Should you buy Nvidia stock or bitcoin?

Bitcoin has already massively underperformed Nvidia. While bitcoin has seen its price increase by around 300% over the past 18 months, Nvidia stock has seen a boom of more than 800%. So, to get rich, is it better to buy Nvidia shares or BTC?

Is this a failure for bitcoin?

Nvidia makes great GPUs for the world and it’s only right that its shareholders are rewarded for that.

Bitcoin and Nvidia are a bit like comparing apples and oranges. Stocks are not a neutral, censorship-resistant, peer-to-peer currency that you can send to anyone or move anywhere.

Rather, these are paper assets that are at the mercy of company management, the board of directors and a myriad of operational, regulatory and jurisdictional risks. You also hold shares in a brokerage account which can easily be closed, frozen or censored.

Sometimes stocks outperform bitcoin. However, if the vision of Bitcoin standard comes true, it is very likely that Holding bitcoin will massively outperform holding a basket of diversified stocks like the S&P 500 over the next ten years.

It is even likely that bitcoin is also much better than cash, bonds and real estate.

Will bitcoin replace stocks?

Under a Bitcoin standard, where BTC becomes the “new dollar”, would stocks disappear?

To answer this question, we must first ask ourselves how the coordination of human activity works. How do we enable large groups of people to work together to accomplish extraordinary things?

The first possibility is to enslave a large number of people to force them to work. However, such a practice is not only ethically reprehensible, but alsoIt does not allow goods to be produced as efficiently as possible.

The second possibility is to relying on religion or nationalism to coordinate human action.

“ Build this pyramid because your beloved pharaoh desires it or because it will make Egypt great again.”

Finally, the last possibility is to resort to free markets.

We are now ready to answer the question: will stocks still exist with a bitcoin standard?

Actions will remain essential

It is very likely that the actions remain.

Indeed, corporations are another great way to coordinate human activity in the context of free currencies like BTC.

A great way to do this is to form a company and allow the management team, workers and outside investors to share in profits in exchange for a capital investment.

The fact that ownership shares of many different companies being listed on the stock exchange is a great idea. This creates deep and liquid markets.

It’s a much better use of capital than investing it all in government bonds like US Treasuries, which help finance a stupid, violent institution that does not know how to distribute capital.

A good, neutral, healthy, rare, math- and energy-based currency, like bitcoin, is the best basis for a prosperous economy.

It is therefore in a way a matter of first layer. One should not use soft money that can be printed endlessly by central bankers or other insiders, as in the case of the US dollar, manipulated by printing money.

The next level from this solid foundation of sound money is the free and voluntary exchange of goods and services for that money, what we call free markets.

From free currency to free markets

Free markets of tany government restrictions, capital controls, tariffs, price controls, wage controls and any other form of interference.

Corporations have given us jet planes, modern automobiles, dishwashers, washing machines…

Today, it is impossible to design and build a new jet plane with your friends in your garage. It requires the coordination of millions of people working on wing design and safety, avionics, flight controls, hydraulic and pneumatic systems, etc.

This is why modern business remains the best mechanism to enable the creation and manufacturing of complex modern objects such as computers or airplanes.

Of course, banks, big pharmaceutical companies, and food manufacturing companies, just to name a feware heavily capturing and corrupting many industries and corporations in the modern fiat era.

But under a bitcoin standard, where the federal government would be much smaller and less powerful, and where it would be unable to bail out industries or play favorites using its access to printing money, they will capture industries much less.

Will people still want to invest in these stocks?

Businesses will continue to exist even under a Bitcoin standard and their shares will still be publicly traded because corporations remain one of the best tools ever developed to help coordinate human activity in useful and productive ways.

Will people still want to invest in these stocks?

Very probably.

It is plausible that thes bitcoiners themselves will use their bitcoins to finance, for example, life extension companies, space exploration or artificial intelligence companies.

And when the world adopts the bitcoin standard, bitcoin will gain purchasing power not through new adoption like today, with new people adopting bitcoin and holding it as a reserve asset, but rather at a much slower pace which takes into account the progress of civilization and productivity gains.

Bitcoin will therefore not kill stocks, but it will restore their value. It therefore makes sense to bet on both Nvidia and bitcoin, and this financial strategy is absolutely not incompatible.

Satosh

Every day, I try to enrich my knowledge about this revolution which will allow humanity to advance in its conquest of freedom.