Why $ETH is Ultrasound Money going to $10K, | Why Buffett and Berkshire Hathaway are WRONG on Crypto

today we're going to talk about why ethereum is on its way to ten thousand dollars and why warren buffett and charlie munger are brilliant but they're totally wrong about crypto i've been an ethereum fan going back to the original pre-sale in 2014 when it was just 30 cents with ethereum over two thousand dollars that's over a 6000 x return and i'm not selling i'm buying more there are more reasons than ever to be bullish on ethereum let's get into it [Music] a couple of weeks ago warren buffett and charlie munger two of the most legendary investors of all time from berkshire hathaway had some harsh words for bitcoin i don't welcome a currency that's so useful and to kidnappers and extortionists and so forth nor do i like just shuffling out a few extra billions and billions and billions of dollars to somebody who just invented a new financial product out of thin air so i think i should say modestly that i think the whole damn development is disgusting and contrary to the interests of civilization whoa harsh they asked me about it on cnbc and here's what i said i'm sure you heard buffett and munger's comments on crypto over the weekend monger hating on what he called the bitcoin success and calling it contrary and disgusting to the interests of civilization i'm sure you have some strong thoughts on this you know i mean what are they missing they are uh they are incredible legends obviously buffett monger and we have a ton to learn from them but you know one of the things that buffett said he learned early was to not do the one last puff sort of investment the end of its life value bet now let's break down what monger actually said and why they're wrong first off calling it the bitcoin drop the it's cleaner next he says i don't welcome a currency that's useful to kidnappers and extortionists let's set the record straight less than one percent of crypto has ever been used in an illicit transaction cash is actually how criminals transfer large sums of money and if you're smart you don't transfer large amounts of illicit wealth in an open blockchain that's immutable you can never remove that record everyone can see that transaction and it's infinitely searchable 99 of transactions in crypto are subject to know your customer and anti-money laundering regulation and that's why on exchanges you can't just buy bitcoin and send it right away there are holes and checks that make it kind of inconvenient to do that and when you do they know who you are finally munger says he thinks someone invented a new financial product we'll get to that in a moment but let's first jump back to how buffett and munger got started warren buffett got to start as a value investor if you want to be as successful as him you've got to buy solid stocks that have a real moat and long-term profit like coca-cola you just hold it forever the majority of buffett's fortune happened exactly in this way they bought real assets and then those things over a long period of time went up in value and that's one of the valid reasons buffett has for why he doesn't like bitcoin he likes to own businesses that make money and throw off dividends then he can reinvest those dividends and that means the money grows very consistently you know with these businesses that are not going anywhere emote is a way that that business continues to win over the long term something that other competitors coming in can't just copy coca-cola's moat for instance is its brand but it's also in its bottling relationships which means it has deep distribution buffett first started buying shares of coca-cola in 1988 not long after the famous black monday stock market crash in 1987.

By the end of 1989 he purchased 23.35 million shares of it worth 1.8 billion well if i were in wall street i'd probably be a a lot poorer at uh you get overstimulated in wall street from 89 through 1999 its earnings per share grew at a compound rate of 12 a year that's some really decent growth ethereum had an over 15 000 return which is a far cry from just 100 percent by the s p 500 in the past five years so i gotta believe some of this is just shade you know if your best investments can only do 12 i get it let's get back to what munger said about bitcoin though he said he didn't like it because it's just a financial product i don't think he really understands what crypto is particularly ethereum ethereum is actually programmable money he's probably only thinking of the first use case of bitcoin and crypto really just digital gold you can't do much with it except hold it what's more important for you to realize is that ethereum is a global decentralized computer that can now be used for a distributed form of every type of financial instrument lending bonds equity derivatives insurance you name it it can be done using ethereum and as you can see on this website d5 pulse over 82 billion dollars is now locked into distributed finance or d5 for short this is up almost 80 x from last year when it was under a billion dollars total 82x it's not every day you see something that can grow that quickly ethereum is settling about 30 billion transactions per day more than double bitcoin to put it in perspective paypal does about 2.5 billion dollars in transactions per day ethereum does 2x more than bitcoin and 10x more than paypal this programmable money idea is so powerful it's driving deep institutional adoption here's what raul paul said recently every single investor i have spoken to is shifting allocation to eth from btc all our mutual friends and that billionaire finance circle institutions are increasing their exposure to ethereum even over bitcoin because programmable money is much more versatile than just digital gold coinbase's institutional balance went from 40 billion at the end of the last year to over 144 billion software is eating all of money and that money underpins all of society so why is ethereum headed to ten thousand dollars here's what i said at the end of my cnbc appearance i think that ethereum is ultrasound money i think that there is a future here for both bitcoin and ethereum and sort of the whole world of cryptocurrencies because this is the continuation of what we're talking about big tech was sort of the first wave crypto is the next let's talk about those three things us dollars bitcoin and ethereum us dollars are unsound money the fed can print as much of it as it wants it's inherently inflationary keeping your assets in u.s dollars is the equivalent of allowing the us government to change the amount of value you own just by creating more of what you already have that's unsound bitcoin in contrast is sound money there will only ever be 21 million bitcoin it is what got us to where we are now in the crypto adoption curve sound money doesn't lose its value and that's where ethereum comes into play and here's why ethereum might actually be ultrasound money there's a new proposal going into effect in july called eip 1559 this will actually reduce the amount of ethereum and theoretically means that at most there will only ever be a 120 million ether and that the supply will actually go down over time hundreds of millions of dollars worth of ether will be burned per year this is why ethereum will become ultrasound money ultrasound money becomes more valuable over time because it's more scarce and this is important it's one of the big reasons why ethereum is headed to ten thousand dollars here's the creator of ethereum vitalik buterin on this whole meme of ultrasound money in asset having a community that wants it to be an ultrasound money is a good property for an ultrasound money to have right like an asset is more effective as an ultrasound money if it has a big portion of its community talking about how that asset is ultrasound money because that community talking about the ultrasound money meme itself like basically makes it be part of the social contract it makes it more likely that things that are supportive of that asset becoming ultrasound money will be implemented and things that are opposed to that asset being ultrasound money will not be implemented what vitalik points out is that the ethereum community via memes have chosen to remake ethereum into something that is more than what it started out as some people say they like a thing because it stays the same like bitcoin and i get that i'm still buying bitcoin i still hold bitcoin but i also like a community that can steer towards being better every single day that's what i look for in the founders and startups that i fund and the reality is good decisions like that can compound but what about the environment elon musk posted this tweet and it's been making waves ever since what about the crazy energy usage that it takes to keep bitcoin running he says tesla has suspended vehicle purchases using bitcoin because of fossil fuel use you know what this is not unfounded cryptocurrencies account for about 0.59 of all energy usage in the world and bitcoin alone took over 128 terawatt hours per year to secure using proof of work to put that in perspective all of australia only consumed 192 terawatt hours in 2019.

At the end of elon's tweet he does mention he's looking at new more sustainable cryptocurrencies that's good news for ethereum ethereum is switching over to proof of stake with ethereum 2.0 which is coming sometime in the next 18 months when that happens the ieee expects energy consumption by ethereum to be reduced by 99 that's a lot it's going to make ethereum far more green so in summary ethereum is programmable money that is ultrasound and not only that it's going to be very green elon if you're watching forget dogecoin it's a scam bitcoin i still like you but i don't think i'm gonna buy that much more of you ethereum though for me ethereum is the future warren buffett talks about the things he owns in this way we expect to hold these securities for a long time in fact when we own portions of outstanding businesses with outstanding management our favorite holding period is forever thanks warren that's how i feel about ethereum today so that's it hold on to your hats everyone it's not really going to be that smooth a ride to ten thousand dollars and if you're thinking of buying it's those dips that will be the best time for you to get in as always don't buy more than you can afford to lose practice some good computer hygiene and stay safe out there at worst think about dollar cost averaging thanks for watching all the way to the end if you like this video please click like subscribe and what's particularly important for me is if you click that bell icon that way you'll always see my new posts when i post them i'll see you next week [Music] [Music] you

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