Should your business own bitcoin?

So big news this week is that Bitcoin is up 154% this year. So for those of you doing the math, that puts the price at over $105,000 per Bitcoin. And it brings the question, like, should your small business be holding Bitcoin? Should it be investing in Bitcoin? And heck, it's kind of attractive, right? If you're getting those kind of returns, why the heck not? And look, you put money in cash, you know, you're lucky if you get 3 or 4%, or if you put it in T-bills, you get 4 or 5%. But if you say had a 1 year's worth of profits sitting in cash and you could put that all into Bitcoin and it goes up 150%, well, you could easily double your profits. And the math is pretty easy, pretty attractive, right? And you don't have to work for that money. And also, like, if you run a small business that happens to deal in global trade, one thing that affects you is what's happening with the US dollar. And right now the US dollar is, well, super strong. But there's not all kind of a rosy picture across the board in terms of the future of the US dollar. There's, you know, threats of tariffs. There's a bunch of potential tax cuts coming. All that stuff could make it hard for the dollar to keep a high level of value. So just like buying gold, buying Bitcoin is potentially a hedge against the dollar going down in value over time. And look, let's say something for real about owning Bitcoin and being part of people talking about it on the internet. The reality is it's developed almost like a religious thing where once, like in the 1980s and 1990s, if you wanted to be somebody cool and seen as macho and kind of counterculture, you know, you'd become a dentist and then go buy a Harley, right? And if I had an editor, I would totally put a picture of a dorky dentist getting all fat and riding on his baby boomer Harley. But anyway, like if you want to be part of something and get kind of into the fervor of how cool it is and counterculture and, you know, self-reliant and American it is to own Bitcoin, Look, it could be fun and it could make you feel good to own that stuff, especially if you're frustrated with a lot of the way things are going in the world, in the economy. But this is the part of the video when I turn into Lecture Girdley, who throws water on the bonfire of your fun of owning Bitcoin and getting free money and profits by holding some of your, you know, your business assets and working capital in Bitcoin rather than in cash. And the bad news I have for you is there's no such thing as a free lunch. So here's problem number 1 with your business owning Bitcoin and putting your working capital for your business into Bitcoin. Bitcoin goes up, Bitcoin goes down. That's part of the problem, right? And there have been numerous times over the past decade and even longer where Bitcoin has gone down 20% or 30% or 40%. And if you have working capital that your business is requiring, to operate and pay salaries and stuff like that, you better make dang sure that you're going to be able to survive Bitcoin going down up to 50% or even more if bad things happen to it, if it goes into another downturn. And trust me, there's been bull markets for Bitcoin and there's been bear markets for Bitcoin, and we will have both in the future. Now, when will those happen? I don't know. But you have to understand, if you're going to be putting your company money into Bitcoin, it may lose value. And here's problem number 2, which is Bitcoins aren't actually currency, right? They're digital gold if you think about it that way. And if you want to borrow or use that stuff, you have to convert it back to dollars. And if you want to borrow against your Bitcoin, well, the truth is that most banks don't view it as a real asset on par with other stuff. So you're not going to be able to borrow against it if things get rough. And here's the funny thing, and I've talked to my friends that are bankers. A lot of them will look at people trying to use cryptocurrency as collateral as potentially a red flag. And yeah, there are lenders out there that allow you to borrow against their cryptocurrency, but they're not going to give you the same low rates that your regular bank's going to give you for borrowing against other types of hard fixed assets, or your broker is going to give you for borrowing against stocks and stuff like that, that are more commonplace and accepted and mainstream assets at this point. And here's another thing. You know, we've been in the middle of 20 years of pretty amazing times economically, especially here in the United States. Even still, there's been a couple of times where it seemed like the entire economy was going to stop and stop working. And I've been alive through some of those times: 2001, 2008, and then again in 2020 with the COVID pandemic. And there are moments in each one of those times when I looked up and I'm like, is this the moment the whole economy just like ends? Because remember, it's all a cycle, right? Everybody's trading with each other. And if something happens to where it just stops and everything falls apart, things can look like there's no hope. And the reality is, during those times when things get really, really bad, the only thing that mattered in the end was the US dollar and how many you had in your bank account. Everything else was a questionable piece of collateral. And I saw it in 2001. I saw it in 2008. And it happened again in 2020. In 2020, we got lucky. You had the government step in, start handing out free money and stop the downward spiral from happening. But it's a reality. And if things hit the fan and go really bad, there's one thing I want to have: US dollars. Everything else is second place or last place comparatively. And that includes Bitcoin. And look, the last factor to consider is opportunity cost, right? And this is what the economists talk about. When you do one thing, you lose the opportunity to do something else. And if you start to spend a bunch of time worrying about when you're going to be buying or selling Bitcoin, and do you have enough of your asset, you know, of kind of the cash of your company dedicated to Bitcoin? Like, if you're worrying about that stuff and you own a small business, you aren't worried about what really matters, which is how you run your business really, really well, delight your customers, and make the most money possible. Because in the end, that is the thing that is the golden goose that makes money so you can go out and buy Bitcoin. And if you're distracted, I guarantee somebody else is going to be less distracted than you and be in there trying to take your customer base. And here's the last thing to think about with regards to Bitcoin. If you watch what happens with it over and over again, there's a cycle. There's a hype cycle where it gets really peak, kind of where we are now, where everybody thinks it's only got one place to go up. And guess what? That is slightly before it does what it always seems to do around this time. Which is go back down. So you don't want to be the last guy standing and looking for a chair when the music stops. And based on the way it's worked over the past 15 years with Bitcoin, highly likely the music will stop at some point. When that'll happen, I don't know when, but we're reaching the point in which there is irrational exuberance and people putting their life savings in there into Bitcoin. And that's a situation that's not going to sustain forever. And that's when people start selling and panic selling, the price goes down, and that's where we'll be in the cycle. So the best time to buy it is when nobody else wants to buy it. And that's when you just wait it out. Then you get back to the irrational exuberance thing again. It's kind of funny how human nature works. And look, I'm not opposed to Bitcoin at all. Like, I think it has a place, but don't buy it for your business. Don't use up the working capital because that's supposed to be there to do what it's supposed to do, enable your business to work. In the end, what you can do is if you believe in Bitcoin, which I do, I've made a lot of money buying and selling it. It's been great. You buy it, you wait for it to go up, then you sell it. What could go wrong? It's not that hard. But if you're into it, then use another vehicle to do it. You can buy the exchange-traded firm— exchange-traded funds. You can use stuff in your IRA. Heck, you could just use your cash in a brokerage account. Go for it. Yeah, there's nothing wrong with it. You can get part of the religious fervor and have a good time doing it. But keep it out of your working capital. That's for cash only.