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Recently, the market cap for Bitcoin surpassed the market cap for Amazon $AMZN ( ▲ 0.02% ) . With that, many are debating whether it’s better to own the entire Bitcoin supply or the entirety of Amazon. For me, I say I’d rather own the entirety of Amazon than own the entire Bitcoin supply, and here’s why.

Bitcoin was never meant to be hoarded

The consensus among the Bitcoin community is that the currency should be hoarded and not used for conducting transactions. You see people making posts on social media showing their progress to owning an entire Bitcoin, and others making progress on owning 2 or more whole Bitcoins. Some influencers go far and say that if you don’t own an entire Bitcoin, you are screwed for the future.

There are entire companies built on hoarding Bitcoin, and other companies built to mine Bitcoin and only sell a bit of it to pay expenses. MicroStrategy $MSTR ( ▼ 1.9% ) goes further and issues debt and dilutes investors to buy more Bitcoin. Some say MicroStrategy alone owns 2.7% of the entire Bitcoin supply.

The country of El Salvador sold volcano bonds to buy more Bitcoin. It owns 5,963 Bitcoin, or 0.028% of the Bitcoin supply (5,963/21,000,000).

When I read the Bitcoin whitepaper, all I read is that Bitcoin was built as a P2P electronic cash system with built-in anonymity and less risk of fraud. In terms of being inflation-free, the incentives section says: “[o]nce a predetermined number of coins have entered circulation, the incentive can transition entirely to transaction fees and be completely inflation free.” In essence, the inflation-free part is only about giving miners incentives that are inflation-free, to encourage them to keep supporting the network with computing power.

It isn’t about giving the entire world a way to hedge their life savings against fiat inflation. It isn’t about NFTs. It isn’t about encouraging as much hoarding of the Bitcoin supply as possible.

Yes, hoarding does help boost the price higher. Financial speculators love to tout Bitcoin as an inflation hedge to boost its price higher. But Bitcoin wasn’t built to inflation-proof your savings account. It’s built to be a new payment network. That’s it.

Productive Asset

Let’s say the world does go from Web 2 to Web 3, would you rather bet on many different cryptocurrencies or only Bitcoin? The safer bet is to be adaptable and welcome all different cryptocurrencies.

And in a Web 3 world, the ones who thrive aren’t the ones who will own the most coins but rather are the ones who provide products and services, because they’ll have a stream of revenue in those currencies. If it’s a Bitcoin world, the firms get paid in BTC. If it’s an Ethereum world, the firms get paid in ETH.

Bitcoin, in and of itself, isn't a productive asset. It is a currency. Most of the value it has, financially, comes from the institutional investors and retail investors who keep buying the coin and touting it as the “God of all cryptocurrencies.” If institutions weren’t buying the coins, and retail investors didn’t see Bitcoin as an inflation-resistant savings account, Bitcoin wouldn’t be worth $100K+ today.

Meanwhile, for Amazon, the products and services they provide are so valuable to the world that it’s why the company is worth $2 trillion. The financial statements show its value. Even beyond the revenues and expenses, Amazon has a strong balance sheet with tons of cash, inventory, real estate, vehicles, robots, and more.

If Amazon wanted to, it could pay dividends to shareholders. But for Bitcoin, there’s no proof-of-stake function as it’s only proof-of-work, which means there’s no way outside of lending Bitcoin where you can derive income from it. But even if you owned the entire Bitcoin supply, and the code doesn’t allow you to expand the supply, how can you make passive income from Bitcoin?

You can make the global economy run on Bitcoin, but at the end of the day, 1 bitcoin = 1 bitcoin. And even if you do build an economy around Bitcoin, instead of owning all the Bitcoin supply available, you’d have less than 21 million coins.

If the world doesn’t end up revolving around Bitcoin, then there’s little value in owning all 21 million coins.

Other issues with Bitcoin

There are other issues with owning the entire Bitcoin ecosystem. These issues include:

• Long transaction times

• Transaction fees are higher than what PayPal or Visa charges

• Its volatile value makes it unsuitable to be a medium of exchange

Conclusion

When considering everything between owning Amazon and owning all the Bitcoin in the world, it’s reasonable to say that it’s better to own Amazon even if its market cap is less than the market cap of Bitcoin.

Owning a tangible business that you know will stick around for generations is better than owning a single cryptocurrency that we don’t know if it will be the future currency or not.

Disclosure

About Me

I am an independent personal finance writer and blogger. I do not have any formal training or certifications in finance, but I have a deep passion for the subject and have been researching and writing about personal finance topics for several years.

Disclaimer

The information provided in my articles is for educational and informational purposes only. It is not intended to be a substitute for professional financial, investment, or tax advice.

I encourage you to do your own research, consult with a licensed financial advisor, and make decisions that are best suited to your individual financial situation and goals. I cannot guarantee any specific outcomes or results from following the advice in my articles.

Please remember that investing involves risk, and you should only invest what you can afford to lose. Past performance is not a guarantee of future results.

If you have any questions or concerns, please don't hesitate to reach out to me. I'm here to help!

I/We own Bitcoin and have exposure to AMZN through YMAX, YMAG, QDTE, and XDTE.