Bitcoin is a global decentralized currency that is not under the control or guarantee of any country. Recent months in the Bitcoin ecosystem have been marked by a rapidly growing mood of optimism based on the approval of exchange-traded funds in the Bitcoin spot market. These ETFs are driving Bitcoin’s mainstream adoption through portfolio construction for millions of retirement accounts and thousands of financial advisors and institutional investors.
But ETFs miss the point. Bitcoin is not a held asset. The currency to use. Bitcoin doesn’t have a price, it has an exchange rate. The future of Bitcoin is not the future of assets sitting in ETFs or buried in the backyards of hardware wallets. Currency is meant to be traded.
Zach Townsend is the CEO and co-founder of Meteen, a Bitcoin-denominated insurance company.This editorial is part of his CoinDesk articles “The Future of Bitcoin” Package It was issued to coincide with the fourth Bitcoin “halving” in April 2024.
Although daily payments such as buying coffee are not a very effective use of Bitcoin, in the future there will be robust economic activity denominated in Bitcoin. Bitcoin is powerful for storing value, settling large payments, and performing financial services.
Last year, inflation exceeded 10% in at least 57 countries around the world. In the UK it was over 9% and in the US it was over 8%. For residents of countries with a history of inflation, regime, or currency risk, daily fluctuations in the exchange rate between Bitcoin and fiat currencies seem less risky than a decade to a decade of fiscal and monetary mismanagement in each country. It may look like. all over the world.
But for this future to exist, businesses and institutions must be built within the Bitcoin economy. Meanwhile, the company founded one of the first companies, a full-fledged regulated life insurance company denominated in Bitcoin. We conduct all of our business in Bitcoin. We are regulated by the Bermuda Monetary Authority and are permitted to operate on a modified accounting basis with Bitcoin as the unit of currency.
We operate a life insurance company like any other life insurance company. But our currency is Bitcoin, which is rising in value as a store of value, rather than a currency whose purchasing power is falling, such as the dollar, euro, yen, Swiss franc, or British pound.
It means we are in business in the true sense of the word. Bitcoin SStandard. Our balance sheet and income statement are all written in Bitcoin. Our policyholders pay their premiums in Bitcoin, we make guarantees and undertakings in Bitcoin, and we agree to pay all insurance claims in full to our beneficiaries in Bitcoin. We perform solvency calculations and file all regulatory filings for Bitcoin. We store our insurance reserves in Bitcoin. We state the value of our policies and perform all actuarial calculations in Bitcoin.
This approach means that, as the saying goes, 1 Bitcoin is equal to 1 Bitcoin. Our policyholders can sleep secure in the knowledge that exchange rate fluctuations will not impact our business, and we can operate with confidence that we can deliver on our commitments for the same reason. . Although the Bitcoin exchange rate has fluctuated between $15,500 and $70,000 throughout the Company’s operations, our balance sheet continues to grow without any fluctuation in Bitcoin terms.
We’re just one of the first companies to operate this way, but we shouldn’t be the last. Entrepreneurs, builders, Bitcoin (and crypto) natives, and let’s be honest, much of the world’s population are increasingly recognizing the value of building their businesses and lives around the Bitcoin standard. It will be. Like the rest of us, they stopped worrying about Bitcoin’s exchange rate against the dollar today, tomorrow, next month, or even this year, and started thinking about Bitcoin as a store of value, clearly showing a higher value. It means becoming. Decades from now.
