The Case For and Against Bitcoin (You Need to Hear This!)

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1:29What's up, everybody, and welcome to the Personal Finance Podcast. I'm your host, Andrew, founder of MasterMoney.co. And today on the Personal Finance Podcast, we're going to make the case for and against Bitcoin. If you guys have any questions, make sure you join the MasterMoney newsletter by going to MasterMoney.co slash newsletter. And don't forget to follow us on Spotify, Apple Podcasts, YouTube, or whatever your favorite podcast player is. And if you want to help out the show, consider leaving a five-star rating and review on Apple Podcasts, Spotify, or your favorite podcast player. Now, today, I'm going to be diving into the case for and against Bitcoin.

2:09Now, we have not made an episode on crypto in years, and a lot of things have changed since our original episode. The first time we recorded a crypto episode, I talked through Bitcoin, I talked through Ethereum, and a bunch of other meme coins. And I basically stated right after the Wall Street bets thing happened and the GameStop surge, we started to talk through, this is a risky asset. This is an asset that over time has no intrinsic value and has no backing whatsoever. Well, a lot of things have changed if you guys haven't seen the news as of late. And those who went against me talking about that would probably have made a lot of money.

2:44But at the same time, I'm going to talk through the pros and cons of Bitcoin and how you should consider Bitcoin. In addition, after I go through 10 pros and 10 cons of Bitcoin and the case for and against Bitcoin, after that, I'm going to talk through how I am investing in crypto and what I am doing with my portfolio when it comes to crypto, if I'm investing at all. So we're going to talk through all of this, but first I want to kind of chat through why Bitcoin was created. Because if you are new to crypto or don't understand why Bitcoin even exists, you think it's stupid, you think it's just something that bros are trading back and forth.

3:17Well, now it's becoming a lot more real. And it's becoming a lot more real because legislation is being passed and there are a lot more people in higher power taking this very seriously. And so what we need to do is we need to at least pay attention and understand Bitcoin at the very bare minimum. So the Bitcoin was originally developed partially because of the 2008 financial crisis. So in 2008, the global financial system nearly collapsed due to excessive risk trading by major banks, bailouts by government, and central banks printing nearly trillions of dollars to prop up the economy. Well, a lot of people didn't like that because they said, oh man, all these banks made horrible financial decisions.

3:57They all got bailed out and they played with our money. The folks who lost money were the folks who were working super hard to earn those dollars in order to put them into some of these investments. So we know the collapse of the housing market with the mortgage-backed securities happened. We know there was a lot of big issues there. If your friend who is a server is buying 15 different rental properties, you know you might have yourself a problem and this might be a bubble. And so trust with traditional finance was shattered for a lot of people out there. And people were really mad about this.

4:26They were really frustrated with what happened when it came to the traditional financial system. And people realized that money was not truly safe, private, or under their control. Now, there's a lot of regulation now that came after the 2008 financial crisis. If you weren't around or you weren't old enough to understand the financial crisis, it was a very bad thing. I personally was in college at that time. And so during that 2008 financial crisis, it was something that I saw impact across the board. And so Bitcoin's purpose was a new form of money. The goal with Bitcoin was to find a new form of money that was decentralized.

5:02So it was designed to remove the need for banks or governments, which is why they call it decentralization, to process transactions or issue a currency. So the original creator didn't think the government should have hold of this money. Instead, it thought it should be decentralized. It could be utilized worldwide. And instead, it relies on a peer-to-peer network of computers called nodes or miners to validate those transactions. The goal was no single point of failure and no central authority whatsoever, because obviously in 2008, there was a very central point of failure, which was Wall Street and the companies that work on Wall Street.

5:35And so Bitcoin wanted to be able to have zero points of failure. Now, what are the key components of Bitcoin? One is there is a fixed supply. There is 21 million coins. And so there is this fixed supply of Bitcoin. They cannot make any more of Bitcoin. And so this is something a lot of people like. So unlike fiat currencies that can be printed endlessly, Bitcoin has a hard cap of 21 million coins. Now, this was built in to protect against inflation. Now, a deflationary scarce asset that holds its value over time was the end goal with this, which is what is kind of happening right now for some people.

6:09Now, they also, another part of Bitcoin is transparency and trust through code. So Bitcoin is open source. This means that anybody out there can audit the code. They can validate the rules or they can even run a node. And every single transaction is recorded in a public immutable ledger. Now, that ledger is called the blockchain. A lot of you may have heard of the blockchain. And this is the ledger that records Bitcoin transactions. So it eliminates the need to trust an institution to hold your money. So instead, you can trust the math instead. Also, another core component of Bitcoin is they wanted it to be permissionless and they wanted it to be borderless.

6:47So anyone with internet access can use Bitcoin, regardless of where they live or what currency they actively use. No bank account required, no government permission needed. And so that was a huge part because they wanted to empower themselves and they wanted to be unbanked. And so that is a huge component of Bitcoin as well. They also wanted financial sovereignty. So with Bitcoin, you can hold your own money, spend it how you choose and avoid censorship or seizure. And it's the only asset where you can fully own it and no one can take it from you if held properly. Now, here's a big thing is there's going to be a lot of guardrails put up against that right now already is that financial sovereignty is going to be something that I think there's a lot of conversations being had, especially in the country that I live in, the United States, where there is going to be guardrails put up when you buy and sell Bitcoin.

7:30And that is just something that we're going to have to look at. And we'll talk about that when we get into the episode deeper here. Now, who created Bitcoin? Bitcoin was created by someone called Satoshi Nakamoto. Nobody actually knows who that is. They think it's obviously a cover up for what the person's real name is. There have been tons and tons of rumors of who that possibly could be, but it is an individual who has criticized centralized banking for a very long period of time. So in short, Bitcoin was created for a couple of different reasons. One, to be a non-governmental money system, free of government, free of the system that the government creates when it comes to money.

8:05Two, immune to inflation. They were tired of inflationary currencies. Obviously, we have felt that impact since Bitcoin has been created on how inflation can impact your dollars. Other currencies have seen it even worse. They wanted it, three, to be open to everyone. So anybody could access Bitcoin, whether you are from the poorest part of the world or the richest part of the world, it should be open to all. It should be controlled by no one is number four. So nobody can control Bitcoin. It is a decentralized entity and built for freedom and financial independence was five. And so that was the goal with Bitcoin, which are all great cases.

8:39These are all great things to think through. And some of them may have more problems and complications than others, but it is a great concept. It is a great idea, and it is something that is obviously revolutionary when it comes to the financial system. And so what I'm gonna do now is, on the rest of this episode, first, we're gonna go into the pros. I am going to give you the pros of Bitcoin and some of the things that have changed over the course of the last couple of years, and then I'm gonna give you the cons, because there are still cons to Bitcoin. At the time of recording this, Bitcoin just hit its highest level ever.

9:12You may be listening to this in the future, and it's even higher than that, but it hit 123 ,000 at the time I'm recording this. This morning, it hit 123 ,000 and the White House is meeting this week for something called Crypto Week, which is going to start to do more often. And so that is one indicator as to what direction this currency could be going. Now, we may talk a little bit about Ethereum in this episode. We may talk a little bit about other meme coins as well, but Bitcoin is the main focus of this episode and we're gonna talk through a bunch of different things. So if that's something you're into, You want to see how I'm investing in Bitcoin?

9:44If I am, then let's get into it. All right, first, we're going to lay out the case for Bitcoin. I'm going to give you 10 different things to lay out the case for Bitcoin. And I want you to arrive at your own conclusions here. I don't want you to just listen to what I think and what I'm doing. I want you to arrive at your own conclusions, do more research, read more books, if you are thinking about investing in this asset, okay? So number one is the institutional adoption is accelerating. So Bitcoin has finally made its way to mainstream investment world. So about two years ago, I was with BlackRock.

10:15BlackRock invited me out to ring the opening bell of their target date ETFs. It's this really cool product that basically is a target date retirement fund, but it is in the form of an ETF. Loved the concept, looked through all the information on it before they were gonna ring the opening bell and put it on the stock market. Loved what it was. And so I went up to the New York Stock Exchange with BlackRock and a bunch of other folks out there, and we got to ring the opening bell at the New York Stock Exchange for these target date ETFs. So after we rang the opening bell, we were riding in the back of a shuttle bus from the New York Stock Exchange to BlackRock headquarters, which is absolutely unbelievable.

10:50If you can imagine, probably the most powerful hedge fund in the world and their headquarters is absolutely incredible. It just had opened when we were there. It opened a couple months prior. And so when we went there, I was riding in the back with Rob Berger. Some of you may know who Rob Berger is. If you watch his YouTube channel, he is one of the biggest influences on my thought process when it comes to finance. and he has now become a personal friend, which is great. But Rob Berger and I were riding the back with one of the reps at BlackRock and we were chatting through some of their products and talking through what was coming up.

11:20And we said, hey, we heard about this Bitcoin ETF that's coming out or this crypto ETF that is coming out. What do you think about that? And she said, we can't talk about that right now. But they were developing this Bitcoin ETF and it was going to be something that they thought was going to be so incredibly powerful. Now, she wouldn't give us any information at the time, but a couple of months later, more information came out. And the cool thing about this was that it was institutional adoption of Bitcoin. So in 2024, the SEC approved several spot Bitcoin ETFs, allowing everyday investors to access Bitcoin through a traditional brokerage account without needing to self-custody or navigate crypto wallets whatsoever.

12:01So this allowed for some of these Bitcoin ETFs to come out. So financial giants like BlackRock, like Fidelity, like Vanguard now offer Bitcoin products, legitimizing it as an asset class. Now, this is one of the biggest arguments that I have, because now that it's institutionalized, meaning that now that some of the big banks are getting involved, it is a huge, huge deal. Now, I want you to think about this for a second. Jamie Dimon, who is the CEO of Chase, probably one of the most powerful people in finance. Jamie Dimon used to harp against Bitcoin over and over and over again. Just like I would chat through it and say, hey, this is not a safe asset whatsoever.

12:38If you want to hold a small amount to this, fine, but this is not a safe asset. He would say the same exact things. Warren Buffett would say the same exact things. Jamie Dimon has done a complete 180 when it comes to Bitcoin. Why? Because it is now institutionalized and he knows he can make a lot of money when it comes to Bitcoin. He knows there is a lot of money in crypto and there's a lot of money in selling these assets to institutions like the big corporations that are investing in these ETFs. There's a record number of institutional investors that just started investing in Bitcoin ETFs over the course of as of today.

13:10Literally, we just reported it on The Business Show, our other podcast that reports in the news. We literally just chatted about this on The Business Show, meaning that when there's a record number of pension money coming in, when there's a record number of corporate money coming in to these ETFs, that signals another shift in how institutionalized this is going to be. So more pension funds, more 401k providers, and more registered investment advisors are now starting to include Bitcoin in portfolios to hedge against asset growth. Now, why does this matter? Why do I care that all these banks are starting to do 180s on Bitcoin, that they're starting to offer ETFs, that they're getting approved by the SEC?

13:47Because institutional money brings scale. What happens with scale? Assets will increase drastically over time. There's stability and there's long-term demand for these assets because they are offering them. Now, there has been gold ETFs for a long time. There have been ETFs in different commodity sectors. It does not mean that it's just going to take off forever because that has happened a number of different ways. And we have seen them not just take off forever. You can go buy a corn or commodity ETF right now if you wanted to. But the endorsement does boost public trust. And that is a huge, huge deal.

14:21So number one, and that is probably the biggest argument overall, is the institutionalization of Bitcoin. That is the biggest change. This did not happen the first time we recorded our episode years ago. And I think it was 2020 or 2021 was the first time we started to talk about crypto. Episode 40, 41, 42, somewhere in that range. Now, number two is that Bitcoin is a store of value thesis. What do I mean by that? What does Bitcoin a store of value thesis mean? Meaning it is often called digital gold. And in 2025, that narrative has grown even stronger. So I have been comparing Bitcoin to gold for a very long time because Bitcoin doesn't have balance sheets or P &Ls backing it.

14:57So you don't really know what its value is. All it is worth is what someone else is willing to pay for it. So if you buy Bitcoin at$123 ,000 today, but 10 weeks from now, someone's only willing to pay$15 ,000 for that Bitcoin, you just lost yourself over$100 ,000 because it's only worth what someone else is willing to pay for. Companies, for example, can be bought out based on what their revenue and their profits are. Bitcoin is not the same. It does not have that intrinsic value, but Bitcoin is a store of value thesis. And we will talk about intrinsic value a little bit later on. Now, with governments running massive deficits and inflation continuing to erode fiat currency, Bitcoin's fixed supply of 21 million coins stands out as a deflationary asset.

15:39So this fixed supply is a big deal because they will not create more Bitcoin and it will help with inflation because of that. Now, it is not controlled by any government, making it appealing to a world of central bank interventions, bailouts, and currency debasements. Now, unlike gold, Bitcoin is portable, divisible, and borderless. And so this is something where you can store value in Bitcoin because it is similar to gold. There's only a certain amount of gold out there. Obviously, you can go out and mine a little more gold here and there, but it is not something we're mining in heavy, heavy, massive amounts still.

16:11It is still something that is a precious metal that people are looking to buy at some point in time. Now, gold hasn't gone up or had any returns like what Bitcoin currently has, but it is a very interesting thing. So why does this matter? Because for high net worth individuals and institutions looking to protect purchasing power, Bitcoin is becoming a serious contender to gold. And so this is where it is actually making contention with gold in people's portfolio. Three, the third case for Bitcoin is global demand is growing. The global demand and Bitcoin adoption is surging in countries facing currency collapse, high inflation, or political instability.

16:48So in places like Argentina, places like Venezuela, places like Nigeria, Bitcoin is used as a lifeline for people who are escaping the 50 to 100 % inflation by storing their wealth in Bitcoin. And honestly, if you're in those countries, that is one of those things. We have a lot of listeners actually in Africa and in South America. So if you're in those countries, this is something where it probably is wise to look at something like this if you're seeing high inflation rates in your country. In developing countries, Bitcoin is easier to access than traditional banking for the unbanked. And all you need is a phone.

17:19And there's also remittances out there that are using, you know, Bitcoin or the lightning network that are becoming more common due to lower fees and faster settlement. So in other countries, this may make more sense than your own currency in your country to help you kind of store value and gain access to long-term growth. So that is something to consider. Next is the halving cycle momentum. Now, Bitcoin's design includes a built-in supply shock every four years, which is called the halving. Now, in April 2024, Bitcoin underwent its fourth halving, cutting minor rewards from 6.25 Bitcoin to 3.125 Bitcoin per block.

17:54And historically, the 12 to 18 months after halving have seen a massive bull run. If you look at 2013, 2017, and 2021, and we are seeing that again And right now, at the time I'm recording this, is another big bull run. But a lot of that is being driven by institutionalization, to be honest. Now, if history rhymes, 2025 could be the peak of post-having bull cycles. And so we'll see what happens there as time goes on. Now, decentralization and financial sovereignty is the fifth case that I want to make here. So Bitcoin remains the most decentralized and sensor-resistant crypto asset. It runs thousands of independent nodes and miners worldwide with no CEO or central foundation.

18:34So a lot of people, because there is no centralization or CEO or foundation, a lot of people like that. They like that there is nobody in power. The person who is in power is everybody kind of combined together. In a world where governments can freeze bank accounts or shut down payment apps, Bitcoin offers that true financial freedom from banks and institutions. So if that is huge for you, if you absolutely love that, that could be a major impact for some people, especially people in restrictive regimes. So if you're in Russia or China or Iran, you can use Bitcoin to store wealth and transact outside of government control.

19:08And so people in those countries absolutely love that as well. And number six is there is a growing integration with financial infrastructure, meaning it is integrated with Cash App and Venmo and Robinhood and PayPal. And you can buy, sell and transfer Bitcoin in seconds. There's also Bitcoin ATMs that are out there that you can go and get Bitcoin out of. And they offer with instant settlement. So more banks and fintechs are offering custody, Bitcoin rewards, and trading features. I just saw I got an ad today for a credit card that gives you Bitcoin rewards. There's a lot of different things that are happening there.

19:40This access point just reduces friction because before, there just wasn't a lot of ways to go and get your Bitcoin. You had to use Coinbase or you had to use FTX, which had all the scandals and the collapse, and a lot of people lost a lot of money in FTX. And so there wasn't a lot of ways to go get Bitcoin. In the old, old days, you had to get it and pull it off the internet. I still recommend you pulling it off the internet. but that is something where there is a growing integration with financial infrastructure. And then the Lightning Network expansion is number seven. So the Lightning Network is Bitcoin's layer two for faster, cheaper payments is gaining traction in emerging markets and among developers.

20:13So platforms like Strike or LightSpark are building real business use cases for some of this stuff, which is super, super interesting. Number eight is the great generational wealth transfer. So because a lot of the great generational wealth transfer is happening right now, meaning the baby boomer generation is handing down more wealth than anybody ever has. A lot of that money is going to flow into people who are more interested in Bitcoin than maybe other traditional assets. And so that is another argument for Bitcoin is that it may go up over time because those folks are more willing to accept decentralized currencies than maybe the baby boomer generation originally was.

20:50Number nine is self-custody and personal finance empowerment. So unlike stocks or real estate, Bitcoin can be self-custodied, meaning you don't need a bank, you don't need a broker, you don't need a custodian to own Bitcoin. Instead, you can take control with hardware wallets, with vaults, with cold storage. All of those are things that you can kind of take control with, where you can take Bitcoin off of the internet and you could store it yourself. You can hide it in a safe or under a mattress or a safety deposit box, and it can make a huge, huge impact on if you are worried about that kind of stuff, if you're worried about privacy.

21:22And in the era of financial surveillance, this privacy in control is revolutionary for a lot of people. As time gets on, we talk about it literally all the time. As time goes on and you need to protect your finances more online, this is going to be something I think that makes a huge, huge impact for a lot of people. And the last one I will say is some emerging nations in government adoption. So countries like El Salvador have adopted Bitcoin as legal tender and are actively mining and holding it. And others are watching closely and considering allowing Bitcoin reserves and bonds or infrastructure projects to happen.

21:55And as geopolitical power shifts, more nations may hedge with Bitcoin to diversify reserves away from the US dollar. And so even at small scales, there are other countries that are adopting Bitcoin. And so that is something I think we need to continue to monitor as well. Now, what we're going to do is those are the 10 cases for Bitcoin currently in at the time of recording this. Every year, we'll probably do a new one of these so that we can talk about some of the things that are changing with Bitcoin. I think it's very important for people to note because it is something that is just having crazy, crazy returns.

22:28And so it's something we definitely need to talk about here on the Personal Finance Podcast and at MasterMoney. And so it is something we're also going to probably end up developing a crypto course, a crypto mini course for folks in MasterMoney Academy. So if you join MasterMoney Academy, which is coming up very soon to be able to join. We will have this at some point in time in the Academy, which is going to be our community of wealth builders who really are passionate about building wealth together. So we're going to dive into the case against Bitcoin next. And I'm going to give you all the cons of Bitcoin that we've been talking about for a while and talk through some of those and how you need to think about it.

23:01Then after that, I'm going to talk about how I'm investing in Bitcoin. My relationship with money has changed a lot over the years. Early on, I building wealth was about making more money. Now I know it's really about having clarity. When you know exactly where your money is going and whether you're on track, you make better decisions. That's one of the reasons I love Monarch. It's the personal finance app that tracks everything from your accounts and investments to your savings goals and spending. So you can see your entire financial picture in one place. One habit that's made a huge difference for me is my five minute drill every single morning.