As-salamu alaykum everyone, I hope you are doing well. Today is Friday, Jamal Mubarak, August 30th, and Bitcoin is at 58,500. And since we've been chopping on Bitcoin's price for the last month, or a few months, and we haven't really done a whole much of anything, a legitimate question for investors to ask is, did we get it wrong about Bitcoin? Is it really going to go higher? And to answer this question, I'm going to use a mental model that I like to use, that was popularized by Charlie Munger in his book, Poor Charlie's Almanac, highly recommend. Charlie Munger is famous for saying, all I want to know is where I'm going to die, so I avoid that place. And the mental model I want to use is inversion thinking. The quote I mentioned is an example of inversion thinking. And inversion thinking is basically when, instead of you thinking about what it's going to take to succeed, instead you ask yourself, what would it take for failure to happen? And you just focus on avoiding those scenarios where failure, or scenarios that could cause failure. So we're going to do this exercise for Bitcoin, and basically we're going to ask ourselves, what is it going to take for our thesis on Bitcoin to be wrong? What are the major risks, scenarios, most probable scenarios for Bitcoin to fail as an investment, as an asset class? So without further ado, let's get started. As always, this is not financial advice, so be sure to do your own due diligence before making any investing decisions. And become a PIF member if you haven't already. Premium membership gets you access to all of our trades, move for move, you get access to our portfolios, access to our watch list, and a whole other suite of benefits, which are always increasing. Elite membership gets you access to our teaching as well. So if you enjoy our teaching, you enjoy the way we try and teach viewers how to invest, how to think about investing, then do consider becoming an elite member. All right, the first thing that could happen, first scenario, that would cause our thesis on Bitcoin to fail, is if governments banned Bitcoin. Now, this seems increasingly unlikely, especially in countries where voter sentiment matters. And the reason I say this is because Bitcoin has become too popular. Cryptocurrency ownership, if you look at American adults as an example, has increased from 30% in 2023 to 40% in 2024. And of those adults, American adults that own crypto, 76% of them own Bitcoin. That's a whole lot of votes. And I don't think any politician is going to want to lose that many votes. Especially with the ETFs, now people are holding Bitcoin in their retirement accounts. So this is why you see Republicans have been very vocal about their support for cryptocurrency in general, because they want the votes. And Democrats have sheepishly been forced to follow suit and issue some statements to obscure the fact that in reality, they're quite hostile to cryptocurrency. But they want to obscure that fact, at least leading up to the elections. So in a place, in a country where votes matter, the more cryptocurrency adoption happens, the more Bitcoin ownership becomes widespread, the less likely a ban or adverse regulation against Bitcoin, the less likely such regulation is to pass. And therefore, I see this risk as increasingly remote. The second risk to Bitcoin, something that would make our thesis in it fail, is if the network, the Bitcoin network was attacked. Now, if we analyze the possibility of something like a 51% attack, this requires basically the computational power of at least 51% of what the total computational power for the network is. If we look at the hash rate, total computational power that is validating and securing the Bitcoin network, we can see that it has approached 600 exahash. Now, for context, Marathon Digital, one of the world's largest publicly traded Bitcoin miners, has an operational hash rate of approximately 30 exahash. So to get to half of the total hash rate for the Bitcoin network, i.e. 300 exahash, Marathon Digital would have to 10x all the while the total hash rate for the Bitcoin network needs to remain stagnant. So it needs to stall at 600 exahash and Marathon would have to 10x its own exahash in order to get to 300 exahash and have a chance at doing a 51% attack on the Bitcoin network. So this, and how much would this cost? If we assume adding one exahash is, if you are looking at the equipment costs and setup costs, that runs you around 100 million per exahash. So 300 exahash would be around 30 billion. And this doesn't take into account the practical limitations revolving around actually getting the miners, so actually taking the delivery of the miners, which will take years for that amount of compute to be delivered. It doesn't take into account the limitations on the access to power, the access to land that is needed to set up this type of operation. So this too seems like an increasingly remote possibility, an increasingly remote risk that we are, the Bitcoin network is avoiding. The third scenario in which our thesis in Bitcoin fails is if it is replaced. Now I have to say, an alternative could emerge. Even though it's hard to imagine what the alternative would offer that would make it a better store of value, considering the network effects that Bitcoin has going in its favor, its history of reliability and consistent uptime, its limited supply, and now the ETFs. Empirically, since 2009, there have been thousands of altcoins, and each one of them boasts something special about them that makes them valuable, but none of them have succeeded in replacing Bitcoin. And if we look at Bitcoin's dominance, its percentage of the total crypto market cap, it seems rather resilient and often increasing. So if you look at the total market cap for cryptocurrencies, it's between 2 and 2.5 trillion, and it has been that way for months now. If you look at the market cap of Bitcoin, it's at close to 1.3 trillion. Now I don't think it's intellectually honest to say that nothing can replace Bitcoin. As Muslims, we believe that the only constant in the universe is its creator. The replacement risk will always remain present, and it's something the rational investor should keep an eye out for. However, I don't think a replacement, if it happens, will happen suddenly. There will be signs. And for the investor who is not bogged down by ideology and who is not married to this specific asset, they will be able to spot it and they can make adjustments. There will be enough time to make adjustments to their investment. Summarize, Bitcoin has more than a decade now of experience and record of not being replaced, maintaining its resilience in terms of its domination as a percentage of total crypto assets, even though that market cap has been increasing. And if a replacement does happen, I do believe it will be gradual and investors will have ample time to adjust their positions so long as they are not bogged down by ideology. A lot of people, a lot of Bitcoin investors, have made their commitment to a coin into something more than an investment into an asset. It's almost an ideology for them. These people will probably not be able to spot the replacement and make the necessary adjustments if that scenario happens. But inshallah for us, we don't suffer from that. We look at it for what it is. And in case there is actual danger of a replacement, I think we'll be able to make the right moves right now. I don't see any legitimate competition to Bitcoin in its use case as a store of value. The next risk is that it's no longer needed. So this is another risk that would cause our thesis in Bitcoin to fail. Now, I think it's important here to remember what our thesis is for Bitcoin, which is that fiat currency is unreliable. Governments are printing more in order to service their debt and there is no end to this insight. For Bitcoin to no longer be needed, governments would have to start spending responsibly, balancing budgets, reducing debt, and inflation would have to become stable and predictable. In other words, fiat currency would have to become a good store of value. This is how Bitcoin would no longer be needed. And I assess this to be a highly unlikely scenario and certainly not what the trend suggests. The trend suggests the following. We recently hit a pretty ominous milestone, which is $35 trillion in U.S. national debt. What that means is per citizen, they have$104,000 in debts. That's per citizen. So that's child, man, woman, elderly, everyone. And the debt per taxpayer is close to$270,000. And this number is just going up. Now, you may say this number is going up, but GDP is going up as well. The economy is growing. If we look at interest payments, they are certainly climbing, going vertical upwards. This is not consistent with the rate of GDP. This is outpacing the rate of growth in GDP. And in fact, if you look at the debt to GDP levels for the United States, they're at levels that were not witnessed in the last 50 years. You'd have to go back to World War II to see something similar. And actually, we've exceeded that debt to GDP level. So all of this tells me that it doesn't seem like the justification for having Bitcoin in the first place is at risk of going away anytime soon. The trend certainly seems to be in the direction of increased need for something like Bitcoin. The thesis is stronger today than it has ever been. We do seem to be approaching a point of bankruptcy for this system. And therefore, the argument for it is stronger than it has ever been. And looking at these primary scenarios, main scenarios that I was able to identify for why Bitcoin would not work, it does seem like we are avoiding them in a big way. It does seem like the trend is not moving towards any one of them. And therefore, by inversion thinking, using this mental model, I think that our conviction in Bitcoin is increased and solidified. I wanted this to be a different approach in which we're not looking at charts, we're not telling you about averages, we're not telling you about different economic data points as we always do. We're just stepping back a bit and analyzing our thesis rationally in order to make sure that we haven't missed anything. I hope you guys found that beneficial. I'll take questions very quickly. Wa'alaikum salam to everyone. Aqeeb asks, is it possible to pay for PIF membership by month? No, currently we only have yearly memberships. We do aim for the membership to pay off for itself many times over. So the membership in relation to the value that you get should be one of the best investments that you make. And I also think that if the yearly membership is too expensive, then you probably don't have enough to invest. And maybe you shouldn't necessarily be thinking about or focusing on investing, you should be focusing on increasing your income. As-salamu alaykum, why is Bitcoin is falling? Has it become exchanges? So there's an infinite number of variables that will cause Bitcoin to move one way or the other on any particular day. I think it's important when you're in doubt to zoom out. And the fact of the matter is we're close to 60,000 per Bitcoin and we're up more than 100% in the last 12 months. And it does seem based on, I think, liquidity levels and our anticipation for these levels to be rising for the rest of the year and into 2025, it does seem that all indicators are pointing up for Bitcoin. And therefore it's just a matter of having enough patience for our thesis to play out. I don't think the question is, are meme coins haram? I don't think meme coins are haram, generally speaking. There is nothing in Islam, Quran or Sunnah that tells you that you have to buy something for a specific reason. You can buy something simply because you think the price of it is going to go up. A lot of people buy collectibles for that reason. Some people may find more utility in something than one else. This is totally fine. If you actually look at meme coins in terms of their utility, I do think that they do have a utility, which is the ability to transfer value from one place in the world to another. And I've actually used Dogecoin, for example, many times to make payments to people in various geographies. So generally speaking, I think meme coins are halal. However, some coins I think are just Ponzi schemes. Those are different. That's different the definition of a meme coin. A subset of meme coin could be Ponzi schemes, but that is not to say that every meme coin is a Ponzi scheme. Elias asks, Salam Alaikum, I kept getting news in XDAP, Binance seized Palestinian funds, is it true? Yes, I've spoken about that before. I don't trust Binance and I would encourage everyone to take their money off of Binance. What are alternative big market to boycott it because it goes against the idea of cryptocurrencies? Not sure what that means. But in terms of alternatives, there are many alternatives. I would simply Google best alternatives in your area. I think that's the best place to start. Omar Mahmoud says, or Omar says, Hello, I am new in this space, looking forward to gain further knowledge. How do you personally see the longevity of BTC? I think I answered that. Zuhair says, Salam Alaikum, thank you for interesting live. Would you would love to see something similar risk factors assessment for Doge too? Thanks for that suggestion Zuhair, perhaps we do that in the future. Aqib says, What do you think about BTC price? I've mentioned before, I think it will go north of 100,000 by the end of this year, Inshallah. Salam, there's news about dismissal of Dogecoin and Elon today. What is your input? Will we see positive moves for Doge? I'm not sure what news you're referring to. I don't know the future, but I do think that I do think that there are, I think that in a bull market, it will probably outperform in bear markets, it will underperform. Amir says, great video. Thank you Amir for that. And do leave if you found this video beneficial. Enjoy your weekend. And until next time, make sure to take care of yourself. Salam Alaikum and peace be upon you all.