The $1 Million Arbitrage Hidden in Plain Sight
CHANGE YOUR MEASURING STICK
Pricing bitcoin in fiat is a -EV fool’s game.
You’re pricing one monetary protocol with another that ultimately are diametrically opposed. Sadly, the BTC/USD pair is the vehicle the majority market participants derive the “value” of bitcoin because USD is perceived the world reserve currency.
Bitcoin as “Beta Nasdaq” narrative has a stranglehold on traders and Wall Street and if you’ve been around the markets for any significant amount of time you know that narratives are powerful short term.
Saifedean Ammous’ “Bitcoin Standard” helped transform my mindset to critically think of bitcoin as a monetary protocol and not a speculative trading vehicle. Sending an on-chain and 2nd-layer transaction on Lightning allows you to see and have an emotion attached to sending value without a third party.
Having said all of that, if you are “playing in Fiat Land” as a speculator, you are arbitraging the two systems as they have started to intertwine – especially since the launch of the Bitcoin ETFs in Q1 2024 and companies adopting their own Bitcoin Standard (MSTR in August 2020).
The world consensus sees gold as the best money available today in 2026.
TIME CLOSES ASYMMETRY
Gold took thousands of years to reach consensus as "money" and fiat currencies took centuries to achieve reserve status. Even disruptive technologies with clear utility advantages (internet, mobile phones) took 20-30 years to reach majority adoption.
Some people have felt bitcoin was the best money for human civilization as early as 2010. it’s been 17 years and still the discount to fair value in many people’s eyes from a dollar-denominated perspective is nearly a 20x IF it matched the value of gold.
$1 million/coin no later than EOY 2033 is a flag-plant for me because it gives a nice time buffer for the information asymmetry to close.
It also gives central banks time and opportunity to do what they do best - print money.
Monetary inflation is running 7-8% (CPI is a lie) so we know $1 million today will not go “as far” as $1 million will then.
Give yourself an extra time buffer so you give other market participants enough time to catch up to your convicted thesis.
If you have borrowed in the weak currency (any fiat) and re-directed those units into the apex asset the last decade (bitcoin) the number of original units you extracted from the legacy system are MUCH higher.
Smart leverage can compress time and amplify returns, but this introduces a timing variable (a la expirations on options) and it introduces the elevation of human emotion during the process.
Way too long to get into that here.
WHAT SHOULD PROFESSIONAL SPECULATORS DO?
If you don't have a multi-year year track record of beating the S&P it's almost statistically impossible that you will outperform bitcoin CAGR over the next decade. So humble yourself and don't even try.
IF you're in the professional speculator category, taking a bucket and exploiting Wall Street's inability to apply monetary history to current markets is available.
The overwhelming narrative is that bitcoin is inferior money to gold and this dynamic doesn't have a chance to change in the next decade.
Here are the numbers as of today:
If bitcoin becomes more of a consensus take that bitcoin is equal to gold as money then as of today that's a 19.5x from here in fiat terms.
(Now add 7-8% monetary inflation per year in your favorite LLM and you can extrapolate as you wish)
Asymmetry has trickled down into bitcoin-laced instruments such as equities, credit, funds, et al for years specifically with MSTR starting in August 2020 and more recently STRC in the new digital credit sector (and yes I realize 99% of market participants don't even see it as a sector yet - asymmetry mid-article).
Depressed and mania markets alike provide asymmetric opportunities in both directions as well as short vol concepts in consolidation periods. Being nimble and directionally agnostic can prove to be a way to capitalize in volatile times and/or suppress portfolio vol on the downside with the right levers being pulled.
One quick directionally long example:
A lot of people were obsessed with the GBTC closed end fund discount to NAV trade in 2023 because instrument pricing was not keeping up with the probability the ETFs would be approved. If you followed the saga closely, it wasn't hard to figure out the discount was a massive mispricing considering all the factors in play.
It was an asymmetric play in an inefficient market (sorry EMH-maxis).
Bear market capitulation sent bitcoin-laced instruments into a death spiral due to liquidations and fraud. However, it provided one of the most profitable trades on Wall Street with the discount to NAV PAR close, getting as steep as 40%+ during the bottom ticks.
To put it in a different way, the GBTC discount gave you a quasi-"free call option" that helped you nearly double the performance of spot.
Find a +EV spot and bet hard with max conviction until your fingers bleed (Druckenmiller Mindset).
Bitcoin is an infinite duration asset. The only way you mess this up is leverage or playing at the WS Table.
Don't sit at the high stakes PLO table with 8 specialists when all you know is NLH. You'll be playing a game with different rules that you don't understand.
Careful out there.
WHAT SHOULD MOST PEOPLE DO?
Humans converge on the best money. You don't adopt a new money, change your unit of account and then all of a sudden go back to the inferior money.
If you’re a pleb, you simply provide value to society, take inferior money and swap it for apex money. Or better yet - just get paid in bitcoin to begin with.
Spend less than you make.
Wait for the rest of the world to wake up.
Humans are still in the very early innings of understanding the arbitrage that sits in front of you.
You are making a conscious decision to act or not.
The rest is in the waiting.
"It never was my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight."
Livermore
"Stay humble. Stack sats."
Matt Odell
Bitcoin was $87k at the time of this writing.
A lesson in absolute scarcity will be an interesting topic for people to revisit in 2036.
x.com/RebellioMarket…
Applying the Druck Playbook especially after the 2017 bust during the 2018-2020 “dead period” in bitcoin set you apart from other money managers.
Even though it was “late” you still outperformed 99%+ of your peers.
Still applies in the next decade imo.
People will also learn a lesson on energy
x.com/ronin21btc/sta…
Bitcoin is apex carry
The bull will be back
Bitcoin isn’t an asset.
It’s a protocol.
People are opting out of one monetary protocol and are opting in to another.
We’re not even close to escape velocity yet.
Not a “Power Law Guy” per se, especially using it as a price prediction mechanism over a 5 year period.
However, this visual is powerful.
Another fiat crisis is around the corner.
Then they’ll print more units.
History rhymes. This isn’t difficult to grasp.
Live in the fiat protocol or the bitcoin protocol.
If you’re still partially in the fiat protocol, you better play a game you understand.
Keeping your units in the bank / credit / etc means your wealth will be diluted every single year. Guaranteed loss.
Find a game you have an advantage in.
Speculate in fiat instruments
Save in bitcoin.
This has been my mental model since 2019 - wish I paid attention sooner.
We figure it out on our own time frame.
Rotation visual
Impossible to time
Inevitable if given infinite duration
Read about Moltbook then revisit this article -
Thesis unchanged
The Fiat Standard
The Bitcoin Standard
The Blocksize War
The Creature from Jekyll Island
The Price of Tomorrow
The Fourth Turning
The Fourth Turning is Here
When Money Dies
The Book of Satoshi
The Sovereign Individual
What else am I missing?
Comment so this can be a resource for soon-to-be bitcoiners.
Everything considered:
Bitcoin is more undervalued than in any point in its 17 year history priced in fiat.
.@RockportAI do your thing 🔥
@RockportAI
Audio
@RockportAI please make this an audio file
@RockportAI do your thing ✅
