Take Profit? Bitcoin IS The Profit

You will have no doubt noticed that Bitcoin is rapidly approaching an historic six figure valuation of $100,000 per coin. There’s a sense of inevitability about us soon having to add another zero to the price.

If we cross that threshold this month, it will be the third time that Bitcoin has added another zero in the month of November. The first time it managed to cross 4 figures and hit $1000 was on November 28th, 2013. And the first time it breached 5 figures and reached $10,000 was on November 28^th,2017.

This makes it particularly strange writing this newsletter to you on November 28^th, 2024, knowing that that if we hit $100,000 today, then it will be the third time in a row that Bitcoin has crossed a major threshold like this not only in the same month, but on exactly the same date!

Of course, by the time you receive this newsletter on December 1^st, we will already know if November did turn out to be the month this happened again.

But regardless of whether we have reached 6 figures per coin or not, Bitcoin has been on a remarkable journey for the past 15 years. Had you bought Bitcoin in 2013 you would have seen your purchasing power appreciate vs the dollar by an outrageous 9900%. Had you bought in 2017, it would have appreciated by 900%. And if you had exchanged your dollars for Bitcoin just last year, you would have increased your purchasing power by 150%!

That’s nothing short of remarkable for a technology that started life on a niche cryptography forum and has no CEO, no leadership team, and no marketing department.

With such an outlandish performance vs the once almighty US dollar, the average person who still only understands Bitcoin as an ‘investment’ might be left wondering….

“When should I take some profit?”

This thought might never have crossed your mind, but we imagine it’s probably a question you get asked frequently if you’re the Bitcoiner in your family. Especially during holidays like Thanksgiving and Christmas. Most people are desperate to know when you plan on swapping your Bitcoin stack for a big pile of dollars.

For anyone that’s done enough homework, the idea of swapping a sound money like Bitcoin for something that inflates away at over 10% a year like the dollar, is ludicrous. But it’s not always easy to explain why.

Over the years we’ve found that one of the best ways to address this question is by posing another question yourself…

“Take profit in what exactly?”

This can turn into an effective orange pilling opportunity because it challenges their default setting of using dollars to measure value and ‘keep score’. By asking this question you can make them consider what ‘taking profit’ really means.

This sets you up to make the case that the moment you bought Bitcoin was in fact the moment you ‘took profit’.

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Bitcoin IS the Profit

When someone asks when you might sell your Bitcoin and take some profit, if you respond by posing the question “‘take profit in what’?”, you will find it normally results in a long pause….

The reason for this is that in traditional finance ‘taking profit’ almost always means moving back into dollars. In most people’s minds if you bought something for $10 and it can now be sold for $100, then the only wayto ‘realise’ this gain is to sell back into dollars again. That way you can ‘bank’ the $90 profit.

It's understandable then that people would apply this same kind of thinking to Bitcoin.  After all, most of the mainstream media and financial pundits only refer to Bitcoin as an ‘investment’. People are conditioned to assume that their ‘gains’ vs the dollar must at some point be ‘realised’ somehow. Most people assume that to benefit from ‘Bitcoin’ they will eventually have to sell it.

This is an unhelpful way to frame things for people trying to understand Bitcoin because they end up viewing it as just a regular investment into a new technology. This belies the fact that Bitcoin is an entirely different animal altogether. Yes, Bitcoin is a novel technology, but unlike other new technologies we invest in, Bitcoin represents the evolution of money itself.

We’ve grown accustomed to investing our dollars into new technologies so that if they become popular and get adopted, we benefit by receiving more dollars than we started with. But how does this work when the technology you invested in only becomes popular and gains adoption because it’s a superior form of money? The only way your investment can be ‘successful’ is if it replaces the money you invested in the first place.

Think about that for a moment. Investing in Bitcoin to at some point try and end up with more dollars is like investing in lightbulbs to try and get more candles. It doesn’t make any sense.

Eventually you come to realise that bitcoin isn’t an investment for your dollars, it’s a replacement for them. You ‘took profit’ the moment you adopted the more superior technology.

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The Real Profit is Time

It’s important to understand the difference between ‘investing in Bitcoin’, where your desired outcome is an increased amount of dollars, vs ‘upgrading to Bitcoin’, where you recognise that what you’re witnessing here is not an investment opportunity but the evolution of money itself.

Unfortunately, most people still talk about ‘investing’ in Bitcoin rather than accurately describing what they’re doing, swapping an inferior currency for a superior one. This is a real shame because failing to recognise the difference can lead to a lot of faulty thinking and potential mistakes.

If you’re still approaching Bitcoin like an investment, then you might be tempted to try and frequently jump between Bitcoin and dollars as you try and time the market. If you end up timing these jumps incorrectly (which almost everybody does), you risk either being left holding broken money instead of sound money, or in a worst-case scenario, no money at all.

By understanding that switching to Bitcoin is simply upgrading your money, you realise how irrational, risky and completely unnecessary this behaviour is.

One of the most amazing things about Bitcoin is the fact that it isn’t an investment at all. When you recognise it simply as an upgrade from one form of money to another, it removes a lot of complexity and confusion. You no longer need to be concerned with Bitcoin’s price in dollars, because dollars are no longer something that you’re interested in holding. The role the dollar plays in your life ends up becoming more and more diminished.  

This kind of realisation sets you free. You no longer need to spend time tracking the market or trying to trade it. You don’t need to worry about what the Federal Reserve might do next. And you certainly don’t need to spend any of your precious time listening to influencers pedalling their latest price predictions.

All of it becomes totally irrelevant when you stop measuring lightbulbs in candles.

This can have a profound effect on your life. It means no more fretting over where to invest your money to try and beat inflation. It means no more constantly checking the price and trying to get a ‘read on the market’. You can now simply save for your future in sound money, knowing it will always appreciate in purchasing power. You no longer need to worry about timing an ‘exit’ back into ‘money’ because Bitcoin IS your money. You might spend your money on things you need, but you don’t sell it.

One of the most profound ways you personally profit from Bitcoin then is by safeguarding another resource even more scarce than your Bitcoin. Your time. By no longer having to waste your time speculating you can focus on the more important things in life.

What’s more, by storing the output of your labour in a currency that will consistently appreciate in purchasing power, the time you exchange to make money today would be worth a lot more of your time in the future. You don’t need to manage a pension account to plan for your future anymore, you can simply save for your future in sound money.

If time is money, then Bitcoin is for those who value their time properly.

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Spend Your Time Wisely

So, life really can be as simple as that. You can redirect a lot of the time you spent speculating because you didn’t have a functional money to save in, and redirect it toward more meaningful pursuits. You can redirect it toward actually living!

But before you do run off and start ticking items off your bucket list there is some important housekeeping you need to do if you want Bitcoin to grant you this type of freedom.

You absolutely must learn how to use Bitcoin properly.

You need to learn how to properly secure it without any counterparty risk and be comfortable sending and managing transactions using the right airgapped hardware and software. It also wouldn’t hurt to put proper inheritance plans in place and improve your overall digital security while you’re at it.

Thankfully this essential housekeeping doesn’t have to be difficult or intimidating. At The Bitcoin Way we are experts on helping you on your journey toward true financial freedom and true sovereignty.

Get in touch by booking a free 30-minute consultation with one of our experts. We would love to help you on your journey.