September 2025

I started adding bitcoin exposure for Flattery Wealth clients (myself included) at around $59,000 in March 2021 (by way of the Grayscale Bitcoin Trust and Microstrategy) and continued accumulating all the way down to $16,000 in 2022. As I write this, only in the last 18 months or so has this decision been vindicated. I've maintained this since our first allocation: the case for bitcoin is about a fixed supply that meets growing demand from increasingly sophisticated (i.e. deep pocketed) buyers. I would argue the all-time highs of over $120,000 in recent months are not a reason to sell. The resurgence of yet another boom cycle is confirmation we're still early in a multi-decade adoption curve.

3 Key Catalysts:

1. Institutional Infrastructure: 

The ETF floodgates opened in January 2024, and we're still in the early innings. Corporate treasuries beyond Strategy (formerly MicroStrategy) are slowly awakening to bitcoin's asymmetric risk-reward profile. As I noted in our July 2024 Client letter, "the pros collectively don't yet understand bitcoin, but that is changing." I give my clients a lot of credit for staying patient. I think our ‘do nothing’ disposition through the 2022-2023 crypto winter exemplifies the advantage of independent thinking, working with individual decision makers. Drawdowns like 2022 are hardly possible with large-scale, committee-driven decision making.

2. Bitcoin as the Ultimate Savings Account:

The money printing I warned about (I was hardly alone) upon our initial allocation in 2021 continues. The U.S. dollar supply has grown 6-7% annually for decades. This means in effect your savings account is systematically losing purchasing power every year. This math rings largely true in the Flattery household in recent years: if you had $100,000 in cash ten years ago, you'd need roughly $140,000 today to buy the same goods and services today. Bitcoin, with its fixed supply of 21 million coins and current issuance of just 0.8% annually (falling to 0.4% after the next halving), represents the first scarce digital savings account in human history. ]

3. Network Effects Compounding:

Bitcoin's brand moat continues widening. The "anyone can copy bitcoin" argument falls apart when you examine network effects, security, and time-tested durability. Each new institutional holder increases the switching costs for existing holders. It is self-reinforcing and the market is finally catching up to these fundamentals. ‘Digital Gold’ as a primary use case for crypto is now being widely embraced beyond niche circles. 

Risks:

- Regulatory capture: Governments could still attempt to tax or restrict bitcoin ownership, though this becomes harder as adoption spreads. While still an ongoing risk, this is less obvious now with the embrace of the U.S. Government in 2025. 

- Technical obsolescence: Quantum computing or undiscovered cryptographic vulnerabilities (though solutions are being developed). More obvious with recent breakthroughs in this space. 

- Macro environment: Severe deflationary episodes could reduce appetite for all risk assets. Bitcoin has traded more like a ‘safe haven’ gold alternative in 2025, but these short-term correlations are far from sacrosanct or guaranteed. 

Bottom Line:

The Flattery Wealth (formerly Simple Wealth) ’hero’s journey’ from $59k to $16k and back in part validates the core thesis: short-term pain for long-term gain in an asset with superior monetary properties. Markets can remain irrational longer than most investors can remain patient (or solvent). We like to think that conviction backed by sound reasoning gets rewarded. And as Satoshi Nakamoto, inventor of the original bitcoin protocol, noted in 2009: "It might make sense to get some in case it catches on."