Introduction
Fiat money, unbacked by physical commodities like gold, derives value from government trust and supply-demand dynamics. This “fiatness” distorts markets, undermining sound money principles. Bitcoin, with its fixed supply and decentralized design, offers a solution, functioning as both a store of value and a medium of exchange. By enabling self-custody and in-kind settlement, Bitcoin counters fiat manipulation, paving the way for a new financial paradigm. This article explores the Bitcoinization of finance and its transformative potential.
Gold’s Manipulation by Financial Paper
Gold, humanity’s preeminent store of value for millennia, is vulnerable to fiat-driven manipulation. The Basel Committee on Banking Supervision (BCBS), under the Bank for International Settlements, has historically penalized gold holdings. Basel I (1988) classified gold as a Tier 3 Risk-Weighted Asset, valuing it at 50% or less for bank capital requirements. While Basel III (phased through 2025) upgrades gold to Tier 1 with 85% collateral value, the message is clear: central banks favor paper money over sound assets.
Gold’s physical constraints—security risks, high storage costs, and logistical challenges—limit decentralized custody. Concentrated custodians, like J.P. Morgan Chase, dominate both physical gold and futures markets. With 99.96% of COMEX gold futures cash-settled, paper claims outstrip actual gold, creating unnatural leverage and fragility. This manipulation erodes gold’s sound money role, highlighting the need for a digital alternative with a fixed supply.
Bitcoin: The Sound Money Solution
Bitcoin redefines money by combining scarcity with digital utility. Its key features include:
- Fixed Supply: 21 million coins enforce scarcity, unlike fiat’s endless expansion.
- Self-Custody: ~55% of Bitcoin (~11.63M coins) is held by 10–30M individuals, decentralizing control.
- In-Kind Settlement: Transactions settle peer-to-peer without intermediaries, eliminating paper claims.
- Dual Role: Functions as both money (store of value) and currency (medium of exchange).
Unlike gold, Bitcoin’s internet-native design avoids custody frictions. It settles instantly, serving as a standardized unit of account and exchange medium without requiring secondary layers like banknotes. This enables a financial system where assets trade and settle in-kind, free from fiat manipulation.
The Bitcoinization of Finance
The Bitcoinization of finance means building products, services, and strategies that uphold Bitcoin’s ethos. By prioritizing self-custody and in-kind settlement, Bitcoiners can create a resilient, transparent financial system. Bitcoin’s decentralized, open-source protocol empowers users to custody assets directly, reducing reliance on concentrated custodians. This counters the fiat-driven leverage that destabilizes markets, offering a path to restore sound money principles.
Why Bitcoin Matters for Investors
For business owners and high earners, Bitcoin’s ability to preserve value and bypass fiat distortions is compelling. Its self-custody model ensures control, while its digital nature supports seamless transactions. As fiat systems falter, Bitcoin offers a hedge against manipulation and a foundation for sustainable wealth.
Embrace Bitcoin for Your Financial Future
The Bitcoinization of finance is here, offering a chance to reclaim sound money. At Basilic Financial, we craft Bitcoin-focused strategies to protect and grow your wealth in a fiat-driven world. Schedule a consultation today to explore how Bitcoin can transform your financial strategy.
Discliamer
Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Information expressed does not take into account your specific situation or objectives, and is not intended as recommendations appropriate for any individual. Listeners are encouraged to seek advice from a qualified tax, legal, or investment adviser to determine whether any information presented may be suitable for their specific situation. Past performance is not indicative of future performance. This is not tax, legal, or investment advice.
Basilic LLC and Wyatt O’Rourke believes that the content provided by third parties and/or linked content is reasonably reliable and does not contain untrue statements of material fact or materially misleading information. This third-party content may be dated. Content posted by third parties is not attributable to Basilic LLC or its employees, as the information within this post was not provided by Basilic LLC. Links to websites and other resources operated by third parties are provided as information only, and there can be no assurance as to its accuracy, suitability or completeness. Basilic LLC & Wyatt O’Rourke does not endorse, authorize or sponsor the content or its respective sponsors and is in no way responsible for third party content, services, products or information, or for the collection or use of information regarding the web site’s users and/or members.
Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Information expressed does not take into account your specific situation or objectives, and is not intended as recommendations appropriate for any individual. Listeners are encouraged to seek advice from a qualified tax, legal, or investment adviser to determine whether any information presented may be suitable for their specific situation. Past performance is not indicative of future performance. This is not tax, legal, or investment advice.
Basilic LLC and Wyatt O’Rourke believes that the content provided by third parties and/or linked content is reasonably reliable and does not contain untrue statements of material fact or materially misleading information. This third-party content may be dated. Content posted by third parties is not attributable to Basilic LLC or its employees, as the information within this post was not provided by Basilic LLC. Links to websites and other resources operated by third parties are provided as information only, and there can be no assurance as to its accuracy, suitability or completeness. Basilic LLC & Wyatt O’Rourke does not endorse, authorize or sponsor the content or its respective sponsors and is in no way responsible for third party content, services, products or information, or for the collection or use of information regarding the web site’s users and/or members.