Parental Orange-Pilling

You’re a hodler. You know that Bitcoin is a thermodynamically-sound store of value unlike anything the world has ever seen. Decentralization protects its firm supply cap, and an angry swarm of cyber hornet Bitcoiners acts as Bitcoin’s immune system. But how do you have the talk with your parents?

First, your parents have to be open the idea. If they have made comments about inflation, and generally have an open mindset on new ideas, then give it a go! Otherwise you’ll have more luck during a chance conversation with a random stranger.

Say your parents own stocks, bonds, and gold. They probably care more about how Bitcoin fits into their portfolio than what Bitcoin actually is. This is where the digital gold narrative comes in. Over 90% of the USD money supply has been created in the last 12 years. This is leading to rising prices in food, cars, and pretty much anything a Boomer would want to buy. Bitcoin is the best store of value in history: its scarcity is approaching that of gold, but Bitcoin’s scarcity is mathematically guaranteed. Bitcoin is also much easier to transact with since it’s built for the digital world. Allocating just a small percentage of a financial portfolio to Bitcoin can protect against rising inflation, a stock market correction or falling bond prices.

Your parents may have a financial advisor. Here are three bullet points (in financial-advisor language) that you can write down with your parents before they meet their advisor:

1. Bitcoin hedges against inflation and downturns in stock and bond prices.
2. The Sharpe ratio shows that Bitcoin’s risk-adjusted returns have historically exceeded other asset classes. Source: http://charts.woobull.com/bitcoin-risk-adjusted-return
3. Let’s choose a small percentage allocation that we’re all comfortable with.

If your parents are managing their own investments they’ll want to know how to buy Bitcoin. They could follow you down the rabbit-hole, ready for self-custody and running a full node. But let’s face it that a custodial solution is likely optimal at the beginning. The easiest place for a Canadian Boomer to start is buying shares of an ETF such as the Purpose Bitcoin ETF. (Disclosure: I am not affiliated with this ETF in any way, and have recommended it to my own family members.) As your parents become more comfortable with Bitcoin you can teach them about exchanges and various custody solutions.

As Saifedean Ammous points out in The Bitcoin Standard: “Human civilization flourished in times and places where sound money was widely adopted.” Let’s keep spreading the message.