you a very simple explanation for this. To your point, you can create Rich Dad Coin.

19:03I could also create a copy of Facebook called Mark's Book, or I can create a copy of Twitter called Mark's Twitter. But it doesn't mean anybody will come use it. So that's number one. Network effects are real. and specifically around monetary networks, the network effects are even more real because what you store your wealth in really matters, right? When the whole world moved to the gold standard and China wanted to stay on the silver standard, they lost their position in the world because of that. So while choosing the right or wrong social network might not be as big of a deal, the monetary network is.

19:35That's number one. So for those who may not follow what Mark's saying, Mark's talking about Metcalfe's law is the power of a network. In other words, a network is if I have a telephone, but I'm the only guy with a telephone, it's not worth anything. But if I have 10 million people in my telephone network, my network goes up. So that's Metcalfe's law. I understand that. Yes, that's exactly. So what gives Bitcoin its power, it has its network already established like McDonald's or Colonel Sanders. They have a network of franchises. That gives us its power. So just explain that. That's what I'm explaining.

20:11Yep, that's exactly right, Robert. So the bigger the network gets, the more powerful it gets. And the network effects are very, very, very powerful. Bitcoin is this really interesting piece of technology that it embodies everything that makes America great. And what I mean by that is if you take the U.S. Constitution, you were to codify it into a piece of technology, it would be Bitcoin. It protects your purchasing power. It gives you private property rights. It protects your free speech, your ability to transact financially. The setup and the structure of Bitcoin, just as there are three branches of the U.S.

20:45government with checks and balances, the Bitcoin system has three branches. which are the node operators, the software developers, and the miners. And there's checks and balances so no one group can make unilateral change. If you go and you look at the ideas of capitalism and democracy, they're codified in the Bitcoin network. And then we have exported those American ideals to anyone in the world with an internet connection. And so when I see that, I look at the United States and I say, this country is the single greatest economic experiment that's ever been created. There's no system that's better.

21:17Maybe one day somebody smarter than all of us will come up with a better one. But until then, we are simply going to sit here with this one. And if Bitcoin can mirror that in a piece of technology, it's likely to get a lot more valuable over time. And so far, that's what's happened for the last 15 years. Lots of anecdotal evidence of that throughout history. Every time the currency collapses, the civilization collapses. So I would argue that it's – clearly, I'm very focused on Bitcoin. I don't advocate for other cryptocurrencies. I don't think Ethereum is going to be a big deal or as big of a deal as Bitcoin.

21:53I think gold is a 5 ,000-year-old technology will only be disrupted once, and that is by Bitcoin. And that's what we're going to see play out over the next 10 years. So with Bitcoin by 2031, north of$12.5 million per coin, it's equal to about 20 % of the global purchasing power. So it's about half the dollar's value in total. But again, the dollar will have increased according to the law of accelerating issuance and depreciation. Its issuance rate will have increased, I'm predicting, to north of 145 % by the early 2030s. This would be early stage hyperinflation. You could say actually probably medium stage hyperinflation.

22:39Typically, a currency won't last more than a few years under that growth. This is the infamous Weimar Republic, which led to the rise of Adolf Hitler. That's right. Every dictator, every internment camp, every world war in human history was funded by fiat currency. Right. Right. Because those individuals were not limited to the bounds of their own balance sheet. They could use fiat currency to steal the savings from the entire society and just keep going to war until everyone's broke. It's like the story of my mother. She'd always say, how can I be broke? I still have checks.

23:19And I think to your point, people see this high degree of volatility that scares the hell out of us. But one of the beauties of Bitcoin being this decentralized digital open system is that you can actually go look on the blockchain and you can see exactly who's buying and who's selling. Right. It's an open, transparent ledger. And so when you go and you look at those on-chain metrics or on the blockchain, what you find is that entire drop from 60 down to 30. It was all new investors, new people in the market. Right. And you can tell that by how long have they been holding on to the Bitcoin that they were selling.

23:57And so when you see that all the new people are selling, it asks yourself, well, who's buying it? It's all the people who've been around for a really long time. Right. Right. They're saying, hey, if you just got here and all of a sudden a little bit of volatility spooks you, I'll surely buy up your Bitcoin at a lower price. Right. And so what you have is you just have weak hands selling to strong hands or kind of new people selling to old people. and so the people who've been around a long time, this is nothing new to them. They can't believe it crashed to$30 ,000. The fact Bitcoin crashes to$30 ,000 is music to their ears.

24:32Well, that's why I'm a little upset because it didn't hit my strike price at$27 ,000. I was just sitting there waiting. I said, come on, come on, go lower. And all the guys who are hoping it goes higher are bailing out. I thought it was pretty funny, personally. Of course. It's called a market. Things go up and things come down. I mean, that's a market. Bulls and bears, right? That's all it is. Yeah. And I think the other thing about Bitcoin that people should know is I always say that it's the last remaining truly free market, right? And so what I mean by that is you've done a great job over the years explaining to people kind of how manipulated the dollar is, how manipulated the stock market is, etc.

25:14But it's not just the macro manipulation, right? It's not just interest rates. It's not just quantitative easing. There's also things that are built into, say, the stock market where if the stock market goes down 7%, 8 % in a single day, they literally call timeout and say, hey, whoa, 15-minute circuit breaker. If it goes down again, 11%, 12%, hey, circuit breaker again. And then if it goes down 20 % in a single day, they literally shut off the market and they all go home for the day. That happens all the time in Bitcoin. I want everybody to listen to what Anthony is saying here, because this is a very big difference between the stock market, real estate market and Bitcoin.

25:53But I always joke, the people who are yelling and screaming about the volatility, right, usually the anti-Bitcoin crowd, they never seem to bring up the volatility on days like today when Bitcoin's up 16 % in the last 24 hours. That's bad news for me. That's bad news. They only bring up volatility when the price goes down, right? But we have to remember, volatility works both ways. It works on the way up and it works on the way down. Volatility is only bad when it goes against you. So if you're short and the price goes up, that's bad news. If you're long and the price goes down, that's bad news.