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With a hard currency that appreciates in value, will you even need a financial advisor in the future?
Recently we delved into the story of Mt Gox and why this failed exchange was suddenly getting so much attention again. If you didn’t catch it, the ‘long story, short’ version is: After a ten-year insolvency case, users of the hacked exchange are now set to receive a portion of their Bitcoin back following the conclusion of the legal proceedings.
And it's no small chunk of change either. North of 130,000 Bitcoin are set to be redistributed back to original holders who had been denied access to them for a decade. Inevitably, the Bitcoin space is now frenzied in speculation about whether after 10 years these users will now hodl or sell, and what colour candles this might result in. It's certainly an interesting story, but after a while these predictions and speculations can become tiring and repetitive.
So, this week we thought we’d offer you some quiet respite from all that noisy speculation.
Instead of worrying about the price and what’s happening in the short term, lets find a little respite by zooming out. Waaay out. Let’s ponder what the world might look like when Bitcoin is ubiquitous. What does the world look like when Bitcoin eventually becomes ‘boring’?
Now we know what you’re thinking. Bitcoin is arguably the most important technological development in the last 40 years and separating money and state will reshape the future of humanity in perpetuity. If Bitcoin represents a complete paradigm shift, how could it ever possibly become boring?
As SBF so succinctly put it….
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Well of course, we completely agree with you, and there’s no danger of Bitcoin ever becoming boring to us.
So, there are two points to note to explain what we mean;
1) We chose the word ‘boring’ purposefully. It doesn’t diminish the impact of Bitcoin. Something can be incredibly important AND still become ‘boring’.
2) When we said we wanted to zoom out, we really meant it. We want to ponder what the world might look like a few generations down the line. We want to explore what happens once Bitcoin acts as both the globe’s medium of exchange (MoE) and primary store of value (SoV).
All of humanity’s greatest innovations are seen as completely magical when they first emerge, but it never remains that way. For example, imagine going back to1971 and showing someone a video call you make on a computer that fits in your pocket. You would completely blow their mind! But today nobody really gives it a second thought. It’s just the default way humans now interact.
Or imagine going back to the Battle of Hastings armed with a machine gun. You would single handedly change the outcome of entire historical battles. The people of 1066 would consider you some sort of other worldly apparition. Yet today we take these incredibly powerful tools for granted.
Over time and following widespread adoption the best inventions eventually begin to drift further into the background. They become deeply embedded into the very fabric of society. If Bitcoin achieves the same, then after a few generations, sending a Bitcoin transaction will be so common place it will no longer be considered a novelty. As Bitcoin gets further entrenched into society it will be considered less and less ‘magical’. It will still be magical of course, but like all great inventions, society will eventually take it for granted.
And that’s not just OK, it’s desirable. If society does fully adopt Bitcoin, then we are headed toward a much brighter future where your economic output is rewarded properly, and you have a viable way to build wealth and invest in your family’s future.
But what might this new society look like?
Well, we’re quite sure we don’t have all the answers. Nobody appreciated the far-reaching impacts the internet would have. But we do want to share with you one prediction we have for the future:
We believe that the adoption of Bitcoin hails the death of the financial advisor.
To understand this point of view it first makes sense to understand why society in its current state has a need for financial advisors. Because without a need,they wouldn’t have a reason to exist. So, what is this current ‘need’ that financial advisors meet?
Well, a financial advisor’s marketing will tell you that it’s their essential expertise that enables you to manage your money professionally and achieve your goal of growing and protecting your wealth. And of course, growing wealth and securing your future is a need we all have.
But if these goals are shared by every member of society, why is it that we need expert guidance to have any hope of achieving them? Why is it so difficult to achieve a solid financial foundation without the help of expensive advisors?
Well, the reality of the situation is that it’s because our money is so irreparably broken. An ordinary person can’t simply earn money and save it. The ravages of inflation will render those savings worthless over any meaningful timeframe. And if you’re already wealthy? Well, you have the same problem. You can’t keep your wealth in cash, or you’re destined to watch it melt like an ice cube.
So, what must the average citizen do instead? Well, alongside earning a living they are also forced to become speculators to have any hope of getting ahead or even standing still.
Oh, and if that wasn’t a daunting enough prospect, if you do well in your attempt to safeguard your wealth, you will of course need to be taxed on anything you made. Sounds like a fun game, right?
So, our current monetary system predicated on perpetual debasement creates an environment where even the average citizen needs to speculate in financial markets to maintain their wealth. When you think about it, that’s completely bonkers. Fiat money has created a worldwide casino where everybody has to play!
And this in turn creates the need for financial advisors. In a fiat world plagued with easy credit, financial loopholes and an intentionally complex taxation system, a huge incentive has been created for people to specialise in how best to navigate it. If we stick to the analogy of a casino, I guess we might refer to financial advisors as ‘professional’ gamblers.
Like poker players who have spent time learning the game and memorising the odds, they have a slight advantage over the general population. They may have access to better quality information, better rates and better odds, and they are willing to sell on some of this access in the form of financial advisory services.
With specualtion being the name of the game, it's no wonder that the financial services industry has exploded in size. In 2023 the share of value added to GDP in the US by financial and adjacent services was a huge 20.7%.
It turns out casinos are BIG business!
But the problem with a system predicated on gambling is that even the best players will eventually catch a ‘bad beat’. Even with the strongest hand, you can still lose big and suffer heavy losses. A good example of this was 2008. How many of these professional gamblers predicted what was coming, protected their clients and avoided taking brutal losses? Practically zero.
And are they even really that good at gambling even in favourable markets? The S&P has delivered an average annual return of 10.84% since 1971. So, if you had invested $10,000 back then and done nothing else you would be sitting on $2,435,365 today! The inflationary environment created by fiat money means that you would have been hard pushed NOT to make money. Do we really believe that most financial advisors outperformed a market returning more than 10% every year? We’re not convinced.
Thankfully in 2024 we now find that things are a little different. There is a new game intown. With Bitcoin on the scene people finally have the option to leave the casino altogether. With a new savings technology that actually works, you can store your wealth and grow it without the need to constantly gamble and speculate in the markets.
So, with people now leaving the casino in droves, does that mean financial advisors will go the way of the Dodo?
Well, we think so. In fact, we’re betting on it….
Bitcoin restores money to its proper function, a way to store the output of your labour for later consumption. People will no longer need to engage with the casino to escape monetary debasement. Furthermore, advancements in technology will mean that we can produce goods more efficiently and most will depreciate in price against Bitcoin. Saving will once again be a practical and rewarding endeavour.
If you’d like to understand more about why we believe Bitcoin isn’t just a new way to speculate but is in fact just very good ‘money’, then we would invite you to read our article ‘Bitcoin is NOT a speculative asset’ to understand more deeply where we are coming from.
The dawn of Bitcoin will save the population from the gruelling and stressful need for constant speculation, and this new reality will beg the question… Will the average citizen still have the need for a financial advisor? If you greatly reduce the need and therefore demand for something, then typically its supply will dwindle in response.
Now perhaps predicting the total absence of financial advisors in the future is a bit strong. But on a Bitcoin standard, it’s unlikely that they will make up anywhere near the same percentage of the world’s economy. I guess you could say we aren’t particularly bullish on the future of the financial services sector.
Instead, we believe that people will simply need a different kind of advisory service. You won’t need questionable ‘financial advice’ to speculate with your money. What you will need instead is advice and guidance when it comes to securing your money. Whilst the need for constant speculation will disappear, it will be replaced by the need to properly understand technology in order to keep your money safe.
If you’re curious as to our level of conviction on this topic, then hopefully our business model tells you all you need to know. It is our ambition to meet the growing demand for this kind of service and ensure that our clients can benefit fully from leaving the speculative casino of fiat money safe in the knowledge that the superior money they transition to can be kept safe and secure.
Our only speculation is that more and more people will come to the logical conclusion and follow the right path to financial security. We are betting on them going The Bitcoin Way…
Are you tired of gambling just to protect your wealth? Have you taken the orange pill and realised that the best way to build a secure future for you and your family is by adopting Bitcoin? In that case you might be in the market for a new advisor. An advisor that’s not interested in speculation, gambling or even how much wealth you have. An advisor that isn’t going to give you financial advice.
Instead, perhaps you’re in the market for an advisor that simply seeks to train you in the art of protecting what’s yours. An advisor that will grant you the skills you need to protect your privacy and secure your money for generations to come. An advisor that makes sure you and your family are fully prepared for a rapidly changing future.
If that sounds like you and you’d like to master the skills needed to succeed in Bitcoin, then we’re always here waiting to hear from you. All you need to do to start your journey is book a call.
Learn from our 25 years of cybersecurity expertise
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