1. Bitcoin as an Asset, Not Currency

Michael emphasized that Bitcoin should not be regarded as a currency because it does not comply with the traits of a legal tender defined by nation-states. He stated that viewing Bitcoin purely as a medium of exchange invites various risks and concerns, especially concerning taxation. Instead, he suggests viewing Bitcoin as an asset or property, likening it to real estate, where the primary intent is long-term capital appreciation rather than everyday transactions.

2. Tax Implications of Bitcoin Transactions

Michael highlighted the complications surrounding Bitcoin transactions, especially concerning capital gains tax. For instance, while a $15 transaction in cash is straightforward, exchanging that amount in Bitcoin could incur significant tax liabilities if the cryptocurrency has appreciated in value since its purchase. This presents a clear disincentive for businesses to adopt Bitcoin for routine payments, creating a scenario where the costs outweigh the benefits.

3. The Role of Nation-States in Currency

Michael pointed out that nation-states are unlikely to relinquish their control over currency systems. He argued that governments tend to increase their regulatory frameworks over time rather than allow decentralization. Therefore, until a country recognizes Bitcoin as legal tender, its role remains limited in formal economic exchanges, which may hinder its mainstream adoption as a currency.

4. Future of Business Investments

According to Michael, businesses will continue to issue equity as long as they exist, creating a market clearing price that determines the viability of investments. He mentioned that investments must be evaluated based on yield and market conditions, indicating that making sound investment decisions requires analyzing both equity and property in context, as they affect overall financial strategies.

5. The Comparison of Bitcoin to Gold

Michael believes Bitcoin has the potential to demonetize gold over time, transforming it into a more desirable store of value compared to traditional ways of asset storage. He explained that the majority of gold's value is currently tied to its monetary use rather than its utility, hinting that Bitcoin might replace this trend by offering a more efficient digital alternative as a store of value in investment portfolios.

6. Real Estate Market Dynamics

Michael raised concerns about how the real estate market is influenced by institutional buying, which can inflate prices beyond the means of average wage earners. He suggested that when properties are bought primarily as a hedge against inflation, it detrimentally affects housing affordability. He encouraged people to consider converting excess real estate investments into Bitcoin to rationalize the market.