A common knock on bitcoin is that it is “too volatile.”

There is no denying that bitcoin is a volatile asset. Its price action supports this conclusion on nearly all time frames (including minute, hour, daily, and yearly).

However, volatility isn’t necessarily a bad thing. In fact, volatility creates opportunity.

Jack Bogle, the founder of Vanguard, popularized the idea of a “60-40 portfolio.” The 60-40 portfolio is the basic idea that passive investors looking to efficiently transfer wealth through time should diversify their assets into 60% stocks and 40% bonds.

If bitcoin’s performance over the last decade tells you anything, it should scream that the 60-40 portfolio is dead.

Currently, the spot price (market price for bitcoin on exchanges) trades lower than futures prices. The spread for the June futures contract is more than 25 percent annualized on most major exchanges.

This means that anyone can buy bitcoin and use that bitcoin as collateral to sell the June futures contract. This trade locks in a risk-free 6 percent USD-denominated return (more than 25 percent annualized) no matter where the price of bitcoin goes over the following months.

If you’ve been following potential bitcoin price targets, you know that many analysts expect bitcoin to completely consume or eat into portions of gold, money supply (M2), global fiat-denominated debt, stocks (equities) and real estate.

Bitcoin will fundamentally change the way investors value companies.

Upgrading monetary technologies is a radical paradigm shift that will leave many financial “experts” confused. Our current monetary system, the US Dollar, is based entirely on an ever growing mountain of debt. In contrast, the Bitcoin monetary system is equity based with no counterparty risk and no dilution risk.

Bitcoin has a preprogrammed algorithmic stock to flow ratio. The ratio is calculated by dividing the existing stock of bitcoin by the flow of bitcoin to be mined annually.

This concept was originally made popular by Saifedean Ammous, author of The Bitcoin Standard and later was analyzed quantitatively by PlanB who created the S2F and S2FX price models.

Let’s compare two vastly different monetary technologies. One is government fiat currency (USD) and the other is bitcoin.

One has an exponentially growing future supply, and the other has a fixed total supply. One is unpredictable and controlled by central bankers and politicians, and the other is predictable and controlled algorithmically by code and user consensus.

Bitcoin is a revolutionary new type of asset, a digital asset. Before Bitcoin, this concept of a scarce digital asset with no counterparty risk did not exist. It was not possible to create a scarce purely digital asset, like a physical gold bar on the internet.

We are in the early stages of a transition between two monetary systems, InFi and DeFi. No, I’m not talking about DeFi as in “Decentralized Finance”. I’m talking about InFi (Inflationary Finance) and DeFi (Deflationary Finance).

Currently, there are roughly 18.6M Bitcoins that exist (maximum of 21M Bitcoins). Since March of 2020, when Covid fear reached its peak, lockdowns commenced all across the world, and markets collapsed, the number of Bitcoins held on exchanges has decreased at an unprecedented pace.

Most people first hear about Bitcoin from its “NgU Technology” (Number Go Up Technology). Typically, Bitcoin’s never-ending parabolic price increases set off alarms for many intelligent people.

MicroStrategy, the billion dollar publicly traded business intelligence software company became famous among the Bitcoin community after announcing it has adopted Bitcoin as their primary treasury reserve asset. Now it has taken its Bitcoin position one big step further.

Bitcoin is the most certain asset in the entire universe. It is an asset that has two unique characteristics that no other asset has combined.

The Bitcoin risk spectrum has two unique blocks as the foundation of this new financial system.