#810 Fidelity Thinks Bitcoin Can't Be Replaced

This episode is a little different than the usual podcast format. There is no guest. Instead, I will share a couple of thoughts I have around a specific topic. Today's episode is about Fidelity and their recent research paper about Bitcoin being the superior Crypto asset. ======================= Bitcoin 2022 is the LARGEST Bitcoin event in the world that takes place April 6th - 9th in Miami Beach, Florida. All four days will be jammed-packed with exclusive content, exciting announcements and an incredible lineup of bitcoin speakers, artists and leaders. Day 1 is INDUSTRY DAY for enterprising bitcoiners who are looking to build a business or career within the ecosystem. Days 2 and 3 are general conference days featuring speakers like El Salvador President Nayib Bukele, CEOs like Michael Saylor, Elizabeth Stark, Jack Mallers, Adam Back and hundreds more. The conference caps off on the fourth day with the world's first and largest Bitcoin Music Festival - Sound Money Fest headlined by rapper and fellow bitcoiner Logic, featuring artists K. Flay, MØ, Royal & the Serpent, Apashe, Asadi and more. Stay tuned for the upcoming lineup announcement! Last year’s conference SOLD OUT and this year’s is on pace to be 3x larger so make sure you grab your tickets before it's too late. Visit b.tc/conference to learn more. Ticket prices increase on JAN 14th, use promo code POMP for 10% off and I will see you in Miami!ire ecosystem bringing utility to #NFTs. ======================= Brave Wallet is the first secure crypto wallet built natively in a web3 crypto browser. No extension required. Store, manage, and grow your portfolio, get NFT & multi-chain support, and more. Download the Brave privacy browser at brave.com/Pomp, and click the wallet icon to get started. =======================

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:02Anthony Pompliano?

  What's up everyone, this is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Now let's kick this thing off. Today's episode is all about fidelity in a recent research paper on Bitcoin that they published. I really enjoy reading the thoughts of multi-trillion dollar asset managers when it comes to this new industry. Before we get into this episode, I want to quickly talk about our sponsors. Today's episode is sponsored by the Bitcoin 2022 Conference. Bitcoin 2022 is the largest Bitcoin event in the world that takes place April 6th through the 9th in Miami Beach, Florida. All four days will be jam-packed with exclusive content, exciting announcements, and an incredible lineup of Bitcoin speakers, artists, and leaders. Day one is Industry Day for enterprising

• 0:45Anthony Pompliano?

  Bitcoiners who are looking to build a business or career within the ecosystem. Days two and three are general conference days featuring speakers like El Salvador President Nayib Bukele, CEOs like Michael Saylor, Elizabeth Stark, Jack Mahlers, Adam Back, and hundreds more. The conference caps off on the fourth day with the world's first and largest Bitcoin music festival, Sound Money Fest, headlined by rapper and fellow Bitcoiner Logic, featuring artists K-Fle, Mo, Royal, and The Serpent, Apache, Asadi, and more. Stay tuned for the upcoming lineup announcement. Last year's conference sold out, and this year's is on pace to be three times larger, so make sure you grab your tickets before it's too late. Visit b.tc/conference to learn more. Again, that's b.tc/conference to learn more. Ticket

• 1:30Anthony Pompliano?

  prices increase on January 14th. Use promo code POMP for 10% off, and I will see you in Miami. Today's episode is brought to you by Fundrise. You all know I believe that the best investors both understand and seek out extreme asymmetry. Fundrise is here to help you do just that. It's the largest direct-to-investor real estate investment platform out there, giving you the opportunity to achieve upside of an asset class previously reserved for institutions and high net worth individuals. That's right, Fundrise is making high-end, private market real estate investing accessible to everyone via an easy-to-use automated platform. Its 1 million users already know that the investment with Fundrise is capable of producing strong appreciation returns and income generation. While helping to stabilize a diversified portfolio. That's more important now than ever in our inflationary environment.

• 2:15Anthony Pompliano?

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• 3:00Anthony Pompliano?

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• 3:38Speaker 01

  Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only.

• 4:02Anthony Pompliano?

  Good morning, everyone. Bang, bang. Fidelity, which has trillions of dollars under management, published a report yesterday that is taking the internet by storm. The paper is titled Bitcoin First: Why Investors Need to Consider Bitcoin Separately from Other Digital Assets. And it highlights a framework that investors can use to evaluate Bitcoin and other digital assets as they begin to invest in the crypto economy. The summary clearly outlines the main differences between Bitcoin and other assets, along with which perspective each asset should be viewed through. Those include Bitcoin is best understood as a monetary good. And one of the primary investment thesis for Bitcoin is as a store of value asset in an increasingly digital world. Bitcoin is fundamentally different from any other digital asset. No other digital asset is likely to improve upon Bitcoin as a monetary good,

• 4:47Anthony Pompliano?

  because Bitcoin is the most, relative to other digital assets, secure, decentralized, sound digital money, and any improvement will necessarily face trade-offs. There is not necessarily mutual exclusivity between the success of the Bitcoin network and all other digital asset networks. Rather, the rest of the digital asset ecosystem can fulfill different needs or solve other problems that Bitcoin does not. Other non-Bitcoin projects should be evaluated from a different perspective than Bitcoin. Bitcoin should be considered an entry point for traditional allocators looking to gain exposure to digital assets. An investor should hold two distinctly separate frameworks for considering investment in the digital asset ecosystem. The first framework examines the inclusion of Bitcoin as an emerging monetary good,

• 5:31Anthony Pompliano?

  and the second considers the addition of other digital assets that exhibit venture capital-like properties. I have previously discussed a similar framework in a letter that I wrote titled "Monetary Maximalism and Technology Competition." In the piece, I stated, "The identification of two separate revolutions is important because it gives us a framework to discuss the importance of monetary maximalism while still acknowledging tremendous value accrual to non-monetary assets." There are two different bodies of work going on here. If you attempt to evaluate both of them through the same lens, you will miss the value and potential of each of them. Fidelity had a number of great points in their research paper. The first was a comparison between gold, Bitcoin, and fiat currencies

• 6:13Anthony Pompliano?

  to call out why they believe Bitcoin is a superior monetary good. They compared those three assets along the durability, divisibility, fungibility, portability, verifiability, scarcity, and track record. Bitcoin is superior in every single one of those fronts, except for the track record. They then explicitly call out that any future creation of another digital monetary good would simply be a reinvention of the wheel. They stated, "The invention of the wheel represented an entirely new technology that once invented could never be reinvented." Similarly, never before in human history had the problem of digital scarcity and a true peer-to-peer electronic cash been solved until Bitcoin was invented. "Solving this problem was not merely an incremental improvement,

• 6:58Anthony Pompliano?

  but a leap forward or an unlocking of the puzzle of how digital scarcity could exist."

• 7:04Anthony Pompliano?

  Lastly, Fidelity acknowledges that there are thousands of developers building various technologies and protocols. They understand that the other ecosystems are pursuing non-monetary good use cases. It appears they are less excited about these opportunities at the present moment. They stated, quote, "In a world of multiple winning chains, it still appears that Bitcoin is likely the best equipped to fulfill the role of the ecosystem's non-sovereign monetary good with relatively less competition than other digital assets attempting to fulfill alternative use cases. The explicit emphasis on security and maximum decentralization reinforces its rule set and enforces all users' rights equally. Furthermore, as a result of its scarcity and enforced supply limit, Bitcoin is the closest a digital protocol could be to enforcing absolute scarcity.

• 7:49Anthony Pompliano?

  In other words, any project or other blockchain network that requires its users to believe they are transacting with a token that has real monetary value likely needs to be directly or indirectly connected to Bitcoin as the ultimate monetary good. For example, people use tokens at an arcade for ease of use and utility and attribute value to them because they know they represent a certain dollar amount or can be traded for other goods and prizes. However, outside of the native arcade environment, the tokens have little to no value. This world leaves non-Bitcoin tokens battling to prove other viable use cases for their technology. They're aiming to find the right trade-off for some particular level of base layer scaling and encountering vast competition for development and functionality enhancements.

• 8:33Anthony Pompliano?

  This is not an indictment of those building on or investing in non-Bitcoin chains, but merely an observation that Bitcoin's clear advantage as a store-value asset reduces its risk even in a world that contains an ecosystem of many vibrant digital assets." Assuming this outcome, Bitcoin is still a clear beneficiary of flows into the overall digital asset space, given that it is viewed as the ultimate monetary digital asset, making it arguably the greatest risk-adjusted and easiest investment to understand and allocate towards across all of the digital asset landscape. Fidelity has been researching and participating in the Bitcoin ecosystem for years. It is still surreal to see a multi-trillion dollar asset manager writing these types of research papers, including the level of detail and nuance that is included in this

• 9:17Anthony Pompliano?

  specific piece. I highly recommend you read the full report that I've linked to if you haven't already. Hope you have a great day and I'll talk to you guys tomorrow. Thanks so much for listening to today's episode. I really hope you guys enjoyed this one. Make sure you subscribe on Apple, Spotify, or your favorite podcast player. And if you're looking to try to transition to get a new job in the Bitcoin or crypto industry, we've got you covered. Head over to pompscryptocourse.com. We've developed a curriculum with the top teams across the industry. It's a three-week intensive training program with over 50 events packed into that three-week time period. Go to pompscryptocourse.com to learn more and I'll meet you guys for the next episode.